Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-8169 December 29, 1913

ANTONIO M. A. BARRETTO, plaintiff-appellant, vs.JOSE SANTA MARINA, defendant-appellee.

Hausserman, Cohn and Fisher, for appellant. W. A. Kincaid and Thos. L. Hartigan, for appellee.

TORRES, J.:

These cases were appealed by counsel for the plaintiff, through a bill of exceptions, from the judgment of January 17, 1912, and the order of February 5 of the same year, whereby the Honorable S. del Rosario, judge, sentenced the defendant to pay to the plaintiff the salary to which he was entitled for the first eight days of January, 1910, also that for the following month, at the rate of P3,083.33 per month, without special finding as to costs, and dismissed the second cause of action contained in the complaint presented in that case.

On January 5, 1911, for the plaintiff Antonio M.a Barretto filed suit against Jose Santa Marina, alleging that the defendant, a resident of Spain, was then the owner and proprietor of the business known as the La Insular Cigar and Cigarette Factory, established in these Islands, which business consisted in the purchase of leaf tobacco and other raw material, in the preparation of the same, and in the sale of cigars and cigarettes in large quantities; that on January 8, 1910, and for a long time prior thereto, the plaintiff held and had held the position of agent of the defendant in the Philippine Islands for the management of the said business in the name and for the account of the said defendant; that the plaintiff's services were rendered in pursuance of a contract whereby the defendant obligated himself in writing to hire the said services for so long a time as the plaintiff should not show discouragement and to compensate such services at the rate of P37,000 Philippine currency per annum; that, on the aforesaid 8th day of January, 1910, the defendant, without reason, justification, or pretext and in violation of the contract before mentioned, summarily and arbitrarily dispensed with the plaintiff's services and removed him from the management of the business, since which date the defendant had refused to pay him the compensation, or any part thereof, due him and payable in full for services rendered subsequent to December 31, 1909; and that, as a second cause of action based upon the facts aforestated, the plaintiff had suffered losses and damages in the sum of P100,000 Philippine currency. Said counsel therefore prayed that judgment be rendered against the

defendant by sentencing him to pay to the plaintiff P137,000 Philippine currency, and the interest thereon at the legal rate, in addition to the payment of the costs, together with such other equitable remedies as the law allows.

By an order of March 14, 1911, the Honorable A. S. Crossfield, judge overruled the demurrer to the first cause of action, but sustained that to the second. Counsel for the plaintiff entered an exception to this order in so far as it sustained the demurrer interposed by the defendant to the second cause of action.

By his written answer to the complaint, on July 19, 1911, counsel for the defendant, reserving his exception to the order of the court overruling his demurrer filed against the first cause of action, denied each and all of the allegations contained in the complaint, relative to such first cause of action.

As a special defense of the latter, he set forth that the plaintiff had no contract whatever with the defendant in which any period of time was stipulated during which the former was to render his services as manager of the La Insular factory; that the defendant revoked for just cause the power conferred upon the plaintiff; that subsequent to the revocation of such power, and on the occasion of the plaintiff's having sold all his rights and interests in the business of the La Insular factory to the defendant, in consideration of the sum received by him, the plaintiff renounced all action, intervention and claim that he might have against the defendant relative to the business aforementioned, whereby all the questions that might have arisen between them were settled.

On December 19, 1911, counsel for each of the parties presented to the court as stipulation of the following purport:

In clause 11 of the will executed by Don Joaquin Santa Marina y Perez in Madrid before a notary public on August 4, 1901, and duly legalized in these Islands, there appears the following:

"The testator provides that the testamentary executor who is holding office as such shall enjoy a salary, allotment, or emolument of 4,000 pesos per annum which shall be paid out of the testator's estate; but that in case of consultation, the testamentary executors consulted shall not be entitled to this allotment, nor to any other, on account of such consultation."

According to the statement of the sums collected by Antonio M.a Barretto as the judicial administrator of the estate of Joaquin Santa Marina from November, 1908, to March, 1910, and during twenty-three days of April of the latter year, the total amount so collected was P5,923.28.

Antonio M.a Barretto ceased to manage the La Insular factory, as the judicial administrator of the estate of the deceased Joaquin Santa Marina, in October, 1909, and not on November 7, 1908, as erroneously out in the stenographic notes.

The remuneration paid to Barretto as judicial administrator of the estate of Santa Marina was independent of that which pertained to him for his services as manager of the La Insular factory both before and after the date on which he ceased to administer the said factory as such judicial administrator.

In the stipulation before mentioned there also appears the following: "The facts above stated are true, but there is a controversy between the attorneys for the plaintiff and the defendant, as to whether such facts are relevant as evidence in the said case. They therefore submit this question to the court if it determines that they are relevant as evidence they should be admitted as such, with exception by the defendant, but if it determines that they are not relevant as evidence they should be excluded, with exception by the plaintiff."

After the hearing of the case, with the introduction of evidence by both parties, the court, on January 17, 1912, rendered the judgment aforementioned, to which an exception was taken by counsel for the plaintiff, who by written motion asked that the said judgment be set aside and a new trial granted, because such judgment was not sufficiently warranted by the evidence and was contrary to law and because the findings of fact therein contained were openly and manifestly contrary to the weight of the evidence. This motion was denied, with exception by the plaintiff. By an order of the 5th of the following month of February, issued in view of a petition presented by counsel for the plaintiff, the court dismissed the second cause of action set out in the complaint, to which order said counsel likewise excepted.

Upon presentation of the proper bill of exceptions, the same was approved, certified, and forwarded to the clerk of this court.

Demand is made in this suit for the payment of the considerable sum of P137,000, together with the legal interest thereon. Two amounts make up this sum: One of P37,000, as salary for the year 1910, claimed to be due for services rendered by the plaintiff as agent and manager of the tobacco factory known as La Insular; and the other of P100,000, as an indemnity for losses and damages, on account of the plaintiff's removal without just cause from his position as agent and manager of said factory, effected arbitrarily and in violation of the contract of hire of services between the parties, the plaintiff claiming to be still entitled to hold the position from which he was dismissed.

The most important fact in this case, which stands out prominently from the evidence regarded as a whole, is that of the plaintiff Barretto's

renunciation or registration of the position he held as agent and manager of the said factory, which was freely and voluntarily made by him on the occasion of the insolvency and disappearance of the Chinaman Uy Yan, who had bought from the factory products aggregating in value the considerable sum of P97,000 and, without paying this large debt, disappeared and has not been seen since.

Antonio M.a Barretto the agent and manager of the said factory, said among other things the following, in the letter, Exhibit 3, addressed by him to Jose Santa Marina, on January 2, 1909:

I have to report to you an exceedingly disagreeable matter. This Chinaman Uy Yan, with whose name I begin this paragraph, has failed and owes the factory the considerable sum of P97,000. We will see that I can get from him, although when these Chinamen fail it is because they have spent everything. I will turned the matter over to my attorney in order that he may sue the party. I am not attempting to make light of this matter. I acknowledge that I have been rather more generous with this fellow than I should have been; but this is the way of doing business here. . . .

I have always thought that when the manager of a business trips up in a matter like this he should tender his resignation, and I still think so. The position is at your disposal to do as you like.

This letter is authentic and was neither denied nor rejected by the plaintiff, Barretto.lawphil.net

Although Santa Marina did not immediately reply and tell him what opinion he may have formed and the decision he had reached in the matter, it is no less true that the silence and lack of reply on the part of the chief owner of the factory were sufficient indications that the resignation had been virtually accepted and that if he did not reply immediately it was because he intended to act cautiously. As the addressee, the chief owner of the factory, knew of no one at that time whom he could appoint relieve the writer, who had resigned, it was to be presumed that he was thereafter looking for some trustworthy person who might substitute the plaintiff in his position of agent and manager of the factory, communicated to the plaintiff that he had revoked the power conferred upon him and had appointed Mr. J. McGavin to substitute him in his position of manager of the La Insular factory, whereby the plaintiff's resignation, tendered in his aforesaid letter of January 2, 1909, Exhibit 3, was expressly accepted.

After the plaintiff had resigned the position he held, and notwithstanding the lapse of several months before its express acceptance, it cannot be understood that he has any right to demand an indemnity for losses and damages particularly since he ostensibly and frankly acknowledged that he had been negligent in the discharge of his duties and that he had overstepped his authority in the management of the factory, with respect

to the Chinaman mentioned. The record does not show that Santa Marina, his principal, required him to resign his position as manager, but that Barretto himself voluntarily stated by letter to his principal that, for the reasons therein mentioned, he resigned and placed at the latter's disposal the position of agent and manager of the La Insular factory; and if the principal, Santa Marina, deemed it suitable to relieve the agent, for having been negligent and overstepping his authority in the discharge of his office, and furthermore because of his having expressly resigned his position, and placed it at the disposal of the chief owner of the business, it cannot be explained how such person can be entitled to demand an indemnity for losses and damages, from his principal, who merely exercised his lawful right of relieving the plaintiff from the position which he had voluntarily given up.

So, the agent and manager Barretto was not really dismissed or removed by the defendant Santa Marina. What did occur was that, in view of the resignation rendered by the plaintiff for the reasons which he himself conscientiously deemed to warrant his surrender of the position he was holding in the La Insular factory, the principal owner of the establishment, the defendant Santa Marina, had to took for and appoint another agent and manager to relieve and substitute him in the said employment — a lawful act performed by the principal owner of the factory and one which cannot serve as a ground upon which to demand from the latter an indemnity for losses and damages, inasmuch as, in view of the facts that occurred and were acknowledged and confessed by Barretto in his letters, Exhibits 3 and 6, the plaintiff could not expect, nor ought to have expected, that the defendant should have insisted on the unsuccessful agent's continuance in his position, or that he should not have accepted the resignation tendered by the plaintiff in his first letter. By the mere fact that the defendant remained silent and designated another person, Mr. J. McGavin, to, discharge in the plaintiff's stead the powers and duties of agent and manager of the said factory, Barretto should have understood that his resignation had been accepted and that if its acceptance was not communicated to him immediately it was owing to the circumstance that the principal owner of the factory did not then have, nor until several months afterwards, any other person whom he could appoint and place in his stead, for, as soon as the defendant Santa Marina could appoint the said McGavin, he revoked the power he had conferred upon the plaintiff and communicated this fact to the latter, by means of the letter, Exhibit D, which was presented to him by the bearer thereof, McGavin himself, the new manager and agent appointed.

Omitting consideration for the moment of the first error attributed to the trial judge by his sustaining the demurrer filed against the second cause of action, relative to the collection of P100,000 as the amount of the losses and damages occasioned to the plaintiff, and turning our attention to the second error imputed to him by his refusal to sentence the defendant, for the first cause of action, to the payment of P37,000 or of any sum over P3,083.33, we shall proceed to examine the question whether any period or term for the duration of the position of agent and manager was fixed in

the verbal contract made between the deceased Joaquin Santa Marina, the defendant's predecessor in interest, and the plaintiff antonio M.a Barretto — a contract which, after Joaquin Santa Marina's death was ratified by his brother and heir, the defendant Jose Santa Marina.

The defendant acknowledged the said verbal contract and also its ratification by him after his brother's death; but he denied any stipulation therein that Barretto should hold his office for any specific period of time fixed by and between the contracting parties, for the deceased Joaquin Santa Marina, in conferring power upon the plaintiff, did not do so for any specific time nor did he set any period within which he should hold his office of agent and manager of the La Insular factory; neither did he fix the date for the termination of such services, in the instrument of power of attorney executed by the defendant Santa Marina before a notary on the 25th of September, 1908. (Record, p. 20.)

From the context of the instrument just mentioned it can not be concluded that any time whatever was fixed during which the plaintiff should hold his position of agent. The defendant, in executing that instrument, whereby the agreement made between his brother Joaquin and Barretto was ratified, did no more than accord to the plaintiff the same confidence that the defendant's predecessor in interest had in him; and so long as this merely subjective condition of trust lodged in the agent existed, the time during which the latter might hold his office could be considered indefinite or undetermined, but as soon as that indespensable condition of a power of attorney disappeared and the conduct of the agent deceased to inspire confidence, the principal had a right to revoke the power he had conferred upon his agent, especially when the latter, for good reasons, gave up the office he was holding.

Article 1733 of the civil Code, applicable to the case at bar, according to the provisions of article 2 of the Code of Commerce, prescribes: "The principal may, at his will, revoke the power and compel the agent to return the instrument containing the same in which the authority was given."

