GR L 2338; (February, 1951) (Digest)
G.R. No. L-2338 February 27, 1951
Community Investment and Finance Corporation, plaintiff-appellant, vs. Eutiquiano Garcia, defendant-appellee.
FACTS
On April 25, 1947, the plaintiff corporation filed an action in the Court of First Instance of Manila to compel the defendant to pay the balance for shares of stock bought in 1936, plus interest and attorney’s fees, and to accept the shares. The defendant filed a motion to dismiss on the ground of prescription, which was denied. After filing an answer, the defendant filed another motion to dismiss on March 9, 1948, alleging that the monetary obligations were covered by the Moratorium Law (Executive Order No. 25, as amended by Executive Order No. 32). On March 31, 1948, the trial court, citing the Supreme Court ruling in Ma-ao Sugar Central Co., Inc. vs. Barrios, dismissed the complaint. The plaintiff appealed, raising purely questions of law.
ISSUE
The principal issue is whether the trial court correctly dismissed the complaint for lack of cause of action due to the moratorium on monetary obligations under Executive Order No. 25, as amended by Executive Order No. 32.
RULING
The Supreme Court affirmed the order of dismissal. The Court held that while the plaintiff had a cause of action in the sense of a right to collect and an obligation on the part of the defendant to pay, the enforcement of such payment was suspended by the moratorium laws. Citing Ma-ao Sugar Central, the Court ruled that Executive Order No. 25, as amended, not only suspends the execution of judgments for monetary obligations but also suspends the filing of suits for their enforcement if the debtor timely raises the defense. Since the defendant raised the moratorium defense in his motion to dismiss, the complaint was properly dismissed. The Court rejected the plaintiff’s arguments that the defense was waived for not being raised in the first motion or answer, noting that a motion to dismiss for failure to state a cause of action can be made at any stage under the rules. The Court also held that the subsequent lifting of the moratorium by Republic Act No. 342 could not cure the lack of a right of action at the time the complaint was filed.