Ynchausti vs.

Yulo

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

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

FACTS:

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 Teodor Yulo and after his death continued by
Gregorio Yulo as principal representative of his children. On Aug.12, 1909, Gregorio Yulo, in
representation of his 3 siblings, executed a notarial instrument, ratifying all the contents of the
prior document of Jan.26, 1908, severally and joint acknowledged their indebtedness for
P253,445.42, 10 % per annum, 5 installments. Plaintiff brought an action against Gregorio for
the payment of the said balance due. But on May 12, 1911, 3 siblings executed another
instrument in recognition of the debt, reduced to P225, 000, interest reduced to 6% per annum,
installments increased to 8.

They obligated themselves to pay but failed to pay right at the first installments. An action was
brought against Gregorio Yulo. However, another notarial instrument was executed by the
Yulos in recognition of the debt and the obligation of payment, and then asking plaintiff to
include in the filed suit Pedro Yulo, and in that case, they’d procure all means for the judgment
to be in favour of the plaintiff. However, the court ruled in favour of Gregorio instead. Court
reversed the judgment and held that plaintiff can sue Gregorio Yulo alone since the Yulos
obligated themselves in solidum.

ISSUE:

1) Whether or not the Plaintiff sues Gregorio YUlo lone, considering that there are other
debtors?
2) What is the effect of the extension of time of payment granted by the creditor to the
three debtors?
3) Whether or Not the contracts constitute Novation?

RULING:

1) In this case, it cannot be doubted that the debtors having obliged themselves in solidnum,
the creditors can bring the action in toto against any one of them in as much as this was surely
its purpose in demanding that the obligation contracted in its favor should be solidary and even
though the creditor may have stipulated with some of solidary debtors diverse installment and
condition. Moreover this does not lead to the conclusion that the solidarity stipulated in the
instrument varied a condition or periods which is the installment is broken since it provides that
“SOLIDARITY EXIST EVEN THOUGH THE DEBTORS ARE NOT BOUND IN THE SAME MANNER AND
FOR THE SAME PERIODS UNDER THE SAME CONDITIONS” as supplied by ARTICLE 1211 OF CIVIL
CODE.
 2) 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 Art. 1215, 1222, the defendant
has the right to enjoy the benefits of the partial remission. At present judgment can be
rendered only as to P112,500.

The contract of May 12, 1911 does not constitute a novation of the former one of Aug.12,
1909, with respect to the other debtors who executed this contract. First, “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 (art. 1292). It is
always necessary to state that it is the intention of the contracting parties to extinguish the
former obligation by the new one.” The 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.

Lafarge Cement Phil vs. Continental Cement

G.R. No. 155173, 23 November 2004

Petitioner: LAFARGE CEMENT PHILIPPINES

Respondent: CONTINENTAL CEMENT CORPORATION

FACTS:

In the Letter of Intent (LOI) executed by both parties, Petitioner Lafarge Cement Philippines,
Inc. on behalf of its affiliates and other qualified entities agreed to purchase the cement
business of Respondent Continental Cement Corporation. Both parties entered into a Sale and
Purchase Agreement knowing that respondent has a case pending with the Supreme Court. In
anticipation of future liability, the parties allegedly agreed to retain from the purchase price a
certain amount to be deposited in an account for payment to the complainant who sued
respondent herein. Upon the finality of the decision of the said case wherein liability was
imposed to the respondent, petitioner allegedly refused to apply the sum for payment despite
repeated instructions of the Respondent. Respondent filed a Complaint with Application for
Preliminary Attachment against petitioners.

Petitioners filed their Answer and Compulsory Counterclaims denying all the allegations and
alleged that respondent`s majority stockholder (Lim) which is also the company president and
the corporate secretary (Mariano), influences respondent to file the baseless complaint and
procured the Writ of Attachment in bad faith. Hence, petitioners prayed that both the
president and corporate secretary be held jointly and solidarily liable with respondent. RTC
dismissed petitioner`s counterclaims.
ISSUE:

1. Whether or not both the President and corporate secretary are held jointly and solidary
liable?

RULING:

Gregory T. Lim and Anthony A. Mariano were the persons responsible for making the bad faith
decisions for, and causing plaintiff to file this baseless suit and to procure an unwarranted writ of
attachment, notwithstanding their knowledge that plaintiff has no right to bring it or to secure the writ.
In taking such bad faith actions, Gregory T. Lim was motivated by his personal interests as one of the
owners of plaintiff while Anthony A. Mariano was motivated by his sense of personal loyalty to Gregory
T. Lim, for which reason he disregarded the fact that plaintiff is without any valid cause.

The plaintiffs, Gregory T. Lim and Anthony A. Marianos bad faith filing of this baseless case
has compelled the defendants to engage the services of counsel for a fee and to incur costs of
litigation, in amounts to be proved at trial, but in no case less than P5 million for each of them
and for which plaintiff Gregory T. Lim and Anthony A. Mariano should be held jointly and
solidarily liable.

