GR L 7766; (November, 1955) (Digest)
G.R. No. L-7766 November 29, 1955
PAZ NERI SAN JOSE, plaintiff-appellee, vs. REHABILITATION FINANCE CORPORATION, defendant-appellant.
FACTS
The plaintiff, Paz Neri San Jose, had a pre-war loan with the defendant’s predecessor. On March 14, 1951, she paid the defendant the sum of P7,162.59 in full settlement of her loan principal and interest. The defendant did not collect interest for the period January 1, 1942, to December 31, 1945, as it was condoned by Republic Act No. 401 . Republic Act No. 671 was later approved on June 16, 1951, amending Republic Act No. 401 . The plaintiff filed a complaint to recover P2,162.59, representing interest charged from January 1, 1946, to March 14, 1951, contending that the new provision in Republic Act No. 671 condoned such interest. The defendant argued that the condonation only applied to debtors who paid their obligations between June 16, 1951, and December 31, 1952. The trial court ruled in favor of the plaintiff, ordering a refund.
ISSUE
Whether Republic Act No. 671 condones and requires the refund of interest paid by a debtor on a pre-war obligation before the law’s approval, specifically for the period January 1, 1946, to the date of payment.
RULING
No. The Supreme Court reversed the trial court’s decision and dismissed the complaint. The Court held that the clear intention of Republic Act No. 671 , as an amendment to Republic Act No. 401 , was to condone only unpaid interest to aid in the rehabilitation of debtors. The new provision condoning interest from January 1, 1946, to the date of payment applies only to voluntary payments of the entire principal obligation made after the law’s approval on June 16, 1951, but not later than December 31, 1952. The law uses the phrase “makes voluntary payment,” denoting a present or future act, not a past one. The policy of enabling debtors to pay their obligations has no application to those who had already settled their indebtedness before the law took effect. The amendatory law does not retroactively entitle a debtor who paid before its approval to a refund of interest already paid.