Title
Borja vs. Mariano
Case
G.R. No. 44041
Decision Date
Oct 28, 1938
Plaintiff sought recovery of P16,000 and P2,300 from defendant, claiming novation of prior debt via mortgage agreement; Supreme Court upheld novation, ordering full payment with interest.
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Case Digest (G.R. No. 44041)

Facts:

  1. Parties Involved:

    • Plaintiff-Appellant: Quintin de Borja
    • Defendant-Appellee: Feliciana Mariano
  2. Nature of the Case:

    • The case involves the recovery of sums of money from the defendant, Feliciana Mariano, by the plaintiff, Quintin de Borja. The plaintiff sought to recover the following amounts:
      • P16,000 with 12% interest per annum from September 2, 1926, until fully paid.
      • P1,920 plus legal interest from August 27, 1927.
      • P1,000 as a penalty.
      • P2,300 with legal interest from September 2, 1928, until fully paid.
  3. Mortgage Agreement (Exhibit A):

    • The plaintiff claimed that the defendant executed a deed of sale with pacto de retro (Exhibit A) for P16,000, which was actually a mortgage. The plaintiff sought to enforce this mortgage to recover the amounts owed.
  4. Lower Court Decision:

    • The lower court ruled in favor of the plaintiff, ordering the defendant to pay P10,000 plus 12% interest and P2,300 plus 12% interest. The court also ordered the sale of the mortgaged properties if the defendant failed to pay within 90 days.
  5. Plaintiff’s Appeal:

    • The plaintiff appealed, alleging errors in the lower court’s decision, including the court’s failure to recognize the full amount owed (P16,000) and its disregard of the promissory note (Exhibit B) and other evidence.
  6. Key Evidence:

    • Exhibit A: Deed of sale with pacto de retro (actually a mortgage) for P16,000.
    • Exhibit B: Promissory note for P5,000 executed by Cornelio Sarangaya (defendant’s deceased husband) and acknowledged by the defendant.
    • Exhibit C: Another document executed by the defendant on the same date as Exhibit A, acknowledging a separate debt of P2,300.
  7. Previous Litigation:

    • The P5,000 debt (Exhibit B) had been previously litigated in Civil Case No. 2585, where the court ordered the defendant to pay the amount plus interest. However, this obligation was allegedly novated by Exhibit A.
  8. Execution of Judgment:

    • The plaintiff attempted to execute the judgment from Civil Case No. 2585, leading to further litigation (Case No. 6009) where the sale of the defendant’s properties was annulled.

Issue:

  1. Novation of Obligation:

    • Whether the obligation of the defendant to pay P5,000 plus interest, as ordered in Civil Case No. 2585, was novated by the execution of Exhibit A.
  2. Effect of Plaintiff’s Actions:

    • Whether the plaintiff’s act of seeking execution of the judgment in Civil Case No. 2585 affected the validity of Exhibit A.
  3. Recovery of Additional Sums:

    • Whether the plaintiff was entitled to recover the additional sums of P1,920, P1,000, and P2,300, as claimed in the complaint.
  4. Errors Alleged by Plaintiff:

    • Whether the lower court erred in its findings regarding the amounts owed and the evidence presented.

Ruling:

  1. Novation of Obligation:

    • The Supreme Court held that the obligation of the defendant to pay P5,000 plus interest, as ordered in Civil Case No. 2585, was novated by the execution of Exhibit A. The court ruled that Exhibit A extinguished the previous obligation and created a new one for P16,000.
  2. Effect of Plaintiff’s Actions:

    • The court ruled that the plaintiff’s act of seeking execution of the judgment in Civil Case No. 2585 did not affect the validity of Exhibit A. The novation of the obligation by Exhibit A was binding, and the plaintiff could not unilaterally alter the terms of the contract.
  3. Recovery of Additional Sums:

    • The court held that the defendant was liable to pay the plaintiff P16,000 plus 12% interest from September 2, 1926, until fully paid. The court also ruled that the defendant was liable to pay P2,300 plus 12% interest from September 2, 1926, until fully paid, as this was a separate obligation acknowledged in Exhibit C.
  4. Errors Alleged by Plaintiff:

    • The court found that the lower court did not err in its findings regarding the amounts owed. The court affirmed the lower court’s decision with modifications, ordering the defendant to pay the full amount of P16,000 plus interest and P2,300 plus interest.

Ratio:

  1. Novation of Obligations:

    • The court applied Article 1204 of the Civil Code, which provides that an obligation may be extinguished by novation. The execution of Exhibit A novated the previous obligation under Civil Case No. 2585, and the new obligation under Exhibit A was the only enforceable one.
  2. Binding Nature of Contracts:

    • The court emphasized that a contract, once executed, is binding on the parties, and no party can unilaterally alter its terms. The plaintiff’s attempt to enforce the previous judgment in Civil Case No. 2585 did not affect the validity of Exhibit A.
  3. Separate Obligations:

    • The court recognized that the P2,300 debt acknowledged in Exhibit C was a separate obligation from the P16,000 debt in Exhibit A. The defendant was liable for both amounts, as they were distinct and unrelated to each other.
  4. Preponderance of Evidence:

    • The court found that the preponderance of evidence supported the plaintiff’s claims for the amounts of P16,000 and P2,300, as these were clearly documented in Exhibits A and C. The court rejected the defendant’s attempts to conflate these amounts with other debts.

Conclusion:

The Supreme Court modified the lower court’s decision, ordering the defendant to pay the plaintiff:

  • P16,000 plus 12% interest from September 2, 1926, until fully paid.
  • P2,300 plus 12% interest from September 2, 1926, until fully paid.

The court affirmed the lower court’s decision in all other respects, with costs to the defendant.


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