Case Digest (G.R. No. 128448)
Facts:
This is Spouses Alejandro Mirasol and Lilia E. Mirasol v. Court of Appeals, Philippine National Bank, and Philippine Exchange Co., Inc., G.R. No. 128448, February 01, 2001, the Supreme Court Second Division, Quisumbing, J., writing for the Court.Petitioners the Mirasols were sugarland owners who, in crop years 1973–1974 and 1974–1975, produced large quantities of sugar, portions of which were earmarked for export. Philippine National Bank (PNB) financed the Mirasols’ sugar operations under crop loan agreements secured by chattel mortgages on standing crops and real estate mortgages; the chattel mortgage authorized PNB as attorney-in-fact to negotiate and sell petitioners’ sugar and apply proceeds to their obligations. In November 1974 President Marcos issued Presidential Decree No. 579 (P.D. No. 579) authorizing Philippine Exchange Co., Inc. (PHILEX) to purchase export sugar at prices set by government agencies, directing PHILEX’s profits to a national government special fund, and permitting PNB to finance PHILEX’s purchases. Government agencies set the export purchase price at P180.00 per picul for the two crop years in question.
When petitioners sought an accounting from PNB of proceeds from their export sugar sales and were rebuffed, they continued to borrow and make withdrawals; after demands for payment PNB accepted a dacion en pago of some properties on August 4, 1977 but still claimed substantial overdrafts and, following further defaults, extrajudicially foreclosed mortgaged properties, leaving a claimed deficiency. On August 9, 1979 the Mirasols sued PNB for accounting, specific performance, and damages (Regional Trial Court [RTC] of Bacolod City, Civil Case No. 14725); PHILEX was later impleaded (amendment, June 16, 1987). At pretrial the parties agreed to limit the issues largely to the constitutionality of P.D. Nos. 338, 579 and 1192 and the amount due to the plaintiffs for the allegedly unliquidated cost price of export sugar for the two crop years.
After trial the RTC rendered judgment in favor of petitioners: it declared P.D. No. 579 and related issuances unconstitutional, ordered PNB and PHILEX jointly and severally to pay the unliquidated residue of export-sugar proceeds (with specified per-picul figures and deductions), awarded legal interest, moral damages and attorney’s fees, and later clarified its decision to preserve any benefits arising under R.A. No. 7202 (the Sugar Restitution Law). PNB and PHILEX appealed to the Court of Appeals (CA), CA-G.R. CV No. 38607.
On July 22, 1996 the CA reversed the RTC: it held the dacion en pago and foreclosure valid, ordered PNB to render an accounting of the Mirasols’ sugar account and to recompute indebtedness in accordance with R.A. No....(Pro-only)
Issues:
- Was it proper for the trial court to declare a statute (P.D. No. 579) unconstitutional without notice to the Solicitor General where the parties agreed to submit the constitutional issue to the trial court?
- Are P.D. No. 579 and its implementing issuances unconstitutional for violating due process and taking private property without just compensation?
- Did the Court of Appeals commit manifest error in refusing to pierce the corporate veil between PNB and PHILEX?
- Did the Court of Appeals err in upholding the validity of the foreclosure and the dacion en pago affecting petitioners’ properties?
- Did the Court of Appeals err in not awarding moral damages and attorney’s fees to pet...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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