Article 279 of the Code of Commerce provides: "The principal may revoke the commission intrusted to an agent at any stage of the transaction, advising him thereof, but always being liable for the result of the transactions which took place before the latter was informed of the revocation."1awphi1.net

From the above legal provisions it is clearly to be inferred that the contract of agency can subsist only so long as the principal has confidence in his agent, because, from the moment such confidence disappears and although there be a fixed period for the excercise of the office of agent, a circumstance that does not appear in the present case the principal has a perfect right to revoke the power that he had conferred upon the agent owing to the confidence he had in him and which for sound reasons had ceased to exist.

The record does not show it to have been duly proved. notwithstanding the plaintiff's allegation, that a period was fixed for holding his agency or office of agent and manager of the La Insular factory. It would be improper, for the purpose of supplying such defect, to apply to the present case the provisions of article 1128 of the Civil Code. This article relates to obligation for which no period has been fixed for their fulfillment, but, which, from their nature and circumstances, allow the inference that there was an intention to grant such period to the debtor, wherefore the courts are authorized to fix the duration of the same, and the reason why it is inapplicable is that the rights and obligations existing between Barretto and Santa Marina are absolutely different from those to which it refers, for, according to article 1732 of the Civil Code, agency is terminated:

1. By revocation.

2. By withdrawal of the agent.

3. By death, interdiction, bankruptcy, or insolvency of the principal or of the agent.

It is not incumbent upon the courts to fix the period during which contracts for services shall last. Their duration is understood to be implicity fixed, in default of express stipulation, by the period for the payment of the salary of the employee. Therefore the doctrine of the tacit renewal of leases of property, established in article 1566 of the Civil Code, is not applicable to the case at bar. And even though the annual salary fixed for the services to be rendered by the plaintiff as agent and manager of the La Insular factory, was P37,000, yet, in accordance with the custom universally observed throughout the world, salaries fixed for the year are collected and paid in monthly installments as they fall due, and so the plaintiff collected and was paid his remuneration; therefore, on the latter's discontinuance in his office as agent, he would at most be entitled to the salary for one month and some odd days, allowed in the judgment of the lower court.

Article 302 of the Code of Commerce reads thus:

In cases in which no special time is fixed in the contracts of service, any one of the parties thereto may dissolve it, advising the other party thereof one month in advance.

The factor or shop clerk shall be entitled, in such case, to the salary due for one month.

From the mere fact that the principal no longer had confidence in the agent, he is entitled to withdraw it and to revoke the power he conferred upon the latter, even before the expiration of the period of the engagement or of the agreement made between them; but, in the present

case, once it has been shown that, between the deceased Joaquin Santa Marina and the latter's heir, now the defendant, on the one hand, and the plaintiff Barretto, on the other, no period whatever was stipulated during which the last-named should hold the office and manager of the said factory, it is unquestionable that the defendant, even without good reasons, could lawfully revoke the power conferred upon the plaintiff and appoint in his place Mr. McGavin, and thereby contracted no liability whatever other than the obligation to pay the plaintiff the salary pertaining to one month and some odd days, as held in the judgment below.

Barretto himself acknowledged in his aforesaid letter, Exhibit 3, that he had exceeded his authority and acted negligently in selling on credit to the said Chinaman a large quantity of the products of the factory under the plaintiff's management, reaching the considerable value of P97,000; whereby he confessed one of the causes which led to his removal, the revocation of the power conferred upon him and the appointment of a new agent in his place.

The defendant, Jose Santa Marina, in his letter of December 2, 1909, whereby he communicated to the plaintiff the revocation of the power he had conferred upon him and the appointment of another new agent, Mr. McGavin, stated among other things that the loan contracted by the agent Barretto, without the approval of the principal, caused a great panic among the stockholders of the factory and that the defendant hoped to allay it by the new measure that he expected to adopt. This, then, was still another reason the induced the principal to withdraw the confidence placed in the plaintiff and to revoke the power he had conferred upon him. Therefore, even omitting consideration of the resignation before mentioned, we find duly warranted the reasons which impelled the defendant to revoke the said power and relieve the plaintiff from the position of agent and manager of the La Insular factory.

In accordance with the provisions of article 283 of the Code of Commerce, the manager of an enterprise or manufacturing or commercial establishment, authorized to administer it and direct it, with more or less powers, as the owner may have considered advisable, shall have the legal qualifications of an agent.

Article 300 of the same code prescribes: "The following shall be special reasons for which principals may discharge their employees, even though the time of service of the contract has not elapsed: Fraud or breach of trust in the business intrusted to them . . . "

By reason of these legal provisions the defendant, in revoking the authority conferred upon the plaintiff, acted within his unquestionable powers and did not thereby violate any statute whatever that may have limited them; consequently, he could not have caused the plaintiff any harm or detriment to his rights and interests, for not only had Santa Marina a justifiable reason to proceed as he did, but also no period whatever had

been stipulated during which the plaintiff should be entitled to hold his position; and furthermore, because, in relieving the latter and appointing another person in his place, the defendant acted in accordance with the renunciation and resignation which the plaintiff had tendered. If the plaintiff is entitled to any indemnity in accordance with law, such was awarded to him in the judgment of the lower court by granting him the right to collect salary for one month and some odd days.

As for the other features of the case, the record does not show that the plaintiff has any good reason or legal ground upon which to claim an indemnity for losses and damages in the sum of P100,000, for it was not proved that he suffered to that extent, and the judgment appealed from has awarded him the month's salary to which he is entitled. Therefore that judgment and the order of March 14 sustaining the demurrer to the second cause of action are both in accordance with the law.

For the foregoing reasons, whereby the errors assigned to the said judgment and order are deemed to have been refuted, both judgment and order are hereby affirmed, with costs against the appellant.

Arellano, C.J., Johnson and Carson, JJ., concur. Moreland, J., concurs in the result.

FIRST DIVISION

[G.R. No. L-7900.  January 12, 1956.]

CIRIACO TIGLAO, ET AL., Plaintiffs-Appellees, vs. THE MANILA RAILROAD COMPANY, Defendant-Appellant.

 

D E C I S I O N

REYES, A., J.:

This action was commenced in the Municipal Court of Manila, in October, 1952, by 35 retired employees of the Defendant Manila Railroad Co. to recover the sum of P7,275, the aggregate balance of salary differentials still due them under a memorandum of agreement signed by theDefendant and the unions representing its employees and laborers. After an unfavorable judgment in that court, the Defendant appealed to the Court of First Instance of Manila, and having again lost in that court it brought the case here on appeal, raising only questions of law.

The memorandum of agreement above-mentioned, which was signed in October, 1948, and constitutes the basis of Plaintiffs’ claim, contains the following stipulations:

“1.  That the Manila Railroad Company hereby reiterates its approval of the standardized salaries provided for by the Standardization Committee effective as of July 1, 1948, to be carried in all subsequent budgets of the Company, payment to be made in accordance with Item 2; and immediate

payment of said salaries will commence with the available funds of P400,000, already appropriated for this purpose;

“2.  That we hereby further agree that upon the exhaustion of the amount of P400,000, the employees and laborers affected by the standardized plan will receive their present salaries provided that any wage differential from date of exhaustion will be paid when funds for the purpose are available.”

It is agreed that Plaintiffs, who retired with gratuity in January, 1951, were entitled to collect the salary differentials, or increase in pay, resulting from the standardization of their salaries; that for salary differentials corresponding to the period from July 1, 1948, to January 31, 1949, they have already received a total of P9,906.05, but that there is still due them the total sum of P7,275, which has remained unpaid because of the exhaustion of the P400,000 appropriated for the purpose.

In refusing to pay the balance still due the Plaintiffs, Defendant does not repudiate the above agreement, but contends in substance that pursuant to its terms payment of salary differentials after the exhaustion of the P400,000 already appropriated is subject to the condition that “funds for the purpose are available” and that no such funds are available because Defendant is losing in its business.

The Defendant has, indeed, presented in evidence two summary statements of its accounting department, showing that it has sustained losses in its operations during the fiscal year ending June 30, 1953, and during the month of July next following. These statements, however, do not necessarily prove that, in a multimillion-peso business such as that of the Defendant funds for the payment of a debt of P7,275 due the Plaintiffs could not have been raised or made available because of the losses suffered in one year and one month. The memorandum of agreement does not stipulate that the salary differentials shall be paid only from surplus profits. In fact, the agreement provides that the standardized salaries — with the resulting salary differentials naturally — are “to be carried in all subsequent budgets of the company.” And we think it may be admitted that in a going concern the availability of funds for a particular purpose is a matter that does not necessarily depend upon the cash position of the company but rather upon the judgment of its board of directors in the choice of projects, measures or expenditures that should be given preference or priority, or in the choice between alternatives. So if Defendant was able to raise or appropriate funds to meet other obligations notwithstanding the fact that it was losing, we think it could have done likewise with respect to its debt to the Plaintiffs, an obligation which is deserving of preferential attention because it is owed to the poor.

Viewed in this light, that is, that the time to redeem Defendant’s promise to pay salary differentials, after the exhaustion of what had already been appropriated for that purpose, really depended upon the judgment of its board of directors — it not appearing that Defendant was bankrupt — the obligation to pay the said salary differentials may be considered as one with a term whose duration has been left to the will of the debtor, so that pursuant to article 1128 of the old Civil Code (Art. 1197 of the new), the duration of the term may be fixed by the courts.

There is something to Defendant’s contention that in previous cases this Court has held that the duration of the term should be fixed in a separate action for that express purpose. But we think the lower court has given good reasons for not adhering to technicalities in its desire to do substantial justice. It says:

“(1)  The facts in the instant case are not disputed, the parties having submitted the case for decision to be based on an agreed stipulation of facts;

“(2)  The fixing of a period for the payment of the obligation has been amply discussed by the parties in their pleadings so that this Court may render judgment on that subject matter under the alternative prayer of the Plaintiffs ‘for such further relief as this Honorable Court may deem just and equitable’;

“(3)  To dismiss the present case and require the Plaintiffs to file another action for fixing the period of Defendant’s obligation, would entail multiplicity of suits;

“(4)  In this case there are thirty-five Plaintiffs who were low salaried employees of theDefendant Manila Railroad Company and the said Plaintiffs have not been paid their salary differentials for the period of, from February 1 to June 30, 1948; and

“(5)  To dismiss the present case and order the Plaintiffs to file another suit would open the door for dilatory tactics leading to a protracted litigation and in effect deny the benefits of social justice.”

We may add that Defendant does not claim that if a separate action were instituted to fix the duration of the term of its obligation, it could present better proofs than those already adduced in the present case. Such separate action would, therefore, be a mere formality and would serve no purpose other than to delay.

We, however, agree that the lower court should not have made the interest adjudged run from October 21, 1948, the day the action was commenced in the municipal court, but only from default of payment of the principal within the period of one year fixed by the court.

Wherefore, with the only modification as to the date the adjudged interest is to commence to run, the judgment below is affirmed, with costs against the Defendant and Appellant.

Paras, C.J., Padilla, Montemayor, Bautista Angelo, Labrador, Concepcion and Reyes, J. B. L., JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-10056 December 24, 1915

SONG FO & CO., plaintiff-appellant, vs.MANUEL ORIA, defendant-appellant.

Gutierrez Repide and Socias for plaintiff.Sanz, Opisso and Luzuriaga for defendant.

 

CARSON, J.:

Song Fo & Co., the original plaintiff in this action, sold a launch to Oria, the defendant, for P16,500, payable in quarterly installments of P1,000, together with interest at the rate of ten per centum per annum. The launch was delivered to Oria in Manila, but was shipwrecked and became a total loss while en route to Oria's place of business in Samar. No part of the purchase price has ever been paid and this action was instituted for the recovery of the total amount of the purchase price with interest thereon until paid. The trial court gave judgment in favor of the plaintiff for P6,000 and interest, that being the amount of the unpaid installments due under the express terms of the contract at the date of the institution of the action; but declined to enter judgment for the balance of the indebtedness on the ground that, under the express terms of the contract, it was not due and payable when the complaint was filed.

From this judgment both parties appealed, and the record is now before us on their duly perfected bills of exceptions.

The defendant's contentions on this appeal are substantially limited to his claim that under the terms of the deed of sale of the launch, Song Fo & Co. had obligated themselves to insure the launch, and since they had failed and neglected to do so, they themselves should suffer the loss resulting from the shipwreck of the launch without insurance.1awphil.net

It cannot be denied that if the contract of sale did in fact impose on Song Fo & Co. an imperative obligation to insure the launch, which under the terms of the contract was mortgaged to secure the payment of the purchase price, and if Song Fo & Co. did in fact fail and neglect to insure the launch in compliance with the terms of the contract, Oria would be entitled to have the amount of his indebtedness reduced by the amount of the insurance which he would have been entitled to have applied to the payment of the purchase price had Song Fo & Co. faithfully complied with the terms of the contract.

