PACIFIC COMMERCIAL COMPANY, PLAINTIFF AND APPELLANT, VS. GO TIAN GEE & COMPANY, GO TIAN GREE, GO PEN, GO LUY, AND GO YU CHEE ALIAS GO TO WAN, DEFENDANTS AND APPELLES.

The pertinent facts in this case, according
to the agreed statement or stipulation of facts entered into and
submitted to the Court of First Instance of Manila by the parties for
decision are, as stated in the appellant’s brief in, the following:

“The plaintiff brought suit against the
defendants to collect the amounts due on the twelve drafts drawn by
said plaintiff on the defendant copartnership, Go Tian Gee &
Company, and which were duly accepted by the latter and have matured or
fallen due (Stipulation, pars. 2 and 4; Record on Appeal, pp. 28-29).
Each and everyone of the twelve drafts were drawn and payable in United
States dollars (Stipulation, par. 2; Record on Appeal, pp. 28-29).

“The twelve drafts, when drawn, were turned’ over by the plaintiff to
the National City Bank of New York for collection. However, the first
two drafts, No. 3611, for $1,664.30, United States currency, and No.
3640 for $1,499.33, United States currency, nave been turned over by
the National City Bank of New York to the China Banking Corporation for
collection at the request of defendant copartnership (Stipulation, par.
9; Record on Appeal, p. 30).

“The plaintiff has demanded of
defendant copartnership payment of the amounts due on each of the
twelve drafts in United States dollars, the currency called for in
them, but defendant copartnership has not paid despite such demands
(Stipulation, pars. 5 and 8; Record on Appeal, pp. 29, 30).

“During the month of June, 1943, the defendant copartnership paid to
the Bank of Taiwan, liquidator of the Japanese Military Government, the
value of the twelve drafts, the payment having been effected in
Japanese war notes, at the rate of two pesos Japanese war notes for
every United States dollar called for in the drafts mentioned in the
complaint (Stipulation, par. Q; Record on Appeal, pp. 29-30). The Bank
of Taiwan has not turned over to either the National City Bank of New
York or the China Banking Corporation or the plaintiff the United
States dollars called for in the-twelve drafts (Stipulation, par. 7;
Record on Appeal, p. 30).”

The lower court, in its decision rendered upon the facts agreed upon by the parties, held;

“The only question to be decided in this case is
whether or not the payment made by the plaintiff (defendant
copartnership) to the Taiwan Bank as liquidator appointed by the
Japanese Military Administration, has extinguished the defendant
copartnership’s obligation to the herein plaintiff.

“Plaintiff contends that such payment did not extinguish defendant’s
indebtedness to plaintiff on the ground that of the 12 drafts in this case there was confiscation of the amount as the liquidator bank did
not subsequently turn over to either the national City Bank of New
York, the China Banking Corporation, or the herein plaintiff. The Bank
of Taiwan, according to the plaintiff, was not authorized by any law,
regulation or measure promulgated by the Japanese Military Government
to confiscate, sequester or even administer private property as the
drafts above referred to, which are the exclusive private property of
the herein plaintiff.

“Plaintiff, in its memorandum,
explains that the doctrine in the Haw Pia case cannot be applied in the
case at bar because in the first case, there was sequestration of the
assets of the bank: while in the instance case there was confiscation.

“Lastly, plaintiff maintains that even if the 12 drafts were, not
confiscated but simply administered by the Bank of Taiwan and that it
was authorized so to do, still the payment made by the herein defendant
did not operate to relieve its obligation to the plaintiff, because the
drafts call for payment in United States dollars.

“The
question raised in this case has been definitely decided by the Supreme
Court in the case of Haw Pia versus China Banking Corporation and
subsequently in C, S, Hodges vs. Mariano Lacson promulgated by the Court of Appeals.

“In the light of the above-mentioned decisions., this Court is
persuaded to adopt the view that the payment of the twelve drafts made
by defendant, to the Taiwan Bank has wiped out the copartnership’s
obligation to the herein plaintiff.”

The plaintiff appealed from the decision of the court a quo, and in his brief makes nine assignments of error, which may be reduced to the first three, to wit:

I

“The trial court erred in
not holding that the Japanese Military Administration has not
promulgated any law, regulation or measure authorizing the Bank of
Taiwan as liquidator to confiscate, sequester or administer private
property so that the payment made by defendant copartnership to the
said Bank of Taiwan was null and void.

