LEGARDA VS MIAILHE
GR No. L-3435 April 28, 1951
FACTS:
On June 3, 1944, plaintiffs filed a complaint against the original defendant William
J.B. Burke, alleging defendants unjustified refusal to accept payment in discharge of
a mortgage indebtedness in his favor, and praying that the latter be order (1) to
receive the sum of P75,920.83; (2) to execute the corresponding deed of release of
mortgage, and; (3) to pay damages in the sum of P1,000. The Court then decided in
favor of plaintiff Legarda. After the war and the subsequent defeat of the Japanese
occupants, defendant filed a case in court claiming that plaintiff Clara de Legarda
violated her agreement with defendant, by forcing to deposit worthless Japanese
military notes when they originally agreed that the interest was to be condoned until
after the occupation and that payment was rendered either in Philippine or English
currency. Defendant was later substituted upon death by his heir Miailhe and the
Courts judged in defendants favor. Plaintiff now assails said decision.
ISSUE:
Is the tender of payment by plaintiff valid?
RULING:
On February 17, 1943, the only currency available was the Philippine currency, or
the Japanese Military notes, because all other currencies, including the English,
were outlawed by a proclamation issued by the Japanese Imperial Commander on
January 3, 1942. The right to election ceased to exist on the date of plaintiffs
payment because it had become legally impossible. And this is so because in
alternative obligations there is no right to choose undertakings that are impossible or
illegal. In other words, the obligation on the part of the debtor to pay the mortgage
indebtedness has since then ceased to be alternative. It appears therefore, that the
tender of payment in Japanese Military notes was a valid tender because it was the
only currency permissible at the time and its payment was tantamount to payment in
Philippine currency.
However, payment with the clerk of court did not have any legal effect because it
was made in certified check, and a check does not meet the requirements of legal
tender. Therefore, her consignation did not have the effect of relieving her from her
obligation of the defendant.