But an examination of the terms of the deed of sale of the launch discloses that Song Fo & Co. did not expressly obligated themselves to insure and keep the launch insured, although it is true that the contract expressly authorized them to insure it in their own name.

Counsel for Oria contend, however, that although the language of the contract did not in express terms obligate Song Fo & Co. to insure the launch, it was their duty so to do under all the circumstances, and it is insisted that they should not be permitted to evade the loss resulting from their negligence in the performance of that duty.

The contract expressly authorized Song Fo & Co. to insure the launch in their own name and to charge the estimated cost of the premiums with interest at the rate of ten per centum to Oria, and there is much force in the contention of counsel for Oria at least to extent that under all the circumstances, it was the duty of Song Fo & Co. to insure the vessel if they could. But there is nothing in the record which would justify a holding that Song Fo & Co. obligated themselves to insure the launch at all events. There is nothing in the written contract, examined in the light of all the surrounding circumstances, which justifies an inference that there was any thought in the mind of either of the parties that the vendor of the launch would himself insure her against loss or damage during the long period allowed for the payment of the purchase price; yet that substantially would be the effect of the effect of the assumption of an obligation of an obligation to insure and keep her insured at all events. On the contrary, the language of the contract, which authorized Song Fo & Co. to take out insurance in their own name and to charge the amount of the premium to Oria, when read in the light of the transaction of which it was a part, imposed at most, a duty upon Song Fo & Co. to take such reasonable measures looking to the insurance of the vessel as might be required of a prudent man in connection with the insurance of his own property.

The undisputed evidence of record shows that Song Fo & Co. did in fact make a bona fide attempt to insure the launch, and to that end did all in their power and adopted all available means which could reasonably be required of them. It appears, however, that partly due to the dangerous nature of the coast of Samar along which Oria desired to operate the launch, and partly due to the some lack of confidence in the character and reputation of the owner of the property for which application for insurance was made, the local agents of the marine insurance companies declined to accept the risk without previous communication within their foreign principals: and the launch was lost before they could ascertain the wishes of these principals as to the execution of an insurance contract. It appears also that Oria, who had exclusive control of the operation of the vessel, sent her from Manila to Samar on the trip in the course of which she was shipwrecked, well knowing that she had not yet been insured: and that Song Fo & Co. had no power to interfere, or to keep her in port pending their application for insurance. Indeed it is evident that under the terms of the deed of sale, they would not have had the right to detain the vessel in a place of safety, against the wishes of Oria, had the insurance agents definitely declined their insurance proposals.

Under these circumstances we are of opinion and so hold that Song Fo & Co. were in no wise responsible under the contract for the loss of the launch without insurance and that the contentions of the defendant in this

regard furnish no defense to the action against him for the purchase agreed upon in the deed of sale.

Coming now to examine the contentions of the plaintiffs on their appeal, we think that the trial judge erred in declining to render judgment in their favor for the total amount of the purchase price of the launch. He appears to have relied upon the provisions of article 1125 of the Civil Code but to have overlooked the co-related provisions of article 1129 of the same code.

These articles are as follows:itc-a1f

1125. Obligations, the fulfillment of which has been fixed for a certain day, are exigible only when such day arrives.

By a certain day is understood one which shall necessarily arrive, even when the date of arrival is unknown.

When the uncertainty consists in the arrival or non-arrival of the day, then the obligations is conditional and shall be controlled by the proceeding section.

1129. The debtor shall lose all right to profit by the term:

1. When, after the obligation has been contracted, it appears that he is insolvent, unless he gives security for the debt.

2. When he does not give to the creditor the security he is bound to give.

3. When by his own acts, he acts, he has reduced such security after giving it, or when it disappears through an unforeseen event (vis major), unless it is immediately substituted by a new one equally safe.

The security for the payment of the purchase price of the launch itself having disappeared as a result of an unforeseen event (vis major), and no other security having been substituted therefor, the plaintiffs were clearly entitled to recover judgment not only for the installments of the indebtedness due under the terms of the contract at the time when the instituted their action, but also for all installments which, but for the loss of the vessel had not matured at that time.

The judgment entered in the court below should be modified by substituting for so much thereof as provides for the recovery by the plaintiff of P6,000 together with interest of November 1911, a provision for the recovery of P16,500 together with interest at the rate of ten per

centum per annum, from the 15th day of November, 1911, and thus modified, the judgment appealed from should be affirmed with the costs of this instance against the appellant. So ordered.

Arellano, C.J., Torres, Johnson, Moreland, Trent and Araullo, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-1525             July 27, 1949

MODESTO SORIANO, petitioner, vs.CAROLINA ABALOS, MERCEDES ABALOS, ENCARNACION ABALOS, PABLO MANUEL, on his behalf and as guardian ad-litem of Romulo and Florencio, both surnamed Manuel, respondents.

Primicias, Abad, Mencias and Castillo for petitioner.Fernandez, Unson and Patajo for respondents.

MORAN, C.J.:

This is an appeal by certiorari from a decision of the Court of Appeals. The facts are as follows:

On March 17, 1938, respondent Juliana Abalos and Carolina Abalos sold the parcel of the land described in the complaint to Felipe Maneclang and Modesto Soriano at the price of P750, with option to repurchase the same "at anytime they have the money." Offer to repurchase was made in December, 1941, which could not be carried out because of the war. Felipe Maneclang, in the meantime, ceded all his right to petitioner Modesto Soriano, and in May, 1944, offer to repurchase was again made, but Modesto Soriano rejected the offer. Wherefore, vendors consigned the price of P750 with the court and filed a complaint for repurchase.

Juliana Abalos died and was substituted in this case by her heirs Romulo and Florencio, surnamed Manuel. It turned out that the property did not belong to the vendors Carolina and Juliana Abalos alone, but also to their sisters, the intervenors and respondent Mercedes and Encarnacion Abalos. The Court of First Instance of Pangasinan rendered judgment ordering Modesto Soriano to execute a deed of reconveyance in favor, not only of Carolina Abalos and the heirs of Juliana Abalos, but also of the intervenors Mercedes and Encarnacion Abalos; authorizing Modesto Soriano to collect and receive as price for the reconveyance the sum of P750 consigned with the court; and sentencing Modesto Soriano to pay the respondent the sum

of P3,200 as the value of the fruits of the land in 1944 obtained by Modesto Soriano. This judgment was affirmed in toto by the Court of Appeals.

Petitioner Modesto Soriano now maintains in this Court that respondent no longer had any right to repurchase the property because, there being no express agreement as to the time within which the repurchase could be made, that time should be, under the first paragraph, article 1508 of the Civil Code, four years which in this case expired on March 17, 1942.

The stipulation, however, is that the vendors may repurchase the property "at any time they have the money." There is, therefore, a time expressly stipulated, which is "any time." It being, however, an unlimited or indefinite time, under the second paragraph of article 1508 of the Civil Code, it cannot exceed ten years. This is the ruling laid down in the cases of heirs of Jumero vs. Lizares, 17 Phil., 112; Bandong vs. Austria, 31 Phil., 479; andGonzaga vs. Go, No. 47061 (40 Off. Gaz [7th Supp.], 71).

In the first case, heirs of Jumero vs. Lizares, 17 Phil., 112, Chief Justice Arellano said: ". . . even admitting that it was stipulated that the right to repurchase or redeem should last for an indefinite time, such period is restricted to ten years, under paragraph 2 of article 1508 of the Civil Code, ..." (p. 120). In the case of Bandong vs. Austria, 31 Phil., 479, the vendors were given the right to repurchase "in the month of March of any year after the date of the contract." In other words, the vendors were given the right to repurchase again at anytime or any year. And this Court held that the repurchase could be made within a period of not more than ten years. And in the case of Gonzaga vs. Go, G. R. No. 47061, the vendors were given the right to repurchase "en cualquier tiempo devolviendo la cantidad de P250 y los gastos que ocasione el contrato." And this Court held that "en cualquier tiempo" meant not more than ten years.

We conclude, therefore, that in the instant case, the vendors had ten years within which to repurchase the property and that the period did not expire until March 17, 1948. The offer to repurchase was made in May, 1944.

It is also maintained by petitioner that the damages awarded to respondent were based erroneously on a value equal with that of Japanese war notes as were due in December, 1944. We believe that this contention is well taken. Petitioner is not liable to pay now in Philippine currency the same number of pesos in Japanese was notes to which he was sentenced in December, 1944. He is liable only to pay the equivalent which may be determined by means of the Ballantine scale of values, as held in Hilado vs. De la Costa, G. R. No. L-150. According to that scale the value of Japanese military notes in relation to the peso in Philippine currency on December 1, 1944, was 90 to 1. Consequently, instead of the sum of P3,200, petitioner should be sentenced to pay yearly P35.55 as damages beginning May, 1944 until the property is finally delivered to respondents.

For all the foregoing, the judgment of the Court of Appeals is affirmed with the only modification that the petitioner is sentenced to pay respondent, counting from May, 1944 until the property is delivered to respondents, as damages, the amount of P35.55 yearly, plus costs. If the price consigned in court was destroyed, petitioner must bear the loss.

Ozaeta, Paras, Feria, Bengzon, Tuason and Montemayor, JJ., concur.Moran, J., Mr. Justice Pablo voted for this decision.

Republic of the PhilippinesSUPREME COURT

ManilaEN BANCDECISION

August 7, 1918

G.R. No. L-12611FELIPE AGONCILLO, and his wife, MARCELA MARIÑO, plaintiff-

appellees,vs.

CRISANTO JAVIER, administrator of the estate of the late Anastasio Alano. FLORENCIO ALANO and JOSE ALANO, defendants-appellants.

Basilio Aromin for appellants.Felipe Agoncillo for appellees.

Fisher, J.:

On the twenty-seventh day of February, 1904, Anastasio Alano, Jose Alano, and Florencio Alano executed in favor of the plaintiff, Da. Marcela Mariño, a

document of the following tenor:

We, the undersigned, Jose Alano and Florencio Alano (on our own behalf), and Anastasio Alano (on behalf of his children Leonila, Anastasio and Leocadio), the former and the latter testamentary heirs of the Rev. Anastasio C. Cruz, deceased, hereby solemnly promise under oath:

1. We will pay to Da. Marcela Mariño within one year from this date together with interest thereon at the rate of 12 per cent per annum, the sum of P2,730.50, Philippine currency, this being the present amount of indebtedness incurred in favor of that lady on the 20th of April 1897, by

our testator, the Rev. Anastasio C. Cruz;

2. To secure the payment of this debt we mortgage to the said Da. Marcela Mariño the house and lot bequeathed to us by the deceased, situated in

this town, on calle Evangelista, formerly Asturias, recorded in the register of deeds on the twenty-second of April, 1895, under number 730;

3. In case of insolvency on our part, we cede by virtue of these presents the said house and lot to Da. Marcela Mariño, transferring to her all our

rights to the ownership and possession of the lot; and if the said property upon appraisal at the time of the maturity of this obligation should not be

of sufficient value to cover the total amount of this indebtedness, I, Anastasio Alano, also mortgage to the said lady my four parcels of land

situated in the barrio of San Isidro, to secure the balance, if any; the title deeds of said property, as well as the title deeds of the said house and lot are this day delivered to Sr. Vicente Ilustre, general attorney-in-fact of Da.

Marcela Mariño.

In witness whereof we have signed these presents in Batangas, this twenty-seventh day of February, 1904.

(Sgd.) JOSE ALANO.

(Sgd.) ANASTASIO ALANO.

(Sgd.) FLORENCIO ALANO.

No part of the interest or of the principal due upon this undertaking has been paid, except the sum of P200 paid in the year 1908 by the late

Anastasio Alano.

In 1912, Anastasio Alano died intestate. At the instance of one of his creditors, proceedings upon the administration of his estate were had in

the Court of First Instance of Batangas. By order dated August 8, 1914, the court appointed an administrator and a committee to hear claims. Notices

were published, as required, in a newspaper of general circulation, to inform the creditors of the time and place at which they might appear to

present their claims against the estate of the deceased (Exhibit No. 1). The time designated in the notice for the presentation of claims expired on

March 24, 1915. It appears that no claims whatever were presented to the committee, and it having been shown to the court, by the statement of the

administrator, that the claim of the creditor at whose instance the administration proceeding was commenced, had been settled by the heirs, the administrator was discharged and the proceeding terminated by order

dated November 8, 1915.

On April 27, 1916, at the instance of the plaintiff, Da. Marcela Mariño, and upon the statement, made on her behalf, that she was a creditor of the deceased and that her claim was secured by mortgage upon real estate

belonging to the said deceased, the court reopened the intestate proceeding, and appointed one Javier to be administrator of the estate. No request was made for a renewal of the commission of the committee on

claims. The appellants Jose and Florencio Alano objected to the appointment of Javier, but their objection was overruled by the court.

