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90 SCRA 533 – – Mercantile Law – Negotiable Instruments Law – Negotiable Instruments in General –
Sum Certain in Money – RA 529

In 1969, Jesusa Afable and two others procured a loan from Nelia Ponce in the amount of $194,016.29.
In June 1969, Afable and her co-debtors executed a promissory note in favor of Ponce in the peso
equivalent of the loan amount which was P814,868.42. The promissory note went due and was left
unpaid despite demands from Ponce. This prompted Ponce to sue Afable et al. The trial court ruled in
favor of Ponce. The Court of Appeals initially affirmed the trial court but it later reversed its decisions as
it ruled that the promissory note under consideration was payable in US dollars, and, therefore pursuant
to Republic Act 529, the transaction was illegal with neither party entitled to recover under the in pari
delicto rule.

ISSUE: Whether or not Ponce may recover.

HELD: Yes. RA 529 provides that an agreement to pay in dollars is null and void and of no effect however
what the law specifically prohibits is payment in currency other than legal tender. It does not defeat a
creditor’s claim for payment, as it specifically provides that “every other domestic obligation … whether
or not any such provision as to payment is contained therein or made with respect thereto, shall be
discharged upon payment in any coin or currency which at the time of payment is legal tender for public
and private debts.” A contrary rule would allow a person to profit or enrich himself inequitably at
another’s expense.

On the face of the promissory note, it says that it is payable in Philippine currency – the equivalent of the
dollar amount loaned to Afable et al. It may likewise be pointed out that the Promissory Note contains
no provision “giving the obligee the right to require payment in a particular kind of currency other than
Philippine currency, ” which is what is specifically prohibited by RA No. 529. If there is any agreement to
pay an obligation in a currency other than Philippine legal tender, the same is null and void as contrary to
public policy, pursuant to Republic Act No. 529, and the most that could be demanded is to pay said
obligation in Philippine currency.