PAZ NERI SAN JOSE, PLAINTIFF AND APPELLEE, VS. REHABILITATION FINANCE CORPORATION, DEFENDANT AND APPELLANT.

The Plaintiff Paz Neri San Jose had pre-war loan of P5,000 with the former
Agricultural and Industrial Bank, now succeeded by the defendant Rehabilitation
Finance Corporation. On March 14, 1951, the plaintiff paid to the defendant the
sum of P7,162.59 in full settlement of her loan plus interest. The defendant did
not collect the interest from January 1, 1952 to December 31, 1945, because
Republic Act No. 401 (approved on June 18, 1949) condoned the same. On June 16,
1951 Republic Act No. 671 was approved, amending Republic Act No. 401 which was
virtually reenacted, the only important change being the addition, to section 2
of the.following paragraph:

“If the debtor, however, makes voluntary payment of the entire pre-war unpaid
principal obligation on or before December thirty-one, nineteen hundred and
fifty-two, the interest on such principal obligation corresponding from January
one, nineteen hundred and forty-six, to the date of payment are likewise hereby
condoned.

On October 14 1952, the plaintiff filed in the Court of First Instance of
Misamis Oriental a complaint against the defendant to recover the amount of
P2,162.59, which was charged by the latter as interest from January 1, 1946 to
March 14 1951. It was the contention of the plaintiff that, in virtue of the
above-quote new paragraph added to section 2 of Republic Act No. 401 by Republic
Act No. 671, such interest Was condoned and should therefore be refunded. Upon
the other hand, the defendant argued that the condonation of interest spoken of
in the new provision, accrued only in favor of debtors who, paid their pre-war
obligations from June 16, 1951 (when Republic Act No. 671 was approved) to
December 31, 1952.

The court rendered a decision dated March 13, 1954 sustaining, the contention
of the plaintiff, and sentencing the defendant to return to her the sum of
P1,793.23, with interest at six per cent per annum from the date of the filing
of the complaint. From this decision the defendant has appealed.

Republic Act No. 671 is entitled “An Act to amend Republic Act Numbered Four
hundred One entitled ‘An Act to condone all unpaid interest accruing from
January first, nineteen hundred and forty-two to December thirty-first, nineteen
hundred forty-five on all obligations outstanding December eight, nineteen
hundred and forty-one’.” Section 1 provides that * * * “In order to afford
opportunities to debtors of the Government or Government owned or controlled
corporations to rehabilitate themselves and to enable them to pay their pre-war
obligations under terms and conditions fair and justto them, it is the declared
policy of the State that the condonation of interests contemplated herein be
extended.” In section 2 it is provided that “all unpaid interests in favor of
the Government or Government owned or controlled corporations accruing from the
first day of January, nineteen hundred and forty-two of thirty-first day of
December, nineteen hundred and forty-five, on all debts and obligations
outstanding on the. eighth day of December, nineteen, hundred and forty-one,
shall not be demandable and are hereby condoned in the following case.

In the light bf the foregoing, we” have no hesitancy in concluding that the
intention of the amendatory law, Republic Act No. 671, and even of Republic Act
No. 401, is to condone only unpaid interest. That the new paragraph added by
Republic Act No.’671 contemplated payment of the entire pre7war obligation
Subsequent to June 16, 1951, but not later than December 31, 1952, is clearly to
be deduced from the clause “makes voluntary payment” which denotes a present or
future act. If completed payment and paid interest were intended to be included,
the new paragraph, would have provided that refund of interest should be made to
debtors who, “shall have already paid , their entire pre-war unpaid principal
obligation.” There is, indeed, a lot of difference between unpaid interest which
may be condone, and paid interest which may be refunded The policy of Republic
Act No. 671, as expressed in section 1, to condone interest (not refund
interest) ‘to enable pre-war debtors to pay their obligations, certainly has no
application to and is unnecessary for those, who had already been able to settle
their indebtedness.

It is insisted for the appellee that, if Republic Act No. 671 was designed to
extend its benefit oniy to debtors who would pay their entire pre-war
obligations after its approval, the new paragraph added to section 2 of Republic
Act No. 401 would have contained a proviso that “such entire pre-war unpaid
principal obligation remains outstanding on the date of approval of this
amendatory Act.” There was no need for such proviso, after the said, section and
the title of the law expressly mentioned “unpaid interest.”

Counsel for appellee also contends that it is a rule in statutory
construction that amendatory laws are to be considered as forming part of the
original from the date of the latter’s enactment, or retroacts to the date of
the original. This contention is correct but in the sense that the appellee
would have been entitled to exemption from the payment of interest not only
January 1, 1942 to December 31, 1945, but also from January 1, 1946 to the date
of actual payment if .made after the approval of Republic Act No.671 on June 16,
1951 but not later than December 31, 1952. “When a statute is amended and
re-enacted” the amendment should be construed as if it had” been included in the
original act; but it cannot be retro-active unless plainly made so by the terms
of the amendment” (State vs. Montgomery, 117 S. E. 870, 94 W. Va. 153,
59 Corpuz Juris 1183.).

Wherefore, the appealed decision is hereby reversed and the complaint
dismissed with costs against the plaintiff. appellee. So ordered.

Bengzon Padilla, Reyes, A., Jugo, Bautista Angelo, Labrador,
Concepcion, and Reyes, J. B. L., JJ., concur.