GR L 1173; (December, 1949) (Digest)
G.R. No. L-1173. December 29, 1949.
ALEJANDRO ANDRES and HERMINIA PICHAY, petitioners, vs. THE COURT OF APPEALS, ROSARIO MATA, FLORENCIO CASTRO, TOMAS CASTRO, Jr., ELMER CASTRO, OLIVER CASTRO, and MAYVELIN CASTRO, respondents.
FACTS
In 1938, Tomas Castro sold a lot with a house to Alejandro Andres and Herminia Pichay under a pacto de retro, allowing repurchase within 4 to 6 years for P5,500. Tomas Castro died, and in April 1944, his widow, Rosario Mata, offered to repurchase the property by tendering P5,500 in Japanese military notes. The vendees rejected the tender, claiming the notes were greatly depreciated compared to the 1938 currency. Rosario Mata, for herself and her children, filed an action to compel reconveyance and consigned the same amount in court. The lower court ruled in favor of the plaintiffs, ordering the vendees to reconvey the property upon receipt of the consigned money. The Court of Appeals affirmed the decision.
ISSUE
Was the tender of payment and consignation made in Japanese military notes valid to exercise the right of repurchase under the pacto de retro?
RULING
Yes. The Supreme Court affirmed the decision of the Court of Appeals. Following the precedent established in Haw Pia vs. China Banking Corporation, Japanese military notes were considered legal tender for the payment of debts and obligations during the Japanese occupation. Therefore, the tender and consignation of P5,500 in Japanese war notes were valid. The vendees’ rejection of the valid tender and their failure to withdraw the consigned money from court left them with no recourse, especially since the notes later became worthless. The Court found no error in the lower courts’ rulings. No costs were awarded due to the petitioners’ good faith in raising the issue before the legality of Japanese notes was settled by jurisprudence.
(Note: A dissenting opinion argued that the contract called for payment in Philippine currency, not Japanese notes, and enforcing reconveyance for worthless notes would be unjust.)*
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