Title
Cabrera vs. Lopez
Case
G.R. No. L-1554
Decision Date
Oct 31, 1949
Lopez sold land to Cabrera with a right to repurchase. After failing to redeem on time, Lopez claimed an extension and offered payment in Japanese military notes, which Cabrera rejected. The Supreme Court ruled that the redemption period was extended, but payment must be in genuine Philippine currency, not depreciated wartime notes.
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Case Digest (G.R. No. L-1554)

Facts:

  1. Sale with Pacto de Retro: On May 31, 1938, Pedro V. Lopez sold one-half (1/2) of four parcels of land to Julian Cabrera for P500, with a right to repurchase within five years (on or before May 31, 1943).
  2. Failure to Repurchase: Lopez failed to repurchase the land by the agreed deadline (May 31, 1943).
  3. Alleged Extension of Redemption Period: Lopez claimed that Cabrera verbally agreed to extend the redemption period until after the war. In 1944, Lopez attempted to repurchase the land by offering P500, but Cabrera refused to accept the payment.
  4. Consignation of Payment: Lopez deposited P500 in court through a money order, but Cabrera returned the money order, leading Lopez to consign the amount in court.
  5. Useful Expenses: Claro B. Cera, who cultivated the land, introduced improvements worth P1,000, half of which was to be reimbursed by the eventual owner of the land.
  6. Trial Court Decision: The lower court ruled in favor of Lopez, ordering Cabrera to allow the repurchase of the property upon payment of P500 in legal tender plus P500 for useful expenses.
  7. Appeal to Court of Appeals: Cabrera appealed, but the Court of Appeals affirmed the trial court’s decision, modifying it to allow payment in Japanese military notes deposited in 1944.
  8. Appeal to Supreme Court: Cabrera appealed to the Supreme Court, arguing that the redemption period was never extended and that Japanese military notes were not valid payment.

Issue:

  1. Extension of Redemption Period: Whether Cabrera verbally agreed to extend the redemption period until after the war.
  2. Validity of Payment: Whether the Japanese military notes deposited by Lopez in 1944 constituted valid payment for the repurchase price.
  3. Equity and Agreement of Parties: Whether the parties intended for the repurchase price to be paid in genuine Philippine currency after the war.
  4. Modification of Trial Court Decision: Whether the Court of Appeals erred in modifying the trial court’s decision regarding the form of payment.

Ruling:

The Supreme Court reversed the decision of the Court of Appeals and reinstated the trial court’s decision in its entirety. The Court held that:

  1. No Review of Factual Findings: The Supreme Court cannot review the factual findings of the Court of Appeals, which accepted the trial court’s findings that Cabrera extended the redemption period.
  2. Invalidity of Japanese Military Notes: The Japanese military notes deposited by Lopez in 1944 were not valid payment for the repurchase price. The parties intended for the payment to be made in genuine Philippine currency after the war.
  3. Equity and Intention of Parties: It would be unjust to compel Cabrera to accept worthless Japanese military notes after he extended the redemption period to avoid receiving such depreciated currency.
  4. Modification of Trial Court Decision: The Court of Appeals erred in modifying the trial court’s decision, which ordered Lopez to pay in legal tender (genuine Philippine currency) and not in Japanese military notes.

Ratio:

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