Soriano v. Abalos
REITERATIONFacts
The Antecedents: On March 17, 1938, respondents Juliana Abalos and Carolina Abalos sold a parcel of land to Felipe Maneclang and petitioner Modesto Soriano for P750, with a stipulation that the vendors could repurchase the property "at anytime they have the money." Felipe Maneclang later ceded his rights to Modesto Soriano. An offer to repurchase was made in December 1941 but could not be consummated due to the war. A subsequent offer to repurchase was made in May 1944, which Modesto Soriano rejected. The vendors then consigned the repurchase price of P750 with the court and filed a complaint for repurchase. It was later discovered that the property also belonged to the sisters of Juliana and Carolina, Mercedes and Encarnacion Abalos, who intervened in the case. Procedural History: The Court of First Instance of Pangasinan ordered Modesto Soriano to execute a deed of reconveyance in favor of Carolina Abalos, the heirs of Juliana Abalos, and the intervenors Mercedes and Encarnacion Abalos, upon receipt of the consigned P750. Modesto Soriano was also ordered to pay P3,200 as the value of the fruits of the land obtained in 1944. The Court of Appeals affirmed this judgment in toto. The Petition: Petitioner Modesto Soriano appealed to the Supreme Court, arguing that the right to repurchase had expired as the four-year period under Article 1508 of the Civil Code had passed, and that the damages awarded were erroneously based on the value of Japanese war notes.
Issue(s)
Whether the right to repurchase the property had expired. Whether the damages awarded should be based on the value of Japanese war notes.
Ruling
The judgment of the Court of Appeals was affirmed with a modification regarding the amount of damages. The petitioner was sentenced to pay P35.55 yearly as damages from May 1944 until the property is delivered, plus costs. If the consigned price was destroyed, the petitioner must bear the loss.
Ratio Decidendi
On the expiration of the right to repurchase: The Court held that the stipulation "at anytime they have the money" constitutes an indefinite period for repurchase. Under the second paragraph of Article 1508 of the Civil Code, such an indefinite period cannot exceed ten years from the date of the contract. Therefore, the period for repurchase did not expire until March 17, 1948, which was after the offer to repurchase was made in May 1944. The Court cited previous rulings in heirs of Jumero vs. Lizares, Bandong vs. Austria, and Gonzaga vs. Go to support this interpretation of indefinite repurchase periods being limited to ten years. On the damages awarded: The Court found the petitioner's contention regarding the damages well-taken. It ruled that the petitioner should not be liable to pay the same number of pesos in Philippine currency as was sentenced in Japanese war notes in December 1944. Instead, the liability should be based on the equivalent value determined by the Ballantine scale of values. Applying this scale, which indicated a 90:1 ratio for Japanese military notes to Philippine pesos in December 1944, the Court recalculated the damages. The original award of P3,200 was deemed excessive and was reduced to P35.55 yearly, to be paid from May 1944 until the property is delivered to the respondents.
Main Doctrine
A stipulation granting the right to repurchase a property sold under pacto de retro 'at any time' is considered an indefinite period, which, under Article 1508 of the Civil Code, cannot exceed ten years from the date of the contract. Damages awarded during the Japanese occupation must be adjusted to their present value using the Ballantine scale.