[ G.R. No. L-2020. December 29, 1949 ] 85 Phil. 217
[ G.R. No. L-2020. December 29, 1949 ]
LA ORDEN DE PADRES BENEDICTINOS DE FILIPINAS, PETITIONER AND APPELLEE, VS. THE PHILIPPINE TRUST COMPANY, OPPOSITOR AND APPELLANT. D E C I S I O N
MONTEMAYOR, J.:
On July 30, 1947, petitioner La Orden de Padres Benedictinos de Filipinas, filed a petition in the Court of First Instance of Manila alleging that on September 24, 1934, it executed a Deed of Second Mortgage over parcels of land covered by certificates of title Nos. 22560 and 22539 of the City of Manila, in favor of oppositor and appellant, the Philippine Trust Company; that on June 19, 1944, the Philippine Trust Company received full payment of the loan according to a deed of cancellation issued on that date; that said deed of cancellation, however, contained some errors, first, that instead of mentioning September 24, 1934 as the date of the second mortgage, it states September 26, 1934 as the said date, and second, that instead of reciting that the second mortgage encumbered the lands covered by the two certificates of title Nos. 22539 and 22560, it only mentions certificate of title No. 22539. Because of these errors, the Register of Deeds of Manila refused to record and register said deed of cancellation unless the Court of First Instance issued an order to the effect that the deed of cancellation presented for registration refers to the deed of second mortgage of September 24, 1934, and that said deed of mortgage covered the parcels of land included in certificates of title Nos. 22539 and 22560.
To this petition the Philippine Trust Company filed a written opposition stating that it admits the execution of a second mortgage by petitioner in favor of the oppositor over lands covered by certificates of title Nos. 22560 and 22539 of Manila, although, as far as it could ascertain, the mortgage was originally executed on January 21, 1928; that the oppositor denies having received the full payment of the mortgage debt, the fact being that the alleged payment on or about June 19, 1944, was made and accepted under duress, and, consequently, is null and void; that there was no error or omission made in the deed of cancellation of the second mortgage but that it was the intention of the oppositor in executing the same to protect itself in the future because of such invalid payment, and finally, that the court had no jurisdiction to entertain or grant the petition.
Acting upon the two pleadings, the lower court issued an order on August 26, 1947, wherein it found the petition well founded and overruled the opposition, and directed the Register of Deeds to proceed with the registration of the deed of cancellation of the second mortgage dated June 19, 1944, cancelling at the same time the annotation of the second mortgage which appears at the back of certificates of title Nos. 22560 and 22539, making of record the pertinent portion of the directives of the Department of Justice, and without prejudice to the right of the oppositor to question in an ordinary civil action the validity of the said deed of cancellation of the second mortgage.
In support of his first assignment of error, appellant cites the case of Castillo vs. Ramos,[1] L-1031, decided by this Court in July, 1947 (45 Off. Gaz., 183), wherein it was held that the validity of payment with Japanese military notes during the war of a pre-war obligation in genuine Philippine currency, is such a transcendental question that it is beyond the special and limited jurisdiction of a Court of First Instance acting as a Court of Land Registration. However, in view of the decision of this Court in the case of Haw Pia vs. China Banking Corporation, L-554[2] (45 Off. Gaz. [Supp. No. 9], 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. As was said in the case of Castillo vs. Ramos, supra, if there is no substantial controversy between the parties about the cancellation of any encumbrance noted in any certificate of title as there can be no serious controversy between petitioner and oppositor in the present case because the payment of the loan and the execution of the corresponding deed of cancellation.of the second mortgage is not denied, then the lower court had jurisdiction to order the inscription of the deed of cancellation and the cancellation of the annotations on the back of the certificates of title.
We believe, however, that the lower court erred in ordering the Register of Deeds to make of record the pertinent portion of the directives of the Department of Justice. The court evidently referred to Circular No. 14, series of 1945 of the Department of Justice, directing Registers of Deeds to insert in all certificates of title involving cancellation of encumbrances effected during the Japanese occupation the following words “subject to such further dispositions as the Government may adopt regarding transactions consummated during the Japanese occupation.”
In the case of Lim vs. Register of Deeds of Rizal,[2] L-1739 (46 Off. Gaz., 3665), this Court has decided that the Department of Justice had no right to issue said Circular No, 14, series of 1945. Consequently, in the present case, the insertion of that directive in the record of the Register of Deeds is unwarranted and illegal.
The oppositor contends that with the order of the lower court, it would be rendered without any remedy, and would lose its rights in the premises because if to protect itself, it brought an action for the foreclosure of the second mortgage, the petitioner may interpose the defense of the debt moratorium. But the oppositor need not bring an action to foreclose the mortgage. It may file an ordinary suit to question the validity of the payment of the obligation on the alleged ground of duress. With such action, its rights in the premises if any, in our opinion would be sufficiently protected.
In view of the foregoing, with the modification of the order appealed from, by eliminating therefrom the portion ordering the insertion in the Register’s records, of the directive of the Department of Justice, said order is hereby affirmed, with costs.
Ozaeta, Paras, Pablo, and Reyes, JJ., concur.