SPOUSES ALEJANDRO MIRASOL AND LILIA MIRASOL (petitioners) VS CA, ET AL

(respondents)
G.R. No. 128448, February 1, 2001
Quisumbing, J:

FACTS

 The Mirasols are sugarland owners and planters. PNB financed the Mirasols’ sugar production
venture under a crop loan financing scheme.
 Pres. Marcos issued PD 579 authorizing PHILEX to purchase sugar allocated for export to the US
and to other foreign markets. The decree further authorized PNB to finance PHILEX’s purchases.
 The crop loans were secured by real estate mortgages and chattel mortgages over the properties of
the Mirasols.
 Believing that the proceeds of the sugar sales to PNB were more than enough to cover their
obligations, the Mirasols asked PNB for an accounting. PNB ignored the request and
subsequently asked the petitioners to settle their due and demandable accounts.
 As a result of the demands, the petitioners conveyed to the PNB the real properties by way of
dacion en pago (dation in payment).
 Petitioners continued to ask PNB to account for the proceeds. However, PNB remained adamant
in its stance under PD 579 that there was nothing to account since all the earnings pertain to the
National Government.
 The petitioners filed a suit and among the rulings of RTC is the declaration of PD 579 as null and
void.
 The petitioners further appealed with the CA for the nullification of the dacion en pago and the
mortgage contracts. The CA then reversed the rulings of the RTC and among others, declared the
dacion en pago and the foreclosure of the mortgaged properties as valid.
ISSUE*

 Whether the RTC has the authority to consider the constitutionality of a statute, PD or EO.
HELD
Yes, the RTC has the authority and jurisdiction to consider their constitutionality. The
Constitution vests the power of judicial review or the power to declare a law, treaty, international or
executive agreement, PD, order, instruction, ordinance or regulation not only in the Supreme Court but
also in all RTCs. Furthermore, BP Blg 129 grants RTCs the authority to rule on the conformity of laws
with the Constitution.
However, as regards the case, the CA did not err in finding that it was improper for the RTC to
have declared PD 579 as unconstitutional since the petitioners had not complied with Rule 64, Section 3,
of the Rules of Court. In the said rule, the Solicitor General must be notified of the case to enable him to
decide whether or not his intervention in the action assailing the validity of a law or treaty is necessary. In
this case, the Solicitor General was never notified nor did the RTC ever require him to appear in person or
by a representative or to file any pleading or memorandum on the constitutionality of the assailed decree.

*issue in relation to the topic that all courts can exercise judicial review.