De Agbayani v.

PNB, 38 SCRA 429 (1971)

Facts: Bayani de Agbayani is not the petitioner in this case. This is a case involving the
prescription of an action for payment of a loan granted by PNB. On 1939, Agbayani borrowed a
sum of money from PNB via realty mortgage but the latter failed to recover the payment due to
the war. Executive Order No. 32 or the Debt Moratorium Law was then passed which suspended
collection of loans for four years which was extended to another eight years through Republic
Act No. 342. Republic Act No. 342 was later declared unconstitutional by the Supreme Court. In
1959 and fifteen years after the maturity date of the loan, PNB filed a suit for the payment.
Agbayani asserts that the action for payment of the loan has prescribed.
Issue: Whether or not the judicial declaration of unconstitutionality is retroactive in effect
Held: No. Exercise of judicial review on the constitutionality of a law may take time. Fairness
and justice calls for the recognition of the events that took place before the completion of the
judicial review.