It may be stated as a general rule that joint tort feasors are all the persons who command,
instigate, promote, encourage, advise, countenance, cooperate in, aid or abet the commission
of a tort, or who approve of it after it is done, if done for their benefit. They are each liable as
principals, to the same extent and in the same manner as if they had performed the wrongful
act themselves.

Joint tort feasors are jointly and severally liable for the tort which they commit. The persons
injured may sue all of them or any number less than all. Each is liable for the whole damages
caused by all, and all together are jointly liable for the whole damage. It is no defense for one
sued alone, that the others who participated in the wrongful act are not joined with him as
defendants; nor is it any excuse for him that his participation in the tort was insignificant as
compared to that of the others.

Joint tort feasors are not liable pro rata. The damages cannot be apportioned among them,
except among themselves. They cannot insist upon an apportionment, for the purpose of each
paying an aliquot part. They are jointly and severally liable for the whole amount.

A payment in full for the damage done, by one of the joint tort feasors, of course satisfies any
claim which might exist against the others.
 Alipio v. Court of appeal

GR No. 134100 September 29, 2000

EXTINGUISHMENT OF OBLIGATIONS - DEATH

FACTS:

Respondent Romeo Jaring was the lessee of a 14.5 hectare fishpond in Barito, Mabuco,
Hermosa, Bataan. The lease was for a period of five years ending on September 12, 1990. On
June 19, 1987, he subleased the fishpond, for the remaining period of his lease, to the spouses
Placido and Purita Alipio and the Manuel Spouses.

The sub lessees only satisfied a portion thereof, leaving an unpaid balance of P50,600.00.

Purita Alipio moved to dismiss the case on the ground that her husband, Placido Alipio,
had passed away on December 1, 1988.

The RTC ruled that a living spouse should pay. The trial court denied petitioner's motion on
the ground that since petitioner was herself a party to the sublease contract, she could be
independently impleaded in the suit together with the Manuel spouses and that the death of
her husband merely resulted in his exclusion from the case.

CA affirmed the decision of the RTC that the surviving spouse should pay. It is noted that all
the defendants, including the deceased, were signatories to the contract of sub-lease. The
remaining defendants cannot avoid the action by claiming that the death of one of the parties
to the contract has totally extinguished their obligation.

ISSUE:
(1) Whether a creditor can sue the surviving spouse for the collection of a debt which is
owed by the conjugal partnership of gains, or

(2) Whether such claim must be filed in proceedings for the settlement of the estate of the
decedent.

APPLICABLE LAW/S:

Rule 3. Section 20 of the 1997 Rules of Civil Procedure. When the action is for the recovery
of money arising from contract, express or implied, and the defendant dies before entry of final
judgment in the court in which the action was pending at the time of such death, it shall not be
dismissed but shall instead be allowed to continue until entry of final judgment. A favorable
judgment obtained by the plaintiff therein shall be enforced in the manner especially provided
in these Rules for prosecuting claims against the estate of a deceased person.

Art. 1207. The concurrence of two or more creditors or of two or more debtors in one and
the same obligation does not imply that each one of the former has a right to demand, or that
each one of the latter is bound to render, entire compliance with the prestation. There is a
solidary liability only when the obligation expressly so states, or when the law or the nature of
the obligation requires solidarity. (1137a)
HELD:
(1) Surviving spouse is not liable. The conjugal partnership of gains is liable. It is clear that
Climaco had a cause of action against the persons named as defendants therein. It was,
however, a cause of action for the recovery of damages, that is, a sum of money, and the
corresponding action is, unfortunately, one that does not survive upon the death of the
defendant, in accordance with the provisions of Section 21, Rule 3 of the Rules of Court. As
held in Calma v. Tañedo, after the death of either of the spouses, no complaint for the
collection of indebtedness chargeable against the conjugal partnership can be brought against
the surviving spouse. Instead, the claim must be made in the proceedings for the liquidation
and settlement of the conjugal property. The reason for this is that upon the death of one
spouse, the powers of administration of the surviving spouse ceases and is passed to the
administrator appointed by the court having jurisdiction over the settlement of estate
proceedings. Indeed, the surviving spouse is not even a de facto administrator such that
conveyances made by him of any property belonging to the partnership prior to the liquidation
of the mass of conjugal partnership property is void. The inventory of the Alipios' conjugal
property is necessary before any claim chargeable against it can be paid. Needless to say, such
power exclusively pertains to the court having jurisdiction over the settlement of the
decedent's estate and not to any other court.