On March 17, 1916, the plaintiffs filed the complaint in this action against Javier, as administrator of the estate of Anastasio Alano and against

Florencio Alano and Jose Alano personally. The action is based upon the execution of the document of February 27, 1904, above set forth, which is

transcribed literally in the complaint. It is averred that defendants have paid no part of the indebtedness therein acknowledged, with the exception of the P200 paid on account in 1908. It is further averred that on April 22,

1910, the debtors promised in writing that they would pay the debt in 1911, but that they had failed to do so. The prayer of the complaint is that,

unless defendants pay the debt for the recovery of which the action was brought, they be required to convey to plaintiffs the house and lot

described in paragraph two of the said document; that this property be appraised; and that if its value is found to be less than the amount of the

debt, with the accrued interest at the stipulated rate, judgment be rendered in favor of the plaintiffs for the balance. No relief is requested

with respect to the undertaking of Anastasio Alano expressed in the third paragraph of the document in suit, as guarantor for the payment of the

difference, if any, between the value of the said house and lot and the total amount of the indebtedness.

The defendants answered denying generally the facts alleged in the complaint, and setting up, as special defenses that (1) any cause of action which plaintiff might have had against the estate of Anastasio Alano has

been barred by failure of the plaintiff to present her claim to the committee on claims for allowance; (2) that the document upon which plaintiff relies

does not constitute a valid mortgage; and (3) that as to all of the defendants, the action is barred by the general statute of limitations

MWQltadQ.

The findings of the trial court upon the evidence were substantially as follows:

1. That the document set forth in paragraph two of plaintiffs' complaint was executed by the deceased, Anastasio Alano, and by the defendants

Javier and Jose Alano, as alleged;

2. That one year after the execution of the document, plaintiffs made a demand upon Anastasio Alano, deceased, and the other two defendants

herein, to comply with the terms of the agreement by the execution of the conveyance of the house and lot, but that they requested an extension of

time for the payment of the debt, which was granted them;

3. That on March 27, 1908, the defendants paid P200 on account of the debt ZX9WRNe.

Upon these findings the court below gave judgment for plaintiffs, and from that judgment the defendants have appealed to his court upon the law and

the facts.

The question raised by the appellants require us to analyze the document upon which this action is based, and to determine its legal effect.

Appellants contend that the contract evidenced by that instrument is merely a loan coupled with an ineffectual attempt to create a mortgage to

effect the payment of debt. The court below regarded it as a conveyance of the house and lot described in the contract, which took effect upon the

failure of the debtors to pay the debt.

The principal undertaking evidenced by the document is, obviously, the payment of money. The attempt to create a mortgage upon the house and lot described in the second clause of the contract is, of course, invalid, as it

is admitted that the so-called mortgage was never recorded. Equally inefficacious, and for the same reasons, is the purported mortgage by

Anastasio Alano of his land in the barrio of San Isidro described in the third paragraph of the document. (Compañia General de Tabacos vs.

Jeanjaquet, 12 Phil. Rep., 195.)

The agreement to convey the house and lot at an appraised valuation in the event of failure to pay the debt in money a t its maturity is, however, in

our opinion, perfectly valid. It is simply an undertaking that if the debt is not paid in money, it will be paid in another way. As we read the contract, the agreement is not open to the objection that the stipulation is a pacto

comisorio. It is not an attempt to permit the creditor to declare a forfeiture of the security upon the failure of the debtor to pay the debt at maturity. It is simply provided that if the debt is not paid in money it shall be paid in another specific was by the transfer of property at a valuation. Of course, such an agreement, unrecorded, creates no right in rem; but as between the parties it is perfectly valid, and specific performance of its terms may

be enforced, unless prevented by the creation of superior rights in favor of third persons 1z5y.

The contract now under consideration is not susceptible of the interpretation that the title to the house and lot in question was to be

transferred to the creditor ipso facto upon the mere failure of the debtors to pay the debt at its maturity. The obligations assumed by the debtors

were alternative, and they had the right to elect which they would perform (Civil Code, art. 1132). The conduct of the parties (Civil Code, art. 1782) shows that it was not their understanding that the right to discharge the

obligation by the payment of money was lost to the debtors by their failure to pay the debt at its maturity. The plaintiff accepted a partial payment from Anastasio Alano in 1908, several years after the debt matured. The prayer of the complaint is that the defendants be required to execute a

conveyance of the house and lot, after its appraisal, "unless the defendants pay the plaintiff the debt which is the subject of this action."

It is quite clear, therefore, that under the terms of the contract, as we read it, and as the parties themselves have interpreted it, the liability of the defendants as to the conveyance of the house and lot is subsidiary and

conditional, being dependent upon their failure to pay the debt in money. It must follow, therefore, that if the action to recover the debt has

prescribed, the action to compel a conveyance of the house and lot is likewise barred, as the agreement to make such conveyance was not an independent principal undertaking, but merely a subsidiary alternative

pact relating to the method by which the debt might be paid.

The undertaking to pay the debt, acknowledged by the contract in suit, is indisputably conjoint (mancomunada). The concurrence of two or more debtors does not in itself create a solidary liability. Obligations in solido

arise only when it is expressly stipulated that they shall have this character (Civil Code, art. 1137). That being so, the debt must be regarded as

divided into as many equal parts as there are debtors, each part constituting a debt distinct from the others. (Civil Code, art. 1138.) The

result of this principle is that the extinction of the debt of one of the various debtors does not necessarily affect the debts of the others.

It is contended on behalf of the administrator of the estate of Anastasio Alano that the failure of the plaintiff to present her claim for allowance to the committee on claims is a bar to her action so far as this defendant is concerned. We are of the opinion that this objection is well-taken. Section 695 of the Code of Civil Procedure expressly requires that a claim of this kind be presented for allowance to the committee, and declares that the

failure to do so operates to extinguish the claim. The operation of this statute and the absolute nature of the bar which it interposes against the

subsequent assertion of claims not presented in accordance with its requirements have frequently been considered by this court, and the

doctrines announced need not be here repeated. (Estate of De Dios, 24 Phil. Rep., 573; Santos vs. Manarang, 27 Phil. Rep., 209). While it is

true that under certain circumstances and within the statutory limits (sec. 690 of the Code of Civil Procedure) the probate court may renew the

commission of the committee on claims, and permit the presentation of belated demands, in no case may a claim proper to be allowed by the

committee, such as is the one now under consideration, be enforced by an original action against the executor or administrator of the state. Our

opinion is, therefore, that the objection to the action interposed on behalf of the administrator of the estate of Anastasio Alano was well-taken and

that the court erred in rejecting it.

This conclusion makes it unnecessary to consider the effect of the payment made by Anastasio Alano in 1908 as regards the interruption of the period

of prescription with respect to him. In this connection, however, we feel constrained to remark that a careful reading of the document makes it

extremely doubtful whether Anastasio Alano was ever personally bound by its terms. It will be noted that he purports to have signed it only as the

representative of his children, Leonina, Anastasio, and Leocadio, who are not parties to this suit.

With respect to the defendants Florencio and Jose Alano, their original liability admits of no dispute and the only question open for consideration is that presented by their plea of prescription. The debt matured February

27, 1905, and as the complaint was not filed within ten years from that date (Code of Civil Procedure, sec. 43), it is obvious that the plea of

prescription is well-taken, unless the running of the statute was interrupted.

While it appears that some verbal and written demands for payment were made upon these defendants, it has been recently decided, upon mature

consideration, that an extrajudicial demand is not sufficient, under the law as it now stands, to stop the running of the statute. (Pelaez vs. Abreu, 26

Phil. Rep., 415). There must be either (1) a partial payment, (2) a written acknowledgment or (3) a written promise to pay the debt. It is not

contended that there has been any written acknowledgment or promise on the part of the defendants Jose and Florencio Alano, or either of them —

plaintiff relies solely upon the payment made in 1908 by Anastasio Alano. But there is not the slightest foundation in the evidence for the belief that the payment made by Anastasio was for the benefit of Jose or Florencio or

that it was authorized by either of them. Bearing in mind the express declaration of article 1138 of the Civil Code that joint (mancomunada)

obligations are, as regard each of the debtors, to be reputed as separate debts with respect to each of the debtors, it follows of necessity that a

payment or acknowledgment by one of such joint debtors will not stop the running of the period of prescription as to the others. That such is the law

may be demonstrated by ample authority.

In his commentaries on article 1138 and 1139 of the Civil Code, Manresa says that one of the effects of the rule established by the code that the debt is to be regarded as "divided into as many parts . . . as there are

debtors" is that "the interruption of prescription by the claim of a creditor addressed to a single debtor or by an acknowledgment made by one of the debtors in favor of one or more of the creditors is not to be understood as

prejudicial to or in favor of the other debtors or creditors." (Manresa, Commentaries on the Civil Code, vol. 8, p. 182.)

The same doctrine is recognized in the Italian Civil Law, as stated by Giorgi in his work on Obligations as follows:

The obligation appears to be one, when as a matter of fact it is an aggregate of as many separate and independent obligations as there are creditors and debtors. Each creditor cannot demand more than his part; each debtor cannot be required to pay more than his share. Prescription, novation, merger, and any other cause of modification or extinction does not extinguish or modify the obligation except with respect to the creditor or debtor affected, without extending its operation to any other part of the

debt or of the credit. The obligation is, in a word, pro rata, or in partes viriles. (Giorgi on Obligations, vol. 1, p. 83, Spanish translation.)

The same view is taken by the French law writers. In the article on obligations in Dalloz' Encyclopedia (Jurisprudence Generale) vol. 33, p. 297,

the author says:

The conjoint (pro rata) obligation is divided by operation of law among the non-solidary co-debtors. It is as though there were many debts as there are persons bound. Hence it follows that if one of the debtors is insolvent the

loss falls upon the creditor and not upon the other debtors, and that if prescription is interrupted with respect to one of the debtors, it is not

interrupted with respect to the others.

In the State of Louisiana, whose Civil Code, like ours, is largely taken from

the Code of Napoleon, the Supreme Court has established the same doctrine on the subject of the interruption of prescription.

In the case of Buard vs. Lemee, Syndic (12 Robinson's Reports, 243), the Supreme Court of Louisiana said:

It results . . . that when the acknowledgment of a debt is made by a joint debtor, such acknowledgment does not interrupt the prescription with regard to the others. Each is bound for his virile share of the debt; and, therefore, each is at liberty to act for himself, and the effect of his acts

cannot be extended to the benefit or prejudice of his co-debtors; so true is this that the law has never intended that a suit brought against one of the several debtors should interrupt prescription with regard to all, unless they

be debtors in solido.

This doctrine was recognized and applied by the Supreme Court of Louisiana in the subsequent cases of Succession of Cornelius Voorhies (21

La. Ann., 659) and Smith vs. Coon (22 La. Ann., 445).

There is no presumption that one conjoint ( pro-rata) debtor is authorized to perform any act having the effect of stopping the running of the statute of limitations as to the others. When the act relied upon is performed by some person other than the debtor, the burden rests upon the plaintiff to show that it was expressly authorized. (17 R.C.L., 911 and the cases there cited.) In this case there is no such evidence. The statement in the letter of

Da. Maria Lontok, to whom the P200 payment was made, is that it was a payment made on account of "the debt of Anastasio Alano." (Plaintiffs'

Exhibit D.) Da. Maria Lontok in her testimony does not attempt to say that the payment was made for the account of any one but Anastasio Alano, from whom she received it. The statement that Florencio Alano was with Anastasio at the time is not in itself sufficient to constitute proof that the payment was made for his benefit. (Lichauco vs. Limjuco and Gonzalo,19

Phil. Rep., 12.)

Plaintiff argues that the undertaking to convey the house and lot constitutes an indivisible obligation, and that even where the promise is not in solidum, the concurrence of two or more debtors in an obligation whose performance is indivisible creates such a relation between them

that the interruption of prescription as to one of necessity interrupts it as to all. The distinction is one which is well-established, although the

authorities cited do not fully support plaintiffs' contentions, but in this particular case the question is academic, for the undertaking is in the

alternative to pay a sum of money — an essentially divisible obligation — or to convey the house. As the alternative indivisible obligation is imposed only in the event that the debtors fail to pay the money, it is subject to a suspensive condition, and the prescription of the obligation whose non-performance constitutes the condition effectively prevents the condition

from taking place.

