FELIPE AGONCILLO, AND HIS WIFE, MARCELA MARIÑO, PLAINTIFFS AND APPELLEES, VS. CRISANTO JAVIER, ADMINISTRATOR OF THE ESTATE OF THE LATE ANASTASIO ALANO. FLORENCIO ALANO AND JOSE …

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 Bev. 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 vthe 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.

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.

Upon these findings the court below gave judgment for plaintiffs, and from
that judgment Jhe defendants have appealed to this 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 Qeneral 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 at 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 way 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 Tperfectly valid, and specific performance of its terms may be
enforced, unless prevented by the creation of superior rights in favor of third
persons.

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 estate. 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 extra-judicial 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 regards each of the debtors, to be
reputed as separate debts with respect to each of the debtors, it
foilows 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 articles 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
nonsolidary codebtors. 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 (5ourt 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 codebtors; 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 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 nonperformance 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 as 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.

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RESOLUTION ON MOTION FOR A RECONSIDERATION.

September. 20, 1918.

FISHER, J.:

Plaintiff seeks a reconsideration 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 solidwm, 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
the 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.

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.

“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.

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.

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.

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

Malcolm, J., dissents.