G.R. No. L-4436. January 28, 1955

Plaintiffs Soledad Osorio de Fernandez and Vicente Fernandez filed this
action in the Court of First Instance of Rizal (Civil Case No. 4), for the
annulment of a deed of sale of a parcel of land located in Navotas, Rizal,
together with the improvements thereon, executed by plaintiff Soledad Osorio de
Fernandez in favor of the Osaka Boeki Kaisha, Inc., Japanese corporation, on
December 29, 1942, on the ground of duress and intimidation.

After her claim to the property had been filed with and disallowed by the
Alien Property Custodian, as required by the Trading with the Enemy Act, the
case was heard in the Court of First Instance, where the Republic of the
Philippines was allowed to intervene. After due trial the Court rendered
judgment setting aside the conveyance as prayed for, and the defendant Alien
Property Administrator and the intervenor, Republic of the Philippines, duly
appealed to this Court. Subsequently, the Attorney General of the United States
was substituted for the Alien Property Administrator, as successor to the latter
in his authority and powers.

It is unquestioned that the plaintiff-appellee Soledad Osorio de Fernandez
was the registered owner of the parcels of land known as lots 1, 2 and 3, plan
P-su-12189, in Navotas, Rizal, covered by Original Certificate of title No. 2541
of Rizal. Lot No. 2 was contiguous to the Varadero de Yangco in Navotas, which
the Japanese Navy took over and used, during the occupation, for repairing and
reconditioning their vessels. On December 29, 1942, said appellee executed two
documents concerning said lands: one (Exhibit A) conveying lot No. 2,
P-su-12189, and its improvements, in favor of the Osaka Boeki Kaisha, Inc., a
Japanese corporation, for a stated price of P70,555; and the other was an
affidavit (Exhibit 2) requesting cancellation of an annotated lease with option
to buy covering lot No. 1, P-su-12189, in favor of Da. Filomena De la Rua Vda.
de Villaescusa, on the ground that both lease and option had already expired.
Both documents appear acknowledged by plaintiff on the same day before notary
public, Leandro Sevilla, and bear consecutive numbers (40 and 41) in his
Notarial Register for 1942; and according to the official records, both
documents appear presented on the same day, January 5, 1943, by plaintiffs son,
Jose 0. Fernandez, to the Register of Deeds of Rizal. It also appears of record
that in view thereof, Original Certificate of Title No. 2541 was cancelled and
in its stead, the Register of Deeds issued three Transfer Certificates: No.
44631 (covering Lot 2) in the name of Osaka Boeki Kaisha, Inc. and Nos. 44632
(for Lot 1) and 44633 (for Lot 3) in the name of plaintiff Soledad Osorio de
Fernandez, whose son Jose signed the receipt for all three certificates.

Plaintiff-appellee’s husband, Vicente Fernandez and her son Jose 0.
Fernandez, testified in Court that one Mori, manager of the Osaka Boeki Kaisha,
Inc. had called at their house, and expressed desire to purchase the afore-
mentioned Lot No. 2, Psu-12189, because the Japanese navy needed it, but was
told it was not for sale; that said Mori returned one week later, on December
29, 1942, accompanied by a Japanese officer, and reiterated the offer to buy,
and by threats that the Navy could appropriate the land and that refusal to
cooperate would mean punishment or death, succeeded in coercing plaintiff into
signing the deed of sale and making her husband sign as a witness. It is claimed
that on this occasion the notary public was not present, nor was any
acknowledgment clause written below the signatures; and that the Japanese only
delivered P3,000 by way of advance payment, which plaintiff accepted lest their
refusal be interpreted as lack of confidence in the military notes.

The witnesses for the plaintiffs further testified that about a week later,
on January 5, 1943, Mori ordered the plaintiff’s son, Jose, to go with him to
Pasig to register the deed of sale; that the Register asked for the owner’s
duplicate of the Certificate of Title but Mori ordered him to make the record
and the Register complied; that Mori got all the documents, placed them in his
portfolio, and ordered Jose O. Fernandez to sign the receipt. Thereafter , both
returned to Manila and about January 22 Mori paid the balance of the price with
a check for P67,555, that the plaintiffs deposited in the Bank and from which
they made withdrawals of P500 a month during the rest of the occupation
period.

