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EN BANC

G.R. No. L-40372 August 4, 1934

GOTIAOCO HERMANOS, INC., Plaintiff-Appellant, vs. FELICIANA ENRIQUEZ, ET AL. Defendants-Appellant.

Vicente Pelaez for plaintiff-appellant.
Rodriguez, Zacarias & Del Mar for defendants-appellants.

AVANCE�A, C. J.: chanrobles virtual law library

On May 26, 1926, the defendants, with the exception of Concepcion Carratala, married to Luis Fernandez Sidebotom, signed a public document (Exhibit D) in favor of Gotiaoco y Hermanos wherein they stated as follows: "That we have received to our full satisfaction the sum of P6,000 from Messrs. Gotiaoco y Hermanos; that we bind ourselves to pay interest thereon at the rate of 12 per cent per annum from the date of the deed until the debt is fully paid, and that we mortgage to said Gotiaoco y Hermanos a parcel of land covered by original certificate of title No. 8696, binding ourselves, furthermore, to the mortgagees for the eviction and warranty of this property which has been given as security for our debt." This document was not registered.chanroblesvirtualawlibrary chanrobles virtual law library

The plaintiff is the successor of Gotiaoco y Hermanos and, as such, filed the complaint in this case, seeking to recover from the defendants the sum of P6,000 with interest at 12 per cent per annum from May 26, 1926.chanroblesvirtualawlibrary chanrobles virtual law library

In their answer the defendants allege that the indebtedness of P6,000 referred to in the complaint was contracted personally by Gabino Veloso; that they did not receive any part of said sum, and that, in signing Exhibit D, they merely tried to secure the loan granted to Gabino Veloso with the mortgage on their property.chanroblesvirtualawlibrary chanrobles virtual law library

The appealed judgment dismissed the complaint as to Concepcion Carratala, married to Luis Fernandez Sidebotom, for not having signed the document Exhibit D. It absolved the other defendants from paying the sum of P6,000, declaring that said sum was a personal debt of Gabino Veloso, but ordered them to pay to the plaintiff, the interest thereon at 12 per cent per annum from May 27, 1926, until fully paid.chanroblesvirtualawlibrary chanrobles virtual law library

Both the plaintiff and the defendants appealed.chanroblesvirtualawlibrary chanrobles virtual law library

The plaintiff appealed from that part of the judgment holding the defendants not liable to pay to it the sum of P6,000. The defendants appealed from so much of the judgment as ordered them to pay to the plaintiff interest on the sum of P6,000 at 12 per cent per annum from May 27, 1926, and particularly with respect to the defendant Consuelo Carratala, on the ground that she, being married, signed the document Exhibit D without the consent of her husband Gabino Veloso.chanroblesvirtualawlibrary chanrobles virtual law library

As to the plaintiff's appeal we are of the opinion that the defendants who signed Exhibit D are liable to pay to said plaintiff the sum of P6,000. The terms of said document, the material parts of which had been quoted herein-before, are explicit in the sense that the defendants considered themselves indebted in said sum upon affirming that they had received the same to their full satisfaction, binding themselves to pay the interest thereon and, calling it, to be more explicit, our debt.chanroblesvirtualawlibrary chanrobles virtual law library

However, the defendants allege that the said sum of P6,000 was Gabino Veloso's personal debt and that they signed the document Exhibit D merely for the purpose of securing with the mortgaged property the payment thereof by Gabino Veloso, and that it was not their attention to assume the obligation to pay the sum in question. The only witness presented in connection with said defense was Gabino Veloso. However, although Veloso testified that the sum of P6,000 is his personal debt, he did not state that the defendants signed the document Exhibit D merely for the purpose of securing with the mortgage the payment thereof and that they did not assume the obligation to pay the same. It results from the foregoing that there is no evidence that the defendants' intention, which is clearly deducible from the terms of the document, is not that which they had upon signing said document.chanroblesvirtualawlibrary chanrobles virtual law library

The fact that the debt in question was originally contracted by Gabino Veloso alone, does not alter the defendants' liability. The most that can be inferred therefrom is that the original contract of loan between Veloso and the plaintiff's predecessor in interest was novated under Exhibit D by the substitution of the persons who signed it as debtors.chanroblesvirtualawlibrary chanrobles virtual law library

This conclusion likewise adversely decides the defendants' appeal with respect to the payment of interest. If they must pay the debt, they should pay the stipulated interest, especially because they expressly bound themselves to do so. Furthermore, this conclusion relieves us from discussing the erroneous contention made in the defendants' brief, to the effect that in this case the mortgage is the principal obligation, and the payment of interest an accessory.chanroblesvirtualawlibrary chanrobles virtual law library

As to Consuelo Carratala, we concur in the trial court's opinion that she cannot evade the effect of the document signed by her by alleging that it is null and void for lack of her husband's consent, inasmuch as only the husband or his heirs can raise such question of nullity.chanroblesvirtualawlibrary chanrobles virtual law library

In view of the foregoing considerations, the judgment appealed from is modified, and the defendants, with the, exception of Concepcion Carratala and her husband, are ordered to pay to the plaintiff the sum of P6,000. Said judgment is affirmed in all other respects, without special pronouncement as to costs. So ordered.

