SECOND DIVISION

[G.R. No. L-1743. May 29, 1951.]

DOMINADOR NICOLAS and OLIMPIA MATIAS , petitioners, vs .

VICENTA MATIAS and AMADO CORNEJO, Jr. , respondents.

Jose R. Jacinto for petitioners.

Alejo Mabanag for respondents.

SYLLABUS

1. OBLIGATIONS WITH A TERM; TENDER OF PAYMENT AND CONSIGNATION

BEFORE PERIOD STIPULATED, NOT BINDING. — If the term is for the bene t of both
parties, the creditor may not demand payment, and the debtor cannot make a binding
tender and consignation of payment, before the period stipulated (8 Manresa, p. 163).
2. ID.; ID. — As a general rule, a creditor can no more be compelled to accept
payments on a contract before, by the terms thereof, they are due, than can the debtor
be compelled to make such payments before they are due.

DECISION

BENGZON , J : p

This is a review by certiorari of a decision of the Court of Appeals, which found

the following material facts briefly stated:
On June 29, 1944 Vicenta Matias, widow, and her son Amado Cornejo Jr.
executed in favor of Dominador Nicolas and his wife Olimpia Matias a promissory note
for P30,000, payable "within the sixth year" from that date with 6 per cent interest due
annually in advance. On the same day a mortgage of four parcel of land in Nueva Ecija
was notarized to secure repayment of the loan, which, by the way, was made in
Japanese military notes. On July 15, 1944 the debtors having come by su cient funds,
offered to liquidate the indebtedness with interest for ve years, but the creditors
refused to receive the money. Wherefore in August 1944 said debtors deposited the
amount of P39,000 in court (principal and interest) and led this action to compel the
defendants to accept the money and to discharge the mortgage.
The foremost defense was that the loan could not be repaid until the sixth year
from the date of the mortgage.
The Court of Appeals believed the term had been established for the bene t of
both the debtors and the creditors and held that inasmuch as the interest for the full
period of ve years had been offered to the creditors (P39,000) they had no right to
reject the payment. It declared the consignation valid and the debt totally discharged.
In commenting article 1127 and others of the Civil Code Manresa says that if the
term is for the bene t of both parties, the creditor may not demand payment and the
debtor cannot make a binding tender and consignation of payment before the period
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 stipulated (Manresa, Vol. 8. p. 163). According to American jurisprudence.
"10. Anticipating Due Date. — As a general rule, a creditor can no more be
compelled to accept payments on a contract before, by the terms thereof, they are due,
than can the debtor be compelled to make such payments before they are due. In other
words, a debtor has no right, without the consent of the creditor, to anticipate the
payment of a debt payable at a future day, and bearing interest; nor may a creditor be
compelled by statute to accept such a payment. Thus, in contracts for the sale of land
the vendor is not obliged to accept payment by the vendee before the time xed for
performance, the holder of a note need not accept a tender of payment before the note
is due, and it is held that a tender before maturity of the amount of principal and
interest which will be due at maturity on a mortgage is not su cient to discharge the
lien . . .." (40 Am. Jur., p. 718.)
The court a quo declined to apply the above principles reasoning out that the only
bene t accruing to the creditors from the period was the stipulated interest; and
inasmuch as interest for the whole period had been tendered they had no excuse for
declining to receive the money. We can not entirely agree. The creditors evidently
stipulated that repayment could not be made within ve years because they wanted to
derive some advantage from the change of currency which they foresaw or awaited.
The creditors wisely provided against repayment in Japanese notes that were then of
little value, making the calculation that after ve years the Japanese would not be here
and the said notes would have ceased to be lawful currency.
Anyway supposing that interest was the only bene t the creditors could expect
within the said period, acceleration of payment could not legally be made, because the
Usury Law speci cally prohibits payment of interest in advance for more than one year.
In other words the creditors could have validly argued: "Under the mortgage we would
be entitled to receive interest for ve years. But if you make payment now, we cannot
demand nor receive interest for more than one year without violating the Usury Law that
prohibits the charging in advance of interest for more than one year. 1 Therefore we
refuse to take the payment." The ruling in Sarmiento and Villaseñor vs. Javellana 43
Phil., 880 backed them up.
In Ilusorio vs. Busuego (84 Phil., 630) a debt of P35,000 contracted on May 3,
1943 was made payable after three years from that date. On April and July 1944 the
debtor tendered the principal plus interest for three years, and sued the creditor to
compel acceptance. We decline to require the creditor to take the money, and ignored
the claim that he had no right to refuse payment inasmuch as interest for the whole
period had been offered. This decision is a binding precedent, because here the debt
was expressly payable "within the sixth year" which means, "after five years."
Hence we must of necessity declare that the offer and consignation were not
valid, except for the satisfaction of the interest for the year 1944 which was then due.
The appealed decision will thus be modi ed. Although the defendants have asked for
judgment against the plaintiffs "in the sixth year from 1944" for the amount of the note
plus interest, we must decline to render such judgment now, rstly because at the time
the case was instituted the mortgage was not yet payable, and secondly because there
is the moratorium law. Anyway they will be at liberty to collect that mortgage plus
interest when the moratorium is lifted, and in that foreclosure proceedings the amount
of recovery shall be determined. Let judgment be entered accordingly. So ordered.
Feria, Tuason, Reyes, Jugo and Bautista Angelo, JJ., concur.

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 Separate Opinions
PARAS, C.J., with whom concurs PADILLA , J., dissenting :

I dissent for the reasons stated in any dissenting opinion in the case of Ilusorio
vs. Busuego cited in the opinion of the majority.

Footnotes

1. Usury Law secs. 5 and 6 as amended by Act No. 3998, Hodges vs. Salas, 36 Off. Gaz.,
898.

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