Private respondent and two others executed a promissory note in favor of petitioner payable in Philippine currency without interest as well as stipulations in case of non-payment. Upon the failure of the debtors to comply with the terms of the note, petitioners filed a complaint for the recovery of the principal sum, plus interest and damages. Private respondent argued that the contract under consideration involved the payment of US dollars and was, therefore, illegal; and that under the in pari delicto rule, since both parties are guilty of violating the law, neither can recover.
Whether or not petitioners can still recover.
YES. Even if the intention of the parties was really to provide for payment of the obligation would be made in dollars, petitioners can still recover the dollar amount in its peso equivalent. What is prohibited by RA No. 529 is the payment of an obligation in dollars, meaning that a creditor cannot oblige the debtor to pay him in dollars, even if the loan were given in said currency. In such a case, the indemnity to be allowed should be expressed in Philippine currency on the bases of the current rate of exchange at the time of payment.