We are, therefore, constrained to hold with defendants and to reverse the decision of the lower court. We do this most regretfully, as the evidence in

this case shows that plaintiff has been extremely lenient with defendants and has refrained from pressing her claim against them when it fell due, and for a long period of years thereafter, purely out of consideration for

them. The defense of prescription interposed, particularly as regards Jose and Florencio Alano, is an indefensible from the standpoint of fair dealing and honesty as it is unassailable from the standpoint of legal technicality.

However, the law, as we see it, is clear and it is our duty to enforce it.

The judgment of the lower court is reversed and the action is dismissed as to all the defendants. No costs will be allowed. So ordered.

Torres, Johnson, Street and Avanceña, JJ., concur.

Malcolm, J., dissents.

R E S O L U T I O N

September 20, 1918.

FISHER, J.:

Plaintiff seeks a consideration of the decision of this court rendered herein. With respect to plaintiff's contention concerning the action against the

estate of Anastasio Alano, we have nothing to add to what was said in the former decision. As regards the defendants, Florencio Alano and Jose

Alano, the principal argument advanced by plaintiff is that those defendants, as testamentary heirs of the late Anastasio C. Cruz, are liable, in solidum, for the debt in suit, which is evidenced by the document signed

by these defendants on February 27, 1904, set forth at length in our decision. Plaintiff argues that he obligation being solidary, by reason of its hereditary origin (Fabie vs. Yulo, 24 Phil. Rep., 240) the running of the

statute of limitations was interrupted with respect to all the debtors, by the payment of P200 made by the late Anastasio Alano in 1908. The whole argument rests upon article 1084 of the Civil Code and the statement

contained in the document of February 27, 1904, that the Alano brothers are the "testamentary heirs" of the original debtor, and the assumption that the latter died, and that his inheritance was accepted, before the

present Code of Civil Procedure was enacted. There is nothing in the record to indicate, even remotely, when the Reverend Cruz died. If he died after

the new Code took effect, the acceptance of his inheritance did not impose upon his testamentary heirs any personal obligation to respond to the

payment of the debts of the deceased. (Pavia vs. De la Rosa, 8 Phil. Rep., 70.) There having been neither allegation nor proof with respect to the

date of the death of the original debtor, we cannot presume, to the prejudice of the defendants, that he died and that his succession was

opened under the old regime NNDgIJr.

But even had it been proved that the late Reverend Cruz died before Act No. 190 took effect, and that the debt, by reason of its hereditary origin, imposed upon the five Alano brothers the solidary obligation of paying it,

as the evidence does not show that the payment made by Anastasio Alano

in 1908 was authorized by any one of the solidary debtors, it cannot have the effect of interrupting the prescription. It must be kept in mind that

Anastasio Alano was in no sense a solidary debtor of the plaintiff, either with respect to the origin of the obligation or by his participation in the

execution of the document by which the indebtedness was acknowledged. it is unquestionable that payment made by any one of the several solidary debtors interrupts the running of the statute of limitations with respect to

the others, and that a third person may make a payment without the knowledge and even against the will of the debtor, but payments so made by a stranger to the debt do not interrupt the operation of the statute of

limitations VL3a5.

The general rule is that an acknowledgment or new promise to pay must, in order to take a case out of the statute, be made by the person to be

charged or by some person legally authorized by him so to act. (17 Ruling Case Law, p. 911.)

In the case of a part payment by a stranger, or by a person not authorized to represent the debtor, it is obvious that there is no ground for assuming

any admission of an existing liability on his part or for inferring a new promise by him to pay the balance of the debt. (17 Ruling Case Law, p.

935.)

Furthermore, it is to be observed that in accordance with the express terms of article 50 of the Code of Civil Procedure, payment in order to have the effect of interrupting the running of the statute, must be made by the

person to be charged oVul.

Independently of these considerations, it is obvious that this action was not brought as though based upon an obligation which had accrued under the provisions of the Civil Code, formerly in force, relating to the acceptance of an estate without benefit of inventory. The action has been brought solely

and exclusively for the enforcement of the obligation created by the execution of the document of credit of 1904. This is the reason, no doubt, why plaintiff made no effort to prove the date of the death of Reverend

Cruz; whether his heirs accepted the inheritance with or without the benefit of inventory; if they were all adults at the time of the death of the testator; whether they inherited in equal parts or in some proportion. It is

natural that she should have made no effort to produce evidence upon these points, as there is nothing in the allegations of the complaint to

support its admission. If the defendants had replied admitting the facts alleged, it is evident that it would have been necessary to decide the case in accordance with the law in force in 1904, considering the execution of

the document in question as the act from which the obligation in suit originated, although it appears from the document that the consideration

for its execution was the debt of a third person FpZL.

When the plaintiff deliberately adopts a certain theory with respect to the basis of his right of action, and the case is tried and decided in the court below and in this court upon that theory, plaintiff will not be permitted to change the theory of his action upon a motion for rehearing. (Molina vs.

Somes, 24 Phil. Rep., 49.) To do so would be to deprive the defendant of an opportunity to defend. The defendant naturally produces evidence

relating to the evidence offered on behalf of plaintiff. If the issue of the liability of Florencio and Jose Alano upon the theory now advanced by

plaintiff had been presented in the court below, it is possible that these defendants might have been able to prove that their testator died after the enactment of the new code or, if he died before, that they were minors at that time; that the inheritance was accepted by their guardian without the

intervention of the family council (Civil Code, art. 992), or that it was expressly accepted with benefit of inventory, and that the value of the property inherited is less than the amount of the debt (Civil Code, art.

1023), or that the effect of the execution of the document of 1904 was a novation of the obligation by which the latter was converted into a simple

joint indebtedness. The defendants Florencio and Jose Alano having had no opportunity to invoke any of these defenses, which might have been

available to them, it would be unjust to give judgment against them upon the theory of their obligation now invoked by plaintiff. The motion for a

rehearing is denied Xzes7Rv.

Torres, Johnson, Street, and Avanceña, JJ., concur.

Malcolm, J., dissents. .

Republic of the PhilippinesSUPREME COURT

Manila

EN BANCDECISION

May 7, 1954G.R. No. L-6220MARTINA QUIZANA, plaintiff-appellee,vs.GAUDENCIO REDUGERIO and JOSEFA POSTRADO, defendants-appellants.Samson and Amante for appellants.Sabino Palomares for appellee.Labrador, J.:

This is an appeal to this Court from a decision rendered by the Court of First Instance of Marinduque, wherein the defendants-appellants are ordered to pay the plaintiff-appellee the sum of P550, with interest from the time of the filing of the complaint, and from an order of the same court denying a motion of the defendants-appellants for the reconsideration of the judgment on the ground that they were deprived of their day in court.

The action was originally instituted in the justice of the peace court of Sta. Cruz, Marinduque, and the same is based on an actionable document

attached to the complaint, signed by the defendants-appellants on October 4, 1948, and containing the following pertinent provisions:

Na alang-alang sa aming mahigpit na pangangailangan ay kaming magasawa ay lumapit kay Ginang Martina Quizana, balo, at naninirahan sa Hupi, Sta. Cruz, Marinduque, at kami ay umutang sa kanya ng halagang Limang Daan at Limang Pung Piso (P550.00), Salaping umiiral dito sa Filipinas na aming tinanggap na husto at walang kulang sa kanya sa condicion na ang halagang aming inutang ay ibabalik o babayaran namin sa kanya sa katapusan ng buwan ng Enero, taong 1949.

Pinagkasunduan din naming magasawa sa sakaling hindi kami makabayad sa taning na panahon ay aming ipifrenda o isasangla sa kanya ang isa naming palagay na niogan sa lugar nang Cororocho, barrio ng Balogo, municipio ng Santa Cruz, lalawigang Marinduque, Kapuluang Filipinas at ito ay nalilibot ng mga kahanganang sumusunod:

Sa Norte, Dalmacio Constantino; sa este, Catalina Reforma; sa sur, Dionisio Ariola; at sa Oeste, Reodoro Ricamora, no natatala sa gobierno sa ilalim ng Declaracion No. na nasa pangalan ko, Josefa Postrado.

The defendants-appellants admit the execution of the document, but claim, as special defense, that since the 31st of January, 1949, they offered to pledge the land specified in the agreement and transfer possession thereof to the plaintiff-appellee, but that the latter refused said offer. Judgement having been rendered by the justice of the peace court of Sta. Cruz, the defendants-appellants appealed to the Court of First Instance. In that court they reiterated the defenses that they presented in the justice of the peace court. The case was set for hearing in the Court of First Instance on August 16, 1951. As early as July 30 counsel for the defendants-appellants presented an "Urgent Motion for Continuance," alleging that on the day set for the hearing (August 16, 1951), they would appear in the hearing of two criminal cases previously set for trial before they received notice of the hearing on the aforesaid date. The motion was submitted on August 2, and was set for hearing on August 4. This motion was not acted upon until the day of the trial. On the date of the trial the court denied the defendants-appellants' motion for continuance, and after hearing the evidence for the plaintiff, in the absence of the defendants-appellants and their counsel, rendered the decision appealed from. Defendants-appellants upon receiving copy of the decision, filed a motion for reconsideration, praying that the decision be set aside on the ground that sufficient time in advance was given to the court to pass upon their motion for continuance, but that the same was not passed upon. This motion for reconsideration was denied.

The main question raised in this appeal is the nature and effect of the actionable document mentioned above. The trial court evidently ignored the second part of defendants-appellants' written obligation, and enforced its last first part, which fixed payment on January 31, 1949. The plaintiff-appellee, for his part, claims that this part of the written obligation is not binding upon him for the reason that he did not sign the agreement, and

that even if it were so, the defendants-appellants did not execute the document as agreed upon, but, according to their answer, demanded the plaintiff-appellee to do so. This last contention of the plaintiff-appellee is due to a loose language in the answer filed with the Court of First Instance. But upon careful scrutiny, it will be seen that what the defendants-appellants wanted to allege is that they themselves had offered to execute the document of mortgage and deliver the same to the plaintiff-appellee, but that the latter refused to have it executed unless, an additional security was furnished. Thus the answer reads:

5. That immediately after the due date of the loan Annex "A" of the complaint, the defendants made efforts to execute the necessary documents of mortgage and to deliver the same to the plaintiff, in compliance with the terms and conditions thereof, but the plaintiff refused to execute the proper documents and insisted on another portion of defendants' as additional security for the said loan; (emphasis ours.)

In our opinion it is not true that defendants-appellants had not offered to execute the deed of mortgage VhGzBPO771.

The other reasons adduced by the plaintiff-appellee for claiming that the agreement was not binding upon him also deserves scant consideration. When plaintiff-appellee received the document, without any objection on his part to the paragraph thereof in which the obligors offered to deliver a mortgage on a property of theirs in case they failed to pay the debt on the day stipulated, he thereby accepted the said condition of the agreement. The acceptance by him of the written obligation without objection and protest, and the fact that he kept it and based his action thereon, are concrete and positive proof that he agreed and contested to all its terms, including the paragraph on the constitution of the mortgage.

The decisive question at issue, therefore, is whether the second part of the written obligation, in which the obligors agreed and promised to deliver a mortgage over the parcel of land described therein, upon their failure to pay the debt on a date specified in the proceeding paragraph, is valid and binding and effective upon the plaintiff-appellee, the creditor. This second part of the obligation in question is what is known in law as a facultative obligation, defined in article 1206 of Civil Code of the Philippines, which provides:

ART. 1206. When only one prestation has been agreed upon, but the obligor may render another in substitution, the obligation is called facultative.

x x x x x x x x x

This is a new provision and is not found in the old Spanish Civil Code, which was the one in force at the time of the execution of the agreement.

There is nothing in the agreement which would argue against its enforcement. it is not contrary to law or public morals or public policy, and

notwithstanding the absence of any legal provision at the time it was entered into government it, as the parties had freely and voluntarily entered into it, there is no ground or reason why it should not be given effect. It is a new right which should be declared effective at once, in consonance with the provisions of article 2253 of the Civil Code of the Philippines, thus:

ART. 2253. . . . But if a right should be declared for the first time in this Code, it shall be effective at once, even though the act or event which gives rise thereto may have been done or may have occurred under the prior legislation, provided said new right does not prejudice or impair any vested or acquired right, of the same origin.

In view of our favorable resolution on the important question raised by the defendants-appellants on this appeal, it becomes unnecessary to consider the other question of procedure raised by them.

For the foregoing considerations, the judgment appealed from is hereby reversed, and in accordance with the provisions of the written obligation, the case is hereby remanded to the Court of First Instance, in which court the defendants-appellants shall present a duly executed deed of mortgage over the property described in the written obligation, with a period of payment to be agreed upon by the parties with the approval of the court. Without costs.

Paras, C.J., Pablo, Bengzon, Montemayor, Jugo, Bautista Angelo, and Concepcion, JJ., concur.   .

