G.R. No. L-1892; August 16, 1949
JACINTO NOTOR, petitioner, vs. RAMON MARTINEZ, as guardian of the incompetent, Pedro Martinez, and THE COURT OF APPEALS, respondents.

FACTS

On February 28, 1943, Pio Martinez, as guardian of Pedro Martinez, executed a promissory note for P2,000 in favor of Jacinto Notor, payable within two years. A mortgage contract executed on March 28, 1943, contained a clause stating it was “renewable at the discretion of the mortgagee.” The total indebtedness, including additional sums, reached P10,111 by January 29, 1945. Prior to this date, the guardian offered to pay the debt, but Notor refused to accept payment. Consequently, the guardian filed an action in the Court of First Instance of Batangas (before liberation) and deposited the amount with the court, praying that the debtor be declared to have fully paid. The trial court and the Court of Appeals ruled in favor of the guardian, declaring the debt fully paid from the time of consignation. Notor appealed to the Supreme Court via certiorari.

ISSUE

1. Whether there was a valid consignation of payment.
2. Whether the creditor had the absolute right to renew the mortgage at his discretion and refuse payment within the original two-year term.
3. Whether the courts of the Commonwealth and the Republic had jurisdiction over the case.

RULING

1. Yes, there was a valid consignation. The absence of a specific allegation of notice of consignation under Article 1177 of the Civil Code was cured by the parties’ stipulation that the only issue was whether the creditor had the right to renew the contract at his discretion.
2. No, the creditor did not have an absolute right to renew and refuse payment. The promissory note was payable within two years from February 28, 1943. The renewal clause was conditioned on the debtor’s promise to pay according to the note’s terms. The debtor had the right to pay within the original two-year term, making the pact allowing payment within that period meaningful. A renewal could only be considered if the note had matured and the debtor was unable to pay.
3. Yes, the courts had jurisdiction. Under the principle of postliminium in international law, judicial acts and proceedings of courts during the Japanese military occupation that were not of a political complexion remained valid after liberation. This case involved civil rights and was not political. The tender of payment in Japanese military notes was valid during the occupation, as the occupant had the power to issue military currency as legal tender. The Court recognized the validity of such payment, giving effect to an obligation valid when made.

The decision of the Court of Appeals was affirmed.

AI Generated by Armztrong.