We are of the opinion that the Court below erred in giving preponderant
weight to this elaborate story. In the first place, the notary public Leandro
Sevilla, (who ratified the document) squarely contradicted it, and testified
that both the deed of sale of Lot No. 2 in favor of Osaka Boeki Kaisha, Inc.,
(Exhibit A) and the affidavit for the cancel- lation of the lease and option to
buy Lot No. 1 of Psu-12189, (Exhibit 2) were prepared by him at the instance of
the son of plaintiff, Jose O. Fernandez, who furnished the notary all the
requisite data; that both documents were signed by plaintiff while sitting in a
“dokar” (dog-cart) parked on the Escolta, and without Mori or her husband being
present; that after execution and signature, the deed of sale was brought to the
Osaka Boeki Kaisha offices in Echague Street where Mori signed on behalf of the
vendee Company, while plaintiff’s husband, Vicente Fernandez, and a Japanese
called Fuji signed as witnesses, and the downpayment of P3,000 was made. The
notary further affirmed that he started drafting a petition under Act 496,
section 44, to segregate the lot sold, but desisted upon advice of Antonio
Noblejas, clerk of the Judicial Land Title Division of the General Land
Registration Office (and now Commissioner heading the same) that the petition
was unnecessary; instead, the notary, accompanied by Jose O. Fernandez and Mr.
Noblejas, went to the office of the Register of Deeds of Rizal and secured the
registration of the Osaka deed and the affidavit Lot No. 1 of Certificate of
Title No. 2541 as well as the issuance of Three Transfer Certificates in lieu of
the original, delivered to and receipted for by Jose O. Fernandez, the son of
plaintiff-appellee.

The trial Court has overlooked that the testimony of the Notary Public, whose
neutrality has not been success- fully assailed, was strikingly supported by the
execution of the affidavit of cancellation of the option and lease of Lot No. 1,
(Exhibit 2) which had nothing to do with the alleged forced sale of Lot No. 2 to
Osaka Boeki Kaisha, Inc. and yet was executed, ratified and recorded
coetaneously with the questioned sale. Only Soledad Osorio Fernandez could have
an interest in this affidavit, and its simultaneous execution conclusively
rebuts her claim that she executed the sale (Exhibit A) under duress. A party
that is able to carry out an act redounding to its exclusive benefit
simultaneously with the assailed contract, can net successfully claim in the
latter case to have acted mechan- ically under the influence of violence or
intimidation destroying its free agency (Reyes vs. Zaballero, 89 Phil.,
39; Martinez vs. Hongkong & Shanghai Bank, 15 Phil,, 252; Vales
vs. Villa, 35 Phil., 769).

Moreover, the testimony for the plaintiff that, when she signed the deed, the
acknowledgment clause was mis- sing from it, finds no support from the
appearance of the deed itself, since it is improbable that the acknowledgment
clause could have been inserted without some horizontal or vertical displacement
becoming apparent, and Exhibits A and I show none. Also, the receipt Exhibit G,
issued by Mori for the Transfer Certificate covering Lot. No. 2, Psu-12189,
belies the testimony of Jose O. Fernandez that in Pasig Mori took with him all
the transfer certificates issued by the Register of Deeds. Said receipt
reads:

“Received from the Register of Deeds for the Province of Eizal (through Dona
Soledad Osorio de Fernandez) one Owner’s Dup- plicate Certificate of Transfer
Certificate of Title No. 44631 (forty-four thousand six hundred thirty-one) in
the name of the Osaka Boeki Kaisha Inc., and issued by the Office of
the Register of Deeds for the Province of Rizal.

Manila, January 22, 1955

Osaka Boeki Kaisha Inc.

By:

(Sgd.) M. Mori
(Exhibit G)

Even if we concede that the sale was executed through threat and intimidation
by Mori, the action for annulment was waived and the contract ratified by the
plaintiff’s action in depositing the check for the purchase price and
withdrawing part of the money up to a total of Pll,500 from time to time (Uy Soo
Lim vs. Tan Unchuan, 38 Phil., 552), specially since according to
plaintiff’s husband they had ample income of their own throughout the
occupation. The excuse offered, to wit, the fear that if the plaintiff or her
family did not make the withdrawals, the Japanese might think they did not like
the Japanese military scrip, might be acceptable to justify one or two
withdrawals, but does not explain why withdrawals were continued all the way
from January, 1943, to November, 1944.

As a final argument in annuling the deed of ,sale in question, the lower
Court held that the transaction being between the military occupant and an
inhabitant of the occupied territory, over a property that was a war necessity,
duress may be presumed and no evidence of a particular coercive act is
necessary. In numerous cases decided before this, particularly Philippine Trust
Co. vs. Luis Araneta, 83 Phil., 132, 46 Off. Gaz., 4254; People vs.
Bagalawis, 78 Phil., 174, 44 Off. Gaz., 2655; and People vs. Quilloy,
88 Phil., 53, this Court has already rejected the theory of “collective” or
“general” duress allegedly exercised by the Japanese military occupant over the
inhabitants of this country as a ground to invalidate acts that would otherwise
be valid and voluntary if done in times of peace.

The decision of the Court below having overlooked significant proof
supporting the case of appellants, its reversal is warranted. Our conclusion is
that plaintiffs-appellees Fernandez have failed to rebut the validity and
regularity of the deed of sale Exhibit A.

Wherefore, the decision appealed from is reversed, and the complaint is
dismissed, with costs against appellees.

Paras, C.J., Pablo, Bengzon, Montemayor, Reyes, A., Jugo, Bautista
Angelo, Labrador and Concepcion JJ., concur.

Judgment reversed.