G.R. No. L-8093 - Nicolas vs. Matias

Two motions for reconsideration were pending before the Court: one filed by the plaintiffs-appellants and another by the defendants-appellees.
The original decision of the Court was rendered on October 29, 1955, in a case involving a deed of mortgage and contract between the parties.

The defendants-appellees sought to modify the Court’s decision regarding the amount and basis of payment.
They asked that the obligation of the defendants in favor of the plaintiffs, as well as the interests thereon, be computed in conformity with the Ballantyne scale.
The motion invoked Articles 2253 and 1250 of the Civil Code of the Philippines, which provide:

Article 2253 – The applicability of the previous laws to acts or events that occurred under their regime, and the safeguarding of any vested or acquired right if its retroactive application would prejudice such right.
Article 1250 – The provision that the value of the currency at the time the obligation was established shall be the basis of payment in the event of an extraordinary inflation or deflation, unless there is an “agreement to the contrary.”

The term of the debt had been extended for ten (10) days by a letter from the plaintiffs dated June 29, 1951 (an alleged photostat copy attached as Annex A).
Pursuant to the deed of mortgage, the debt was payable one (1) year after the expiration of five (5) years from June 29, 1944, making the maturity date June 29, 1950.
This period effectively extended by an additional ninety (90) days (up to September 27, 1950) because of the mortgagors’ equity of redemption under Section 2, Rule 70, of the Rules of Court.
Plaintiffs’ right as mortgagees vested on September 27, 1950 (or, as argued, on September 27, 1960 when the new Civil Code was already in force) and was thus subject to the provisions of the new Civil Code.
The defendants maintained that since the defendants were not in default until after the plaintiffs made a valid demand (on July 24, 1951), the new Civil Code provisions should govern the computation of the obligation, including interest and the method of payment.

The plaintiffs-appellants, through a pleading titled “Petition for Additional Grant,” essentially filed a motion for reconsideration regarding additional attorney’s fees.
They prayed that the Court’s decision be amended to include an additional sum (originally P3,000.00) as attorney’s fees, pursuant to a stipulation in the contract which stated that if payment were delayed, an attorney’s fee would be due.
The contractual stipulation expressly mentioned:

That aside from the main debt, there would be a fixed amount (P3,000.00) paid as attorney’s fees.
The provision indicated this fee was to cover the expenses during litigation, encapsulating the understanding between the parties.

The deed of mortgage between the parties established that the defendants’ debt was to be paid one (1) year after the expiration of five (5) years from June 29, 1944.
Plaintiffs acquired their corresponding right on June 29, 1944, but the enforcement of the obligation was not demandable until a later prescribed period.
The period of three (3) months granted in Section 2, Rule 70, of the Rules of Court for the mortgagor did not postpone the vesting of the mortgagee’s right but rather confirmed its accrual.

Whether the extension of the maturity date (by the letter dated June 29, 1951) affects the vesting of the plaintiffs’ right under the deed of mortgage.

Does the fixed term in the contract merely determine the time at which performance may be demanded rather than the accrual of the creditor’s right?
Is the application of Articles 2253 and 1250 of the Civil Code proper, given that the right of the plaintiffs had already vested?

Whether the provisions of the newly enacted Civil Code should govern the case despite the prior contract being perfected under an earlier regime.

Does the change in applicable law (the new Civil Code) alter or impair the vested right of the plaintiffs?
Should retroactive application of the Civil Code be allowed when it may impair rights acquired under prior legislation?

Whether the plaintiffs-appellants are entitled to the additional attorney’s fees as stipulated in the contract and as sought in their motion, especially in light of the separate investment and litigation expenditures incurred.