Facts:

The case involves Alejandro Andres and Herminia Pichay as petitioners against the Court of Appeals and respondents Rosario Mata along with her late husband Tomas Castro's heirs. On September 22, 1938, Tomas Castro sold Lot No. 9318 in Laoag, Ilocos Norte, to Alejandro and Herminia for P5,500, with a clause allowing him the right to redeem the property by paying back the sales price between four to six years after the sale. However, Tomas died in April 1944. Upon his death, his widow Rosario Mata attempted to repurchase the property by offering P5,500 in Japanese military notes, which the vendees Jacob and Herminia rejected, arguing that the notes had substantially depreciated in value compared to the original amount paid in 1938. Rosario then initiated a lawsuit to compel the vendees to reconvey the property, concurrently depositing P5,500 in court. The lower court ruled in favor of Rosario and her children, ordering the vendees to return the property in exchange for the

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Facts:

Transaction and Contract Formation

• On September 22, 1938, by means of a deed of sale, Tomas Castro conveyed Lot No. 9318, with a house, in Laoag, Ilocos Norte.
• The sales price was P5,500, and the deed contained a clause reserving the vendor’s right to redeem the property within a period—specifically, not less than four years and not more than six years after the lapse of the initial four-year period.
• The agreement further stipulated that the repurchase payment must be made in Philippine currency, as per the terms outlined in the contract.

Events Following the Sale

• By April 1944, Tomas Castro had already died.
• In the same month and year, his widow, Rosario Mata, offered the repurchase price of P5,500 in Japanese military notes to the vendees (Alejandro Andres and Herminia Pichay).
• The petitioners (vendees) rejected this tender on the ground that the Japanese military notes had greatly depreciated value compared to the legitimate payment they had made in 1938.

Judicial Proceedings and Actions

• In order to force a repurchase, Rosario Mata, together with her children, filed an action to compel the vendees to reconvey the property.
• Rosario also deposited and consigned in court the amount of P5,500 in support of her claim.
• The trial court rendered a judgment in favor of Rosario and her children, ordering the vendees to execute a reconveyance deed and to allow the release of the consigned funds.
• The decision was affirmed by the Court of Appeals.

Issue of Currency and Consignation

• The petitioners, now appealing by certiorari to the Supreme Court, challenged the legality of the tender using Japanese military notes.
• They argued that because these notes were not in Philippine currency—and due to their depreciated value—the tender was invalid.
• The petitioners further questioned the regularity and validity of the consignation made by the respondents.
• It was noted that prior to this case, no ruling existed regarding payment with Japanese war notes during the occupation, until the Haw Pia case established a precedent validating such payments under certain conditions.

Governing Circumstances on Legal Tender during the Occupation

• Although general legal tender rules were in force, the context of the Japanese occupation introduced the use of Japanese military notes, which had been considered legal tender in previous cases (e.g., Haw Pia, Notor vs. Martinez).
• There was an additional focus on the terms of the contract, which prescribed payment in Filipino currency, raising the question of whether the tender in Japanese military notes complied with the agreed mode of payment.

Issue:

Legality of the Tender

• Whether the tender of P5,500 in Japanese military notes, despite their depreciated value, constituted a valid tender of the repurchase price.
• Whether such tender complied with the contractual stipulation requiring payment in Philippine currency.

Effectiveness of the Consignation

• Whether the consignation of P5,500 in court, alongside the required procedural notifications, was sufficient to protect the respondents’ rights.
• Whether the petitioners, by rejecting the valid tender and consequent consignation, have thereby forfeited any claim against the respondents.

Application of Precedent and Statutory Provisions

• Whether the established precedents (Haw Pia and subsequent cases) validating the use of Japanese war notes during the occupation apply to the present case.
• Whether the legal principles regarding compulsory modes of payment, as provided for in the Civil Code (e.g., Articles 1170 and 1176), compel acceptance of the tender offered.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)