Fabros v. Agustin
REITERATIONFacts
The Antecedents: Esteban Fabros sought to redeem land purchased by Juan Tabliga. The land was originally owned by Tomas Arenas, and Fabros had a lien on it. The land was sold at public auction on April 6, 1906, to satisfy a judgment against Arenas and Fabros. Juan Tabliga purchased the land of Tomas Arenas for P120. Procedural History: The Court of First Instance of Tarlac granted the plaintiff's principal petition, allowing him to redeem the land upon payment to the defendant, Juan Tabliga, of the purchase price plus interest. The plaintiff appealed the incidental petition regarding damages and the rate of interest. The Petition: The plaintiff appealed on two grounds: (1) the denial of damages at P1,000 per year from March 23, 1907, and (2) being compelled to pay 6% interest in addition to 12% on the sum refused by the defendant.
Issue(s)
Whether the plaintiff is entitled to damages in the amount of P1,000 per year from March 23, 1907. Whether the plaintiff should be compelled to pay 6% interest per annum on the redemption price after his offer to redeem was refused.
Ruling
The judgment of the Court of First Instance is affirmed in so far as it directs the payment of legal interest at 12% per annum up to the time the plaintiff offered to redeem the land. It is reversed in so far as it provides that the plaintiff shall pay 6% per annum from the date of the said offer of redemption.
Ratio Decidendi
On the issue of damages: The Court held that the existence and amount of damages must be proved. The plaintiff's estimate of P1,000 per year was deemed neither just nor correct by the trial court for the small area of land, even with a fishery. The plaintiff's sole testimony was not satisfactory proof, and no further evidence was adduced. Therefore, it was improper to allow damages that were not satisfactorily proven. The plaintiff's argument that the defendant's failure to demur or deny facts in the complaint meant they were admitted was unfounded, as the defendants expressly denied all allegations in their answer. Section 126 of Act No. 190, cited by the plaintiff, pertains to situations where there is no answer or the defendants are in default, neither of which was the case here. On the issue of interest after the offer to redeem: The Court found this assignment of error to be well-founded. Section 465 of the Code of Civil Procedure provides for redemption by paying the purchase price with 1% per month interest up to the time of redemption. The trial court divided the period into two: before the offer to redeem (12% per annum) and after the offer (6% per annum). The Supreme Court, citing Martinez vs. Campbell, ruled that it is neither reasonable nor just to require the repurchaser to pay interest after an offer to repurchase and tender of the money has been made within the legal period. Furthermore, Article 1176 of the Civil Code states that if a creditor refuses a tender of payment without reason, the debtor is released from liability through judicial deposit (consignacion). The imposition of an additional 6% interest after the offer to redeem was deemed a penalty for delinquency where no delinquency existed, as the plaintiff had made a valid offer and tender.
Main Doctrine
When the right of redemption is exercised within the term fixed by law, and an offer is made of the amount due for the repurchase of the property, it is neither reasonable nor just that the repurchaser should pay interest on the redemption money after the time when he offered to repurchase and tendered the money therefor. If the creditor to whom the tender of payment has been made should refuse to accept it without reason, the debtor shall remain released from all liability by judicial deposit (consignacion) of the thing due.