G.R. No. 128448 . February 1, 2001.
SPOUSES ALEJANDRO MIRASOL and LILIA E. MIRASOL, petitioners, vs. THE COURT OF APPEALS, PHILIPPINE NATIONAL BANK and PHILIPPINE EXCHANGE CO., INC., respondents.

FACTS

Petitioners, sugar planters, obtained crop loans from respondent Philippine National Bank (PNB) for the 1973-1974 and 1974-1975 crop years, secured by chattel and real estate mortgages. The chattel mortgage authorized PNB, as attorney-in-fact, to sell their sugar and apply the proceeds to their loans. During this period, Presidential Decree No. 579 was issued, authorizing respondent Philippine Exchange Co., Inc. (PHILEX) to purchase export sugar at a government-fixed price of P180.00 per picul, with PNB providing financing. The decree directed that profits from PHILEX’s export sales be remitted to a special government fund.
Petitioners later requested PNB to account for the proceeds from their export sugar sales, believing the proper liquidation would show excess proceeds to settle their obligations. PNB refused, citing P.D. No. 579. Petitioners subsequently conveyed properties to PNB by dacion en pago and faced foreclosure for remaining debts. They filed a suit for accounting, specific performance, and damages against PNB and PHILEX, challenging the constitutionality of P.D. No. 579 and seeking payment of the alleged unliquidated balance from their export sugar sales.

ISSUE

The primary issue is whether P.D. No. 579 is constitutional, and whether respondents PNB and PHILEX have a legal obligation to account for and pay petitioners the alleged difference between the government-fixed price and the actual market price of their export sugar.

RULING

The Supreme Court affirmed the Court of Appeals’ decision, upholding the constitutionality of P.D. No. 579 and ruling that petitioners were not entitled to further payment. On constitutionality, the Court held that the decree, enacted under the President’s martial law powers, was a valid exercise of police power aimed at rationalizing and stabilizing the sugar industry for national economic protection. The fixing of a uniform procurement price for export sugar was a legitimate legislative policy to address industry crises, and the Court deferred to the wisdom of the political branches on such economic matters.
On the obligation to account and pay, the Court ruled that PNB and PHILEX acted as agents of the government under the decree’s mandatory scheme. Their role was merely to implement the law, and they had no discretion over the pricing or the disposition of proceeds, which were directed to a special government fund. Since the law fixed the price and designated the fund recipient, no fiduciary duty to account for additional proceeds existed between the respondents and the planters. Any claim for additional compensation based on higher market prices was effectively a claim against the government, not against the implementing agencies. The Court found no basis to hold PNB and PHILEX jointly and severally liable for damages.