GR L 4896; (April, 1953) (Digest)
G.R. No. L-4896 April 30, 1953
APOLINARIO CRUZ, plaintiff-appellant, vs. PATROCINIO KELLY, defendant-appellee. JOSE C. MARCELO, third party defendant.
FACTS
On July 22, 1949, plaintiff Apolinario Cruz filed a complaint in the Court of First Instance of Tarlac against defendant Fernando F. Yapcinco for the collection of P6,000 plus interest and liquidated damages, and for the foreclosure of a mortgage. Cruz was suing by virtue of an assignment from the original mortgagee, Jose C. Marcelo. The defendant, in his answer, prayed for judgment ordering the plaintiff to release the mortgage upon payment of the amount equivalent to the consideration of the mortgage contract in accordance with the Ballantyne scale of value. The defendant also filed a third-party complaint against Jose C. Marcelo, praying for judgment ordering the discharge of the defendant’s obligation and delivery of the title upon payment of P200 in Philippine currency, and to relieve the defendant of any obligation to the plaintiff. After the death of Fernando F. Yapcinco, he was substituted by the administratrix of his estate, Patrocinio Kelly. On January 9, 1951, the trial court, motu proprio, dismissed the case on the ground that the obligation fell under the debt moratorium (Executive Order No. 25, as amended by Executive Order No. 32). The plaintiff appealed.
ISSUE
Whether the trial court correctly dismissed the case based on the debt moratorium.
RULING
No. The appealed order is reversed and the case is remanded to the court of origin for further proceedings. The Supreme Court held that the moratorium is a right that may be waived by the debtor, as such waiver does not affect public interest or the rights of third parties. In this case, there was not only a waiver due to the defendant’s failure to invoke the defense, but also an express prayer in his answer for a judgment releasing the mortgage upon payment according to the Ballantyne scale, and an express prayer in the third-party complaint for a judgment ordering the discharge of the obligation upon payment of P200. Willingness to pay was further evident from allegations in the defendant’s answer and third-party complaint that offers of payment had been made but were refused.