JULIAN CABRERA, PETITIONER, VS. PEDRO V. LOPEZ AND COURT OF APPEALS, RESPONDENTS.

On August 14, 1944, in the Court of First Instance of
Pangasinan, Pedro V. Lopez filed suit (civil case No. 589) to compel Julian
Cabrera to reconvey to him one-half (1/2) of four parcels of land described in
his complaint, which he had sold to said Cabrera on May 31, 1938, for the sum of
P500, with right to repurchase within a period of five years, claiming that
although he failed to effect the redemption within the five-year period, that is
to say, on or before May 31, 1943, nevertheless, Cabrera had, upon his (Lopez’)
request agreed to extend the period of redemption until after the war, and that
in pursuance of said agreement of extension, he had offered to redeem the land
sometime in 1944; that Cabrera evaded receipt of payment of the repurchase price
and so he (Lopez) sent the amount of P500 by money order, but Cabrera refused to
accept said amount and returned the money order to him and Lopez had to deposit
or consign in court the said amount of P500. Cabrera claims that he never
extended the period of redemption and that inasmuch as the plaintiff failed to
redeem the land on or before May 31, 1943, he (Cabrera) has become absolute
owner of 1/2 of the four parcels of land in question. After hearing, the lower
court rendered judgment on April 3, 1946, in favor of Lopez and ordered Cabrera
to allow the repurchase of the property involved upon payment by Lopez of P500
in legal tender plus P500 for useful expenses incurred on said property.

We are reproducing a portion of the decision of the lower court
which contains its findings of fact:

“Son hechos probados en esta causa que el demandante Pedro V.
Lopez entrego las cuatro parcelas de terreno descritas en su obmanda a Claro B.
Cera para su cultivo; que el mismo demandante vendio antes de la guerra, o sea,
en 31 de Mayo de 1938, al demandado Julian Cabrera la mitad de las citadas
cuatro parcelas de terreno por la suma de P500, con el pacto de poder reseataria
dentro de 5 años (Exhibit A); que el comprador Julian Cabrera entrego la mitad
que compro al mismo Claro B. Sera para su cultivo; que posteriormente, o sea el
15 de Septiembre de 1939, antes atin de la guerra el citado demandante vendio de
una manera absoluta la otra mitad al susodicho Claro B. Cera por la suma de P500
(Exhibit 2); que mucho antes de que expire el plazo del demandante para rescatar
la mitad vendida al demandado Julian Cabrera, jeste, Pedro V. Lopez y Claro B.
Cera convinieron en que este ultimo introduciria de su propio peculio varias
mejoras en los terrenos, la mitad de cuyo importe seria reembolsada por el que
de los dos, Pedro V. Lopez y Julian Cabrera, se quedarla dueno en definitiva de
la mitad vendida por el primero con pacto de retro al segundo; que Claro B. Cera
introdujo varias mejoras en los terrenos, construyo un pozo artesiano en ellos y
convirtio la mitad de la parcela grande en una pesqueria, por cuyas mejoras
gasto la suma de P1,000; que en Mayo de 1943, poco antes de que expire su plazo
para rescatar, estando el pals invadido por los Japoneses, el demandante Pedro
V. Lopez se acerco al demandado Julian Cabrera y le pidio que le extendiera su
plazo para rescatar y ya porque el vendedor era su vecino y pariente o ya porque
no le convenfa recibir dinero fiat, dicho Julian Cabrera condescendio;
que, en 12 de Octubre de 1943, el demandado reembolso a Claro B. Sera la suma de
P500, mitad de los gastos incurridos por las mejoras introducidas (Exhibits 4 y
4-A); que, el demandado, apremiado por sus hermaños, que se consideraban
condueños de e en los terrenos y poseedor de papeles de banco japoneses,
escribio el 12 de Julio de 1944 el demandado, pidiendole que acepte el Giro
Postal que le enviaba adjunto por la cantidad de P500 en rescate de la mitad
vendida de las referidas cuatro parcelas de terreno (Exhibits C, D, D-1, E y
E-1), pero esto, negandose a dar de rescatar dieha mitad, devolvio el Giro
Postal; que en 28 de Agosto de 1944, el demandante promovio la presente causa,
depositanao en la mlsma fecha en poder del Escribano la suma de P500 a
disposicion del demandado (folio 7 y Exhibit F).”

