G.R. No. L-599; October 26, 1948
AMALIA RODRIGUEZ, plaintiff-appellee, vs. PIO E. VALENCIA, and EMILIA H. RODRIGUEZ, defendants-appellants.

FACTS

Plaintiff Amalia Rodriguez sold a parcel of land in Cebu to defendant Emilia H. Rodriguez in October 1944. The deed of sale, executed on November 18, 1944, stated the consideration as “two hundred thousand pesos only (P200,000) in legal tender,” which was paid in Japanese war notes. Plaintiff alleged there was an additional verbal agreement for defendant to pay P5,000 in Philippine currency, not included in the written deed due to fear of the Japanese. Defendant denied this additional agreement. Plaintiff filed for rescission of the contract, claiming the Japanese notes had become valueless and the agreed Philippine currency sum was unpaid. The trial court, instead of rescinding, ordered defendant to pay plaintiff the P5,000 (plus another sum), and plaintiff to pay defendant a smaller amount. Defendant Emilia H. Rodriguez appealed.

ISSUE

Whether there was a valid verbal agreement for an additional purchase price of P5,000 in Philippine currency, separate from the P200,000 in Japanese war notes stated in the written deed of sale.

RULING

Yes. The Supreme Court affirmed the trial court’s decision, upholding the existence of the verbal agreement for the additional P5,000. The Court found plaintiff’s testimony credible. More importantly, it considered the equitable principle against unjust enrichment. The Court noted that even at a favorable exchange rate for defendant, the total equivalent in Philippine currency paid for the land (approximately P1,733.33) was grossly disproportionate to its pre-war value (P11,800) and its current much higher value. Enforcing only the written deed would result in a clearly inequitable and unconscionable benefit to the defendant. Therefore, the agreement for the additional P5,000 in Philippine currency was upheld as just and equitable.

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