[ G.R. No. 41768. December 17, 1935 ] 62 Phil. 593
[ G.R. No. 41768. December 17, 1935 ]
VIUDA E HIJOS DE PIO BARRETTO Y CFA., INC., PLAINTIFF AND APPELLEE, VS. ALBO & SEVILLA, INC., VICENTE ALBO, EUGENIO SEVILLA AND ANGEL GARCHITORENA, DEFENDANTS AND APPELLANTS. D E C I S I O N
IMPERIAL, J.:
The plaintiff brought suit to require the defendants to pay a certain rent stipulated in a contract of lease. The defendants appealed from the judgment ordering them to pay, jointly and severally, the plaintiff the sum of P11,400 as unpaid rents from April 1, 1932 to October 31, 1933, inclusive, the sum of P600 a month from November 1, 1933 until £he termination of the contract of lease, plus Pl,000 as penalty and attorney’s fees, and the costs. The pertinent facts requisite to resolve the appeal are condensed in the following stipulation of the parties:
“1. That the plaintiff is a corporation duly organized and existing under the laws of the Philippine Islands, with its main office at No. 720, Echague Street, Manila; “2. That the defendant Albo & Sevilla, Inc., is likewise a corporation organized and existing under the laws of the Philippine Islands, with its office at No. 670, Dasmarinas Street, City of Manila; and the other defendants, Vicente Albo, Eugenio Sevilla and Angel de Garchitorena, are all of age with legal capacity to be parties in this suit; “3. That on july 15.1930, the plaintiff and the (defendants entered into a contract of lease, the original of which is attached hereto and made an integral part of this stipulation as Exhibit A; “4. That by force of said contract of lease the defendants occupied the ‘Cine Collegian’ and^ regularly paid the rents therefor until February 28, 19tt; “5. That thereafter the rents for said cinema have been paid by Angel Garchitorena either by check of Benigno del Rio or in cash; “6. That the receipts for rents paid from March, 1931, were issued in the name of Albo & Sevilla, Inc., without prejudice to the right of the defendants Albo & Sevilla, Inc., Eugenio Sevilla, and Vicente Albo to adduce evidence that the said issuance has not come to their knowledge from March 1, 1931; “7. That on January 19, 1931, the defendants Eugenio Sevilla, Vicente Albo and Angel Garchitorena executed a chattel mortgage? of the fixtures and chattels of the ‘Cine ’ Collegian’ in favor of Vda. e Hijos de Pio Barretto & Co., Inc., which was presented for registration on February 6, 1931, but said document was not registered; and that said mortgage was executed under the stipulation in subsection (h) of the second paragraph of the contract of lease, Exhibit A. The original of said deed is attached hereto and made an integral part of ihis stipulation marked as Exhibit B; “8. That by a deed of February 28, 1931, Vicente Albo and” Eugenio Sevilla, in their own behalf: and in that of the corporation Albo & Sevilla, Inc., sold their right, interest, and participation, including the Rights of lease! of the ‘Cine Collegian’, to Angel Garchitorena and Benigno del of which is attached to this stipulation and made a part thereof as Exhibit I, reserving plaintiff’s right to establish that it neither has knowledge of, nor consented to, said sale; “9. That on August 15, 1931, Angel Garchitorena and Benigno del Rio executed in favor of Viuda e Hijos de Pio Barretto & Co., Inc., another chattel mortgage of the same fixtures and chattels of the ‘Cine Collegian’ described therein, which deed is duly registered in the office of the register of deeds of the City of Manila pursuant to Act No. 1508, copy of which, duly certified by said registry office, is attached to this stipulation as Exhibit C; “10. That the defendants have been required by the attorneys for the plaintiff to pay the rents, as evidenced by the letters of February 6, 1933, and March 1, of the same year, copies of which are attached hereto as Exhibits P and D-l, respectively; and the defendants have orally alleged that they are no longer connected with the ‘Cine Collegian in virtue of the aforesaid sale to Benigno del Rio and Angel Garchitorena.”
