MARCELINO BUYCO v.

PHILIPPINE NATIONAL BANK

Facts:
Petitioner Marcelino Buyco owed the Philippine National Bank (PNB) P5,102.90 plus
interest for a crop loan in 1952-53.
Buyco holds a Backpay Acknowledgment Certificate (BAC) under Republic Act No.
897, worth P22,227.69, payable over 30 years.
On April 24, 1956, Buyco offered to pay his debt to PNB with his BAC, but PNB
refused.
PNB cited the pending motion for reconsideration in the case of Marcelino B.
Florentino vs. PNB as the reason for not accepting Buyco's offer.
On February 15, 1957, the Supreme Court denied PNB's motion for reconsideration
in the Florentino case.
On February 19, 1957, PNB informed Buyco that it could not accept his BAC due to
an amendment in its charter (R.A. No. 1576).
Buyco requested PNB to reconsider, and the respondent's Legal Department opined
on April 23, 1957, that it could not accept the certificate due to the amendment in
its charter.
Issues:
1. Did PNB admit Buyco's right to apply his BAC in payment of his debt?
2. Did the pending motion for reconsideration in the Florentino case affect Buyco's
vested right to pay his debt with the BAC?
3. Did R.A. No. 1576 nullify Buyco's right to pay his debt with the BAC?
4. Is mandamus the proper legal remedy?
Ruling: The Court of First Instance of Iloilo granted Buyco's petition and ordered PNB to
accept his BAC as payment of his debt. PNB appealed the decision.
Principle: The court affirmed the lower court's ruling. It held that Buyco's right to pay his
debt with the BAC existed before the Florentino case and the amendment to PNB's
charter (R.A. No. 1576). Even though PNB impliedly admitted Buyco's right, the
admission lost significance due to the law in effect at the time of the debt offer. R.A. No.
1576, which prohibited PNB from accepting backpay certificates, had no retroactive
effect since it did not contain any provision to that effect. Therefore, the court ruled that
mandamus was the proper remedy