GR L 5932; (February, 1954) (Digest)
G.R. No. L-5932 February 25, 1954
ALEJANDRO SAMSON, petitioner, vs. ANDREA B. ANDAL DE AGUILA, ET AL., respondents.
FACTS
On October 25, 1944, during the Japanese occupation, petitioner Alejandro Samson obtained a loan of P6,000 from Agapito B. Andal and Valentina Berana de Andal, secured by a real estate mortgage, with interest at 7% per annum. On March 4, 1947, Samson filed a complaint for declaratory relief in the Court of First Instance of Manila to fix the amount payable to cancel the mortgage. The trial court applied the Ballantyne scale of values and declared the amount due to be P150 (the equivalent in Philippine currency of P6,000 in Japanese war notes as of October 25, 1944) plus 7% annual interest from that date. The defendants appealed. The Court of Appeals reversed, holding that Samson should pay the full P6,000 in actual Philippine currency plus stipulated interest, subject to the moratorium law, because the obligation became due after the liberation. Samson appealed to the Supreme Court by certiorari.
ISSUE
Whether the loan obligation contracted in Japanese war notes during the occupation, which became due after liberation, should be paid at its full face value in Philippine currency or adjusted according to the Ballantyne scale of values.
RULING
The Supreme Court reversed the decision of the Court of Appeals. Applying the Ballantyne scale, the Court held that the amount due is only P150, the equivalent in Philippine currency of P6,000 in Japanese war notes as of the date of the loan (October 25, 1944), plus 7% annual interest on P150 from that date. The Court ruled that when an obligation is payable within a period that coincides with the Japanese occupation, payment after liberation must be adjusted according to the Ballantyne schedule because the debtor could have paid in Japanese war notes during the occupation. The creditor’s inability to demand payment before the due date did not preclude the debtor from paying earlier. The mere failure of the debtor to pay during the occupation does not make him liable for the difference in value between the war notes and Philippine currency as a penalty.