Alonso v. Philippine National Bank
REITERATIONFacts
The Antecedents: Plaintiff Francisco M. Alonzo alleged that he held Philippine National Bank (PNB) circulating notes amounting to P7,000, which he presented to the defendant, PNB, for redemption in actual legal currency. The defendant refused to redeem the notes, causing the plaintiff to suffer damages amounting to P5,000 due to lost investment opportunities and interest paid on commercial obligations. Procedural History: The Court of First Instance of Cebu dismissed the complaint. The court noted that Republic Act No. 211, enacted after the trial but before the decision, provided for the retirement and redemption of lawfully issued PNB notes and the registration of illegally issued ones, enumerating serial numbers of non-redeemable notes. The decision allowed the plaintiff to present his notes for redemption under RA 211. The Petition: The plaintiff appealed the decision of the Court of First Instance.
Issue(s)
Whether the plaintiff is entitled to damages for the defendant's refusal to redeem the PNB circulating notes. Whether the plaintiff can assail the constitutionality of Republic Act No. 211 for the first time on appeal.
Ruling
The Supreme Court affirmed the decision of the Court of First Instance, dismissing the complaint. The Court held that the plaintiff was not entitled to damages and that the constitutionality of Republic Act No. 211 could not be raised for the first time on appeal.
Ratio Decidendi
On the issue of damages: The Court ruled that the plaintiff was not entitled to damages. The refusal to redeem the circulating notes was justified because Executive Order No. 25, issued on November 18, 1944, by the President of the Philippines, prohibited transactions in such currency and expressly outlawed it as legal tender. Therefore, the plaintiff's inability to utilize the notes was a direct consequence of this executive order, not an actionable wrong by the bank. The plaintiff's claim for damages stemming from lost investment and interest payments on other obligations was thus unfounded. On the issue of constitutionality: The Court held that the plaintiff could not assail the constitutionality of Republic Act No. 211 for the first time on appeal. It is a well-settled principle that questions of constitutionality cannot be raised for the first time on appeal. While Republic Act No. 211 was not in existence at the time the complaint was filed or during the trial, the plaintiff had the opportunity to raise such an issue through a motion for reconsideration or a new trial in the lower court, especially since the appealed decision was solely based on this Act. Failing to do so precluded him from raising it at this appellate stage.
Main Doctrine
A party cannot assail the constitutionality of a law for the first time on appeal, especially when the appealed decision is predicated on that law. Furthermore, damages cannot be claimed for refusal to redeem currency that was expressly outlawed as legal tender by executive order.