G.R. No. L-1328; September 9, 1949
MARIANO NEPOMUCENO and AGUEDA G. DE NEPOMUCENO, plaintiffs-appellants, vs. EDILBERTO A. NARCISO and MAURA SUAREZ, defendants-appellees.

FACTS

Plaintiffs-appellants Mariano Nepomuceno and his wife executed a mortgage in 1938 in favor of defendants-appellees to secure a loan payable within seven years. In 1943, before the mortgage matured, the parties executed a “Partial Novation of Contract,” which modified the original terms. Among the modifications was a stipulation that “while the war goes on, the mortgagor… cannot redeem the property mortgaged.” In July 1944, during the war, the mortgagors tendered payment of the debt, but the mortgagees refused to accept. The mortgagors then filed an action to compel acceptance, release of the mortgage, and damages, arguing the stipulation against redemption during wartime was against public policy.

ISSUE

Whether the stipulation in the novated contract prohibiting the mortgagor from redeeming the property during the war is valid and binding, thereby making the mortgagors’ tender of payment premature.

RULING

Yes, the stipulation is valid and binding. The Supreme Court affirmed the dismissal of the complaint. The stipulation was not contrary to law, morals, or public order under Article 1255 of the Civil Code. It was a mutually agreed modification where the mortgagees, not wanting repayment in Japanese military notes, reduced the interest rate in exchange for the mortgagor’s agreement not to pay during the war. The term was established for the benefit of both parties under Article 1127 of the Civil Code. Since the obligation was not yet due under the novated contract, the mortgagees rightfully refused the tender, and the action was prematurely filed.

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