From the decision of the trial court, only Cabrera appealed to
the Court of Appeals which accepted the findings of fact of the trial court and
even reproduced in its decision the portion of the trial court’s decision copied
above. The Court of Appeals affirmed the judgment of the trial court with the
modification that the appellant will have to receive as repurchase price the sum
of P500 in Japanese military notes deposited in court in August, 1944. Cabrera
as petitioner has now brought the case here on appeal through certiorari.

The petitioner contends that he never extended the period of
redemption and that the Court of Appeals erred in finding that said period was
actually extended by verbal agreement. We cannot review the evidence in this
case; neither are we permitted to disturb the finding on this point of the Court
of Appeals which accepted the findings of fact of the trial court. In cases
appealed to this Court from the Court of Appeals, we pass upon and decide only
questions of law.

We agree with petitioner in his contention included in his
third assignment of error that the Court of Appeals erred in considering the
Japanese military notes deposited in court by Lopez as valid and sufficient
payment of the repurchase price agreed upon by the parties. Our reason however,
is not as claimed by petitioner that said Military Notes were not legal tender
in 1944 but because, we believe that what the parties had in mind in the
extension of the period of redemption was for the petitioner to receive the
repurchase price in genuine Philippine currency to be paid after the war. This
seems to be the main, if not the only consideration, for the extension of the
period of redemption. This may be found In the penultimate paragraph of the
trial court’s decision, the pertinent portion of which we are reproducing
below:

“No se puede obligar al demandado que reciba como rescate de la
mitad de los terrenos el dinero fiat que el demandante deposito en poder
del Escribano; * * * y segundo, porque, si cuando no tenia el demandante dinero,
fiat o genuino, obtuvo del demandado que lo rescatase despues de la
guerra, no es justo que cuando ya tuvo dinero fiat y sin terminar aun la
guerra, pudiese obligar al demandado a recibir dicho dinero.”

It is also indicated and included in the findings and
considerations contained in a paragraph of the decision of the Court of Appeals
which reads as follows:

“Hacia mediados del año 1943, el dinero genuino Filipino ya no
estaba a la par con la moneda de la ocupacion y, ademas, se sabe que durante la
ocupacion Japonesa eran muy contados los que querlan guardar dicha clase de
dinero ya porque su valor era menos o ya porque habia duda de si despues de la
guerra la misma podria tener algun valor. Por lo demas, es muy creible que el
apelante hubo de ampliar el plazo de retracto hasta despues de la guerra porque
ello es una manera indirecta de no aceptar o rechazar el dinero de la ocupacion
como pago.” (Page 5 of the decision of the Court of Appeals.)

If Cabrera extended the period of redemption just so he would
not be paid and compelled to accept depreciated Japanese military notes as
repurchase price, then it would clearly be unjust now to oblige him to accept
the military notes, now absolutely worthless, after he had granted the
extension.

Another reason for our holding that the Court of Appeals erred
in permitting the payment of the repurchase price of P500 with the Japanese
military notes consigned in court, is that in the decision of the Court of First
Instance of Pangasinan, respondent Lopez was ordered to pay this repurchase
price of P500 in legal tender in the year 1946, that is to say, in genuine
Philippine currency, in addition to the P500 in same currency to be paid for the
useful expenses on the property. Lopez did not appeal from that decision. He
would appear to have agreed to and been satisfied with it. It was therefore
error on the part of the Court of Appeals to have gone out of its way and to
have modified a portion of the decision not appealed from and not in issue in
the appeal. This, aside from the fact that the judgment of the trial court
ordering Lopez to pay the repurchase price of P500 not in Japanese military
notes but in genuine Philippine currency is the more equitable under the
circumstances, and in accord with the agreement and intention of the parties,
especially the consideration for the extension of the period of redemption.

This holding of ours render it unnecessary to pass upon the
second assignment of error. As to the fourth assignment of error, regarding
payment of costs, we agree with petitioner that he should not be made to pay
costs in hts appeal to the Court of Appeals.

In view of the foregoing, the decision of the Court of Appeals
is hereby reversed insofar as it modifies the decision of the trial court which
latter decision should be enforced in its entirety. No pronouncement as to costs
in both instances.

Moran, C.J., Ozaeta, Paras, Feria, Bengzon, Tuason, and
Torres, JJ., concur.

PADILLA, J.:

I concur in the result.