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2] Sum Certain in Money

Nicolas and Matias vs. Matias, et al., G.R. No. L-8093. October 29, 1955

 Nicolas lend to Matias P 30,000 in Japanese military notes payable within one year after the expiration of five
(5) years from June 29, 1944 (date of the instrument) with interest at the rate of 6% per annum.
 As a security, Matias mortgaged his four parcels of land situated in San Roque, Gapan, Province of Nueva
 On July 15, 1944, Matias offered to pay the debt, with interest for 5 years, but Nicolas rejected the offer.
 Whereupon, in August 1944, Matias deposited judicially the sum of P 39,000 – representing the principal
(P30,000), plus interest for five years, and instituted a civil case in the CFI of Nueva Ecija for the purpose of
compelling the mortgagees to accept said amount and to discharge the mortgage.
 CFI ruled in favor of Nicolas declaring the consignation invalid for failure of the mortgagors to give previous
notice thereof, and sentencing the mortgagors to pay the mortgagees the sum of P2,000—as the equivalent
in Philippine currency, pursuant to the Ballantyne schedule, of P30,000 in Japanese military notes—with
interest, at the legal rate, from June 29, 1944.
 On appeal, CA ruled in favor of Matias and held that the consignation is valid and the obligation guaranteed
by the mortgage is fully discharged. Hence, this petition.

ISSUE: Whether the sum of P30,000, lent by the mortgagees in Japanese war notes, should be paid by the
mortgagors in Philippine currency, peso for peso, or in accordance with the Ballantyne schedule.

 It should be paid in Philippine currency, peso for peso.
 The contracting parties are free to stipulate on the currency in which their respective obligations shall be
settled, and that whenever, pursuant to the terms of an agreement, an obligation assumed during the
Japanese occupation is not payable until after liberation of the Philippines, the parties to the agreement are
deemed to have intended that the amount stated in the contract be paid in such currency as may be legal
tender at the time when the obligation becomes due.
 The deed of mortgage in question provides that the obligation of the mortgagees shall be paid one year after
the expiration of five (5) years from June 29, 1944, which is the date of said instrument.
 In other words, the obligation is not payable until June 29, 1949.
 Indeed, in the decision of this Court in case G. R. No. L-1743, we reversed the decision of the Court of Appeals
sustaining the theory of the mortgagors, upon the ground that the latter were not entitled to accelerate, without
the consent of the mortgagees, the date of the maturity of the obligation; that the mortgagees could not be
compelled, and were under no obligation, to accept the tender of payment made on July 15, 1944 (except as
to the interest for one [1] year) despite the fact that said tender included the interest for five (5) years from
June 29, 1944; and that, consequently, the consignation effected simultaneously with the institution of civil
case No. 156 of the Court of First Instance of Nueva Ecija in August, 1944, was null and void, with the
exception abovementioned.
 In other words, said decision of this Court was implicitly held, and the doctrine laid down in the cases above
referred to, leave us no choice but to declare, as we do, that the obligation involved in the present case must
be satisfied, peso for peso, in Philippine currency.