Mirasol v CA

Gr No 128448
February 1, 2001

Doctrine/Provision:

Article VII Section 5: Powers of the Supreme Court – Other rules: “Raise at earliest
opportunity” & “Constitutionality is the very lis mota” (accounting by PNB Separable)

Facts of the Case:

The Mirasols are Sugarland owners and planters who annually produced tens of
thousands of piculs of sugar with a certain number of piculs assigned for export. From crop years
1973 to 1977, the Philippine National Bank (PNB) financed the Mirasols’ sugar production
venture under a crop loan financing scheme.

During this time, President Marcos, using his law-making powers under the Martial Law,
issued Presidential Decree (PD) No. 579 in November 1974. This authorized private respondent
PHILEX to purchase sugar allocated for export to the US and to other foreign markets. This
decree also further authorized PNB to finance PHILEX’s purchases. Finally, the decree also
directed that whatever profit PHILEX realizes from its sales abroad would be remitted to a
special fund for the national government.

The petitioners, believing that the proceeds of their sugar sales to PNB were more than
enough to pay for their obligations, asked for an accounting for the proceeds of their sales. This
was however ignored by PNB.

On August 10, 1982, the Mirasols had an outstanding loan of P15,964,252.93 to PNB.
After foreclosure of the mortgaged properties, the PNB still had a deficiency claim of P
12,551.252.93.

The Mirasols continued to ask PNB for the accounting of the proceeds from 1973 to 1975
and claimed that the proceeds, if properly liquidated, could offset their outstanding obligations
with the bank. PNB remained adamant in its stance that under P.D. No. 579, there was nothing to
account since under said law, all earnings from the export sales of sugar pertained to the National
Government and were subject to the disposition of the President of the Philippines for public
purposes.

Issue(s) of the Case:

Whether or not it was proper for the court to have exercised judicial review on the
constitutionality of PD 579.

Held/Decision of the Case:

Santos, Ray Paolo B.

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 The petitioners contend that PD No 579 and its implementing issues are void for
violating the due process clause and the prohibition against the taking of private property without
just compensation and thus ask for a judicial review on the case.

Based on Jurisprudence, there are 5 requisites for the exercise of this power: 1. There
must be an actual case, 2. The question before the court must be ripe for adjudication, 3. The
person challenging it must have locus standi, 4. The question of constitutionality must have been
raised at the earliest opportunity, 5. The issue of constitutionality must be the very lis mota of the
case (the cause of the suit or action).

As a rule, the courts will not resolve the constitutionality of the case based on the
presumption on separation of powers. This means that the Presidential Degree must have gone
through careful study by the executive and legislative department before it has been passed to a
law.

In the present case, the constitutionality of PD 579 is immaterial in PNB’s obligation to

render an accounting since the court finds that there is nothing in PD 579 that would be
applicable to PNB’s refusal. The governing law should be the law on the agency. The 5th
requisite that the issue of constitutionality of the law in question must be the very lis mota of the
case is absent. Thus the courts cannot rule on the constitutionality of PD 579.

Santos, Ray Paolo B.

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