G.R. No. L-5532. May 13, 1953
DIOSDADO PIÑON, ET AL., PLAINTIFFS AND APPELLEES, VS. RAMON H. YANGA, DEFENDANT AND APPELLANT.
MONTEMAYOR, J.:
DIOSDADO PIÑON AND ROSARIO TIANA, in the sum of P1,500.00, payable
within one (1) year. The loan was to bear interest at 12% a year and
was secured by a mortgage on a piece of land with a house in Jolo. The
parties agreed that Yanga was to pay the sum of P300.00 as attorney’s
fees in case an action in court was taken to collect the debt. Upon his
failure to pay the indebtedness the creditors brought a court action
against Yanga in October, 1940. During the hearing in March, 1941, the
parties submitted an agreed statement of facts, Yanga acknowledging his
indebtedness of P1,500.00; in return his creditors reduced the rate of
interest from 12% to 6%, and condoned all interests due for the last two
years, 1938 to 1940, at the same time renouncing their right to the
P300.00 as attorney’s fees. On the basis of this agreement, the Court
of First Instance of Jolo rendered judgment in favor of the plaintiffs,
sentencing the defendant to pay P1,500.00 with interest at 6% per annum
from the date of the filing of the complaint. Thereafter, Yanga paid
the interest due and requested plaintiffs to suspend the execution of
the judgment as to the amount of the debt which request was granted.
Then the war came and it seems that nothing was done either on the part
of the plaintiffs to collect or on the part of the defendant to pay.
However, in June, 1944, the Japanese Navy paid Yanga for a
parcel of land belonging to him which was converted into an air strip or
landing field. Naturally, payment was made in Japanese Military notes.
On June 28th of that year, accompanied by his son Johnny, Yange went
to his creditors Diosdado and Rosario and offered to pay his debt at
P1,500.00 including interest, in said military notes. The couple
rejected the offer, saying that the notes had very much depreciated in
value, but according to them they told him that if he insisted in paying
them in that kind of money and so that he would not notify the Japanese
authorities, they would accept payment but at the ratio of 18 centavos
Philippine currency to P1.00 of Japanese military notes, which was the
ratio then obtaining in Jolo. Yanga answered he would think it over and
return the following day. The next day he told them that he was not
disposed to make the payment at the ratio imposed by them.. After some
talk Diosdado and Rosario, according to them, to avoid any trouble with
the Japanese authorities, porposed to accept payment if it was three
times the amount of the debt. Yanga again said that he would take the
proposition under advisement and would return the following day. The
day following, Yanga told his creditors that he was not agreeable to
their proposition, and that all that he was willing to do was to pay 1-½
times the original debt including interest, otherwise, he would be
constrained to advise the Japanese Navy people that the money with which
they paid for his land did not have much value. The couple accepted
payment rather reluctantly, according to them, under intimidation
because of their fear of being reported to the Japanese Navy (Humbo) and
the Kempeitai, and they executed a deed of cancellation of the
mortgage. The amount actually paid to them was P1,797.50 representing
the debt plus interest and the additional amount of P898.50 which is 50%
of the entire debt plus interest or a total of P2,695.00, all in
Japanese military notes.
After Liberation, in May 1945, Diosdado and Rosario tried to
get from Yanga the deed of cancellation executed by them, offering as a
consideration an amount in Japanese military notes more than what he had
given or paid them in June, 1944. Upon his refusal, the couple in July
of that year filed the present action to annul said deed of
cancellation on the ground that it was executed under intimidation and
duress, to compel Yanga to deliver to the Register of Deeds the
certificate of title of the land mortgaged and to sentence the defendant
to pay them the sum of P2,021.06 in Philippine currency which is the
balance owed by him on June 30, 1944, with interest at the legal rate
from that date and to pay the costs, at the same time, depositing in
Court P2,695.50 in Japanese military notes.
Yanga in his answer made a general denial and because he was
unable to get the services of an attorney at the time, because none were
available, attended the hearing without the benefit of counsel and did
not even present evidence to counteract that submitted by plaintiffs.
After hearing, the court thru Judge P. Pecson, dismissed the case for
lack of merit, holding that the payment made by Yanga in June, 1944,
with Japanese military notes which were legal tender was valid, at the
same time stating that it was not impressed by the claim of the
plaintiffs of having been threatened or intimidated into accepting the
payment. However, upon motion for reconsideration by the plaintiffs
Judge P. Villalobos who was then acting in that court, in an order dated
January 6, 1947, reversed the decision of Judge Pecson, declared the
cancellation of the mortgage to be null and void and ordered the
defendant to pay the balance of his original debt in Philippine
currency. Yanga appealed from that order to the Court of Appeals, but
that Tribunal in a resolution certified the appeal to this Court on the
ground that only a question of law was involved, namely, whether payment
of a pre-war debt made during the Japanese occupation in Japanese
military notes was valid or not.
In justice to Judge Villalobos we may state that when he
rendered his decision or order reversing the judgment of Judge Pecson
and ruled that payment of a pre-war debt in the depreciated Japanese
military notes was invalid, our decision in the case of Haw Pia vs.
China Banking Corporation had not yet been promulgated. In the case of
La Orden de Padres Benedictinos de Filipinas vs. Philippine
Trust Co., G.R. No. L-2020, December 29, 1949, we said:
“In view of the decision of this Court in the case of Haw
Pia vs. China Banking Corporation, G.R. No. L-554 (45 Off. Gaz.,
No. 9, Supp. Sept. 1949, p. 229) in which it was ruled that payments
made with Japanese war notes during the occupation of obligations
contracted before the war, to the creditors or his legal
representatives, and accepted by them, are valid and release the said
obligations, there no longer is any doubt as to the validity of similar
payments.”
In the case of Larraga v. Bañez, 47 O.G. p. 696, we held valid the
payment of a debt in Japanese military notes and the consequent
cancellation of the mortgage executed to guarantee its payment
notwithstanding the reluctance of the mortgagor to accept payment.
It is, therefore, clear that the payment made by Yanga of his
debt in military notes in June, 1944, extinguished his obligation. Like
Judge Pecson who presided over the trial court we are not impressed by
the claim of the plaintiffs-appellees that they accepted payment and
executed the deed of cancellation of the mortgage because of
intimidation and duress. In the first place, the debt was then payable
and Yanga had every right to extinguish his obligation by payment in
Japanese military notes which we have repeatedly held to be legal tender
and sufficient to pay a debt. There might have been a little pressure
to make them accept payment but not enough to constitute intimidation or
duress. It will be recalled that on two successive days
plaintiffs-appellees flatly refused to accept payment in the depreciated
Japanese military notes and yet Yanga did not report their refusal to
the Japanese military notes and yet Yanga did not report their refusal
to the Japanese authorities. On the third day far from insisting in
making payment in the exact amount of his debt, he agreed to pay and in
fact paid one and a half (1-½) times said amount and intimated that if
they did not accept he would report the matter to the Japanese Navy
people not exactly to have them punish his creditors but rather to call
the attention of the Japanese Navy purchasers that the money with which
they bought his land apparently did not have much value and was not
acceptable to his creditors. It is possible that his intention was to
have said Japanese Navy authorities pay him in currency which was
accepted everywhere and in the open market.
In view of the foregoing, the order appealed from is hereby
reversed and the decision of Judge Pecson dismissing the complaint is
hereby affirmed. No pronouncement as to costs.
Paras, C. J., Feria, Pablo, Bengzon, Reyes, Jugo, and Bautista
Angelo, JJ., concur.
Padilla and Labrador, JJ., no part.
Tuason, J., reserves his vote.