G.R. No. L-6386. March 29, 1955

Owing to the alleged refusal of the Court of Appeals to follow our applicable
decisions, due course was given to this petition for review on certiorari.

The facts and issues are simple: During the Japanese occupation plaintiff
Maria Josefa de la Paz Fabie delivered to defendant Narciso Mordeno a piece of
realty in Pasay, Rizal, by virtue of a written contract entitled “Agreement of
Sale with Right to Repurchase.” Therein the vendor reserved the right to
repurchase the property within the period of “three months from and after the
termination of the war at present raging * * * .” On April 8, 1946 Maria Josefa
offered to repay the money she had received on account of the sale, but
defendants refused to accept, claiming her time to repurchase had already
passed.

Wherefore a complaint was filed on May 24, 1947 in the Court of First
Instance of Rizal for the return of the premises upon payment of the amount
received by Josefa. Plaintiffs (husband and wife) based their demand upon two
propositions: first, the contract was a mortgage, and they were ready to redeem;
second, even if it were a pacto de retro sale, she had exercised her option
within the appointed time.

The Court of First Instance gave judgment for plaintiffs upholding their
right to repurchase, for the equivalent amount of P375.00, adjusted to the
Ballantyne scale. Defendant took the matter to the Court of Appeals; and a
division therein reversed the adjudication, expressing the opinion that the
compact was a true pacto de retro, the redemption period of which had already
expired when Josefa tendered payment in April 1946, inasmuch as the war had
terminated on February 27, 1945 when General McArthur turned over the Government
of these Islands to President Osmeña in Malacañan Palace, or at the latest, on
September 2, 1945, when the document of formal surrender was signed by Japanese
representatives on board the U. S. battleship “Missouri” at Tokyo Bay.

Requested to apply General vs. Venecia,^[1] 178 Phil., 780. 44 Off. Gaz., 4912 wherein
we ruled that in July 1947 a promissory note had not yet matured because it was
payable “within six months after peace has been declared.”

The Court of Appeals declined, making a distinction between “termination of
war” and “proclamation of peace,” and quoting authorities to the effect that war
terminates when hostilities cease.

The General case, involved a constant referring expressly to declaration of
peace; and it is not clearly erroneous to deny its application where parties to
another contract (as in this litigation) refer to termination of war, without
express reference to “peace”. However, Raquiza vs. Bradford,^[2] 178 Phil., 780. 41 Off. Gaz., No. 7, p.
262 which was cited in General vs. Venecia, clearly stated that in
September 13, 1945 the war had not yet terminated, because war, in the
legal sense continues until, and terminates at the time of, some
formal proclamation of peace by an authority competent to proclaim it.
That view was reaffirmed in Yamashita vs. Styer,^[3] 178 Phil., 780. 42 Off. Gaz., 664 and in
Untal vs. Chief of Staff, 47 Off. Gaz., 1147. Such holding is amply
sustained by additional authorities quoted in petitioners’ brief.

The Court of Appeals copied several decisions to sustain its view that, as to
private contracts, war ends “when hostilities cease.” These are some such
pronouncements:

“There is a line of decisions which hold that war does not end with the
cessation of hostilities but continues until peace treaties are signed and
ratified or peace is formally proclaimed. The existence of war and restoration
of peace, according to these authorities, are political questions determined by
the legislative and executive departments and such determination is conclusive
and binding on the courts. See Palmer vs. Pokorney, 217 Mich. 284, 186
N.W. 505; Meier vs. Schmidt, 150 Neb. 383, 24 N.W. 2d 400, 403, 404;
Industrial Commission of Ohio vs. Rotar 124 Ohio St. 418, 179 N.E. 135;
Waller vs. United States Ct. CI., 78 F. Supp. 816, and citations; Woods
vs. Cloyd W. Miller Co., 333 U.S. 138, 68 S. Ct. 421, 92 L. Ed. 596,
and citations; 56 Am. Jur., War, section 13; 67 C. J., War, sections
195-197.

However there is an impressive array of authority which supports the trial
court’s decision that, as commonly understood and especially where the
parties to a contract so intend, war ends when hostilities cease. See
Keiser vs. Hopkins, 6 Cal 2d 537, 58 p. 2d 1278, 1279; Supp. Hotel
Operating Co. vs. Donn. 158 Pla, 541, 29 So. 2d 441 (involving a lease
for the duration of the present World War); * * * (Darnell vs. Day 37
N.W. 2d 277).”

“Similarly, where private contracts are in terma limited to the ‘duration of
the war,’ the courts have generally held that the meaning of that phrase is to
be decided by determining the intent of the parties, * * *. However
there is some authority holding that, despite the clear intent of the parties to
the contrary, such a contract remain in force until peace is formally restored.
Palmer vs. Pokerny, supra.” (Italics is ours.)

It should be observed that the same authorities specifically qualify the rule
with “where the parties to a contract so intend,” or by “determining the intent
of the parties”.

Supposing therefore that the above enunciate the binding principle as to
contracts, it appears from the same, and the citations therein, that war
terminates when peace is formally proclaimed, except where the parties
have intended otherwise and meant mere cessation of hostilities—in
which case their intention must be given effect.

Indeed, an annotation (1947) in vol. 168 American Law Reports p. 173 et seq.
on the meaning of “end of war” in a contract reaches the conclusion, after
review of the cases, that the determination of the question depends upon the
intent of the parties.

Logically, an exception to the general rule must be proven by adequate
circumstances, facts, declarations etc. None is described in the decision now
under scrutiny, and none may be cited to support or require a declaration that
Maria Josef a de la Paz Fabie and Narciso Mordeno actually intended
mere cessation of hostilities as termination of the war.

On the contrary, the short period of three months indicates both parties
contemplated the return of complete normalcy, not merely the end of armed
conflict, for everybody knows that the months and years after such ending, are
periods of reconstruction and economic hardship.

Anyway, in this jurisdiction the language of a writing is to be interpreted
according to the legal meaning it bears in the place of its execution”
* * * (Rule 123 sec. 58) and as stated in the Raquiza, Yamashita and Untal
cases, the war terminates in a legal sense, upon official proclamation,
of peace.

Undoubtedly in April 1946 (when the offer to repurchase was made) no peace
treaty had been signed between the United States and Japan, and no formal
declaration of peace had been published (President Truman issued his
proclamation in December 1946). Therefore, in that month (April 1946)
plaintiffs’ period for repurchase had not yet passed.

Error was thus committed in the Court of Appeals on this major point, which
error constituted the basis of this petition for the reversal of its decision
and consequent confirmation of the judgment of the Court of First Instance. And
as the appellee Mordeno ascribed no other mistake to said inferior court (he
filed no brief and did not appear at the oral argument);

The decision under review is hereby reversed, and the judgment of the court
of First Instance affirmed, with costs against respondent Narciso Mordeno. So
ordered.

Pablo, Reyes, Jugo, Bautista Angelo, Labrador Concepcion, and
Reyes, J.B,L., JJ., concur.

Judgment reversed.

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^[1] 178 Phil., 780.

^[2] 75 Phil., 50.

^[3] 75 Phil., 563.