Ang Lam v. Peregrina
REITERATIONFacts
The Antecedents: On December 26, 1944, Eugenia Peregrina borrowed P100,000 from Ang Lam, payable within one year. Peregrina died on April 1, 1945. Ang Lam presented a claim against the estate for the full amount. Procedural History: The claim was granted judgment for P1,000, representing the equivalent value according to the Ballantyne Conversion Table. The Petition: Ang Lam appealed, contending that the debt should be paid in legal tender as of December 25, 1945, one year from the loan date, arguing that both parties subjected their rights to the contingency of currency value changes.
Issue(s)
Whether a loan of P100,000 contracted in Japanese military notes in 1944 and payable 'within one year' must be paid in its full nominal amount in Philippine pesos after liberation or be subject to the Ballantyne Conversion Table.
Ruling
The Supreme Court affirmed the judgment of the lower court, holding that the loan should be paid in the currency existing at the time of payment, valued at the time the loan was contracted, applying the Ballantyne Conversion Table.
Ratio Decidendi
On Issue 1: The Court distinguished this case from Gomez v. Tabia and Roño v. Gomez, noting that in those cases, the obligations were payable only 'after' a specific date that occurred after liberation, thereby making them payable in the currency existing at that time. Here, the loan was payable 'within one year,' meaning the debtor had the absolute right to pay the following day or any day before liberation in Japanese military notes. It is incorrect to assume a 'contingency' regarding currency changes without express evidence of such an intent; parties are bound by fluctuations in the value of the currency they contracted in, but are not presumed to be 'gambling' on a total change of currency. To allow the lender to receive the same nominal amount in restored currency would result in the lender being 'unduly enriched at the expense of the debtor,' as the value of the currency at the time of payment vastly exceeded its value at the time of the contract. The Court applied the fair and just rule that the debtor must pay the 'actual value or worth' of the loan at the time it was contracted. This follows the doctrine in Hilado v. De la Costa and Soriano v. Abalos, which align with the principles laid down by the Supreme Court of the United States in Thorington v. Smith.
Main Doctrine
In cases involving loans contracted during the Japanese occupation, where payment is due within one year from the date of the loan, the debtor is obligated to pay the actual value or worth of the loan at the time it was contracted, in the currency existing at the time of payment, to ensure fairness and prevent undue enrichment or loss.