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DE AGBAYANI vs PNB_digest

PKI TANGAL NG BULLETS WHEN WRITING

Agbayani obtained a loan P450 from PNB secured by a REM, which was to
mature 5 years later.
15 years later, PNB sought to foreclose the REM.
Agbayani filed a complaint claiming that it was barred by prescription. She
also claims that she obtained an injunction against the sheriff.
PNB argued that the claim has not yet prescribed if the period from the
time of issuance of EO32 to the time when RA 342 was issued should be
deducted.
o E0 32 was issued in 1945 providing for debt moratorium
o RA 342 was issued in 1948 - extension of the debt moratorium
The RA 342 was declared void and since it was an extension of EO 32, EO
32 was likewise nullified.
Here, RA 342 (the debt moratorium law) continued EO 32, suspending the
payment of debts by war sufferers. However RA 342 could not pass the
test of validity. (I think what Justice Fernando was saying is that the law
was later declared unconstitutional because it violates the nonimpairment of contractual obligations clause in the constitution).
PNB claims that this period should be deducted from the prescriptive
period since during this time the bank took no legal steps for the recovery
of the loan. As such, the action has not yet prescribed.
ISSUE: Has the action prescribed?
HELD:
The general rule is that an unconstitutional act because it suffers from
infirmity, cannot be a source of legal rights or duties. When the courts
declare a law to be inconsistent with the Constitution, the former shall be
void and the latter shall govern.
However, prior to the declaration of nullity of such challenged legislative act
must have been in force and had to be complied with. This is so as until after
the judiciary, in an appropriate case declares its invalidity, it is entitled to
obedience and respect. Such legislative act was in operation and presumed
to be valid in all respects. It is now accepted that prior to its being nullified,
its existence as a fact must be reckoned with. This is merely to reflect the
awareness that precisely because the judiciary is the governmental organ
which has the final say on whether a legislative act is valid, a period of time
may have elapsed before it can exercise the power of judicial review that
may lead to a declaration of nullity. It would e to deprive the law of its quality

of fairness and justice then, if there be no recognition of what had transpired


prior to such adjudication.
The past cannot always be erased by judicial declaration. (OPERATIVE FACT
DOCTRINE). The existence of a statute prior to its being adjudged void is an
operative fact to which legal consequences are attached.
During the 8 year period that EO 32 and RA 342 were in force, prescription
did not run. Thus, the prescriptive period was tolled in the meantime prior to
such adjudication of invalidity.

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