SOFIA GUSTILO, GLORIA GUSTILO, ROMEO GUSTILO, FELISA GUSTILO AND JULIETA GUSTILO, PLAINTIFFS AND APPELLANTS, VS. CONCHITA JAGUNAP AND HER HUSBAND SEVERINO QUIDATO, DEFENDANTS AN…

On July 31, 1936, Conchita Jagunap, married
to Severino Quidato, mortgaged two parcels of land to Primitive.
Gustilo and Sofia Gustilo, husband and wife, to secure a debt of
P1,500. The mortgage was for a term of five years with interest at the
rate of 12 percent per year. Sometime in 1944, the mortgage having
matured,, the mortgagors tendered payment of the debt but the creditors
turned it down because it was in Japanese military notes. As a result
of this refusal, the mortgagors consigned in court the amount due, in
the same notes, pursuant to Art. 1176 of the Civil Code then in force.
On May 1, the mortgagees relented, and through their attorney-in-fact
withdrew from the clerk of court the amount consigned in full
satisfaction of the obligation, and on May 3 executed a document of
cancellation of the mortgage. This document was duly entered on the
same date in the records of the Register of Deeds and inscribed on the
corresponding certificate of title.

Primitivo Gustilo having died on November 20, his widow and
children commenced the present action against the mortgagors to collect
the same mortgage debt plus interest and attorney’s fees. The grounds
alleged for the action were. “That during the period of Japanese
occupation, the Japanese Military Police or ‘Kempetai’ compelled the inhabitants of Iloilo Province to accept the Japanese Military notes
under penalty of death for refusal to accept the same; that the
plaintiff Sofia Gustilo and Primotivo Gustilo acting under threat and
intimidation had no other alternative at that time, but much against
their will, to receive from the clerk of the Court of First Instance of Iloilo Province the amount of P1,500 in Japanese Military notes
deposited by the herein defendants In order to avoid the imminent
penalty of death on refusal to accept the depository amount.”

When the payment was tendered and consigned by the debtors and
accepted by the creditors, the same was due and demandable, and the
only currency then in circulation was the Japanese fiat money. Not to
pay their debt at that time in the only money then in circulation, the
plaintiffs would subject themselves to a lawsuit and possible loss of
their property. Certainly, they would have to continue paying a high
rate of interest.

Payments of pre-war debts in Japanese war notes have been uniformly
held valid and effective to discharge the obligations if the contract
did not specify the currency with which the debt was to be satisfied
and was silent as to the date of maturity. On the authority of these
decisions it was immaterial whether duress or coercion, general or
specific, was exerted on the creditors.

Viewed from the equity side of the case, the plaintiffs1 action is
also untenable. The money they received had value and could have been
employed in useful or profitable investments. Very probably it was.
They then are estopped from repudiating their action after they have
accepted and presumably made use of the money.

The judgment appealed from is affirmed with costs against the appellants.

Paras, C. J., Feria, Bengzon, Reyes, Jugo and Bautista Angelo, JJ., concur.
Pablo, J., concurs in the dispositive part.
Padilla, J., concurs in the result.