GR L 2020; (December, 1949) (Digest)
G.R. No. L-2020. December 29, 1949.
LA ORDEN DE PADRES BENEDICTINOS DE FILIPINAS, petitioner-appellee, vs. THE PHILIPPINE TRUST COMPANY, oppositor-appellant.
FACTS
Petitioner La Orden de Padres Benedictinos de Filipinas filed a petition in the Court of First Instance of Manila seeking an order to direct the Register of Deeds to register a deed of cancellation of a second mortgage. The petitioner alleged it had executed a second mortgage in favor of oppositor Philippine Trust Company over parcels of land covered by Certificates of Title Nos. 22560 and 22539. It further alleged that on June 19, 1944, it fully paid the loan, and the oppositor executed a deed of cancellation. However, this deed contained errors: it mentioned the wrong date and only referred to Title No. 22539, omitting Title No. 22560. The Register of Deeds refused to register it without a court order. The oppositor admitted the mortgage but opposed the petition, claiming the payment during the Japanese occupation was made under duress and was null and void, and that the deed of cancellation was intentionally drafted that way for its protection. The lower court granted the petition and ordered the registration and cancellation of the mortgage annotations, subject to a directive from the Department of Justice regarding wartime transactions.
ISSUE
1. Whether the lower court, acting as a land registration court, had jurisdiction to order the registration of the deed of cancellation and the cancellation of the mortgage annotations despite the oppositor’s claim that the payment was invalid due to duress.
2. Whether the lower court correctly ordered the annotation of the Department of Justice directive on the certificates of title.
RULING
1. Yes, the lower court had jurisdiction. Following the precedent in Haw Pia vs. China Banking Corporation, payments made with Japanese war notes during the occupation for pre-war obligations, if accepted by the creditor, are valid and release the obligation. Since the fact of payment and the execution of the deed of cancellation were not denied, there was no substantial controversy over the cancellation of the encumbrance. The oppositor’s remedy is to file an ordinary civil action to question the validity of the payment on the ground of duress, which action is not barred by the lower court’s order.
2. No, the annotation of the Department of Justice directive was erroneous. In Lim vs. Register of Deeds of Rizal, the Supreme Court held that the Department of Justice had no authority to issue Circular No. 14, series of 1945, which required such annotations. Therefore, that portion of the lower court’s order was unwarranted and illegal.
The order of the lower court was affirmed with modification, by eliminating the portion directing the annotation of the Department of Justice directive.
AI Generated by Armztrong.