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No. L­14406. June 30, 1961.

MARCELINO BUYCO, petitioner­appellee, vs.

PHILIPPINE NATIONAL BANK,ILOILO BRANCH, Iloilo
City, respondent­appellant.

Obligations and Contracts; Payment; Backpay Certificate;

PNB refusal to accept certificate may be compelled by mandamus.
—Following the ruling of this Court in Florentino v. Philippine
National Bank, L­8782, (52 O.G. 2522), the latter can be
compelled by mandamus to accept acknowledgment of backpay
certificate in payment of petitioner’s obligation with the bank.

Words and Phrases; Vested right or vested interest defined.—A

vested right or a vested interest may be held to mean some

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Buyco vs. Philippine National Bank

right or interest in property that has become fixed or established,

and is no longer open to doubt or controversy (Graham v. Great
Falls Water Power & Town Site Co. [Mont] 76 Pac. 808, 810,
citing Evans­Snider­Buel Co. v. McFadden, 10 Fed. 293, 44 CCA,
464 L.R.A. 900).

Statutory Construction; Laws shall generally have no

retroactive effect.—Laws shall have no retroactive effect, unless
the contrary is provided (Art. 4, NCC), for it is said that the law
looks to the future only and has no retroactive effect unless the
legislator may have formally given that effect to some legal
provisions (Lopez vs. Crow, 40 Phil. 997), and that statutes are to
be construed as having only prospective operation, unless the
purpose and intention of the Legislature to give them a
retrospective effect is expressly declared or is necessarily implied
from the language used, and that in case of doubt the same must
be resolved against retrospective effect (Montilla v. Agustinian
Corp., 24 Phil. 220).
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Statutes; Effect of amendment on accrued rights.—After an

act is amended, the original act continues to be in force with
regard to all rights that had accrued prior to such amendment
(Fairchild v. U.S., 91 Fed. 297; Hathaway v. Mutual Life Ins. Co.
of N.Y., 99 F. 534).

APPEAL from a judgment of the Court of First Instance of

Iloilo. Fernan, J.

The facts are stated in the opinion of the Court.

     Efrain B. Treñas for petitioner­appellee.
          Ramon B. de los Reyes and Nemesio C. Vargas for
respondent­appellant.

PAREDES, J.:

Mandamus case filed by petitioner Marcelino Buyco

praying that the respondent Philippine National Bank be
compelled to accept his Backpay Acknowledgment
Certificate No. 4801, as payment of his obligation with said
respondent.
The case was submitted on an agreed stipulation of
facts, with the pertinent documents as annexes.
On April 24, 1956, petitioner Marcelino Buyco was
indebted to respondent in the amount of P5,102.90 plus
interest thereon, which represented petitioner’s deficit on
his 1952­53 crop loan with respondent bank. The said loan
was secured by a mortgage of real property. Petitioner is a
holder of Backpay Acknowledgment Certificate No. 4801,
dated July 9, 1955, under Rep. Act No. 897 in the amount
of P22,227.69 payable in thirty (30) years. On

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Buyco vs. Philippine National Bank

April 24, 1956, petitioner offered to pay respondent bank

the deficit of his crop loan for the abovementioned cropyear
1952­53 with his said backpay acknowledgment certificate,
but on July 18, 1956, respondent answered petitioner that
since respondent’s motion for reconsideration in the case of
Marcelino B. Florentino v. Philippine National Bank, L­
8782, (52 O.G. 2522) was still under consideration by this
Court (S.C.), respondent “cannot yet grant” petitioner’s
request (Annex A, amended petition). On February 15,
1957, and after this Court had denied respondent’s motion
for reconsideration in said case No. L­8782, petitioner,

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again wrote respondent, reiterating his request to pay the

obligation with said certificate (Annex B). On February 19,
1957, respondent answered petitioner that in view of the
amendment of its charter on June 16, 1956 by R.A. No.
1576, it could not accept petitioner‘s certificate (Annex C).
Petitioner requested respondent to reconsider its decision,
in a letter dated March 26, 1957 (Annex D), which was
referred to the respondent’s Legal Department. In an
opinion rendered on April 23, 1957, said department
expressed the view that notwithstanding the decision of
this Court, the respondent could not accept the certificate
because of the amendment of its Charter heretofore
mentioned.
The Court of First Instance of Iloilo, on July 24, 1958,
granted the petition and ordered the respondent bank “to
give due course on the vested right of the petitioner
acquired previous to the enactment of Republic Act No.
1576 by accepting his backpay acknowledgment certificate
as payment of the obligation of the petitioner with
respondent Bank with costs of the proceedings against
respondent.” Hence, this appeal by the respondent Bank.
In spousing the cause of the petitioner­appellee, the trial
court made the following findings and conclusions:

(1) That in the letter Annex A, dated July 18, 1956, the
respondent has impliedly admitted the right of
petitioner to apply or offer his certificate in
payment of his obligation to respondent.
(2) That the pendency of the motion for reconsideration
of the Florentino case filed by respondent­appellant,
did not affect the petitioner’s vested right already
creat

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Buyco vs. Philippine National Bank

ed and acquired at the time he offered to pay his

obligation with his certificate on April 24, 1956, and
before the passage of Rep. Act No. 1576.
(3) That Rep. Act No. 1576 does not nullify the right of
the petitioner to pay his obligation with his backpay
certificate.
(4) That the writ of mandamus would lie against the
appellant.

