DOJ Opinion No. 023, s. 1988

DOJ OPINION NO. 023 , s. 1988 February 3, 1988 Mr. Luis B. Pangilinan, Jr. Acting General Manager Public Estates Authority 7th Floor, Legaspi Towers Paseo de Roxas, Makati Metro Manila Sir : This refers to your request for opinion on the "enforceability of a certain provision of the Agreement entered into by and between the Public Estates Authority (PEA) and Dillingham Philippines, Inc. dated June 29, 1978." You state that under P.D. No. 1346 dated April 11, 1978, the Cebu Port Development and Reclamation Project (CPDRP) then being undertaken in Cebu City by a private entity, the Cebu Development Corporation (CDC) was conveyed in absolute ownership and administration to PEA; that pursuant to par. (b), Sec. 3 of P.D. No. 1346 "the investments of CDC shareholders shall be returned to them without accruing dividends or fruits thereon"; that on June 29, 1978, PEA entered into an Agreement with Dillingham Philippines, Inc., another private entity, whereby PEA agreed, among others, to pay a 14% interest per annum on the outstanding claims of CDC shareholders for the return of their investments, if such claims are not paid within two (2) years from the date of execution of said Agreement, or beginning June 29, 1980. prcd You further state that PEA has started to pay the claims of CDC stockholders by returning to them the amount corresponding to the value of their shares, but without accruing "dividends or fruits" thereon, pursuant to aforesaid par. (b), Sec. 3 of P.D. No. 1346; that CDC President Francisco C. Delgado objected to this mode of settlement of CDC shareholders' claim adopted by PEA pursuant to P.D. No. 1346. It appears that the new Management of PEA is willing to pay the 14% interest on the existing claims of CDC shareholders as agreed upon in Paragraph 6 of the Agreement dated June 29, 1978 but that it hesitates to do so in view of the provision of par. (b), Sec. 3 of P.D. No. 1346 which forbids the payment of accrued "dividends or fruits". Otherwise stated, opinion is requested on whether or not CDC can enforce its claim for the payment of 14% interest without violating the provision of par. (b), Sec. 3 of P.D. No. 1346. Pursuant to settled practice and precedents, the Secretary of Justice does not render opinion on matters which involve the substantive rights of private parties, and especially if such rights arise from contract. The reason is that the opinion of the Secretary of Justice is merely advisory in nature and is not binding upon private parties who may, in all probability, contest the opinion in court if it turns our to be adverse to their interest (Ops., Secretary of Justice, No. 73, s. 1983; No. 10, s. 1979; No. 83, s. 1975; Nos. 107 and 163, s. 1974). prcd For your guidance, we call your attention to the provision of Sec. 3, par. (a) of P.D. No. 1346 which authorizes the full settlement of the "claims of all creditors . . . but without interest being accrued thereon ", which appears to be relevant to your query. Very truly yours, (SGD.) SEDFREY A. ORDOEZ Secretary of Justice