[ G. R. No. 41320. November 09, 1934 ] 60 Phil. 861
[ G. R. No. 41320. November 09, 1934 ]
CONCEPCION J. VIUDA DE SYQUIA, IN HER CAPACITY AS ADMINISTRATRIX OF THE ESTATE OF THE DECEASED GREGORIO SYQUIA, PLAINTIFF AND APPELLEE, VS. PERFECTO JACINTO ET AL., DEFENDANTS. RAFAEL PALMA, APPELLANT. D E C I S I O N
BUTTE, J.:
On December 15,1924, the Bank of the Philippine Islands obtained a judgment against Perfecto and Felipe Jacinto and Rafael Palma on a promissory note in its favor executed by the defendants on May 27, 1922, for the sum of P24,000 with interest at the rate of 9 per cent per annum plus 10 per cent of the principal as costs and attorney’s fees. The dispositive part of this judgment is as follows:
“Se condena a los Sres. P. y F. Jacinto y Rafael Palma a que paguen a la parte demandante, los primeros como obligados principales y el ultimo como fiador, la suma de veinticuatro mil pesos (P24,000) al interns de 9 por ciento al ano desde el 27 de mayo de 1923, mas el uno porciento sobre el principal en concepto de honorarios de abogado y costas.
“No debe expedirse ejecucion contra el demandado Sr. Rafael Palma, sino despues de haberse hecho excusion de los bienes de los senores P. y F. Jacinto.”
On August 16, 1928, the Bank of the Philippine Islands “in consideration of the sum of P1 and other valuable considerations” assigned and transferred said judgment to Gregorio Syquia.
On July 12, 1932, the widow of Gregorio Syquia, as administratrix of his estate, filed suit in the Court of First Instance of Manila against Perfecto and Felipe Jacinto and Rafael Palma reciting the aforementioned judgment and assignment and alleging that since the date of said judgment none of the defendants had paid anything thereon and there remains still due the sum of P24,000 with interest at 9 per cent since May 27, 1923. The plaintiff prayed that the judgment be revived and that the defendants Perfecto and Felipe Jacinto as principal and Rafael Palma as guarantor be adjudged to pay the sum of P24,000 with interest since May 27, 1923, and costs. To this petition were attached a copy of the judgment of December 15, 1924, Exhibit A, and a copy of the assignment thereof to the plaintiff, Exhibit B.
The defendants filed a joint amended answer in which they admitted the judgment, Exhibit A, and that said judgment had lapsed and it was necessary to revive the same; but they denied the assignment to Syquia and the allegation that nothing had been paid on said judgment and that the full amount thereof was still due. They set up as a special defense that the judgment which the plaintiff was attempting to revive has been fully paid; that at the time of making the assignment to Gregorio Syquia, the bank had no right or interest under said judgment, the same having been fully paid, and that the petition does not state facts sufficient to constitute a cause of action.
In the same answer they set up a counter-demand to the following effect: that in the month of April, 1925, the Bank of the Philippine Islands caused an execution to be issued under said judgment and the sheriff on the request of the bank sold at a public sale three properties belonging to the defendants Jacinto which had been previously attached; that at said public sale the bank was the highest bidder crediting the amount of its bid on the said judgment; that said parcels of land with their improvements consisting of four houses yielded a monthly revenue of P880 or P10,560 a year; that during the year allowed the judgment debtors for redemption the said bank took control and possession of the said parcels of land and collected and retained the revenues thereof as aforesaid and that Gregorio Syquia has been receiving the same since that time, though without any right whatever; that the said revenues during the year of redemption in the sum of P10,560 were never applied by the bank as a credit on said judgment. The defendants prayed that they be absolved from the demand of the petitioner and that the estate of Gregorio Syquia be condemned to pay the sum of P10,560 with costs. The answer concludes with a prayer for general relief.
On the trial of this cause it was shown that at the execution sale held on April 18,1925, the bank bought two of the properties of the defendants Jacinto for the sum of P15,045. The third property was sold to Rufino Reyes for P1,000 which was not credited on the judgment debt pending the determination of Reyes’ claim of priority. The trial court stated the judgment debt as of April 18, 1925, as follows:
Loan ………………………………………………………………………………….
924,000.00
Interest from May 27, 1923 to April 17, 1925 at 9 per cent
4,083.29
Costs including sheriff’s sale………………………………………………………..
657.96
Total obligation……………………………………………………….
P28,741.24
from which is to be deducted P15,045 the value of the two parcels sold to the bank on April 18,1925, leaving a balance due of P13,696.24. On September 2, 1925, the defendant Palma paid the bank P100 leaving thus a net balance due of P13,596.24. The trial court entered the following judgment:
“Dictese sentencia condenando a los demandados, Perfecto Jacinto y Felipe Jacinto, como obligados principals, y Rafael Palma como fiador, a pagar a la demandante la cantidad de trece mil quinientos noventa y seis pesos con veinte y cuatro centimos (P13,596.24), mas las costas del juicio.
“Se sobresee la reconvencion de los demandados.
“Asi se ordena.
“Manila, I. F., 25 de septiembre de 1933.”
From this judgment only defendant Palma appeals. He submits the following assignments of error:
“1. El Juzgado err6 al no apreciar que la cuenta de los deudores P. y F. Jadnto quedo liquidada con el banco al efectuarse la venta de las tineas embargadas por 6ste a favor de Gregorio Syquia por la suma de P45,000 y que, por consiguiente, la sentencia firme de diciembre 14, 1924, quedd ipso facto saldada y con creces, en virtud de aquella venta.
“2. El Juzgado erro al no apreciar que el banco no transmitio ningun derecho, interns o participacion en la sentencia referida al tiempo de hacerse el traspaso de los mismos a Gregorio Syquia.
