Florentino v. Philippine National Bank
REITERATIONFacts
The Antecedents: Petitioners Marcelino B. Florentino and Lourdes T. Zandueta filed a petition for mandamus against the Philippine National Bank (PNB) to compel the bank to accept a backpay certificate issued to Marcelino B. Florentino as payment for an indebtedness of P6,800 plus interest, secured by a real estate mortgage. The loan was incurred on January 2, 1953, and was due on January 2, 1954. Petitioner Florentino held Backpay Acknowledgment No. 1721 dated October 6, 1954, for P22,896.33, issued by virtue of Republic Act No. 897. Procedural History: The case was submitted to the Court of First Instance of La Union on an agreed statement of facts. The PNB refused to accept the backpay certificate offered by the petitioners on December 27, 1953, to settle their loan. The Petition: Petitioners sought to compel the PNB to accept the backpay certificate as payment for their outstanding loan.
Issue(s)
Whether the qualifying clause "who may be willing to accept the same for such settlement" in Section 2 of Republic Act No. 897 refers to all antecedents or only the last antecedent. Whether the Philippine National Bank is legally obligated to accept the backpay certificate of petitioner Marcelino B. Florentino in payment of his indebtedness.
Ruling
The decision of the Court of First Instance is reversed. The Philippine National Bank is ordered to accept the backpay certificate of petitioner Marcelino B. Florentino in payment of his debt, without interest from December 27, 1953.
Ratio Decidendi
On the interpretation of Section 2 of Republic Act No. 897: The Court held that grammatically, the qualifying clause "who may be willing to accept the same for such settlement" refers only to the last antecedent, which is "any citizen of the Philippines, or any association or corporation organized under the laws of the Philippines." The presence of a comma before this phrase further supports this interpretation, separating it from the preceding list of entities. Even disregarding strict grammatical construction, the Court found cogent reasons to limit the clause to the last antecedent. To make acceptance obligatory upon private creditors would constitute an impairment of the obligation of contracts, compelling them to accept a form of payment with a significantly lower interest rate and a ten-year redemption period, which could be unconstitutional. The legislative intent, as evidenced by the Congressional Record, was to permit the use of backpay certificates for payment of obligations, and the inclusion of private entities in the list suggests their willingness to accept such certificates, not an obligation to do so. The Court also noted that it is common knowledge that government employees have used their backpay certificates to settle debts with government entities. On the obligation of the Philippine National Bank to accept the backpay certificate: The Court found that the petitioner's debt to the PNB was incurred on January 2, 1953, which was subsisting at the time Republic Act No. 897 was approved. Therefore, the case squarely falls under the provisions of Section 2 of the amendatory Act. Based on the interpretation of the law, the PNB, as a government-controlled corporation, was permitted to accept the backpay certificate. The Court distinguished the present case from Diokno vs. Rehabilitation Finance Corporation, where the debt was incurred after the period for application under the original Act had expired, making acceptance discretionary. In this case, the debt subsisted at the time of the amendatory Act's approval, and the offer to pay was made within the statutory allowance.
Main Doctrine
Backpay certificates issued under Republic Act No. 897, which represent salaries or wages due to an applicant, can be used to settle obligations subsisting at the time of the approval of the amendatory act, provided the certificate is accepted by the creditor. The clause 'who may be willing to accept the same for such settlement' in Section 2 of Republic Act No. 897 refers only to the last antecedent, namely, 'any citizen of the Philippines, or any association or corporation organized under the laws of the Philippines,' and does not make acceptance obligatory for private creditors.