(2) The obligation is joint. Indeed, if from the law or the nature or the wording of the obligation
the contrary does not appear, an obligation is presumed to be only joint, i.e., the debt is divided
into as many equal shares as there are debtors, each debt being considered distinct from one
another. Clearly, the liability of the sublessees is merely joint. Since the obligation of the
Manuel and Alipio spouses is chargeable against their respective conjugal partnerships, the
unpaid balance of P50, 600.00 should be divided into two so that each couple is liable to pay
the amount of P25, 300.00.
 Jaucian vs. Querol

Creditor (D) vs. Estate of "solidary" debtor (P)

GR L-11307, October 5, 1918

Facts:
Lino Dayandante and Hermenegilda Rogero (as surety) executed a private writing
acknowledging their debt to Roma Jaucian amounting to 13,332.33. However, the document
states that both are jointly and severally liable for the obligation.

On November 1909 Rogero filed a complaint with the CFI of Albay asking Jaucian to cancel
the document on the ground that her signature was obtained by means of fraud. In his answer,
Jaucian asked for the payment of the debt as it had already matured at that time. CFI granted
his petition.

Rogero appealed the case to the SC but she died during the pendency of the case and the
administrator of her estate substituted her in the present case. The SC ruled that there was
indeed fraud and the disputed claim was valid.

While the case (concerning the fraud above) was pending, Francisco Querol was named the
administrator of the estate of Rogero. Jaucian entered his appearance in the estate proceedings
to collect the loan granted to Dayandante which Rogero guaranteed (because Dayandante only
paid him 100 pesos LOLS). CFI held that since Rogero was only a surety it is necessary that
Jaucian produce a judgment for his claim before his collection may be effected so that Querol
may be subrogated in the right of Jaucian and the former can collect the money from
Dayandante.

Jaucian sued Dayandante and was able to get a judgment for the full amount of money to
be collected. The notice was returned unsatisfied as the debtor has no property to be levied
upon. They then filed a suit against the estate of Rogero contending that by virtue of the return
of the notice, the CFI had admitted Dayadante’s insolvency.

CFI ruled against Jaucian:

1) Insolvent your face LOLS, the case was not final because there was no pronouncement
by the court;

2) The collection was subject to a suspensive condition which is that he must first exhaust
all the remedies against Dayandante before he can collect from the estate of Rogero. As a
surety, Rogero (her estate) is only liable for the deficiency that might result after the exhaustion
of the assets of Dayandante.

Issues:
WON Hermenegilda Rogero is principally though she was only a surety for Lino Dayadante?
Ruling:
Yes. Rogero, though a surety for Dayandante, was nevertheless bound jointly and severally
with him in the obligation.

Article 1822 of the Civil Code provides:

By security a person binds himself to pay or perform for a third person in case the latter should
fail to do so.

Article 1144 of the Civil Code provides:

A creditor may sue any of the joint and several (solidarios) debtors or all of them
simultaneously. The claims instituted against one shall not be an obstacle for those that may be
later presented against the others, as long as it does not appear that the debt has been
collected in full.

Rogero was solidary liable for the full amount of the obligation without any right to demand the
exhaustion of the property of the principal debtor. Her position so far as the creditor was
concerned was exactly the same as if she had been the principal debtor.
 Quiombing vs. Court of Appeals
Creditor (P) vs. Debtor (D)
GR 93010, 189 SCRA 325

Facts:
Spouses Saligo (D) contracted Quiombing (P) and his co-creditor Bischoco to construct a
house for them. The Construction and Service Agreement between the parties stated that the
creditors Quiombing (P) and Bischoco "jointly and severally" bound themselves to construct a
house for the debtors. Upon completion, Quiombing (P) was paid partially, but was unable to
collect the balance after repeated demands. Quiombing (P) alone filed for recovery of the
balance plus charges and interests.

Issues:
(1) May one of the two solidary creditors sue by him alone for the recovery of amounts due
to both of them without joining the other creditor as a co-plaintiff?

(2) In such a case, is the defendant entitled to the dismissal of the complaint on the ground
of non-joinder of the second creditor as an indispensable part?

(3) More to the point, is the second solidary creditor an indispensable party?

Ruling:
Yes. The question of who should sue the private respondents was a personal issue between
creditors Quiombing and Biscocho. It did not matter who as between them filed the complaint
because the private respondents were liable to either of the two as a solidary creditor for the
full amount of the debt. Full satisfaction of a judgment obtained against them by Quiombing
would discharge their obligation to Biscocho, and vice versa; hence, it was not necessary for
both creditors Quiombing and Biscocho to file the complaint. Inclusion of Biscocho as a co-
plaintiff when Quiombing was competent to sue by himself alone, would be a useless formality.

Necessary parties are those whose presence is necessary to adjudicate the whole
controversy, but whose interests are so far separable that a final decree can be made in their
absence without affecting them. (Necessary parties are now called proper parties.

Where the obligation of the parties is solidary, both one of the parties is indispensable, and
the other is not even necessary because complete relief may be obtained from either.

