Asis v. Agdamag
REITERATIONFacts
The Antecedents: Plaintiff-appellant filed an action to recover P10,000 based on a promissory note executed by the defendants-appellees on August 15, 1944, payable on or before August 15, 1947, with 7% annual interest compounded semi-annually. The note also stipulated P1,000 for costs, attorney's fees, and collection expenses in case of non-payment at maturity. Procedural History: Defendants admitted the loan but invoked the Debt Moratorium and expressed willingness to pay an amount adjusted under the Ballantyne scale of values. The trial court rendered judgment against the defendants for P400, without interest and attorney's fees, applying the Ballantyne scale which valued 25 pesos in Japanese war notes as equivalent to one Philippine peso in August 1944. The Petition: Plaintiff-appellant appealed the trial court's decision, primarily contesting the application of the Ballantyne scale and seeking recovery of the full loan amount, interest, and attorney's fees.
Issue(s)
Whether the trial court correctly applied the Ballantyne scale of values to the loan. Whether the plaintiff-appellant is entitled to recover interest on the loan. Whether the plaintiff-appellant is entitled to recover stipulated attorney's fees.
Ruling
The appealed judgment is affirmed. The defendants-appellees are liable for P400 without interest and attorney's fees.
Ratio Decidendi
On the application of the Ballantyne Scale of Values: The trial court correctly applied the Ballantyne scale of values. The loan was stipulated to be payable on or before August 15, 1947, meaning it could be paid at any time during the Japanese military occupation. The defendants' failure to pay during that period does not justify requiring them to pay the full amount in Philippine currency at the time of payment. This Court has previously allowed recovery only under the Ballantyne scale for contracts stipulating for payments presumably in Japanese war notes, as seen in Hilado vs. De la Costa. Furthermore, in Soriano vs. Abalos, it was held that a petitioner is not liable to pay now in Philippine Currency the same value of pesos in Japanese war notes to which they were sentenced, but only the equivalent determined by the Ballantyne scale. The cases cited by the appellant, Roño vs. Gomez and Gomez vs. Tabia, are not applicable as the obligations therein were payable after liberation. The principle articulated by Mr. Justice Feria in his concurring opinion in Gomez vs. Tabia supports the appealed judgment, stating that if a debtor had the right to pay in Japanese war notes during the occupation, their failure to do so does not make them liable for the difference in currency values. On the recovery of interest: The claim for interest cannot be allowed. Given that the loan was payable during the Japanese occupation and the defendants invoked the Debt Moratorium, their failure to pay on time, in light of the moratorium, does not warrant the imposition of interest. The trial court's adoption of the value of Japanese war notes in August 1944, rather than closer to liberation when their value had significantly depreciated, was already in favor of the appellant, making the insistence on recovering interest untenable. On the recovery of attorney's fees: The claim for stipulated attorney's fees cannot be allowed. The appellees properly invoked the defense of moratorium. Although the trial court did not explicitly rule on the moratorium and no appeal was taken by the defendants, their willingness to pay the judgment amount at any time, considering the moratorium, means they cannot be considered to have failed to pay their indebtedness on time. Therefore, the condition for the payment of attorney's fees was not met.
Main Doctrine
The Ballantyne Scale of Values is applicable to loans contracted during the Japanese occupation, where payment could have been made in Japanese war notes, and failure to pay does not automatically render the debtor liable for the full amount in Philippine currency at the time of payment.