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    9 Rutter V Esteban

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    Cedrick
    On August 20, 1941, the complainant sold two parcels of land to the respondent for P9,600, with P4,800 paid upfront and the remaining P4,800 to be paid in installments. The respondent failed to pay the installments and interest. The complainant filed a case to recover the outstanding balance, interest, and attorney's fees. The respondent argued that payment was delayed due to Republic Act No. 342, which imposed an 8-year moratorium on pre-war debts for war victims. The court dismissed the case based on the moratorium law. On appeal, the court found the moratorium law to be unreasonable and oppressive, violating the non-impairment

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    9 Rutter V Esteban

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    Cedrick
    82 views2 pages
    On August 20, 1941, the complainant sold two parcels of land to the respondent for P9,600, with P4,800 paid upfront and the remaining P4,800 to be paid in installments. The respondent failed to pay the installments and interest. The complainant filed a case to recover the outstanding balance, interest, and attorney's fees. The respondent argued that payment was delayed due to Republic Act No. 342, which imposed an 8-year moratorium on pre-war debts for war victims. The court dismissed the case based on the moratorium law. On appeal, the court found the moratorium law to be unreasonable and oppressive, violating the non-impairment

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    9 Rutter v Esteban

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    On August 20, 1941, the complainant sold two parcels of land to the respondent for P9,600, with P4,800 paid upfront and the remaining P4,800 to be paid in installments. The respondent failed to pay the installments and interest. The complainant filed a case to recover the outstanding balance, interest, and attorney's fees. The respondent argued that payment was delayed due to Republic Act No. 342, which imposed an 8-year moratorium on pre-war debts for war victims. The court dismissed the case based on the moratorium law. On appeal, the court found the moratorium law to be unreasonable and oppressive, violating the non-impairment

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    82 views2 pages

    9 Rutter V Esteban

    Uploaded by

    Cedrick
    On August 20, 1941, the complainant sold two parcels of land to the respondent for P9,600, with P4,800 paid upfront and the remaining P4,800 to be paid in installments. The respondent failed to pay the installments and interest. The complainant filed a case to recover the outstanding balance, interest, and attorney's fees. The respondent argued that payment was delayed due to Republic Act No. 342, which imposed an 8-year moratorium on pre-war debts for war victims. The court dismissed the case based on the moratorium law. On appeal, the court found the moratorium law to be unreasonable and oppressive, violating the non-impairment

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 2

    Facts: On August 20, 1941, Complainant sold to Respondent two

    parcels of land which P4,800 were paid outright, and the balance of
    P4,800 was made in installment payment with interest at the rate of 7
    percent per annum. Respondent failed to pay the two installments as
    agreed upon, as well as the interest that had accrued there-on, and so
    Complainant instituted this action in the Court of First Instance to
    recover the balance due, the interest due thereon, and the attorney’s
    fees stipulated in the contract. The complaint also contains a prayer
    for sale of the properties mortgaged in accordance with law.
    Respondent admitted the averments of the complaint, but set up a
    defense the moratorium clause embodied in Republic Act No. 342. He
    claims that this is a prewar obligation contracted on August 20, 1941;
    that he is a war sufferer, having filed his claim with the Philippine War
    Damage Commission for the losses he had suffered as a consequence
    of the last war; and that under section 2 of said Republic Act No. 342,
    payment of his obligation cannot be enforced until after the lapse of
    eight years from the settlement of his claim by the Philippine War
    Damage Commission, and this period has not yet expired. After a
    motion for summary judgment has been presented by the defendant,
    and the requisite evidence submitted covering the relevant facts, the
    court rendered judgment dismissing the complaint holding that the
    obligation which plaintiff seeks to enforce is not yet demandable
    under the moratorium law. Plaintiff filed a motion for reconsideration
    wherein he raised for the first time the constitutionality of the
    moratorium law, but the motion was denied. Hence this appeal.

    Issue: Whether Republic Act No. 342 violates the Non-Impairment


    Clause and therefore null and void?

    Held: Yes, Republic Act No. 342 is unreasonable and oppressive, and,
    therefore, the same should be declared null and void and without
    effect. Although the reservation of state power appropriate to such
    extraordinary conditions may be deemed to be as much a part of all
    contracts, as is the reservation of state power to protect the public
    interest in the other situation to which we have referred. And if state
    power exists to give temporary relief from the enforcement of
    contracts in the present of disasters due to physical causes such as
    fire, flood or earthquake, that power cannot be said to be nonexistent
    when the urgent public need demanding such relief is produced by
    other and economic causes. but these said cause is no longer present
    in our country therefore the said exercise of the state’s police power is
    unnecessary.

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