Republic of the PhilippinesSUPREME COURT

ManilaEN BANCDECISION

January 4, 1908

G.R. No. L-3128UN PAK LEUNG, plaintiff-appellee,vs.JUAN NIGORRA, ET AL, defendants-appellants.

Johnson, J.:

MOTION FOR REHEARING.

The plaintiff and appellee presents a motion for rehearing, basing the same upon the claim that this court was without jurisdiction to consider and decide the cause, for reason that section 16 of Act No. 1627 of the Philippine Commission deprived this court of jurisdiction in causes which were originally commenced in the court of the justice of the peace, and cites many cases in support of this contention. Said section 16, among other things, provides as follows:

Judgments rendered by the Court of First Instance on appeal (from the court of the justice of the peace) shall be final and conclusive, except in cases involving the validity or constitutionality of a statute or municipal ordinance.

The contention of the appellee is that this provision deprived this court of jurisdiction to hear and determine the present cause.

The facts are as follows:

On the 31st day of March, 1905, the justice of the peace of the city of Manila rendered judgment in the present cause against the defendants and in favor of the plaintiff. From this decision the defendants appealed to the Court of First Instance. On the 2d day of September, 1905, the judge of the Court of First Instance, after hearing the evidence in said cause, rendered judgment affirming the decision of the justice of the peace. From this decision the defendants appealed to this court. The record was received in this court on the 19th of January, 1906. The bill of exceptions was printed and distributed on the 2d day of March, 1906. Act No. 1627 did not take effect until the 1st day of July, 1907. The briefs of both parties were filed on or before the 29th day of August, 1906, and the cause was duly submitted to this court on the 5th day of November, 1907. In other words, the appeal in the present case to this court was made and perfected nearly a year and a half before said Act No. 1627 went into effect.

The question presented is, Did the above-quoted provision of Act No. 1627 have the effect of depriving this court of jurisdiction over said cause? It will be noted that the language of said act is that the "judgments rendered by the Court of First Instance on appeal shall be final and conclusive," etc. The appellee relies especially upon Ex parte McCardle (74 U.S. 506). In that case the amended law expressly deprived the Supreme Court of the United States of jurisdiction in appeals in the class of cases mentioned in said law, and, of course, this law deprived the Supreme Court of such jurisdiction immediately upon the taking effect of said law. It will be observed, however, that there is nothing in the amendment upon which the appellee relies which deprived this court of jurisdiction of cases pending. In the case of Railroad Company vs. Grant (98 U.S. 398) a writ of error was granted by the Supreme Court of the United States on the 6th day of December, 1875. The cause was not brought on for trial until some time after the 25th day of February, 1879. On this latter date Congress passed a law providing that thereafter no case of the character of the one in question "may be reexamined and reversed or affirmed in the Supreme Court of the United States upon the writ of error or appeal." Here again it will be noted that the law deprived the Supreme Court of its jurisdiction, and, of course, after the passage of that law, and having been deprived of its jurisdiction, it could no longer hear cases of the nature of that presented in the particular case.

No doctrine is better settled than that a repeal of an act giving jurisdiction of a pending suit is an express prohibition of the exercise of the jurisdiction conferred by the former law. In the present case, however, the appeal was perfected long before the new law went into operation, and we are of the opinion, and so hold, that it was not the intention of the legislature to deprive persons who had perfected their appeals before that date of the right to have their appeals considered by the Supreme Court. Act No. 1627 did not deprive this court of its jurisdiction over cases appealed prior to the 1st day of July, 1907. The decision in the case of Pavon vs. Philippine Islands Telephone and Telegraph Company (5 O.G. 1076, 9 Phil. 247) is not in conflict with this conclusion. The motion for rehearing is, therefore, hereby denied. So ordered.

Arellano, C.J., Torres, Mapa, Carson, Willard and Tracey, JJ., concur. .

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-7721            March 25, 1914

INCHAUSTI & CO., plaintiff-appellant, vs.GREGORIO YULO, defendant-appellee.

Hausserman, Cohn and Fisher for appellant.Rohde and Wright for appellee.Bruce, Lawrence, Ross and Block, Amici Curiae, for Manuel, Francisco and Carmen Yulo.

ARELLANO, C.J.:

This suit is brought for the recovery of a certain sum of money, the balance of a current account opened by the firm of Inchausti & Company with Teodoro Yulo and after his death continued with his widow and children, whose principal representative is Gregorio Yulo. Teodoro Yulo, a property owner of Iloilo, for the exploitation and cultivation of his numerous haciendas in the province of Occidental Negros, had been borrowing money from the firm of Inchausti & Company under specific conditions. On April 9, 1903; Teodoro Yulo died testate and for the execution of the provisions of his will he had appointed as administrators his widow and five of his sons, Gregorio Yulo being one of the latter. He thus left a widow, Gregoria Regalado, who died on October 22d of the following year, 1904, there remaining of the marriage the following legitimate children: Pedro, Francisco, Teodoro, Manuel, Gregorio, Mariano, Carmen, Concepcion, and Jose Yulo y Regalado. Of these children Concepcion and Jose were minors, while Teodoro was mentally incompetent. At the death of their predecessor in interest, Teodoro Yulo, his widow and children held the conjugal property in common and at the death of this said widow, Gregoria Regalado, these children preserved the same relations under the name of Hijos de T. Yulo continuing their current account with Inchausti & Company in the best and most harmonious reciprocity until said balance amounted to two hundred thousand pesos. In for the payment of the disbursements of money which until that time it had been making in favor of its debtors, the Yulos.

First. Gregorio Yulo, for himself and in representation of his brothers Pedro Francisco, Manuel, Mariano, and Carmen, executed on June 26, 1908, a notarial document (Exhibit S) whereby all admitted their indebtedness to

Inchausti & Company in the sum of P203,221.27 and, in order to secure the same with interest thereon at 10 per cent per annum, they especially mortgaged an undivided six-ninth of their thirty-eight rural properties, their remaining urban properties, lorchas, and family credits which were listed, obligating themselves to make a forma inventory and to describe in due form all the said properties, as well as to cure all the defects which might prevent the inscription of the said instrument in the registry of property and finally to extend by the necessary formalities the aforesaid mortgage over the remaining three-ninths part of all the property and rights belonging to their other brothers, the incompetent Teodoro, and the minors Concepcion and Jose.

Second. On January 11, 1909, Gregorio Yulo in representation of Hijos de T. Yulo answered a letter of the firm of Inchausti & Company in these terms: "With your favor of the 2d inst. we have received an abstract of our current account with your important firm, closed on the 31st of last December, with which we desire to express our entire conformity as also with the balance in your favor of P271,863.12." On July 17, 1909, Inchausti & Company informed Hijos de T. Yulo of the reduction of the said balance to P253,445.42, with which balance Hijos de T. Yulo expressed its conformity by means of a letter of the 19th of the same month and year. Regarding this conformity a new document evidencing the mortgage credit was formalized.

Third. On August 12, 1909, Gregorio Yulo, for himself and in representation of his brother Manuel Yulo, and in their own behalf Pedro Yulo, Francisco Yulo, Carmen Yulo, and Concepcion Yulo, the latter being of age at the time, executed the notarial instrument (Exhibit X). Through this, the said persons, including Concepcion Yulo ratified all the contents of the prior document of June 26, 1908, severally and jointly acknowledged and admitted their indebtedness to Inchausti & Company for the net amount of two hundred fifty-three thousand four hundred forty-five pesos and forty-two centavos (P253,445.42) which they obligated themselves to pay, with interest at ten per cent per annum, in five installments at the rate of fifty thousand pesos (P50,000), except the last, this being fifty-three thousand four hundred forty-five pesos and forty-two centavos (P53,445.42), beginning June 30, 1910, continuing successively on the 30th of each June until the last payment on June 30, 1914. Among other clauses, they expressly stipulated the following:

Fifth. The default in payment of any of the installments established in clause 3, or the noncompliance of any of the other obligations which by the present document and that of June 26, 1908, we, the Yulos, brothers and sisters, have assumed, will result in the maturity of all the said installments, and as a consequence thereof, if they so deem expedient Messrs. Inchausti & Company may exercise at once all the rights and actions which to them appertain in order to obtain the immediate and total payment of our debt, in the same manner that they would have so done at the maturity of the said installments.

Fifteenth. All the obligations which by this, as well as by the document of June 26, 1908, concern us, will be understood as having been contradicted in solidum by all of us, the Yulos, brothers and sisters.

Sixteenth. It is also agreed that this instrument shall be confirmed and ratified in all its parts, within the present week, by our brother Don Mariano Yulo y Regalado who resides in Bacolod, otherwise it will not be binding on Messrs. Inchausti & Company who can make use of their rights to demand and obtain immediate payment of their credit without any further extension or delay, in accordance with what we have agreed.

Fourth. This instrument was neither ratified nor confirmed by Mariano Yulo.

Fifth. The Yulos, brothers and sisters, who executed the preceding instrument, did not pay the first installment of the obligation.

Sixth. Therefore, on March 27, 1911, Inchausti & Company brought an ordinary action in the Court of First Instance of Iloilo, against Gregorio Yulo for the payment of the said balance due of two hundred fifty-three thousand, four hundred forty-five pesos and forty-two centavos P253,445.42) with interest at ten per cent per annum, on that date aggregating forty-two thousand, nine hundred forty-four pesos and seventy-six centavos (P42,944.76)

Seventh. But, on May 12, 1911, Francisco, Manuel, and Carmen Yulo y Regalado executed in favor Inchausti & Company another notarial instrument in recognition of the debt and obligation of payment in the following terms: "First, the debt is reduce for them to two hundred twenty-five thousand pesos (P225,000); second, the interest is likewise reduced for them to 6 percent per annum, from March 15, 1911; third, the installments are increase to eight, the first of P20,000, beginning on June 30, 1911, and the rest of P30,000 each on the same date of each successive year until the total obligation shall be finally and satisfactorily paid on June 30, 1919," it being expressly agreed "that if any of the partial payments specified in the foregoing clause be not paid at its maturity, the amount of the said partial payment together with its interest shall bear interest at the rate of 15 per cent per annum from the date of said maturity, without the necessity of demand until its complete payment;" that "if during two consecutive years the partial payments agreed upon be not made, they shall lose the right to make use of the period granted to them for the payment of the debt or the part thereof which remains unpaid, and that Messrs. Inchausti & Company may consider the total obligation due and demandable, and proceed to collect the same together with the interest for the delay above stipulated through all legal means." (4th clause.)

Thus was it stipulated between Inchausti & Company and the said three Yulos, brothers and sisters — by way of compromise so that Inchausti & Company might, as it did, withdraw the claims pending in the special proceedings for the probate of the will of Don Teodoro Yulo and of the intestacy of Doña Gregoria Regalado — stipulating expressly however in the sixth clause that "Inchausti & Company should include in their suit brought in the Court of First Instance of Iloilo against Don Gregorio Yulo, his brother and joint co-obligee, Don Pedro Yulo, and they will procure by all legal means and in the least time possible a judgment in their favor against the said Don Gregorio and Don Pedro, sentencing the later to pay the total amount of the obligation acknowledged by them in the aforementioned instrument of August 12, 1909; with the understanding that if they should deem it convenient for their interests, Don Francisco, Don Manuel, and Doña Carmen Yulo may appoint an attorney to cooperate with the lawyers of Inchausti & Company in the proceedings of the said case."

Eighth. Matters being thus on July 10, 1911, Gregorio Yulo answered the complaint and alleged as defenses; first, that an accumulation of interest had taken place and that compound interest was asked for the Philippine currency at par with Mexican; second, that in the instrument of August 21, 1909, two conditions were agreed one of which ought to be approved by the Court of First Instance, and the other ratified and confirmed by the other brother Mariano Yulo, neither of which was complied with; third , that with regard to the same debt claims were presented before the commissioners in the special proceedings over the inheritances of Teodoro Yulo and Gregoria Regalado, though later they were dismissed, pending the present suit; fourth and finally, that the instrument of August 12, 1909, was novated by that of May 12, 1911, executed by Manuel, Francisco and Carmen Yulo.

Ninth. The Court of First Instance of Iloilo decided the case "in favor of the defendant without prejudice to the plaintiff's bringing within the proper time another suit for his proportional part of the joint debt, and that the plaintiff pay the costs." (B. of E., 21.)

The plaintiff appealed from this judgment by bill of exceptions and before this court made the following assignment of errors:

I. That the court erred in considering the contract of May 12, 1911, as constituting a novation of that of August 12, 1909.

