GR L 8782; (April, 1956) (Digest)
G.R. No. L-8782; April 28, 1956
MARCELINO B. FLORENTINO and LOURDES T. ZANDUETA, petitioners-appellants, vs. PHILIPPINE NATIONAL BANK, respondent-appellee.
FACTS
The petitioners, Marcelino B. Florentino and Lourdes T. Zandueta, filed a petition for mandamus in the Court of First Instance of La Union to compel the Philippine National Bank (PNB) to accept Florentino’s backpay certificate, issued by the Republic of the Philippines under Republic Act No. 897 , as payment for their indebtedness of P6,800 plus interest, secured by a real estate mortgage. The debt was incurred on January 2, 1953, and was due on January 2, 1954. On December 27, 1953, the petitioners offered to pay the loan with the backpay certificate, but the PNB refused the offer on December 29, 1953. The case was submitted on an agreed statement of facts.
ISSUE
Whether the qualifying clause “who may be willing to accept the same for such settlement” in Section 2 of Republic Act No. 879 (amending Republic Act No. 304 , the Backpay Law) refers to all antecedents (the Government, its branches, instrumentalities, government-owned or controlled corporations, and private citizens/entities) or only to the last antecedent (“any citizen of the Philippines, or to any association or corporation organized under the laws of the Philippines”).
RULING
The Supreme Court reversed the lower court’s decision. The qualifying clause “who may be willing to accept the same for such settlement” refers only to the last antecedent, i.e., private citizens, associations, or corporations. Therefore, the Philippine National Bank, as a government-owned or controlled corporation, is obligated to accept the backpay certificate in payment of the petitioners’ debt. The Court ordered the PNB to accept Marcelino B. Florentino’s backpay certificate in payment of the debt, without interest from December 27, 1953, the date of the offer.
The Court based its ruling on: (1) the grammatical construction, noting a comma separates the private entities from the preceding government entities; (2) the constitutional avoidance principle, as making acceptance obligatory for private creditors would impair contractual obligations; (3) legislative intent from the Congressional Record, indicating the law aimed to permit payment of obligations to the government and its entities; and (4) administrative consistency, upholding the Secretary of Justice’s earlier 1948 opinion. The case was distinguished from Diokno vs. Rehabilitation Finance Corporation, as here the debt was subsisting at the time of the amendatory act’s approval.