Title
Aguilar vs. Miranda
Case
G.R. No. L-16510
Decision Date
Nov 29, 1961
A 1944 loan in Japanese military notes, secured by a mortgage, was ruled repayable in post-liberation Philippine currency peso for peso, as the repayment period extended beyond the occupation.
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Case Digest (G.R. No. L-16510)

Facts:

  1. Loan Agreement: On September 22, 1944, Valeriano Miranda borrowed P15,000.00 in Japanese military notes from Filemon Aguilar.
  2. Mortgage Clause: The loan was secured by a mortgage on a parcel of land in Las Piñas, Rizal. The mortgage contained a clause stating that the loan would become void if repaid after four years and four harvests, but if not repaid, the mortgage would remain enforceable.
  3. Registration: The mortgage was registered in the Office of the Register of Deeds of Rizal on October 2, 1944.
  4. Non-Payment: After the redemption period expired, Miranda failed to repay the loan despite repeated demands.
  5. Legal Action: Aguilar filed a case in the Court of First Instance of Rizal to recover the loan and foreclose the mortgage.
  6. Trial Court Decision: The trial court ordered Miranda to pay P15,000.00 with legal interest within 90 days, failing which the property would be sold.
  7. Appeal: Miranda appealed directly to the Supreme Court on questions of law, specifically whether the loan should be repaid in Japanese military notes or their equivalent under the Ballantyne schedule, or in Philippine currency peso for peso.

Issue:

The sole issue before the Supreme Court was whether the loan of P15,000.00 in Japanese military notes should be repaid:

  1. In the same currency or its equivalent based on the Ballantyne schedule, or
  2. In Philippine currency peso for peso, as ruled by the trial court.

Ruling:

The Supreme Court affirmed the trial court's decision, holding that the loan should be repaid in Philippine currency peso for peso. The Court ruled that since the repayment period extended beyond the Japanese occupation and into the post-liberation period, the obligation must be settled in the currency prevailing at the time of repayment, unless there was an express agreement to the contrary.

Ratio:

  1. General Rule for Loans During Japanese Occupation: If a monetary obligation was contracted during the Japanese occupation and payable within a period covering both the occupation and post-liberation, repayment should be made in Philippine currency under the Ballantyne scale.
  2. Exception for Post-Liberation Maturity: If the repayment period falls entirely after liberation, the obligation must be settled in the currency prevailing at the time of repayment, unless there is a clear agreement to the contrary.
  3. No Need for Express Stipulation: The Court emphasized that an express stipulation for repayment in the prevailing currency is unnecessary. The mere fact that the repayment period extends beyond liberation suffices to require payment in the currency then in effect.
  4. Presumption of Benefit to Both Parties: The Court rejected the argument that the repayment period was solely for the debtor's benefit, stating that such periods are presumed to benefit both creditor and debtor under the Civil Code.
  5. Precedent: The Court cited Gomez vs. Tabia and other cases to support its ruling that repayment in the prevailing currency is implied when the maturity date falls after liberation.

Dissent

Justice Padilla dissented, citing his opinion in Ponce de Leon vs. Santiago Syjuco, Inc., G.R. No. L-3316, October 31, 1951, though the specific reasons for his dissent were not detailed in this decision.


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