Credit Transaction Case Digest
Credit Transaction Case Digest
ISSUE:
Was the trial court correct in its decision that
defendant will only have to pay the interest from August 6,
1964 instead of September 28, 1956?
RULING:
No. Instead of requiring appellees to pay interest
at 12% only from August 6, 1964, the trial court should
have adhered to the terms of the agreement which plainly
provides that Esteban Piczon had obligated Sosing-Lobos
and Co., Inc. and himself to "return or pay (to Piczon and
Co., Inc.) the same amount (P12,500.00) with Twelve Per
Cent (12%) interest per annum commencing from the date
of the execution hereof", Annex A, which was on
September 28, 1956. Under Article 2209 of the Civil Code
"(i)f the obligation consists in the payment of a sum of
money, and the debtor incurs in delay, the indemnity for
damages, there being no stipulation to the contrary, shall
be the payment of the interest agreed upon, and in the
absence of stipulation, the legal interest, which is six per
cent per annum." In the case at bar, the "interest agreed
upon" by the parties in Annex A was to commence from
the execution of said document.
Appellees' contention that the reference in Article
2209 to delay incurred by the debtor which can serve as
the basis for liability for interest is to that defined in
Article 1169 of the Civil Code is untenable. In Quiroz vs.
Tan Guinlay, 5 Phil. 675, it was held that the article cited
by appellees (which was Article 1100 of the Old Civil Code
read in relation to Art. 1101) is applicable only when the
obligation is to do something other than the payment of
money. And in Firestone Tire & Rubber Co. (P.I.) vs.
Delgado, 104 Phil. 920, the Court squarely ruled that if the
contract stipulates from what time interest will be counted,
said stipulated time controls, and, therefore interest is
payable from such time, and not from the date of the filing
of the complaint (at p. 925). Were that not the law, there
would be no basis for the provision of Article 2212 of the
Civil Code providing that "(I)nterest due shall earn legal
interest from the time it is judicially demanded, although
the obligation may be silent upon this point." Incidentally,
appellants would have been entitled to the benefit of this
article, had they not failed to plead the same in their
complaint. Their prayer for it in their brief is much too
late. Appellees had no opportunity to meet the issue
squarely at the pre-trial.
Issue: WON Mendoza and Blas are bound to pay 46K or 23K
Held: 23K. The obligating clause of the contract of guaranty is quite clear to the
effect that the rent tobe paid for the privilege of fishery was 23K for the full term
of 2 years. It is true that Mendoza and Blasdeclared 46K, but it was only because
the bond was required to be made in double the amount of theprincipal liability
as an assurance of the performance of the principal obligation.
Wise and Co. vs. Kelly
Facts: D purchased merchandise from C on credit and agreed that D would apply
the proceeds of itssale to the discharge of his indebtedness in the amount of 13K
the purchase price. Kelly as surety forD, undertook that D would pay over to C
the entire proceeds from the sale of the merchandise.
Issue: WON Kelly is liable for the difference between the
amount realized from the sale of themerchandise and the purchase price of
the same?
Held: No. Kelly did not undertake absolutely to pay the sum of 13K. His
agreement was limited torespond for the performance by D of his undertaking to
deliver to C the total proceeds of the sale of the merchandise for the invoice
value of which a promissory note was given by D.