II. That the court erred in rendering judgment in favor of the defendant.

III. And that the court erred n denying the motion for a new trial.

"No one denies in this case," says the trial judge, "that the estate of Teodoro Yulo or his heirs owe Inchausti & Company an amount of money, the object of this action, namely, P253,445.42" (B. of E. 18). "The fact is

admitted," says the defendant, "that the plaintiff has not collected the debt, and that the same is owing" (Brief, 33). "In the arguments of the attorneys," the judge goes on, "it was really admitted that the plaintiff had a right to bring an action against Gregorio Yulo, as one of the conjoint and solidary obligors in the contract of August 12, 1909; but the defendant says that the plaintiff has no right to sue him alone, since after the present suit was brought, the plaintiff entered into a compromise with the other conjoint and solidary debtors, the result being the new contract of May 12, 1911, by virtue of which the payments were extended, the same constituting a novation of the contract which gave him the same privileges that were given his conjoint and solidary codebtors. This (the judge concludes) is the only question brought up by the parties." (B. of E., 19.)

And this is the only one which the Supreme Court has to solve by virtue of the assignments of errors alleged. Consequently, there is no need of saying anything regarding the first three defenses of the answer, nor regarding the lack of the signature of Mariano Yulo ratifying and confirming the instrument of August 12, 1909, upon which the appellee still insists in his brief for this appeal; although it will not be superfluous to state the doctrine that a condition, such as is contained in the sixteenth clause of the said contract (third point in the statement of facts), is by no means of suspensive but a resolutory condition; the effect of the failure of compliance with the said clause, that is to say, the lack of the ratification and confirmance by Mariano Yulo being not to suspend but to resolve the contract, leaving Inchausti & Company at liberty, as stipulated, "to make use of its rights to demand and obtain the immediate payment of its credit."

The only question indicated in the decision of the inferior court involves, however, these others: First, whether the plaintiff can sue Gregorio Yulo alone, there being other obligors; second, if so, whether it lost this right by the fact of its having agreed with the other obligors in the reduction of the debt, the proroguing of the obligation and the extension of the time for payment, in accordance with the instrument of May 12, 1911; third, whether this contract with the said three obligors constitutes a novation of that of August 12, 1909, entered into with the six debtors who assumed the payment of two hundred fifty-three thousand and some odd pesos, the subject matter of the suit; and fourth, if not so, whether it does have any effect at all in the action brought, and in this present suit.

With respect to the first it cannot be doubted that, the debtors having obligated themselves in solidum, the creditor can bring its action in toto against any one of them, inasmuch as this was surely its purpose in demanding that the obligation contracted in its favor should be solidary having in mind the principle of law that, "when the obligation is constituted as a conjoint and solidary obligation each one of the debtors is bound to perform in full the undertaking which is the subject matter of such obligation." (Civil Code, articles 1137 and 1144.)

And even though the creditor may have stipulated with some of the solidary debtors diverse installments and conditions, as in this case, Inchausti & Company did with its debtors Manuel, Francisco, and Carmen Yulo through the instrument of May 12, 1911, this does not lead to the conclusion that the solidarity stipulated in the instrument of August 12, 1909 is broken, as we already know the law provides that "solidarity may exist even though the debtors are not bound in the same manner and for the same periods and under the same conditions." (Ibid, article 1140.) Whereby the second point is resolved.

With respect to the third, there can also be no doubt that the contract of May 12, 1911, does not constitute a novation of the former one of August 12, 1909, with respect to the other debtors who executed this contract, or more concretely, with respect to the defendant Gregorio Yulo: First, because "in order that an obligation may be extinguished by another which substitutes it, it is necessary that it should be so expressly declared or that the old and the new be incompatible in all points" (Civil Code, article 1204); and the instrument of May 12, 1911, far from expressly declaring that the obligation of the three who executed it substitutes the former signed by Gregorio Yulo and the other debtors, expressly and clearly stated that the said obligation of Gregorio Yulo to pay the two hundred and fifty-three thousand and odd pesos sued for exists, stipulating that the suit must continue its course and, if necessary, these three parties who executed the contract of May 12, 1911, would cooperate in order that the action against Gregorio Yulo might prosper (7th point in the statement of facts), with other undertakings concerning the execution of the judgment which might be rendered against Gregorio Yulo in this same suit. "It is always necessary to state that it is the intention of the contracting parties to extinguish the former obligation by the new one" (Judgment in cassation, July 8, 1909). There exist no incompatibility between the old and the new obligation as will be demonstrated in the resolution of the last point, and for the present we will merely reiterate the legal doctrine that an obligation to pay a sum of money is not novated in a new instrument wherein the old is ratified, by changing only the term of payment and adding other obligations not incompatible with the old one. (Judgments in cassation of June 28, 1904 and of July 8, 1909.)

With respect to the last point, the following must be borne in mind:

Facts. — First. Of the nine children of T. Yulo, six executed the mortgage of August 12, 1909, namely, Gregorio, Pedro, Francisco, Manuel, Carmen, and Concepcion, admitting a debt of P253,445.42 at 10 per cent per annum and mortgaging six-ninths of their hereditary properties. Second. Of those six children, Francisco, Manuel and Carmen executed the instrument of May 12, 1911, wherein was obtained a reduction of the capital to 225,000 pesos and of the interest to 6 per cent from the 15th of March of the same year of 1911. Third. The other children of T. Yulo named Mariano, Teodoro, and Jose have not taken part in these instruments and have not mortgaged their hereditary portions. Fourth. By the first instrument the maturity of the first installment was June 30, 1910, whereas by the second instrument,

Francisco, Manuel, and Carmen had in their favor as the maturity of the first installment of their debt, June 30, 1912, and Fifth, on March 27, 1911, the action against Gregorio Yulo was already filed and judgment was pronounced on December 22, 1911, when the whole debt was not yet due nor even the first installment of the same respective the three aforesaid debtors, Francisco, Manuel, and Carmen.

In jure it would follow that by sentencing Gregorio Yulo to pay 253,445 pesos and 42 centavos of August 12, 1909, this debtor, if he should pay all this sum, could not recover from his joint debtors Francisco, Manuel, and Carmen their proportional parts of the P253,445.42 which he had paid, inasmuch as the three were not obligated by virtue of the instrument of May 12, 1911, to pay only 225,000 pesos, thus constituting a violation of Gregorio Yulo's right under such hypothesis, of being reimbursed for the sum paid by him, with the interest of the amounts advanced at the rate of one-sixth part from each of his five codebtors. (Civ. Code, article 1145, par. 2). This result would have been a ponderous obstacle against the prospering of the suit as it had been brought. It would have been very just then to have absolved the solidary debtor who having to pay the debt in its entirety would not be able to demand contribution from his codebtors in order that they might reimburse him pro rata for the amount advanced for them by him. But such hypothesis must be put out of consideration by reason of the fact that occurred during the pendency of the action, which fact the judge states in his decision. "In this contract of May last," he says, "the amount of the debt was reduced to P225,000 and the attorney of the plaintiff admits in his plea that Gregorio Yulo has a right to the benefit of this reduction." (B. of E., 19.) This is a fact which this Supreme Court must hold as firmly established, considering that the plaintiff in its brief, on page 27, corroborates the same in these words: "What effect," it says, "could this contract have over the rights and obligations of the defendant Gregorio Yulo with respect to the plaintiff company? In the first place, we are the first to realize that it benefits him with respect to the reduction of the amount of the debt. The obligation being solidary, the remission of any part of the debt made by a creditor in favor of one or more of the solidary debtors necessarily benefits the others, and therefore there can be no doubt that, in accordance with the provision of article 1143 of the Civil Code, the defendant has the right to enjoy the benefits of the partial remission of the debt granted by the creditor."

Wherefore we hold that although the contract of May 12, 1911, has not novated that of August 12, 1909, it has affected that contract and the outcome of the suit brought against Gregorio Yulo alone for the sum of P253,445.42; and in consequence thereof, the amount stated in the contract of August 12, 1909, cannot be recovered but only that stated in the contract of May 12, 1911, by virtue of the remission granted to the three of the solidary debtors in this instrument, in conformity with what is provided in article 1143 of the Civil Code, cited by the creditor itself.

If the efficacy of the later instrument over the former touching the amount of the debt had been recognized, should such efficacy not likewise be

recognized concerning the maturity of the same? If Francisco, Manuel, and Carmen had been included in the suit, they could have alleged the defense of the nonmaturity of the installments since the first installment did not mature until June 30, 1912, and without the least doubt the defense would have prospered, and the three would have been absolved from the suit. Cannot this defense of the prematurity of the action, which is implied in the last special defense set up in the answer of the defendant Gregorio Yulo be made available to him in this proceeding?

The following commentary on article 1140 of the Civil Code sufficiently answers this question: ". . . . Before the performance of the condition, or before the execution of a term which affects one debtor alone proceedings may be had against him or against any of the others for the remainder which may be already demandable but the conditional obligation or that which has not yet matured cannot be demanded from any one of them. Article 1148 confirms the rule which we now enunciate inasmuch as in case the total claim is made by one creditor, which we believe improper if directed against the debtor affected by the condition or the term, the latter can make use of such exceptions as are peculiarly personal to his own obligation; and if against the other debtors, they might make use of those exceptions, even though they are personal to the other, inasmuch as they alleged they are personal to the other, inasmuch as they alleged them in connection with that part of the responsibility attaching in a special manner to the other." (8 Manresa, Sp. Civil Code, 196.)

Article 1148 of the Civil Code. — "The solidary debtor may utilize against the claims of the creditor of the defenses arising from the nature of the obligation and those which are personal to him. Those personally pertaining to the others may be employed by him only with regard to the share of the debt for which the latter may be liable."

Gregorio Yulo cannot allege as a defense to the action that it is premature. When the suit was brought on March 27, 1911, the first installment of the obligation had already matured of June 30, 1910, and with the maturity of this installment, the first not having been paid, the whole debt had become mature, according to the express agreement of the parties, independently of the resolutory condition which gave the creditor the right to demand the immediate payment of the whole debt upon the expiration of the stipulated term of one week allowed to secure from Mariano Yulo the ratification and confirmation of the contract of August 12, 1909.

Neither could he invoke a like exception for the shares of his solidary codebtors Pedro and Concepcion Yulo, they being in identical condition as he.

But as regards Francisco, Manuel, and Carmen Yulo, none of the installments payable under their obligation, contracted later, had as yet matured. The first payment, as already stated, was to mature on June 30, 1912. This exception or personal defense of Francisco, Manuel, and

Carmen Yulo "as to the part of the debt for which they were responsible" can be sent up by Gregorio Yulo as a partial defense to the action. The part of the debt for which these three are responsible is three-sixths of P225,000 or P112,500, so that Gregorio Yulo may claim that, even acknowledging that the debt for which he is liable is P225,000, nevertheless not all of it can now be demanded of him, for that part of it which pertained to his codebtors is not yet due, a state of affairs which not only prevents any action against the persons who were granted the term which has not yet matured, but also against the other solidary debtors who being ordered to pay could not now sue for a contribution, and for this reason the action will be only as to the P112,500.

Against the propriety and legality of a judgment against Gregorio Yulo for this sum, to wit, the three-sixths part of the debt which forms the subject matter of the suit, we do not think that there was any reason or argument offered which sustains an opinion that for the present it is not proper to order him to pay all or part of the debt, the object of the action.

It has been said in the brief of the appellee that the prematurity of the action is one of the defenses derived from the nature of the obligation, according to the opinion of the commentator of the Civil Code, Mucius Scaevola, and consequently the defendant Gregorio Yulo may make use of it in accordance with article 1148 of the said Code. It may be so and yet, taken in that light, the effect would not be different from that already stated in this decision; Gregorio Yulo could not be freed from making any payment whatever but only from the payment of that part of the debt which corresponds to his codebtors Francisco, Manuel, and Carmen. The same author, considering the case of the opposing contention of two solidary debtors as to one of whom the obligation is pure and unconditional and as to the other it is conditional and is not yet demandable, and comparing the disadvantages which must flow from holding that the obligation is demandable with these which must follow if the contrary view is adopted, favors this solution of the problem:

There is a middle ground, (he says), from which we can safely set out, to wit, that the creditor may ofcourse, demand the payment of his credit against the debtor not favored by any condition or extension of time." And further on, he decides the question as to whether the whole debt may be recovered or only that part unconditionally owing or which has already matured, saying, "Without failing to proceed with juridical rigor, but without falling into extravagances or monstrosities, we believe that the solution of the difficulty is perfectly possible. How? By limiting the right of the creditor to the recovery of the amount owed by the debtors bound unconditionally or as to whom the obligation has matured, and leaving in suspense the right to demand the payment of the remainder until the expiration of the term of the fulfillment of the condition. But what then is the effect of solidarity? How can this restriction of right be reconciled with the duty imposed upon each one of the debtors to answer for the whole obligation? Simply this,

by recognizing in the creditor the power, upon the performance of the condition or the expiration of the term of claiming from any one or all of the debtors that part of the obligation affected by those conditions. (Scaevola, Civil Code, 19, 800 and 801.)