“3. Atin suponiendo que la sentencia firme era subsistente contra los deudores y su fiador al tiempo de hacerse el traspaso por el banco de cualquier tftulo, derecho, interns o participacion en dicha sentencia, el Juzgado erro al no apreciar que se ha constituido una novacion de la obligacion del fiador sin su conocimiento ni consentimiento, y, por tanto, sin eficacia juridica contra el.
“4. El Juzgado erro al no apreciar que el demandado Rafael Palma, como fiador, ha quedado eximido de su obligacion no solo por efecto de la novacion hecha sin su conocimiento ni consentimiento, sino tambien por efecto de la aceptacion por el banco de los bienes inmuebles de los deudores P. y F. Jacinto, en pago de deuda.”
It is to be noted that Palma filed no separate answer nor special defenses available to him as guarantor but merely joined in the answer of his codefendants pleading that the bank had been fully paid. It should be noted too that the execution which was issued under the judgment of December 15,1924, and under which said parcels of land were sold on April 18,1925, was directed solely against the principal debtors, Perfecto and Felipe Jacinto, Palma not being mentioned therein.
Under his first and second assignments of error, the appellant argues that when the bank acquired said properties at the sheriff’s sale on April 18, 1925, for the sum of P15,045, it paid much less than they were worth, in view of the fact that they yielded an annual, revenue of P10,560; and this is further established by the fact that the bank on August 16,1928, sold and conveyed said parcels to Gregorio Syquia for the sum of P45,000. Exhibits 2-A and 2-B are copies of pages of the “Ubro de diversas euentas” of the bank, upon which appears the account of Perfecto and Felipe Jacinto and Rafael Palma. From these it appears that after the sale by the bank to Syquia, said account was marked as balanced and closed. From these facts the appellant contends that the principal debtors, and therefore the guarantor, were discharged from further liability on the judgment; and that being true, Syquia acquired nothing by the assignment of the judgment to him by the bank. In strict law, it is obvious that the plea that the defendants had paid their debt cannot be sustained. Indeed the appellant himself in arguing his first and second assignments of error invokes the equitable principle that no person should enrich himself unjustly at the expense of another. Clearly this equitable principle has no application to a legally conducted sheriff’s sale. The appellant does not question the regularity of the sale. A purchaser at a sheriff’s sale, when his title has once become vested, may dispose of the property for such consideration as he sees fit or as he can obtain. The rule which the appellant asks us to introduce into our jurisprudence with regard to sheriff’s sales would cast such a doubt upon such sales that bidders would abstain therefrom and even judgment creditors would offer less, all to the prejudice of judgment debtors. The Code of Civil Procedure goes far in protecting the judgment debtor. He may prevent the sale of the property on execution (sec. 456); or he may redeem it from the purchaser at any time within twelve months after the sale (sec. 465). In the instant case, although it was alleged the property was sold for greatly below its value, the defendants did not exercise any right of redemption. We hold, therefore, that the judgment debt in its entirety was not discharged before the action for the revival of the judgment was brought.
However, the majority of the court are of the opinion that there should be credited upon the judgment for the benefit of the guarantor alone the sum of P10,560, being the revenues collected and retained during the year of redemption by Gregorio Syquia from said properties, according to the testimony of Perfecto Jacinto (t. s. n., 19, 20, 22). This conclusion is based on the interpretation given to the provisions of the Code of Civil Procedure by this court in the cases of Pabico vs. Ong Pauco (43 Phil., 572); Flores vs. Urn (50 Phil., 738); Powell vs. National Bank (54 Phil., 54). It is the view of the writer that this defense so far as the guarantor is concerned is premature.
In his brief and upon the oral argument the appellant has pressed upon our attention several defences available to guarantors under our law which, he claims, entitle him to a reversal of the judgment. With reference to all these defences, it suffices to say that it is conceded that Palma as guarantor is still entitled to the benefits of articles 1830, 1832 and 1852 of the Civil Code. Up to the present, the judgment creditor has made no demand on Palma. Joining him in the suit against the principal debtor is not the demand intended by article 1832 of the Civil Code. That demand can be made only after judgment on the debt, for obviously the “exhaustion of the principal’s property”—the benefit of which the guarantor claims—cannot even begin to take place before judgment has been obtained. Only then can the creditor “levy upon the property of the principal”— only then can the liability of the creditor begin under article 1833 of the Civil Code. It would be absurb and futile to point out “saleable property of the debtor” at the inception of the suit, when it cannot be seized or sold, and require the creditor to make a “levy” upon it.
There is no competent evidence that the principal debtors, Perfecto and Felipe Jacinto, are insolvent—even if they were not be in funds when an execution on the revived judgment is issued. So far as this record shows, the judgment creditor has not exhausted his remedies against the principal debtors and he is still looking to them for payment. It is not for the guarantor to anticipate that there will be a return of nulla bona on the execution, when and if issued. Nor is it for him to anticipate a demand on him under article 1832 and to offer defences thereto which have not matured. The occasion for these defences may never arise. The present revived judgment could not therefore be res judicata as to such future differences. The revived judgment does not foreclose any deference which the guarantor may raise when “demand for payment” is made in him. Indeed, he cannot claim the benefits of articles 1830, 1832, 1834 and 1852 of the Civiul Code before femand is made on him; they are all available to him only after “demand for payment” (art. 1832).
The appellant’s deferences may all be considered when they are properly presented at the proper time. The case which he now presents, in anticipation of a demand which has not yet been made, is purely hypothetical. The courts do not undertake to decide hypothetical cases.
It results that the judgment appealed from must be modified in the sense that Refael Palma as guarantor may be held contingently liable only in the sum of P3,036.24 under said judgment, which is in all other respects affirmed, without special pronouncement as to costs in the instance. So ordered.
Street, J., concurs.