In the chattel mortgage deed of August 15, 1931, mentioned in paragraph 9 of the stipulation of facts, are found the following important clauses:
“First: That we are the owners in fee simple, free from all lien, incumbrance, and charge, undivided and share and share alike, of the following property found in the building known as ‘Cine Collegian’, belonging to the corporation Viuda e Hijos de Pio Barretto & Co., Inc., situated on the corner of Mercedes and Trinidad Ayala Streets, Ermita, Manila;
“Third: That to secure the payment of the monthly rental of Six hundred pesos (1*600), Philippine currency, for the occupancy of the ‘Cine Collegian’, payable within the first five (5) days of every month, in advance, until December 31, 1936, as well as the faithful compliance with the terms of the existing contract on said ‘Cine Collegian, we, the undersigned, do constitute a first, special, and voluntary mortgage upon the property described in the first paragraph hereof, and upon all our right, interest, action, or participation in the properties described in the second paragraph hereof, in favor of the corporation Viuda e Hijos de Pio Barretto & Co., Inc., its heirs and assigns. * * * “We, Angel de Garchitorena and Benigno del Rio, mortgagors, and Jose G. Barretto, manager of the corporation Viuda e Hijos de Pio Barretto & Co., Inc., mortgagee, do swear individually that the foregoing mortgage has been constituted to secure the obligation therein specified, that the said obligation is just and valid, and thai the said mortgage has not been fraudulently constituted?”
Under the facts, the only question pfnaps which we must resolve is whether the contract of lease was noyated by the substitution of lessees, and, if so, whether the substitution was consented to by the plaintiff lessor. Articles 1203 and 1205 of the Civil Code provide:
“Art. 1203. Obligations may be modified: “1. By the change of their object or principal conditions; “2. By substituting another in place of the debtor; “3. By subrogating a third person to the rights of the creditor.” “Art. 1205. Novation which consists in the substitution of a new debtor in the place of the original one may be made without the knowledge the latter, but not without the consent of the creditor”
Responsive to the said provisions, the substitution of the debtor in an obligation with the creditor’s consent, produces novation by bringing into being a new obligation in place of the old. Applied-iokjthecase under consideration, the result is, that if the plaintiff consented to the substitution of Angel Garchitorenaana^Benigno del Rio in lieu of the original lessees, it has exhausted all its right of action against the latter and can only enforce the same against the new lessees. Our inquiry, therefore, will bear on the existence of such consent. Exhibit 1 undoubtedly evidences that Vicente Albo and Eugenio Sevilla conveyed all their rights, interest and participation in the “Cine Collegian”, whose business was styled Albo & Sevilla, Inc., in favor of Angel Garchitorena and Benigno del Rio, including all their rights, interest, and obligations under the contract of lease entered into on ^ly 15, 1S30?) This appears in the aforesaid deed, and so also in paragraph 8 of the stipulated facts. True, the plaintiff had no hand in this document Exhibit 1, for which sole reason it may be alleged that it neither knew nor consented to the transaction. However, in the quoted clauses from the duly registered chattel mortgage Exhibit C, executed on August 15, 1931, by Angel Garchitorena and Benigno del Rio, wherein the plaintiff directly intervened and took part through the manager Jose G/Barretto, who signed in its name, appear statements of wie contracting parties clearly and logically compelling the deduction that, under its terms, the plaintiff knew of the conveyance made by Vicente Albo and Eugenio Sevilla in favor of Angel Garchitorena and Benigno del Rio, and virtually approved of and consented to thjsjjfuhatitiitinn of tfte newksseesr It is first to be noted that the document states that Garchitorena and Del Rio mortgaged the same chattels which Albo, Sevilla, Garchitorena and Albo & Sevilla, Inc., had already previously mortgaged to the said plaintiff to secure the obligations which they assumed under the contract of lease. Paragraph 1 next states that Angel Garchitorena and Benigno del Rio became the owners of the same chattels. Paragraph 3 likewise states that the period of the contract of lease is extended to December 31, 1936, and that the security is for the faithful compliance with the other conditions stipulated in the original contract of lease. The concluding clause of the deed is a reiteration that the security takes in all the conditions and obligations arising from the contract of lease. In the face of such circumstances, we believe the only logical and reasonable deduction is that in view of the second mortgage, the plaintiff was apprized of and acquiesced in the change of lessees. The plaintiff argues that-Vicente Albo and Eugenio Sevilla undertook to be jofalt and several