GR L 14461; (August, 1960) (Digest)
G.R. No. L-14461; August 29, 1960
BONIFACIO MERCADO, plaintiff-appellant, vs. PAULO M. MERCADO, defendant-appellee.
FACTS
On August 29, 1944, plaintiff Bonifacio Mercado executed a “Deed of Sale of Real Property with Right to Repurchase” in favor of defendant Paulo M. Mercado. The consideration was P5,000.00 in Japanese war notes, and the plaintiff had the right to redeem the property “at any time within the period of ten years from this date for the same amount of P5,000.00.” Before July 10, 1954, the plaintiff offered to redeem the property by tendering P300.00 in Philippine currency, which he believed was more than the equivalent of P5,000.00 in Japanese war notes under the Ballantyne scale of values. The defendant rejected the offer, insisting on P5,000.00 in Philippine currency. The plaintiff then deposited P300.00 with the Court of First Instance of Zambales and filed a complaint, praying that the court determine the equivalent in Philippine currency of P5,000.00 in Japanese war notes under the Ballantyne scale and order reconveyance upon payment of that amount. The parties stipulated that the sole issue for determination was whether redemption should be made peso for peso in Philippine currency or by paying the equivalent in Philippine pesos of P5,000.00 in Japanese war notes under the Ballantyne scale. The lower court, relying on Gomez vs. Tabia, ruled that redemption should be made at P5,000.00 in Philippine currency.
ISSUE
Whether the redemption price should be paid peso for peso in Philippine currency or should be the equivalent in Philippine currency of P5,000.00 in Japanese war notes under the Ballantyne scale of values.
RULING
The Supreme Court modified the decision of the lower court. It held that the redemption should be made by paying the equivalent in Philippine currency, as of August 29, 1944, of P5,000.00 in Japanese war notes, pursuant to the Ballantyne schedule. The Court distinguished this case from Gomez vs. Tabia, noting that in Gomez, the redemption period began only after the war, when Japanese war notes were no longer legal tender, implying the parties intended payment in Philippine currency on a peso-for-peso basis. In contrast, here, the plaintiff could have redeemed the property as early as August 30, 1944, during the occupation, by paying in Japanese war notes. Therefore, applying the Ballantyne scale, where one genuine Philippine peso was worth P25.00 in Japanese war notes, the redemption price was P200.00 in Philippine currency. The Court declared that the plaintiff had made a valid tender of payment, and from the consigned amount of P300.00, the sum of P200.00 (after deducting costs) should be paid to the defendant upon execution and delivery of the deed of reconveyance within thirty days after the decision becomes final, with the balance refunded to the plaintiff.