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The above findings and conclusions are assigned as errors,

alleged to have been committed by the trial court.
In the light of the Supreme Court’s decision in the
Florentino case, the respondent Philippine National Bank
therein was declared authorized to accept backpay
acknowledgment certificate as payment of the obligation of
any holder thereof. Although the Florentino case was
promulgated on April 28, 1956, four (4) days after April 24,
1956, the date the appellee offered to pay with his backpay
acknowledgment certificate, it is nevertheless obvious that
on or before said April 24, 1956, the right to have his
certificate applied for the payment of his obligation with
the appellant already existed by virtue of Republic Act No.
897, which was merely construed and clarified by this
Court in the said Florentino case. So that when the
appellant in its letter of July 18, 1956. replied that “in the
meantime that our motion for reconsideration of the said
decision is still pending the resolution of the Supreme
Court, we regret to advise that we cannot yet grant your
request”, the said appellant already knew or should have
known that a right was vested, only that its enforcement
had to wait the resolution of this Court which it handed on
February 15, 1957, by maintaining its decision. A vested
right or a vested interest may be held to mean some right
or interest in property that has become fixed or
established, and is no longer open to doubt or controversy
(Graham v. Great Falls Water Power & Town Site Co.
[Mont] 76 Pac. 808, 810, citing Evans­Snider­Buel Co. v.
McFadden, 10 Fed. 293, 44 CCA, 464 L.R.A. 900).
Considering the facts and circumstances obtaining in the
case, we agree with the lower court that the appellant
herein had impliedly admitted the right of the petitioner to
apply his backpay certificate in payment of his obligation.
This notwithstanding, whether implied or expressed the
admission by the appellant
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Buyco vs. Philippine National Bank

of appellee’s right, has already lost momentum or

importance, because the law on the matter on April 25,
1956, when the offer to pay the obligation with the
certificate was made, or the law before the amendatory Act
of June 16, 1956, was that the PNB was compelled to
receive petitioner’s backpay certificate.

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Section 9­A of Republic Act No. 1576, passed on June 17,

1956, amending the Charter of the respondent­appellant
bank, provides:

“The Board of Directors shall have the power and authority:

“x x x (d) In its discretion, to accept assignment of payments,
certificate of indebtedness of the government or other such similar
securities: Provided, however, that the authority herein granted
shall not be used as regards backpay certificates.”

What would be the effect of this law upon the case at bar?
“Laws shall have no retroactive effect, unless the contrary
is provided” (Art. 4, New Civil Code). It is said that the law
looks to the future only and has no retroactive effect unless
the legislator may have formally given that effect to some
legal provisions (Lopez, et al. v. Crow, 40 Phil. 997, 1007);
that all statutes are to be construed as having only
prospective operation, unless the purpose and intention of
the Legislature to give them a retrospective effect is
expressly declared or is necessarily implied from the
language used; and that every case of doubt must be
resolved against retrospective effect (Montilla v.
Agustinian Corp., 24 Phil. 220). These principles also apply
to amendments of statutes. Republic Act No. 1576 does not
contain any provision regarding its retroactivity, nor such
may be implied from its language. It simply states its
effectivity upon approval. The amendment, therefore, has
no retroactive effect, and the present case should be
governed by the law at the time the offer in question was
made. The rule is familiar that after an act is amended, the
original act continues to be in force with regard to all rights
that had accrued prior to such amendment (Fairchild v.
U.S., 91 Fed. 297; Hathaway v. Mutual Life Ins. Co. of
N.Y., 99 F. 534).
It is true that “acts executed against the provisions of
mandatory or prohibitory laws shall be void, except when

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Equitable Banking Corp. vs. Regional Off. 3, Dept. of Labor

the law itself authorizes their validity” (Art. 5, New Civil

Code). It should be recalled, however, that since the
prohibitive amendment of the appellant’s charter should
not be given retroactive effect; and that the law, at the time
appellee made his offer, allowed, in fact compelled, the
respondent bank to accept the appellee’s certificate, the
above provision finds no application herein.
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IN VIEW HEREOF, mandamus is the proper remedy

(Florentino case, supra), and the judgment appealed from
is hereby affirmed with costs against the respondent­
appellant.

          Bengzon, C.J., Labrador, Reyes, J.B.L., Dizon, De

Leon and Natividad, JJ., concur.
     Padilla, Bautista Angelo, Concepcion and Barrera,
JJ., took no part.

Judgment affirmed.

Notes.—The applicability of backpay certificates to the

payment of loans obtained from the government
instrumentalities, or entities, or the corporations owned or
controlled by the government, is limited to those subsisting
at the time of the approval of the Act (Rep. Act No. 304, as
amended by Rep. Act No. 897, approved June 20, 1953;
Rodriguez v. DBP, L­19771, Feb. 27, 1964; Macaraeg, et al.
v. PNB, L­15915, May 26, 1962). The right to use backpay
certificates, however, is given only to applicants and
original holders of such certificate and not to “a mere
assignee thereof”. (Sabalino v. R.F.C., L­11790, Sept. 30,
1958; Florentino v. PNB, 42 O.G. 2522).

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