G.R. No. L-17724; November 29, 1963
RAMON B. MELENDEZ, plaintiff-appellant, vs. TOMASA LAVARIAS, ET AL., defendants-appellants.

FACTS

On September 27, 1944, defendants Tomasa Lavarias de Sajonas and Brigida Estrada de Sajonas executed two deeds of “sale with right to repurchase” over a co-owned residential lot in favor of Rodolfo Sajonas, receiving P1,000 and P700, respectively, in Japanese war notes. The repurchase period was two years. Over eight years later, on April 7, 1953, Rodolfo Sajonas executed an absolute deed of sale over the same lot in favor of plaintiff Ramon Melendez. Melendez then filed an action in 1954 to be declared owner, alleging the defendants failed to redeem the property within the stipulated period and were unlawfully withholding possession.
During trial, after plaintiff presented several witnesses, both parties entered into a stipulation in open court. They agreed that the two 1944 deeds were not true sales but were executed merely as security for the loans, and that the defendants had received the sums in Japanese military notes. Based on this stipulation, the parties submitted the case for decision solely on the amount defendants must pay plaintiff. The trial court applied the Ballantyne scale to determine the present value of the Japanese war notes, ordering defendants to pay plaintiff P180.00 with interest.

ISSUE

The primary issue is whether the trial court correctly applied the Ballantyne scale to determine the repayment amount based on the parties’ stipulation that the transaction was an equitable mortgage. A secondary issue is whether the plaintiff-appellant could be relieved from the stipulation he later deemed unfavorable.

RULING

The Supreme Court affirmed the trial court’s decision. The legal logic centers on the binding nature of judicial stipulations and the proper application of the Ballantyne scale to obligations contracted in Japanese war notes. The Court held that the stipulation entered into by the parties in open court was valid and binding. Through this stipulation, the parties conclusively established that the true nature of the 1944 transactions was an equitable mortgage (a loan secured by the property), not a pacto de retro sale. Therefore, the defendants’ right was to repay the loan and redeem the property, not to repurchase it under a conditional sale.
The Court rejected plaintiff’s motion to be relieved from the stipulation. The motion, based on counsel’s claim of having agreed “improvidently” and forgetting his client paid P600 for the property, was insufficient. A stipulation of facts voluntarily entered into is a judicial admission binding upon the parties, and relief is not granted merely because a party later believes the agreement works to his disadvantage. Furthermore, the Court found no merit in plaintiff’s argument that defendants lost the benefit of the Ballantyne scale by not paying within the original two-year period. The expiration of that period merely gave the creditor the right to sue for collection; it did not alter the fundamental character of the obligation or the applicable rule for valuing the currency in which it was created. Consequently, the Ballantyne scale, which adjusts the value of Japanese war notes to their equivalent in pre-war Philippine currency, was correctly applied to prevent the unjust enrichment of the creditor. The affirmed payment of P180.00 represented the fair present value of the original P1,700 in Japanese notes.