A joint obligation is one in which each of the debtors is liable only for a proportionate part of
the debt, and each creditor is entitled only to a proportionate part of the credit.

A solidary obligation is one in which each debtor is liable for the entire obligation, and each
creditor is entitled to demand the whole obligation.

Hence, in the former, each creditor can recover only his share of the obligation, and each
debtor can be made to pay only his part; whereas, in the latter, each creditor may enforce the
entire obligation, and each debtor may be obliged to pay it in full.
 BALDOMERO INCIONG, JR. vs. CA and PBCom
[G.R. No. 96405; June 26, 1996] Obligations and Contracts| Joint and Solidary
Liability|

FACTS:
Petitioner Inciong together with Rene C. Naybe and Gregorio D. Pantanosas, signed a
promissory note holding themselves jointly and severally liable to private respondent PBCom,
CDO branch. Said due date expired without the promissors having paid their obligation.
Consequently, the bank sent petitioner telegrams demanding payment. Since both obligors did
not respond to the demands made, a complaint for collection of money was filed. In 1987, the
lower court dismissed the case against defendant Pantanosas as approved by the bank,
meanwhile defendant Naybe had gone to Saudi Arabia. In his answer, petitioner Inciong alleged
that he was just persuaded to act as a “co-maker” in the said loan. Petitioner also argues that
the dismissal of the complaint against Naybe and Pantanosas, his co-maker, constituted a
release of his obligation.

ISSUE:
Whether the promissory note binds Inciong as a solidary co-maker or as a guarantor.

HELD:
Petitioner signed the promissory note as a solidary co-maker and not as a guarantor. This is
patent even from the first sentence of the promissory note which states: I/we, JOINTLY and
SEVERALLY promise to pay.

Because the promissory note expressly states that the three signatories are jointly and
severally liable, any one, some or all of them may be proceeded against for the entire
obligation. The choice is left to the solidary creditor to determine against whom he will enforce
collection. Consequently, the dismissal of the case against Judge Pontanosas may not be
deemed as having discharged petitioner from liability as well. As regards Naybe, suffice it to say
that the court never acquired jurisdiction over him. Petitioner, therefore, may only have
recourse against his co-makers, as provided by law.
REHABILITATION FINANCE CORPORATION, Petitioner, v. THE HONORABLE
COURT OF APPEALS, ESTELITO MADRID and JESUS ANDUIZA, Respondents.

Facts:
Jesus De anduiza and Quitana Cno borrowed money from the Agricultural and Industrial Bank
(nowRFC), as evidence by a promissory note dated October #!, 1941. In said not, they promised
to pay the AIB or order on or before October 32, 1951, the sum of 13,800 with interest at the
rate of 6% p.a. Said note also recited that the payment were to be made in ten equal annual
installment in accordance with the given schedule of amortizations

Mortgagors Anduiza and Cano failed to pay the yearly amortizations that fell due on October
31, 1942 and 1943. Learning of this Estelito Madrid offered to pay and actually paid on October
30, 1944 the full amount of said indebtedness to AIB/RFC.

July 30c1948 Madrid instituted the present actin asking the court to declare as paid the 16,
425.Anduza owed to AIB/RFC and order them to cancel the mortgage and release the
properties and also condemn Anduiza to pay Madrid the !6,425 with legal interest.

In answer RFC prayed that the complaint be dismissed. The bank argued that in as much as
Madrid payment was unauthorized by anduiza to pay Madrid the P16, 425 was null and void in
accordance with EO No. Series of 1945. Anduiza on the other hand alleged that when Madrid
paid his debt the same was not yet due and demandable; hence he may not be compelled to
pay the latter.

RTC dismissed the complaint .On appeal; the CA reversed and directed the RFC to cancel the
mortgage and Anduiza to pay Madrid the P16, 425. Hence this appeal by certiorari.

RFC argument that the pyment by Madrid were not made against the express will of Anduiza
and over the objection of the Bank, hence not valid; that the obligation in question was not
fully due and demandable at the time of payment.

ISSSUE:

1. WON the debtors were entitled to pay the obligation prior to Oct. 15, 1951?
2. WON the payment made by Madrid was valid.

HELD:

1. YES. Where the makers of the promissory note promised to pay the obligation
evidenced thereby "on or before October 31, 1951," although the full amount of said
obligation was not demandable prior to October 31, 1951, in view of the provision of
the note relative to the payment in ten annual installments, the makers or debtors were
entitled to make a complete settlement of the obligation at any time before said date.
2. YES. Payment made by Madrid is valid. Under article 1158 of the Civil Code of Spain,
which was in force in the Philippines when the payments under consideration were
made, "payment may be made by any person, whether he has an interest in the
performance of the obligation or not, and whether the payment is known and approved
by the debtor or whether he is unaware of it.