sureties for the payment Of rents under the third paragraph of the contract of lease which says: J1Thira: Messrs. Vicente Albo, Eugenio Sevilla ami Angei Garchitorena, jointly and severally undertake with Albo & Sevilla, Inc., to comply with all the obligations of the lessees in this contract.” We understand and so hold that by the terms, clear to be sure, of said clause, Albo and Sevilla did not execute a special and separate bond, but only intended to state that the obligations assumed by them with Garchitorena and the corporation Albo & Sevilla, Inc., relative to the conditions of the contract of lease, were joint and several in nature. It would be repugnant to the nature of the contract of guaranty and to the provisions of article 1822 of the Civil Code to construe that the intention of said alleged sureties was to become guarantors of their own obligations. Granting, however, that it were a bond, which seems to us absurd, their obligations as sureties were extinguished at the sametime as their obligations as debtors or lessees, under Me express provisions of article 1847 of the same Code. After the promulgation of the decision rendered in this case, which is practically that above-quoted, the co-defendant Albo & Sevilla, Inc., filed a motion entitled “Motion to clarify the dispositive part of the judgment” praying that the judgment be modified by absolving it likewise from the complaint. In support of the petition the point is made that the corporation Albo & Sevilla, Inc., was likewise released from its obligation as lessee in view of our holding that there had been a novation by the substitution of lessees. And the whole argument rests on the stipulation in paragraph 8 of the agreed statement of facts that the corporation had likewise conveyed its interest, rights, and obligations in the contract of lease Exhibit A to Angel Garchitorena and Benigno del Rio. The contention, although it was not discussed at length in the original decision because it was not raised then in the briefs, is clearly untenable and without merit. It should be borne in mind that while such fact has really been stipulated, however, the said paragraph 8 has likewise stated that Exhibit 1, which is the deed of conveyance furnishing one of the grounds of novation, forms an integral part of said stipulation, hence, its content cannot and should not be overlooked in ascertaining who transferred their obligations to the new lessees under the contract of lease. Viewing the fact stipulated in paragraph 8 in connection with the contents of Exhibit 1, and interpreting them together pursuant to the provisions of article 1285 of the Civil Code, it will plainly be seen that the corporation Albo & Sevilla, Inc., neither intervened in Exhibit 1 nor conveyed its rights and obligations in the lease, from which it follows that the plaintiff could not have consented expressly or impliedly to a non-existing contract. We said that there was a novation of the original contract of lease in view of certain statements appearing in the second chattel mortgage deed, Exhibit C, from which the plaintiff necessarily obtained knowledge of the existence of the deed of conveyance Exhibit 1, and in yielding assent to the second mortgage, the logical and inescapable deduction is that it consented impliedly to the substitution of lessees. If these were the grounds of the novation, and if the corporation Albo & Sevilla, Inc., neither took part nor intervened either in the deed of conveyance Exhibit 1 or in the second chattel mortgage Exhibit C, it is evident that the novation was not extended to it, nor can it successful]/ allege that it was substituted by the new lessees. We, therefore, conclude that the petition is absolutely groundless and untenable. In its reply to the motion of Albo & Sevilla, In the plaintiff likewise petitioned that we affirm the appealed judgment on the ground that, although Vicente Albo and Eugenio Sevilla were relieved from their obligations as lessees in view of the substitution, nevertheless they continue to be bound by all the consequences of the original contract of lease as sureties. In other words, the plaintiff reaffirms that under paragraph 3 of the deed of lease, said two defendants also acted as sureties of the other lessees. The language of paragraph 3 does not lend itself to such interpretation. Manifest is the parties’ intention that Vicente Albo and Eugenio Sevilla did not bind themselves as sureties of the other co-lessees, their only intention being to make known that the obligations assumed by all the lessees were joint and several in nature. This same conclusion was already stated in the original decision when the s>ame point was considered and discussed. We, therefore, hold that the plaintiff’s petition is likewise groundless and untenable. Wherefore, the appealed judgment is modified, absolving the defendants Vicente Albo and Eugenio Sevilla from the complaint, and the same is affirmed in all other respects, without special pronouncement as to the costs in this instance. So ordered. Hull, Butte, and Diaz, JJ., concur.