Ponce de Leon vs. Santiago Syjuco Inc 90 Phi 311 GR No. L-3316

Ponce de Leon vs. Santiago Syjuco Inc. 90 Phi 311 GR No. L-3316; 31 Oct 1951 FACTS: Jose Ponce de Leon obtained two loans from Santiago Syjugo Inc: P200,000 on May 5,1944 and P16,000 on July 31, 1944. Both were expressly agreed to be payable "within one yearfrom May 5, 1948...peso for peso in the coin or currency of the Phil. government", and were secured by parcels of land Ponce de Leon agreed to purchase from Phil. Nat'l. Bank. It was also agreed upon in the two deeds of mortgage that "if either party should attempt to annul or alter any of the stipulations of this deed or of the note which it secures, or do anything which has for its purpose or effect an alteration or annulment of any of said stipulations, he binds himself to indemnify the other for the losses and damages, which the parties hereby liquidate and fix at the amount of P200,000". On October 1944, because he was being hunted by the Japanese for being a member of the geurrilla forces, and was afraid of getting caught and killed, Ponce de Leon tendered full payment of his debt but Syjuco refused to accept the repeated tenders. He then deposited his payment with the Clerk of Court of First Intance of Manila, and filed a complaint consigning it to Syjuco. Lower court absolved Syjuco. ISSUES: 1. Whether or not the consignation made was valid. 2. Whether the amount of the loans should be reduced by applying the Ballantyne* schedule. 3. Whether or not the penal clause should be applied. RULING: 1. No. It is invalid thus Ponce de Leon is not relieved of his obligation. He failed to give previous notice to the person interested in the performance of the obligation. It also appears that the obligation was not yet due and demandable when the money was consigned. The failure of these two requirements is enough ground to render the consignation ineffective. And it cannot be contended that he is justified in accelerating the payment of the obligation because, under the law, in a monetary obligation contracted with a period, the presumption it is deemed

constituted in favor of both the creditor and the debtor unless from its tenor or from other circumstances it appears that the period has been established for the benefit of either one of them (Art. 1127, Civil Code). Here no such exception or circumstance exists. 2. No. When the creditor and the debtor have agreed on a term and on the currency, that stipulation should be given force and effect unless it appears contrary to law, moral or public order. Ponce de Leon agreed to pay peso for peso in the coin or currency of the Government that at the time of payment it is the legal tender for public and private debts. This stipulation is permitted by law because there is nothing immoral or improper in it. He has no other alternative than to pay the Syjuco peso for peso in the present currency as expressly agreed. 3. No. The attempt made to pay the obligation before it was due may be wrong, but it may be attributed to an honest belief that the term was not binding and not to a desire to modify the contract. This penal clause should be strictly construed. Note: *Ballantyne schedule fixes twenty-five pesos in Japanese war notes as the equivalent of the Philippine peso in August, 1944. (G.R. No. L-3709 October 25, 1951)