De Asis v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioner Engracio de Asis leased a lot and house to respondent Pedro M. Martires. The contract stipulated a monthly rent and an option for Martires to purchase the property upon full payment. Martires paid the stipulated rents and subsequently paid P3,000, after which De Asis executed a deed of sale for the property. The deed was registered, and a transfer certificate of title was issued in Martires' name. Procedural History: Petitioner De Asis filed an action to annul the sale, claiming he was forced to accept the P3,000 payment and execute the deed of sale under duress. The Court of First Instance dismissed the complaint and counterclaim. The Court of Appeals affirmed the judgment. The Petition: Petitioner sought review of the Court of Appeals' judgment, contending that the appellate court erred in not deciding the validity of the consideration paid and the validity of the Japanese Military Government's proclamation regarding the circulation of Japanese money.
Issue(s)
Whether the Court of Appeals erred in not deciding the validity of the consideration paid by the respondent. Whether the Court of Appeals erred in not deciding the validity of the proclamation issued by the Japanese Military Government regarding the circulation of Japanese money. Whether the deed of sale was executed under threat, intimidation, or duress.
Ruling
The Supreme Court affirmed the judgment of the Court of Appeals, holding that the sale was valid. The Court found that the petitioner voluntarily accepted the payment in Japanese military notes, which were current and legally usable at the time, and that there was no threat, intimidation, or duress exerted upon him.
Ratio Decidendi
On the issue of threat, intimidation, or duress: The Court held that the question of whether threat, intimidation, or duress was exerted upon the petitioner is a question of fact. Both the trial court and the Court of Appeals found that no such threat, intimidation, or duress occurred. The evidence showed that the petitioner requested the respondent to settle his account and caused the deed of sale to be drawn up. Furthermore, the deed was executed in the presence of witnesses and acknowledged before a notary public, none of whom testified to corroborate the petitioner's claim of duress. The Court emphasized that the petitioner's voluntary request for settlement and acceptance of payment negated any claim of coercion. On the validity of the transaction and consideration: The Court ruled that the transaction of sale was made voluntarily and that the penal sanctions for refusing to accept Japanese notes had no bearing on the execution of the deed of sale. The petitioner, of his own free will, demanded payment and voluntarily received the Japanese notes tendered by the respondent. Since these notes were current and legally usable for acquiring property at the time, the contract could not be invalidated solely because the consideration was paid in such currency. The Court found no fraud, error, intimidation, or any cause that would vitiate the contract's validity. On the validity of the Japanese Military Government's proclamation and the consideration: The Court noted that these points were similar to those raised in another case (G.R. No. L-18620). Even if the Japanese military notes were not legal tender and the proclamation was unauthorized, the petitioner could not later question the payment. This is because he had requested the vendee to settle his account and voluntarily accepted the payment of the balance of the purchase price. The Court stated that having accepted the payment under these circumstances, the vendor could not be permitted to question it afterward. He could have chosen to donate the balance and still execute the deed of sale.
Main Doctrine
A contract cannot be invalidated solely because its consideration was paid in Japanese military notes, if such notes were current and legally usable for acquiring property at the time of payment, and if the vendor voluntarily accepted the payment without fraud, error, or intimidation.