G.R. No. L-1949. October 31, 1949
REALTY INVESTMENTS, INC. AND PEOPLES BANK & TRUST COMPANY, PLAINTIFFS AND APPELLANTS, VS. MARIANO VILLANUEVA ET AL., DEFENDANTS. MARIA PASTRANA AND PRUDENCIO CASTRENCE, APPELLEES.
TUASON, J.:
of Rizal, Rizal City Branch, dismissing the above entitled case as to Maria D.
Pastrana and her husband, Prudencio Castrence, with costs, upon motion of these
defendants. The other defendants did not file any motion to dismiss.
The defendants are several, majority of whom bought lots from
the plaintiff, the rest being subsequent purchasers. The plaintiff’s causes of
action against them are separate and distinct from one another save for the fact
that the lots involved are in the same subdivision belonging to the plaintiff
and the issues are identical in their essential features. In this decision we
shall state only the facts as they relate to Maria D. Pastrana and her
husband.
According to the amended complaint, plaintiff Realty
Investments, Inc. is the registered owner of the Valhalla Gardens Subdivision
situated in Rizal City and mortgaged to the Peoples Bank & Trust Company. On
May 8, 1941, Maria D. Pastrana bought from the plaintiff one let known as
262-VV, with a house of strong materials erected thereon, for P7,200, and paid
P700 on account of the purchase price upon the execution of the deed of sale.
The deed provided that the purchaser should pay to the vendor at its principal
office in Manila the balance of P6,500, together with interest thereon at 10 per
cent per annum, a monthly installment of not less than P85.93, beginning with
the 31st of that month until she should have completed payment of the purchase
price. It was further provided, among other conditions, that should the
purchaser fail to make any of the payments due under the contract within 30 days
after due date, all the unpaid balances would automatically become due and
demandable in their entirety and the owner could, at its option, “either
(a) consider this contract as rescinded, in which case the owner shall be
at liberty to dispose of the property to any other person in the same manner as
if this contract had never been made, and all sums of money paid hereunder shall
be considered and treated as rents for use of the said property, the purchaser
hereby waiving all right to ask for or demand the return thereof and agreeing to
peaceably vacate the said property, or (b) repossess and sell the
property at public or private sale and recover the balance of the purchase price
and other amounts due after applying thereto the proceeds of such sale, together
with reasonable attorney’s fees.”
Defendant Maria D. Pastrana had paid eight installments
totalling P687.44, (of which P426.10 was applied to interest and P261.34 to
principal, leaving a balance on her contract of the sum of P6,238.14), when the
war between the United States and Japan broke out. On account of the war
payments were interrupted, the plaintiff’s office having been closed and its
officers, being American citizens, interned.
In 1944, Maria D. Pastrana paid to the Enemy Property
Custodian, Japanese Imperial Army in the Philippines, the remaining unpaid
installments, after which, on the 21st of October of that year, the Register of
Deeds of then Greater Manila, defendant Mariano Villanueva, cancelled the
plaintiff’s title with respect to lot 262-VV and issued to this defendant
Transfer Certificate of Title No. 75513.
The complaint, after setting forth the above facts, and others
not essential for the determination of this appeal, prays the Court to declare
as due and payable on account of the purchase price the sum of P6,238.14; to
declare null and void the purported sale executed by the Japanese Military
authorities; to declare that plaintiff is the legal owner of lot 262-VV; and to
order the Register of Deeds to reinstate plaintiff’s title to said lot, “or in
the alternative, order payment to the Realty Investments, Inc. * * * by
defendant Maria D. Pastrana of the sum of P6,238.14 for lot 262-VV with the
stipulated interest from April 1, 1945.” It is a lso prayed that in the event of
default in such payment, plaintiff Realty Investments, Inc. be adjudged entitled
to the restoration of the premises as well as to reasonable rentals for the
period during which defendants were in possession thereof.
The motion to dismiss is premised on the moratorium proclaimed
in Executive Order No. 25 as amended by Executive Order No. 32. Judge Bienvenido
A. Tan in granting the motion relied on Luis General vs. Hon. Jose de Venecia,
78 Phil., 780, cited by the defendants in support of their motion.
In Ricardo Medina vs. Ambrosio Santos, 78 Phil., 464, it was
held that a case for the recovery of a truck with prayer for payment of its
value in case the truck was not returned, could proceed notwithstanding the
moratorium law. The Court observed that the indemnity sought was a subsidiary
liability and would not come into being unless and until decision was rendered
against the defendants for such payment. In Moya vs. Barton, 79 Phil., 14, the
Court said that when the cause of action was in part covered by the moratorium
and in part not, it was not unjust to render judgment for the payment of the
entire obligation with the understanding that execution with respect to the
amounts that full due before March 10, 1945, would be stayed. And in Alejo vs.
Gomez, L-1969, May 30, 1949[1], the Court
ruled that suit for unlawful detainer and rents in arrears was not affected by
the moratorium, the recovery of the unpaid rentals, it was said, being accessory
to the main action.
A close examination of plaintiffs’ allegations and prayer will
disclose that the primary object of the action is to obtain a determination of
the validity of the payments made by the defendants to the Japanese Alien
Property Custodian, and of the title issued in pursuance of those payments. The
case was improperly dismissed.
In the case at bar, the money judgment prayed for is not even
an accessory or subsidiary to the main action. It is an alternative remedy and
as such is contingent upon the defendants’ unwillingness or inability to permit
the cancellation of the title issued to them and to surrender the land. Whereas
in an unlawful detainer suit, the defendant has no escape from the payment of
the back rentals if he loses, the payment of money in the instant case rests on
defendants’ own choice between the two remedies demanded by the plaintiffs.
The case of De Venecia vs. General, ante, is easily
distinguishable from this, in that the former was an action on a promissory note
stripped of all other objectives, principal, accessory, subsidiary or
alternative. Maao Sugar Central Co. vs. Conrado Barrios, 79 Phil., 666, is also
unavailing to the defendants. That action, like General vs. De Venecia, had for
its sole object the enforcement of a monetary obligation.
As a final word, let it be noted that the moratorium orders
were conceived exclusively for the benefit of debtors in the strict sense of the
term; i.e. for the suspension of payments in money during the time of
financial distress occasioned by the late war. They were not intended to suspend
other rights of action. And, as moratorium is in derogation of the protection
against the impairment of the obligations ob contract and other constitutional
guarantees, justified only as an emergency measure, Executive Orders Nos. 25 and
32 are rigidly to be confined to cases which embrace only matters falling within
the scope of their express purpose.
The appealed order is reversed and the respondent Judge is
ordered to proceed with the trial of the case on the merits, with costs of this
appeal against the appellees.
Moran, C.J., Ozaeta, Paras, Bengzon, Padilla, Reyes,
and Torres, JJ., concur.
[1] 83 Phil., p. 969.