CO537-(1262-1649) — Page 245

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CO 537/1374

THE NATIONAL ARCHIVES

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CO 537/1374

THE NATIONAL ARCHIVES

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subject to copyright

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Please note that this copy is supplied subject to the National Archives' terms and conditions and that your use of it may be subject

-2-

The defendant company, during the period from the 12th to

30

the 30th of August, 1944, paid to the said Bank of Taiwan, as such

liquidator, the sum of $ 21,639,419.24 in Japanese Military currency,

Said Bank of

By

on account of its overdraft with the plaintiff bank,

Taiwan executed and delivered to the defendant company a deed of

cancellation (Exhibit "K") of the deed of mortgage, Exhibit "A".

virtue of said document of cancellation, the office of the Register

of Deeds of Manila noted the discharge of mortgage in question on the

corresponding certificates of title.

Contending that the said debt of the defendant has not been

extinguished by said payment made to the Bank of Taiwan and that,

consequently, the mortgage to guaranty said obligation was never legally

discharged, the plaintiff bank instituted the present action for fore-

closure of mortgage, praying: (a) that the indebtedness of the defend-

ant, in the exact amount stated, be declared in effect, (b) that when

the moratorium is lifted, a supplementary judgement be granted ordering

the defendant to pay to the plaintiff bank said indebtedness, amounting

to 21,414,770.36, plus the agreed interest, attorneys' fees and costs,

and (c) that the cancellation of the mortgage registered in the office

of the Register of Deeds of Manila, and noted by said office on the corresponding certificates of title, be declared null and void and with-

out effect.

On the other hand, the defendant maintains that the paymant

made by it to the Bank of Taiwan is valid and it has extinguished its

contractual obligation to the plaintiff bank.

The principal question to decide is whether the payment made

to the Bank of Taiwan was valid or not, and consequently, whether or

not it has extinguished the obligation of the defendant to the plaintiff.

The plaintiff maintains the negative: and alleges the follow- ing reasons: that the sequestration and subsequent disposition by the

Japanese invaders of its mortgage credit against the defendant were against the law, namely, the Hague Convention of 1907, which was ratified by the United States and the Japanese Empire, and therefore,

they were absolutely null and void; that by virtue of the joing declaration of the United Nations, dated January 5, 1943, to which the

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