Street, Malcolm, Vickers, Butte, Goddard and Diaz, JJ., concur.

Separate Opinion

IMPERIAL, J., dissenting:chanrobles virtual law library

On May 26, 1926, the defendants signed the document which reads as follows:

Know all men by these presents: That we Feliciana Enriquez, widow, Carmen Carratala, married to Mariano G. Veloso, Concepcion Carratala, married to Luis Fernandez Sidebotom, Manuel Carratala, married to Quintillana Samson, all of age, do hereby declare that, in consideration of the sum of six thousand pesos (P6,000), which we have received to our full satisfaction from Messrs. Gotiaoco y Hermanos, do hereby mortgage to Said Messrs. Gotiaoco y Hermanos, their heirs and successors in interest, a parcel of land known as lot number one thousand seven hundred fifty-six (lot No. 1756) of the cadastre of Cebu, Cebu, and described in original certificate of title number eight thousand six hundred and ninety-six (o. c. of title No. 8696) of the registry of deeds of Cebu.chanroblesvirtualawlibrary chanrobles virtual law library

We likewise declare that the stipulated term of this mortgage is two (2) years from the date of this deed, and we bind ourselves to pay interest thereon at twelve per cent (12%) per annum until the debt is fully paid.chanroblesvirtualawlibrary chanrobles virtual law library

We further declare that during the term of the mortgage the assessments in favor of the municipality, by way of land taxes, as well as the assessments in favor of the provincial or insular government, will be paid by the mortgagors, binding ourselves, furthermore, to the mortgagees for the eviction and warranty of the above described property which has been given as security for our indebtedness.chanroblesvirtualawlibrary chanrobles virtual law library

In witness whereof, we hereunto affix our signatures at Cebu, Cebu, P. I., this 26th day of May, 1926.

(Sgd.) FELICIANA ENRIQUEZ, CONSUELO CARRATALA, CARMEN CARRATALA, M. CARRATALA E.

With my marital consent:

(Sgd.) V. GANDIONGCO

Inasmuch as the defendants refused to pay the sum of P6,000 and the interest thereon and because, on the other hand said mortgage deed was not duly registered, the plaintiff entity brought a personal action for the recovery of both.chanroblesvirtualawlibrary chanrobles virtual law library

The plaintiff appealed from that part of the judgment absolving the defendants from the payment of the sum of P6,000. The defendants, in turn, appealed in so far as the judgment ordered them to pay interest thereon at 12 per cent per annum from May 27, 1926, with costs.chanroblesvirtualawlibrary chanrobles virtual law library

In their answer, the defendants alleged, among other defenses, that the above quoted document, transcribed in the complaint, does not express the true intention of the parties, and that the sum claimed was an indebtedness of one Gabino Veloso, which they, without assuming it, secured by the real property described in the document.chanroblesvirtualawlibrary chanrobles virtual law library

It has been established by means of preponderant and convincing evidence that the sum of P6,000 was an obligation contracted by Gabino M. Veloso from the plaintiff's predecessor in interest, which the defendants secured with the mortgage on their real property.chanroblesvirtualawlibrary chanrobles virtual law library

Such facts are shown by said Veloso's testimony to the effect that he owed said sum; that he issued a promissory note for the accrued interest thereon; and that said promissory note was presented in his insolvency proceedings as evidence of the claim filed by the plaintiff, and that the defendants merely secured his personal obligation with the mortgage in question. Exhibit 1 corroborates Veloso's statement that he issued a promissory note for the accrued interest on his indebtedness of P6,000 and that, in order to collect the same, the plaintiff presented it as a claim in his insolvency proceedings.chanroblesvirtualawlibrary chanrobles virtual law library

It having been proven that the case involves an obligation or indebtedness contracted by a third person and that the defendants by means of the above quoted document merely secured it with the mortgage executed by them, it is evident that the action brought for the recovery of the principal obligation does not lie against the defendants, and the same should have been instituted against Veloso.chanroblesvirtualawlibrary chanrobles virtual law library

The plaintiff's claim that the defendants, by means of said document, assumed Veloso's obligation, is incompatible with the weight of the evidence and is not supported by the terms of the document which, it has also been proven, does not reflect the true intention of the parties or the true facts of the case.chanroblesvirtualawlibrary chanrobles virtual law library

As to the defendants' appeal, the same is unfounded. It is not error to have ordered them to pay interest. Such obligation is clearly disclosed by the terms of the document. The obligation which they voluntarily bound themselves to perform is lawful and effective, for the reason that a person may bind himself to pay the interest on the debt of a third person, and that is precisely what the defendants did in this case.chanroblesvirtualawlibrary chanrobles virtual law library

The judgment appealed from should be affirmed, with the costs of this instance against plaintiff-appellant.

Villa-Real, Abad Santos and Hull, JJ., concur.