G.R. No. L-14406; June 30, 1961
MARCELINO BUYCO, petitioner-appellee, vs. PHILIPPINE NATIONAL BANK, ILOILO BRANCH, respondent-appellant.

FACTS

Petitioner Marcelino Buyco held a Backpay Acknowledgment Certificate issued under Republic Act No. 897 . On April 24, 1956, he offered this certificate to respondent Philippine National Bank (PNB) as payment for his outstanding crop loan deficit. The bank initially deferred action, citing its pending motion for reconsideration in the related Supreme Court case of Florentino v. PNB. Subsequently, on February 15, 1957, after the Supreme Court denied the bank’s motion and upheld its decision in the Florentino case, Buyco reiterated his request. PNB then refused, invoking an amendment to its charter, Republic Act No. 1576 , enacted on June 16, 1956, which prohibited it from accepting backpay certificates. The Court of First Instance of Iloilo granted Buyco’s petition for mandamus, compelling PNB to accept the certificate, prompting this appeal.

ISSUE

Whether Republic Act No. 1576 , which prohibited PNB from accepting backpay certificates, can be applied retroactively to nullify Buyco’s vested right to use his certificate for payment, a right which accrued prior to the law’s enactment.

RULING

The Supreme Court affirmed the lower court’s decision, ruling that mandamus was the proper remedy to compel PNB to accept the backpay certificate. The legal logic rests on the non-retroactivity of laws and the protection of vested rights. At the time of Buyco’s offer on April 24, 1956, his right to use the certificate for payment was already vested under the operative law, Republic Act No. 897 , as authoritatively construed by the Court in the Florentino decision. A vested right is a fixed, established interest no longer open to controversy. The subsequent enactment of R.A. No. 1576 , which contained a prohibitive clause, contained no express provision or necessary implication granting it retroactive effect. Fundamental statutory construction principles dictate that laws and amendments operate prospectively unless retroactivity is expressly declared. Therefore, the original law ( R.A. No. 897 ) continued to govern rights accrued before the amendment. Since Buyco’s right vested prior to June 1956, the amendatory act could not impair it. PNB’s obligation to accept the certificate was thus mandatory under the law in force at the time of the offer, and mandamus properly lay to enforce that clear legal duty.