G.R. No. L-5345 May 29, 1953
Community Investment Finance Corporation, plaintiff-appellant, vs. Eutiquiano Garcia, defendant-appellee.

FACTS

The plaintiff, Community Investment Finance Corporation, filed an action in the Court of First Instance of Manila in 1947 to recover from the defendant, Eutiquiano Garcia, the unpaid balance of the price, including interest, for shares of stock bought by the defendant in October 1936. The defendant invoked the moratorium provided under Executive Orders Nos. 25 and 32, leading to the dismissal of the case. The plaintiff appealed. In February 1951, the Supreme Court, while justifying the dismissal, noted that Republic Act No. 342 (approved on July 26, 1948, during the pendency of the appeal) should be considered. The case was remanded to the trial court for the presentation of evidence regarding the said Act, with instructions to proceed to trial if the defendant was not a war sufferer or had not filed a war damage claim. Upon remand, the plaintiff filed a supplementary complaint challenging the constitutionality of Republic Act No. 342 . The trial court found the Act valid and determined that the defendant’s obligation was contracted before the war, that he was a war sufferer, and that he had filed a war damage claim. Consequently, the action was dismissed. The plaintiff appealed this decision.

ISSUE

The sole issue for resolution is the constitutionality of Republic Act No. 342 .

RULING

The Supreme Court revoked the decision appealed from and remanded the case to the lower court for trial and decision on the merits. The Court held that Republic Act No. 342 , along with Executive Orders Nos. 25 and 32, had already been declared unconstitutional and void in the case of Rutter vs. Esteban (G.R. No. L-3708, promulgated May 18, 1953). Therefore, the defense of moratorium based on said Act or executive orders could no longer be sustained. Costs were imposed against the appellee.