It has been said also by the trial judge in his decision that if a judgment be entered against Gregorio Yulo for the whole debt of P253,445.42, he cannot recover from Francisco, Manuel, and Carmen Yulo that part of the amount which is owed by them because they are obliged to pay only 225,000 pesos and this is eight installments none of which was due. For this reason he was of the opinion that he (Gregorio Yulo) cannot be obliged to pay his part of the debt before the contract of May 12, 1911, may be enforced, and "consequently he decided the case in favor of the defendant, without prejudice to the plaintiff proceeding in due time against him for his proportional part of the joint debt." (B. of E., 21 and 22.)

But in the first place, taking into consideration the conformity of the plaintiff and the provision of article 1143 of the Civil Code, it is no longer possible to sentence the defendant to pay the P253,445.42 of the instrument of August 12, 1909, but, if anything, the 225,000 of the instrument of May 12, 1911.

In the second place, neither is it possible to curtail the defendant's right of recovery from the signers of the instrument of May 12, 1911, for he was justly exonerated from the payment of that part of the debt corresponding to them by reason of there having been upheld in his favor the exception of an unmatured installment which pertains to them.

In the third place, it does not seem just, Mucius Scaevola considers it "absurd," that, there being a debtor who is unconditionally obligated as to when the debt has matured, the creditor should be forced to await the realization of the condition (or the expiration of the term.) Not only is there no reason for this, as stated by the author, but the court would even fail to consider the special law of the contract, neither repealed nor novated, which cannot be omitted without violating article 1091 of the Civil Code according to which "the obligations arising from contracts have the force of law between the contracting parties and must be complied with in accordance with the tenor of the same." Certain it is that the trial court, in holding that this action was premature but might be brought in the time, regarded the contract of August 12, 1909, as having been expressly novated; but it is absolutely impossible in law to sustain such supposed novation, in accordance with the legal principles already stated, and nevertheless the obligation of the contract of May 12, 1911, must likewise be complied with in accordance with its tenor, which is contrary in all respects to the supposed novation, by obliging the parties who signed the contract to carry on the suit brought against Gregorio Yulo. The contract of May 12, 1911, has affected the action and the suit, to the extent that Gregorio Yulo has been able to make in his favor the defense of remission of part of the debt, thanks to the provision of article 1148, because it is a defense derived from the nature of the obligation, so that although the

said defendant was not party to the contract in question, yet because of the principle of solidarity he was benefited by it.

The defendant Gregorio Yulo cannot be ordered to pay the P253,445.42 claimed from him in the suit here, because he has been benefited by the remission made by the plaintiff to three of his codebtors, many times named above.

Consequently, the debt is reduced to 225,000 pesos.

But, as it cannot be enforced against the defendant except as to the three-sixths part which is what he can recover from his joint codebtors Francisco, Manuel, and Carmen, at present, judgment can be rendered only as to the P112,500.

We therefore sentence the defendant Gregorio Yulo to pay the plaintiff Inchausti & Company P112,500, with the interest stipulated in the instrument of May 12, 1911, from March 15, 1911, and the legal interest on this interest due, from the time that it was claimed judicially in accordance with article 1109 of the Civil Code, without any special finding as to costs. The judgment appealed from is reversed. So ordered.

Carson, Trent, and Araullo, JJ., concur.

Republic of the PhilippinesSUPREME COURT

Manila

EN BANC

G.R. No. L-30111             February 23, 1929

THE BANK OF THE PHILIPPINE ISLANDS, plaintiff-appellee, vs.MAY MCCOY, as executrix of the Estate of H.B. McCoy, ET AL., defendants-appellants.

William J. Rhode, Manuel Garcia Goyena, Ohnick and McFie and Camus and Delgado for appellants.Araneta and Zaragoza for appellee.

STREET, J.:

This action was originally intituted by the Bank of the Philippine Islands against May McCoy, executrix of the estate of H. B. McCoy, deceased, for the purpose of recovering upon a claim against the deceased in excess of P16,000 which had been disallowed by the committee upon claims, the

plaintiff having appealed from the committee's action. In the amended complaint, by requirement of the court, the names of six individuals, namely, C. H. Sleeper, A. G. Moody, Milton E. Springer, John B. McCord, George E. Brown, and B. A. Green, were introduced as codefendants with the executrix. After the case was about ready for hearing, the executrix entered into a compromise with the plaintiff and paid the sum of P12,000 in satisfaction of the entire claim, after which the action proceeded with the executrix substituted as plaintiff against her former codefendants, for the purpose of compelling them to make contribution, to the extent of their proportionate shares, for her reimbursement. Upon hearing the cause the trial court gave judgment against the said six defendants, requiring each of them to pay to their former codefendant, but now plaintiff, the sum of P1,714.28, being the proportional share of each in the P12,000 aforesaid, with the additional provision that each of the six should pay the proportional part of any share or part of any share which could not be made out either of the six, with legal interest from August 21, 1924. From this judgment the six defendants have brought the present appeal.

Exception is taken by the appellants to the action of the court in permitting May McCoy, executrix, to assume the role of plaintiff, after she had first answered and denied the liability of her intestate for the claim sued upon. But this suggestion is untenable. By paying off the claim which was originally the subject of litigation, the executrix was subrogated to the rights of the original palintiff, and if the situation was one involving a joint and several liability on the part of all of the original defendants, the executrix, upon paying of the claim, necessarily acquired the right to prosecute the action for contribution against her codefendants. But it is said that the amendment by which the executrix was permitted to substitute the original plaintiff had the effect of changing the cause of action entirely, since the original action was founded upon a debt supposedly owing to the bank from the seven defendants, whereas after the instant the debt was paid, the only right of action vested in the executrix was right to obtain contribution. It must be remembered, however, that if the original action had proceeded, to its end against all the defendants the court, in giving judgment, would have taken account of the obligation of each to contribute his proportionate share to the payment of the judgment, and what has been finally done, as the case shaped itself here, is to give effect to the same obligation. It was in our opinion a proper case for substitution of parties resulting from the subrogation of one of the defendants to the right of action of the plaintiff.

The facts of the case, so far as effects the merits of the controversy, are substantially these: On and prior to June 19, 1919, H. B. McCoy, deceased, and the present six appellants, with three others, were interested in a domestic corporation known as the Cooperative Coconut Products Co., Inc., and became jointly and severally liable with it to the Bank of the Philippine Islands for money advanced by the bank to said corporation, to the extent of P235,000. In order further to secure this indebtedness said corporation, on June 19, 1919, executed in favor of the bank a mortgage upon certain building and improvements belonging to it, and on June 30, 1919, the

corporation executed still another mortgage upon its interest in a contract of lease upon lands and properties in San Pablo, Laguna.

The company apparently did not prosper; and the present six appellants (with H. B. McCoy), foreseeing that the aforesaid mortgages would soon be foreclosed, addressed to the bank the following letter, upon occasion of the receipt of a demand from the bank for the payment of the debt:

MANILA, August 16, 1922

Mr. WILLIAM T. NOLTING, President, Bank of the Philippine Islands, Manila, P. I.

DEAR SIR: Referring to your letter of the 16th ultimo, addressed to us to the Cooperative Cocoanut Products Company, demanding payment of the indebtedness of that concern, which indebtedness is guaranteed by us, we, the undersigned guarantors of the Cooperative Cacoanut Products Company, make the following proposition to you:

That you are to proceed to foreclose the mortgage you hold on the properties mortgaged to you and that you are to bid in the same at the auction sale to be held for this purpose, for the amount due on said mortgage. If your bid is successful, you are to sell the properties to us for the sum of P65,114.99, plus interest from August 1st, 1992, at the rate of 9 per cent annum, insurance and other expenses incurred and or to be incurred on the mortgaged properties untill the same is transferred to us, and the total cost of sale (including costs, fees and other expenses), which we agree to pay in the following manner:

(a) Fifteen thousand pesos on the purchase by you, at public auction of the properties mortgaged to you.

(b) The remainder, after deducting the first payment of P15,000, we oblige ourselves to pay in three equal installments, we to sign, jointly and severally, three promissory notes as follows: The first for one-third of the remainder at six months date, the second for the other third of the remainder at twelve months date, and the last for the balance at eighteen months date. All these ntes are to be sighned when the purchased properties are in your possession and said notes are to bear interest at the rate of 9 per cent per annum. It is understood that on payment of the last note, you are to transfer to us the properties purchased by you.

(c) It is also specifically understood that your actual right to take any action against the Cooperative Cocoanut Product Company

and against us as joint guarantors of their indebtedness, by virtue of certain documents signed by us and said concern, are to continue in force notwithstanding the above further agreement.

If the above conditions are agreeable to you, kindly confirm same by signing the duplicate to this letter and returning to us.

Yours very truly,

(Sgd.) C. H. SLEEPER B. A. GREEN A. G. MOODY J. D. MCCORD H. B. MCCOY GEORGE E. BROWN MILTON E. SPRINGER

Replying to this proposition under date of August 21, 1922, the President of the Bank, in communication addressed to one of the appellants, said:

We beg to aknowledge receipt of your letter of this date together with proposal signed by Messrs. J. D. McCord, H. B. McCoy, A. G. Moody, George E. Brown, Milton E. Springer, C. H. Sleeper and B. A. Green, regarding the indebtedness of the Cooperative Cocoanut Products Company to this bank.

You are advised that your proposition is accepted to us under the terms and conditions stated therein.

It is necessary, however, to invite your attention to the fact that if someone else bids more than our claim (which amounts to approximately P68,500) you should protect yourself in the biding.

In conformity with the understanding indicated in this correspondence, the plaintiff bank instituted an action to foreclose its mortgages, and on or about April 20, 1923, the Court of First Instance found that the amount of the secured indebtedness was P67,377.77, plus interest and costs. Thereafter, in due course, the mortgaged property was sold by the sheriff and bought in the bank for the full amount of its claim, or P75,590. The bank then made demand upon the appellants and their associate McCoy to comply with their agreement to take the property off the hands of the bank, by making the initial payment of P15,000 and delivering to the bank the three joint and several promissory notes mentioned in subsection (b) of the letter of August 16, 1922. The subscribers to the letter, however, failed to comply with this demand; and for its own protection the bank, on April 15, 1924, sold the property to the Philippine Food Company, a domestic corporation, for the sum of the property and, under the conditions, a fair valuation for it. By this step the bank was loser to the extent about

P16,000, and for the recovery of this amount the present action was originally begun.

Upon the facts sketched above we can discover no sufficient reason to doubt the liability of all the individuals who signed the letter of August 16, 1922, to answer for the loss which has fallen upon the bank by reason of their failure to comply with the terms of said letter; and as the executrix of the estate of H. B. McCoy has settled the whole claim, she is in our opinion entitled to contribution from the defendants. The letter of August 21, 1922, from the president of the bank to the appellants constituted in our opinion a sufficient notification of acceptance by the bank of the proposition made by the appellants; and when the bank acted pursuant to that offer, the appellants and McCoy became obligated according to the terms of the letter. The word "acceptable" in the letter of the president of the bank was evidently used in the sense of "accepted;" and that the final paragraph in the same letter, containing the suggestion that if the property should not be awarded to the bank at the sale, the signatory parties to the letter of August 16, 1922, should be prepared to protect themselves in the bidding, did not constitute any additional condition varying the terms of the offer. Again, we are of the opinion that the bank's acceptance, by the separate note, was valid, notwithstanding the fact that in the final paragraph of the offer of the bank was requested, if the proposition should be "agreeable," to indicate its conformity by signing the duplicate of the letter and returning it to the appellants. It was not necessary that acceptance should be in the precise form indicated, which could not have been considered material to the writers of the letter.

There was therefore no error on the part of the trial court in finding that the appellants are bound to contribute to the estate of H. B. McCoy, in the proportion of their respective shares in the principal obligation, in accordance with article 1145 of the Civil Code. But inorder to prevent a possible misunderstanding of the dispositive part of the appealed decision, we may be permitted to point out that, in case the proportional share of any of the appellants should not be paid and cannot be made effective by execution, the solvent appellants will be liable only for such portion of said shares as the number of the solvent appellants bears to such number plus one; for it must not be overlooked that the executrix herself must share with the solvent appellants in bearing the burden arising from the insolvency of any of the appellants.

The judgment appealed from will be affirmed, and it is so ordered, with costs against the appellants.

Johnson, Malcolm, Villamor, Ostrand, Johns, Romualdez and Villa-Real, JJ., concur.