January 1962 - Philippine Supreme Court Decisions/Resolutions
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G.R. No. L-17384 January 30, 1962 - NESTORA RIGOR VDA. DE QUIAMBAO, ET AL. v. MANILA MOTOR COMPANY, INC., ET AL. :
EN BANC
[G.R. No. L-17384. January 30, 1962.]
NESTORA RIGOR VDA. DE QUIAMBAO, ET AL., Petitioners, v. MANILA MOTOR COMPANY, INC. and THE HON. COURT OF APPEALS, Respondents.
Manuel Y. Macias, for Petitioners.
Ozaeta, Gibbs & Ozaeta for Respondents.
R E S O L U T I O N
REYES, J.B.L., J.:
Petitioners moved for the reconsideration of our decision dated October 31, 1961, affirming that of the Court of Appeals, on the following grounds:chanrob1es virtual 1aw library
(1) That the Moratorium Law is inapplicable in this case because the respondent Manila Motor Co., Inc. tried to enforce its pre-war judgment against the deceased Gaudencio Quiambao only after said law had been declared void by this Court;
(2) That the act of the respondent company in accepting the return of the car in question from the deceased Quiambao before the war operated either as a foreclosure of respondent’s chattel mortgage thereon or a rescission of the contract of sale between the parties; and
(3) That it would be highly iniquitous, and an unjust enrichment on the part of the respondent at petitioners’ expense, to make the latter pay an amount close to P30,000 or P40,000 for an original unpaid indebtedness of P1,542.72, in view of the mounting compounded interest provided for in the chattel mortgage contract Exhibit "C."
As to the first argument, we have already ruled in many cases that since in Rutter v. Esteban (93 Phil., 68; 49 Off. Gaz., 1807) we did not declare the Moratorium Law void ab initio, but only held that its continued operation and enforcement had already become unreasonable and oppressive said law did suspend the running of the statute of limitations, and no action could be taken to collect monetary obligations falling within the purview of the law during the period that it was still in effect (Santos Vda. de Montilla v. Pacific Commercial Co., 98 Phil., 133; Liboro v. Finance & Mining Investments Co., 102 Phil., 489, Manila Motor Co. v. Flores, 99 Phil., 738; 52 Off. Gaz., No. 13, 5804; Pacific Commercial v. Aquino, 100 Phil., 961; 53 Off. Gaz., No. 13, 4067, among others). Consequently, whether or not the creditor actually brought his action to court before or after the law had been voided, still the period for the enforcement of his credit was tolled by the moratorium law.
As to the second contention, the same had already been rejected by us in our main decision, wherein we held that the surrender of the car in question by the deceased Quiambao to the respondent company before the war did not operate either as a foreclosure of the chattel mortgage thereon or as a rescission of the contract of sale between the parties, because said return was only by way of deposit or "for storage", pending settlement of the judgment in Civil Case No. 58043."
On the equity side, however, we believe that, in view of the circumstances, we are justified in applying herein the doctrine of this Court in the case of Warner, Barnes & Co. v. L-12984, July 25, 1960:jgc:chanrobles.com.ph
"Considering, however, that no bad faith is imputed to the debtors; that payment could not be made during the war years, even if the debtor had so desired, because the creditor was a British company and an enemy vis a vis the belligerent occupant of the Islands at the time; that the creditor was indirectly benefited by the debtor’s inaction thereby avoiding payment in military script; and that both under Article 1172 of the new Civil Code and Article 11703 of the old Code, the Court have power to regulate or moderate the liability arising from negligence of a debtor, we think it equitable to reduce the interest by eliminating that which accrued during the war years, as well as to limit the attorney’s fees to 10% of the total amount of the judgment, this case presenting no unusual difficulty." (Emphasis supplied),
especially as respondent company itself has manifested in its answer to the motion of reconsideration that they are willing to reach a suitable agreement with petitioners whereby they may "reduce the obligation of the petitioners within reason", and that said company is willing to "treat them with sympathy and consideration in the eventual liquidation of the petitioners’ indebtedness."
We should further make it clear that respondent actually has no more right to enforce the provisions of the chattel mortgage Exhibit "C", as to compound interest because the final judgment in Civil Case No. 58043 did not provide for such compound interest but only for simple interest of 12% per annum. Consequently, the unpaid obligation of petitioners under the judgment (that superseded the original obligation), exclusive of attorney’s fees and costs, amounts only to the outstanding principal obligation before the war of P1,542.72, plus simple interest of 12 per cent per annum until payment, but deducting the interests that fell due during the war years, under the doctrine in the Warner, Barnes & Co. v. Yasay, supra.