II

“The trial court erred in not holding that even if
the Japanese Military Administration had authority to direct the
liquidation of enemy banks, the twelve drafts in question could not and
should not have been included in the liquidation of such enemy banks,
as said drafts were not assets of said enemy banks but are private
property of plaintiff-appellant.

III

“The trial court erred in not holding that the
payment made by defendant copartnership in Japanese war-note pesos to
the Bank of Taiwan was null and void, because the twelve drafts were
drawn and payable in United States dollars.”

The questions raised in the above quoted assignments of error have
already been decided against the appellant’s contention in many among
them, those of Haw Pia vs. China Banking Corporation, G. R. No. L-554,^[1] April 9, 1948, and Allison & Gibbs et al., vs. Eulogio Rodriguez Sr. et al., G. R. No. L-1494,^[2]
August S, 1949. In said cases this Court has taken judicial notice and
applied the Japanese Military laws, ordinances, and regulations
defining who were nationals of hostile countries and designating the
Bank of Taiwan as liquidator of enemy banks and “Bureau of enemy
property.” As the Bank of Taiwan was authorized to sequestrate, not
only the assets of enemy banks, but also the property of enemy
individuals or corporations, whether the drafts in question remained
the property of the appellant, and the national City Bank of New York
and the China Banking Corporation were holding them only as trustees,
as claimed by the appellant, or the title to said drafts was vested in
said Banks which became appellant’s debtors of the value thereof, the
payment of said drafts made by the appellees to the Bank of Taiwan in
Japanese war notes ha»e extinguished that obligation. As to debts in
dollars

The above cited case of Gibbs vs.. Rodriguez, held the following:

“The plaintiffs’ contention that the debt of the
defendants in the present case was payable in dollars or its equivalent
in Philippine peso at the option of the plaintiffs is immaterial,
because both the Philippine pesos and American dollars at the rate of
.one dollar for two pesos -were then legal tender in the Philippines
according to Sec. 1612 of the Revised Administrative Code, and for that
reason the lower court sentenced the defendants to pay the plaintiffs
in dollars or its equivalent in Philippine pesos. Besides we have held
in the case of Haw Pia the following:

‘But be that as it
may,whatever might have been the intrinsic or extrinsic worth of the
Japanese war-notes which the Bank of Taiwan has received as full
satisfaction of the obligations of the appellee’s debtors to it, is as
of no consequence in the present ease, is we have already stated, the
Japanese war-notes were issued as legal tender at par with the
Philippine peso, and guaranteed by Japanese Government ‘which takes
full responsibility for their usage having the correct amount to back
them up (Proclamation of Jan. 3, 1942). Now that the outcome of the war
has turned against Japan, through their States or Government, payments
or compensation in Philippine peso or U. S. dollars as the case may be,
for the loss or damage, inflicted on the property by the emergency war
measure by the enemy. If Japan had won the war or were the victor, the
property or money of said banks sequestrated or impounded by her might
be retained by Japan and credited to the respective State of which the
owners of said banks were nationals, as a payment on account of the
sums payable by them as indemnity under the treaties, and the said
owners were to look for compensation in Philippine Pesos or U.S. dollars.
to their respective States. (Treaty of Versailles and other peace
treaties entered at the close of the first World War; VI Hackworth
Digest of International Law, p. 232.) And if they cannot get any of
sufficient compensation either from’ the enemy or from their States,
because of their insolvency or impossibility to pay, they have
naturally to suffer, as everybody else, the losses incident to all
wars.’ ”

In view of all the foregoing, the judgment appealed from is affirmed, with costs against the appellant. .

Paras, C.J., Pablo, Bengzon, Reyes, Jugo, and Bautista Angelo JJ., concur.

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^[1] 80 Phil., 604.

^[2] 84 Phil., 230.

 

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DISSENTING

PADILLA, J.,

I dissent for the same reasons given in my opinion in the case of
La Orden de Padres Benedictinos de Filipinas v. The Philippine Trust
Company, ^[*] G. R. No. L-2020, 47 Off. Gaz., 2894, 2897.

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DISSENTING

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^[*] 85 Phil., 217.

TUASON, J.,

I dissent on the grounds stated in my dissent in the Haw Pia and allied appellants.