GR L 6386; (March, 1955) (Digest)
G.R. No. L-6386; March 29, 1955
MARIA JOSEFA DE LA PAZ FABIE and JOSE CARANDANG, petitioners, vs. THE COURT OF APPEALS and NARCISO MORDENO, respondents.
FACTS
During the Japanese occupation, petitioner Maria Josefa de la Paz Fabie delivered a piece of real property in Pasay, Rizal, to respondent Narciso Mordeno by virtue of a written “Agreement of Sale with Right to Repurchase.” The vendor reserved the right to repurchase the property within “three months from and after the termination of the war at present raging . . .” On April 8, 1946, Fabie offered to repay the money received, but Mordeno refused, claiming her time to repurchase had expired. A complaint was filed on May 24, 1947, in the Court of First Instance of Rizal for the return of the property upon payment. The Court of First Instance ruled in favor of the petitioners, upholding their right to repurchase. The Court of Appeals reversed this decision, holding that the contract was a true pacto de retro sale and that the redemption period had expired when Fabie tendered payment in April 1946, as the war had terminated on February 27, 1945 (when General MacArthur turned over the government to President Osmeña) or, at the latest, on September 2, 1945 (the formal surrender of Japan). The petitioners argued that the Court of Appeals erred in not following applicable Supreme Court decisions, particularly General vs. Venecia.
ISSUE
Whether the period for repurchase under the “Agreement of Sale with Right to Repurchase” had expired when Maria Josefa de la Paz Fabie tendered payment on April 8, 1946, given that the right was exercisable within three months “from and after the termination of the war.”
RULING
The Supreme Court reversed the decision of the Court of Appeals and affirmed the judgment of the Court of First Instance. The Court held that the period for repurchase had not expired in April 1946. The phrase “termination of the war” in the contract must be interpreted according to its legal meaning in the Philippines, as established in Raquiza vs. Bradford, Yamashita vs. Styer, and Untal vs. Chief of Staff, which hold that war, in the legal sense, continues until a formal proclamation of peace by a competent authority. No such proclamation had been issued by April 1946 (President Truman’s proclamation was issued in December 1946). While authorities from other jurisdictions suggest that for private contracts, the “end of war” may mean the cessation of hostilities if the parties so intended, no such intent was proven in this case. On the contrary, the short three-month repurchase period indicated the parties contemplated the return of complete normalcy, not merely the end of armed conflict. Therefore, the petitioners’ offer to repurchase was timely. Costs were awarded against respondent Narciso Mordeno.