Clarified as above indicated, the judgment of this Court of October 31, 1961 is reaffirmed.
Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Barrera, Paredes, Dizon and De Leon, JJ., concur.
(1) That the Moratorium Law is inapplicable in this case because the respondent Manila Motor Co., Inc. tried to enforce its pre-war judgment against the deceased Gaudencio Quiambao only after said law had been declared void by this Court;
(2) That the act of the respondent company in accepting the return of the car in question from the deceased Quiambao before the war operated either as a foreclosure of respondent’s chattel mortgage thereon or a rescission of the contract of sale between the parties; and
(3) That it would be highly iniquitous, and an unjust enrichment on the part of the respondent at petitioners’ expense, to make the latter pay an amount close to P30,000 or P40,000 for an original unpaid indebtedness of P1,542.72, in view of the mounting compounded interest provided for in the chattel mortgage contract Exhibit "C."
As to the first argument, we have already ruled in many cases that since in Rutter v. Esteban (93 Phil., 68; 49 Off. Gaz., 1807) we did not declare the Moratorium Law void ab initio, but only held that its continued operation and enforcement had already become unreasonable and oppressive said law did suspend the running of the statute of limitations, and no action could be taken to collect monetary obligations falling within the purview of the law during the period that it was still in effect (Santos Vda. de Montilla v. Pacific Commercial Co., 98 Phil., 133; Liboro v. Finance & Mining Investments Co., 102 Phil., 489, Manila Motor Co. v. Flores, 99 Phil., 738; 52 Off. Gaz., No. 13, 5804; Pacific Commercial v. Aquino, 100 Phil., 961; 53 Off. Gaz., No. 13, 4067, among others). Consequently, whether or not the creditor actually brought his action to court before or after the law had been voided, still the period for the enforcement of his credit was tolled by the moratorium law.
As to the second contention, the same had already been rejected by us in our main decision, wherein we held that the surrender of the car in question by the deceased Quiambao to the respondent company before the war did not operate either as a foreclosure of the chattel mortgage thereon or as a rescission of the contract of sale between the parties, because said return was only by way of deposit or "for storage", pending settlement of the judgment in Civil Case No. 58043."
On the equity side, however, we believe that, in view of the circumstances, we are justified in applying herein the doctrine of this Court in the case of Warner, Barnes & Co. v. L-12984, July 25, 1960:jgc:chanrobles.com.ph
"Considering, however, that no bad faith is imputed to the debtors; that payment could not be made during the war years, even if the debtor had so desired, because the creditor was a British company and an enemy vis a vis the belligerent occupant of the Islands at the time; that the creditor was indirectly benefited by the debtor’s inaction thereby avoiding payment in military script; and that both under Article 1172 of the new Civil Code and Article 11703 of the old Code, the Court have power to regulate or moderate the liability arising from negligence of a debtor, we think it equitable to reduce the interest by eliminating that which accrued during the war years, as well as to limit the attorney’s fees to 10% of the total amount of the judgment, this case presenting no unusual difficulty." (Emphasis supplied),
especially as respondent company itself has manifested in its answer to the motion of reconsideration that they are willing to reach a suitable agreement with petitioners whereby they may "reduce the obligation of the petitioners within reason", and that said company is willing to "treat them with sympathy and consideration in the eventual liquidation of the petitioners’ indebtedness."
We should further make it clear that respondent actually has no more right to enforce the provisions of the chattel mortgage Exhibit "C", as to compound interest because the final judgment in Civil Case No. 58043 did not provide for such compound interest but only for simple interest of 12% per annum. Consequently, the unpaid obligation of petitioners under the judgment (that superseded the original obligation), exclusive of attorney’s fees and costs, amounts only to the outstanding principal obligation before the war of P1,542.72, plus simple interest of 12 per cent per annum until payment, but deducting the interests that fell due during the war years, under the doctrine in the Warner, Barnes & Co. v. Yasay, supra.
Clarified as above indicated, the judgment of this Court of October 31, 1961 is reaffirmed.
Bengzon, C.J., Padilla, Bautista Angelo, Labrador, Concepcion, Barrera, Paredes, Dizon and De Leon, JJ., concur.
