G.R. No. L-35796 and L-35932. January 31, 1983.
REPARATIONS COMMISSION, petitioner, vs. HON. JESUS P. MORFE, et al., respondents. INDUSTRIAL CHEMICALS, INC., petitioner, vs. REPARATIONS COMMISSION, respondent.

FACTS

Several reparations end-users, including New Tanauan Subdivision Farmers Cooperative Association, United Disabled Veterans Association of the Philippines, and Industrial Chemicals, Inc. (ICI), were allocated specific dollar amounts of reparations goods from Japan by the Reparations Commission (Repacom). Contracts to purchase were executed based on the official exchange rate of P2.00 to US$1.00. Subsequently, a Presidential Directive was issued on March 28, 1963, requiring payments for reparations goods to be made at the free market rate (P3.91 to US$1.00). When Repacom demanded payment at this new rate, the end-users filed suit in the Court of First Instance of Manila to enjoin its application.
The lower court ruled in favor of the end-users, ordering Repacom to apply the P2.00 rate and permanently enjoining the application of the free market rate. For ICI, the court also issued a writ of mandamus, commanding Repacom to take necessary steps to implement the procurement of the undelivered balance of ICI’s allocated soda ash plant machineries. Repacom appealed the injunction, and ICI separately appealed the aspect concerning the mandamus order.

ISSUE

The primary issues were: (1) Whether the Presidential Directive requiring payment at the free market rate could be validly applied to the existing reparations contracts; and (2) Whether a writ of mandamus could properly compel Repacom to procure and deliver the undelivered reparations goods allocated to ICI.

RULING

The Supreme Court reversed the lower court’s decision. On the first issue, the Court held that the Presidential Directive was a valid exercise of executive power, constituting a lawful modification of the terms for payment of reparations goods. The reparations contracts were not purely private commercial agreements but were governed by public law and administrative regulations. The directive, issued pursuant to the Republic Act governing reparations, altered the condition of payment which was within the government’s prerogative. The end-users’ rights were subject to such valid changes in policy, and thus, the applicable rate was the free market rate of P3.91.
On the second issue, the Court dismissed the petition for mandamus. A writ of mandamus lies only to compel the performance of a ministerial duty enjoined by law. The duty of Repacom to procure reparations goods was not ministerial but discretionary, involving prior approval from the President of the Philippines and the National Economic Council, as well as agreement with the Japanese government, as mandated by Republic Act No. 1789 . Since Repacom lacked the unilateral power to complete the procurement, mandamus could not issue to compel such an act.