Case Digest (G.R. No. L-23127) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Francisca Serrano de Agbayani vs. Philippine National Bank (G.R. No. L-23127, April 29, 1971), appellee Francisca Serrano de Agbayani obtained a P450 loan from appellant Philippine National Bank on July 19, 1939, secured by a real estate mortgage over T.C.T. No. 11275 in Pangasinan, with maturity on July 19, 1944. As of November 27, 1959, the unpaid balance amounted to P1,294. On July 13, 1959, the Bank commenced extra-judicial foreclosure with the Provincial Sheriff of Pangasinan. Thereupon, on August 10, 1959, Serrano de Agbayani filed suit in the Court of First Instance of Pangasinan, alleging that the right to foreclose had prescribed after fifteen years from maturity. She secured a preliminary injunction against the sheriff, which the trial court made permanent in its January 27, 1960 decision. The lower tribunal applied the principle that measures later declared unconstitutional create no rights or obligations and refused to deduct the interval during which moratorium l Case Digest (G.R. No. L-23127) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Background of the loan and mortgage
- On July 19, 1939, plaintiff-appellee Francisca Serrano de Agbayani obtained a P450 loan from Philippine National Bank (PNB), secured by a registered real estate mortgage (TCT No. 11275, Pangasinan), maturing July 19, 1944.
- As of November 27, 1959, the unpaid balance was P1,294.00.
- Extrajudicial foreclosure and injunctive relief
- On July 13, 1959, PNB instituted extrajudicial foreclosure proceedings before the Provincial Sheriff of Pangasinan to recover the loan balance.
- On August 10, 1959, plaintiff filed a civil suit seeking a permanent injunction against the Sheriff’s sale, alleging prescription had run—15 years elapsed from maturity.
- The trial court issued a writ of preliminary injunction, later made permanent, enjoining the foreclosure.
- Defense and lower court ruling
- PNB argued that prescription was tolled during the moratorium under Executive Order No. 32 (effective March 10, 1945) and Republic Act No. 342 (1948) until declared unconstitutional on July 26, 1948, thus the 15-year period had not lapsed.
- The trial court rejected this defense, applying the doctrine that an invalid statute is void ab initio and creates no legal effect, and ruled in favor of plaintiff.
- Appeal to the Supreme Court
- PNB appealed, contending the lower court erred in disregarding the legal effect of the moratorium period prior to its nullification.
- This appeal turned on the doctrine regarding the effect of statutes and executive orders later declared invalid, and on prior Supreme Court holdings tolling prescription during the moratorium.
Issues:
- Whether the period during which Executive Order No. 32 and Republic Act No. 342 were in force—later declared invalid—must be excluded in computing the 15-year prescriptive period for extrajudicial foreclosure.
- What legal effect attaches to a statute or executive order that was operative prior to its later adjudication as unconstitutional.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)