MA-AO SUGAR CENTRAL CO., PETITIONER, VS. HON.CONRADO BARRIOS, ET AL., RESPONDENTS.

This is a petition for certiorari to set aside the order of the respondent
judge denying the motion to dismiss the complaint of the other respondents which
seek to recover amounts of money due them from the petitioner before the
outbreak of the war, on the ground that the respondent judge acted without or in
excess of the court’s jurisdiction in rendering said order; and for prohibition
to forbid the respondent judge from taking cognizance of the case on the ground
that the respondent judge has no jurisdiction to try and decide it.

The ground for the motion to dismiss filed by the petitioner is that the
complaint of the respondents does not state facts sufficient to constitute a
cause of action, because the plaintiffs have no right to demand the payment of
the defendants’ alleged debts until after the termination or legal cessation of
the moratorium provided in Executive Order No. 25, as amended by Executive Order
No. 32, the pertinent part of which reads as follows:

“III. DEBT MORATORIUM

“1. Enforcement of payment of all debts and other monetary obligations
payable within the Philippines, except debts and other monetary obligations
entered into in any area after declaration by Presidential Proclamation that
such area has been freed from enemy occupation and control, is temporarily
suspended pending action by the Commonwealth Government.” (41 Off. Gaz., No. 1,
p. 56.)

It is plain and we are of the opinion that the complaint filed by the
plaintiff respondent in the court below does not state facts sufficient to
constitute a cause of action. A cause of action is an act or omission of one
party in violation of the legal right or rights of the other; and its essential
elements are legal right of the plaintiff, correlative obligation of the
defendant, and act or omission of the defendant in violation of said legal
right. In the present case the complaint alleges the legal right of the
plaintiffs to be paid the amount due them from the defendant, as well as the
correlative obligation of the defendant to pay said debts to the plaintiffs when
it becomes due and payable; but not the omission on the part of the defendant to
pay in violation of the legal rights of the plaintiffs to be paid, because
according to the above quoted provision of Executive Order No. 32, said debts
are not yet payable or their payment can not be enforced until the legal
cessation of the moratorium, which is still in force. As the defendant herein
petitioner is not yet in default, plaintiffs have no cause of action against
him.

While the debt moratorium is in force the defendant-petitioner has no
obligation yet to pay the plaintiffs, and the latter can not file a suit against
him in the courts of justice requiring him to recognize his debts to the
plaintiffs and to pay them (after the moratorium) not only the amount of the
indebtedness, but the legal interest thereon from the filing of the complaint,
the attorney’s fees of ten per centum of the amounts due, and the costs of the
suits. There is no such action to compel a defendant to acknowledge or recognize
his debt which is not yet payable, distinct and different from the action for
recovery or payment of a debt already due and payable, against the debtor who
refuses to pay it. To allow the plaintiffs’ action and grant the relief demanded
in the complaint, would be to compel the defendant to pay legal interest on the
amount claimed from the filing of the said complaint, as well as the attorney’s
fees of 10 per cent of the sum due thereon as stipulated, and the costs of the
suit, as if the defendant’s obligations to the plaintiffs were already payable
and he had failed or refused to pay them. Why should the defendant be required
to bear the expenses incidental to a suit before he has violated the plaintiffs’
right? How could plaintiffs assume that the defendant will not pay his debts
when they become payable, and for that reason they have filed this action
against defendant? Why should not the contrary be presumed, that is, that the
debtor will pay his obligation at the proper time, in order to prevent a suit,
preserve its credit, and avoid the expenses incident to a suit, and the payment
of legal interest on the amount due and attorney’s fees?

In the case of Henares vs. Cordova (G. R. No. L-1536), a petition
for prohibition was filed by the petitioner alleging that the lower court had no
jurisdiction over the subject matter, which is the collection of an alleged
indebtedness unenforceable under the debt moratorium, and this Court denied the
petition on the ground that Executive Order No. 25, as amended by Executive
Order No. 32, did not have the effect of divesting the lower court of its
jurisdiction to try and hear the case. We did not deem it necessary then to
express our opinion on the sufficiency of the complaint, but now we do for the
guidance of the courts and legal practitioners, and state that said Executive
Order No. 25 as amended by Executive Order No. 32 not only suspends the
execution of the judgment that the court may render so far as it orders the
payment of debts and other monetary obligations, as stated in the resolution in
said case, but also suspends the filing of suit in the courts of justice for the
enforcement of the payment of debts and other monetary obligations therein
referred to, if timely objection is set up by the defendant debtor. It is to be
borne in mind that the debt moratorium is a right granted by law to the debtors,
and as such right it may be waived because its waiver does not affect the public
interest or the rights of third parties.

After stating our opinion that the complaint of the plaintiffs respondents
states no cause of action, we have to hold that the facts stated in the petition
for certiorari and prohibition filed in the present case do not entitle the
petitioner to said reliefs. It requires no argument to show that the respondent
judge had jurisdiction and did not exceed it or act with grave abuse of
discretion in denying the petitioner’s motion to dismiss, and therefore we have
to dismiss the present petition. This Court, in special civil actions of
certiorari and prohibition, can only determine the question whether or not the
court acted without or in excess of its jurisdiction or with grave abuse of its
discretion in doing the act complained of. We can not correct errors committed
by the lower courts in their judgments, decrees or orders rendered in the
exercise of their jurisdiction.

In view of the foregoing, the petition is denied.

Moran, C.J.,
Pablo, and Bengzon, JJ., concur.