Ndc vs Pvb (Digest)

National Development Company and New Agrix vs. Philippine Veterans Bank  (192 SCRA 257) Facts: Agrix Marketing executed in favor of respondent a real estate mortgage over three parcels of land. Agrix later on went bankrupt. In order to rehabilitate the comp compan any, y, then then Presid esiden entt Mar Marcos cos issue ssued d Presid esiden enti tial al Decr Decree ee 17 1717 17 whic which h mand mandat ated ed,, amon among g othe others rs,, the the exti exting ngui uishi shing ng of all all the the mort mortga gage ges s and lien liens s attaching to the property of Agrix, and creating a Claims Committee to process claim claims s agains againstt the compan company y to be admini administer stered ed mainly mainly by NDC. NDC. Respond espondent ent there thereon on filed filed a claim claim against against the company company befor before e the Commit Committee tee.. Petitio etitioner ners s however filed a petition with the RTC RTC of Calamba, Ca lamba, Laguna invoking the provision of  the law which cancels all mortgage liens against it. Respondent took measures to extrajudicially foreclose which the petitioners opposed by filing another case in the same court. These cases were consolidated. The RTC held in favor of the respondent on the ground of unconstitutionality of the decree; mainly violation of  the separation of powers, impairment of obligation of contracts, and violation of  the equal protection clause. Hence this petition. Issue: •

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Is the respondent estopped from questioning the constitutionality of the law since they first abided by it by filing a claim with the Committee? Is PD 1717 unconstitutional?

Ruling: On the issue of estoppel, the Court held that it could not apply in the present case since when the respondent filed his claim, President Marcos was the supreme ruler of the country and they could not question his acts even before the courts because of his absolute power over all government institutions when he was the President.  The creation of New Agrix as mandated by the decree was also ruled as unconstitut unconstitutional ional since it violated violated the prohibiti prohibition on that the Batasang Batasang Pambansa Pambansa (Congr (Congress) ess) shall shall not provid provide e for the format formation ion,, organi organizat zation ion,, or regula regulatio tion n of    priva private te corpor corporati ations ons unless unless such such corpor corporati ations ons are owned owned or contro controlle lled d by the government. PD 1717 was held as unconstitutional on the other grounds that it was an invalid exercise of police power, It had no lawful subject and no lawful method. It violated due process by extinguishing all mortgages and liens and interests which are property rights unjustly taken. It also violated the equal protection clause by lump lumpin ing g toge togeth ther er all all secu securred and and unse unsecu curred cred credit itor ors. s. It also also impa impair ired ed the the obligation of contracts, even though it only involved purely private interests.