Rosario v. Sandico
REITERATIONFacts
1. The Antecedents: The underlying dispute concerns the possession of a parcel of land. Plaintiffs, Antonio del Rosario et al., sought to recover possession of a property held by defendant Carlos Sandico under an antichretic right, which originated from a contract entered into before the war. The Court of First Instance had previously ruled that the plaintiffs owned the land, subject to Sandico's antichretic right, and ordered the return of possession upon payment of P3,944.20 within ninety days. 2. Procedural History: The Court of Appeals affirmed the lower court's decision on July 8, 1944, reiterating the condition for the return of possession upon payment. When the plaintiffs attempted to pay the P3,944.20 to Sandico's attorney, he refused. Consequently, the plaintiffs deposited the amount with the court on October 19, 1944. Sandico opposed this, arguing the deposit was invalid as it was made by a third party and in Japanese war notes. The court, on October 5, 1945, accepted the deposit and ordered Sandico to surrender possession. Sandico appealed this resolution. 3. The Petition: The appellant, Carlos Sandico, raises two main issues on appeal. First, he contends that the P3,944.20 deposited in Japanese war notes is not a valid payment for the judgment, as the original contract and the Court of Appeals' decision were rendered before the widespread circulation and subsequent devaluation of these notes. Second, he argues that the deposit was not made in accordance with Articles 1176 and 1177 of the Civil Code, as it was a consignation by a third party (Ponciano Ong) and not a direct payment to the creditor.
Issue(s)
Whether the payment of P3,944.20 in Japanese war notes was valid to satisfy the judgment. Whether the deposit of the amount in court, made by a third party, was valid under Articles 1176 and 1177 of the Civil Code.
Ruling
The Supreme Court affirmed the appealed order, upholding the validity of the payment made in Japanese war notes and the deposit into court.
Ratio Decidendi
On the validity of payment in Japanese war notes: The Court held that since the judgment of the Court of Appeals was rendered during the Japanese occupation when Japanese war notes were legal tender, the payment made in such currency was valid. The Court cited its ruling in Soriano vs. Abalos and Haw Pia vs. China Banking Corporation, stating that the fact that the money used was Japanese war notes does not affect the validity of the payment. The Court clarified that Article 1170 of the Civil Code, regarding payment in the specie stipulated, does not apply when the agreement was to pay a sum of money generally, not a specific specie. Furthermore, even if Philippine currency was stipulated, it had disappeared from circulation by the time the judgment was to be satisfied, making payment in the then-legal tender (Japanese war notes) necessary and valid. The Court also noted that the Japanese Military Administration had declared these notes legal tender and warned against refusal to accept them. On the validity of the deposit (consignation): The Court distinguished between the tender of payment of a judgment and the tender of payment of a contractual debt. It held that Articles 1176 and 1177 of the Civil Code, governing consignation for contractual debts, were not applicable to the payment of a judgment. The Court cited American Jurisprudence, stating that if a judgment debtor tenders payment and it is refused, the court may direct the money to be paid into court, and upon such payment, order satisfaction of the judgment. The fact that the deposited money belonged to Ponciano Ong, who had purchased the rights of some of the judgment debtors, did not invalidate the payment, as a voluntary payment by one of several obligors can bar an action against the others for the same debt.
Main Doctrine
Payments made during the Japanese occupation with Japanese war notes, which were legal tender at the time, are valid and satisfy judgments rendered during that period, even if the original contract stipulated payment in Philippine currency, provided no specific specie was stipulated or if the original currency was no longer in circulation.