CO537-(1262-1649) — Page 246

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United States was a party,

which declaration has a binding force

on the Government of the Commonwealth of the Philippines the said

sequestration and subsequent disposition of plaintiff's aredit, made

by the Japanese invaders, could not and should not have effect or

validity; and that the said payments were made in Japanese military

currency, which was not the legal tender under the laws of the Common--

wealth of the Philippines.

The defendant maintains the affirmative, alleging that the

payments made by it to the Bank of Taiwan are valid and have extinguished:

its obligation to the plaintiff. Its view is predicated upon the

following reasons:

The occupying military authorities could validly compel the

defendant to pay to the enemy bank liquidator appointed by it, its in-

debtedness to the plaintiff, and such payment extinguished its obligation

The order of the Japanese military authority to pay is a consequence of

the right of all belligerents to take possession of all kinds of enemy

property, wherever found, and therefore the payment made by virtue of

said order is valid. The theory of the palintiff undermines the basis

of all law of the civilezed world. The payment was made by order of a

legitimate authority and therefore it discharged the defendant.

The

payment is not invalidated by the fact that it was made in Japanese

military notes. Neither does the declaration of the Governments of

some of the United Nations, invoked by the plaintiff bank, invalida te

said payment. The payment was made by the defendant under force and

duress and therefore produced the extinguishment of its obligation to-

wards the plaintiff. The defendant's negligence has contributed to the

possibility of the collection of the debt from the defendant by the

Japanese military authority. The plaintiff bank has a right to make

a claim against the Bank of Taiwan or the Japanese Government, and the

defendant does not have such right. The payment made to the Japanese

military government has been dechred valid by Act No. 727 of the Congress

of the Philippines.

The first point to consider is whether or not the sequestratio

and subsequent disposition by the Japanese invaders of the credit in

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Ref.:

CO 537/1374

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