G.R. No. L-1539; December 3, 1947
MA-AO SUGAR CENTRAL CO., petitioner, vs. CONRADO BARRIOS, ET AL., respondents.

FACTS

Respondents (plaintiffs below) filed a complaint to recover pre-war monetary debts from petitioner Ma-Ao Sugar Central Co. Petitioner moved to dismiss the complaint on the ground that it failed to state a cause of action, citing the debt moratorium under Executive Order No. 32, which suspended the enforcement of payment of pre-liberation debts. The respondent judge denied the motion to dismiss. Petitioner then filed this petition for certiorari to annul that order and for prohibition to prevent the respondent judge from taking cognizance of the case.

ISSUE

Whether the complaint states a cause of action despite the debt moratorium under Executive Order No. 32.

RULING

No. The Supreme Court held that the complaint does not state a cause of action. A cause of action requires a legal right of the plaintiff, a correlative obligation of the defendant, and an act or omission of the defendant in violation of that right. While the complaint alleges the plaintiffs’ right to payment and the defendant’s obligation, it does not allege a violation because, under the moratorium, the debts were not yet payable or enforceable. The debtor was not yet in default. The moratorium suspends not only the execution of judgments but also the very filing of suits for enforcement if the debtor timely objects. However, the Court denied the petition for certiorari and prohibition because the respondent judge, in denying the motion to dismiss, acted within jurisdiction and without grave abuse of discretion. The proper remedy for an erroneous order denying a motion to dismiss is not certiorari but to proceed to trial and, if necessary, appeal. The petition was dismissed.

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