KAPISANAN NG MGA MANGAGAWA SA MANILA RAILROAD COMPANY, PLAINTIFF AND APPELLEE, VS. CREDIT UNION KAPISANAN NG MGA MANGAGAWA SA MANILA RAILROAD COMPANY, DEFENDANT AND APPELLANT.

In the Manila court of first instance, the plaintiff, a duly
registered labor organization, sued to recover a sum of money from the
defendant, a credit and cooperative association.

The parties submitted the cause for decision upon a stipulation of
facts, in view of which the court rendered judgment ordering payment by
defendant of the sum of P49,900.00 plus stipulated interest of one per
centum (1%) per annum from 1953 until fully paid, and the costs.

The defendant appealed in due time. It does not dispute the fact, declared by the court a quo,
that from 1950 to 1951 “defendant borrowed from plaintiff the total
amount of P104,000.00 payable within ten years in ten equal annual
installments; that pursuant to the terms of the loan contract between
the parties, there is now due and owing to the plaintiff, from 1950 up
to the present, the sum of P68,400.00 of which the defendant has only
paid P18,500.00, leaving a balance of P49,900.00 * * *.”

However, pointing to the stipulation that:

“from 1950 to 1953, inclusive, when the General
President of plaintiff and the Chairman of the defendant credit union,
one and the same person, Mr. Vicente K. Olazo, and the majority members
of the Board of the two associations were the same, no payment was made
by the defendant to the plaintiff and during the said period the amount
of P26,800.00 was due and unpaid.”

Defendant insists that the sum of P26,800.00 that became due and
payable during that period (1950-1953) should not be now paid since
“Mr. Vicente K. Olazo and the majority members of the Board of the
plaintiff-appellee were the same officers of the defendant-appellant
during 1950 to 1953 or in other words, the creditor in this case being
also the debtor from 1950 to 1953, same can be considered as a merger of creditor and debtor under Article 1276 of the New Civil Code.”

Such argument is clearly untenable. There was never any merger of
the two juridical entities. They kept their own identities and
activities: the one was duly registered and operated under Commonwealth
Act 213 and Republic Act 875, while the other functioned under the
provisions of the National Cooperative Act (Act 2508 as amended). In
fact, one is now suing the other—a thing that would not happen had
there been a fusion. Note that only a majority—not all—of the members of the boards of the two organizations were the same persons.

Invoking Sec. 148 of Republic Act No. 2023 to the effect that no
suit shall be instituted against a cooperative “until the expiration of
two months after notice in writing” to the Administrator, appellant
pleads for denial of plaintiff’s demand for being premature: no
previous notice. But, as appellee says in reply, this legal provision
took effect only on June 22, 1957, i.e., after this litigation
had been filed in January 1957. And there is nothing in the Act to
indicate the legislator’s intention to make it retroactive or
applicable to litigations already pending before the courts.

Wherefore, finding no merit in the assignments of error discussed in
appellant’s brief, we have to affirm, and hereby affirm, the appealed
judgment with costs. So ordered.

Paras, C. J., Padilla, Montemayor, Bautista Angelo, Labrador, Concepcion, Barrera, and Gutierrez David, JJ., concur.