Generosa v. Nardo
REITERATIONFacts
The Antecedents: On August 3, 1944, respondent Vicente Nardo executed a deed of conditional sale of unregistered land in favor of Juan Generosa for P1,500.00 in Japanese military notes, redeemable within ten (10) years from said date, but only from the beginning of the eighth year to the tenth year. Nardo received additional sums from Generosa, aggregating P2,000.00 in Japanese military notes and later P240.00 in genuine Philippine currency. In 1952, Nardo tendered P350.00, claiming it was the equivalent under the Ballantyne Scale of Values, but the tender was rejected by Generosa's widow, who insisted on payment on a peso-to-peso basis in Philippine currency. Procedural History: Nardo filed an action to compel acceptance of the tender and execution of a deed of conveyance. The lower court ordered Mrs. Generosa to accept P346.89 and execute the deed. This decision was affirmed by the Court of Appeals. The Petition: Petitioner Teodora Villalon Vda. de Generosa sought review by certiorari of the Court of Appeals' decision.
Issue(s)
Whether the Ballantyne Scale of Values is applicable to the redemption price. Whether the redemption price should be paid on a peso-to-peso basis in Philippine currency.
Ruling
The decisions of the Court of Appeals and the Court of First Instance were reversed. It was declared that upon payment of P3,740.00 in Philippine currency, Mrs. Generosa shall execute the corresponding deed of reconveyance in favor of Nardo.
Ratio Decidendi
On the applicability of the Ballantyne Scale of Values: The Supreme Court reiterated its consistent ruling that the Ballantyne Scale of Values applies exclusively to obligations that were payable during the period of Japanese occupation. In this case, the contract expressly stipulated that redemption could only be made after the lapse of seven (7) years from August 3, 1944, meaning redemption was only possible from August 3, 1951, onwards. This period falls outside the Japanese occupation. Therefore, the Ballantyne Scale of Values is not applicable to the present transaction. The Court cited previous rulings such as Roño vs. Gomez and Gomes vs. Tabia to support this principle. The express stipulation on the redemption period is determinative of the applicability of the Ballantyne Scale. On the basis of payment for redemption: Since the Ballantyne Scale of Values is inapplicable, the obligation must be settled on a peso-to-peso basis. The total amount received by Nardo in Japanese military notes was P3,500.00, and P240.00 in genuine Philippine currency. Consequently, the redemption price, to be paid in Philippine currency on a peso-to-peso basis, amounts to P3,740.00. The Court emphasized that when an obligation is not payable during the occupation, the peso-to-peso equivalence in legitimate currency is the governing principle. The respondent's attempt to use the Ballantyne Scale to reduce the redemption price was therefore unfounded.
Main Doctrine
The Ballantyne Scale of Values applies only when the obligation is payable during the Japanese occupation; otherwise, payment shall be due on the peso-to-peso basis.