Facts:

In the case of Levy Hermanos vs. Pedro A. Paterno, decided on February 01, 1911, the plaintiff, Levy Hermanos, filed a complaint in the Court of First Instance of Manila against the defendant, Pedro A. Paterno, concerning an alleged unpaid debt. On March 28, 1906, Paterno executed a document which acknowledged an indebtedness of P6,177.35 in favor of Levy Hermanos, to be paid in partial payments. Paterno made several partial payments, but later asserted that he had the right to establish a set monthly installment of P30. The plaintiffs contested this assertion and sought legal recourse to recover the balance of the unpaid debt amounting to P5,862.35. In his answer, Paterno contended that the debt was not yet overdue, as the payment was to be made in installments, a fact supported by the original agreement.

During the proceedings, the matter of the total amount owed as of March 28, 1906, was agreed to be P5,317.35. The court found that a reasonable installment was P200 per month,

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Facts:

Background of the Case

• On March 28, 1906, the defendant executed a promissory note in favor of the plaintiffs, acknowledging a debt of P6,177.35.
• The note stipulated that the amount was "payable in partial payments," with no fixed schedule or interest provided for the installments.

Partial Payments and Dispute on Payment Scheme

• The defendant made several partial payments before the filing of the complaint, including:
• Payment of P100 on June 6, 1906.
• Payment of P50 on September 4, 1906.
• Payment of P25 on January 8, 1907.
• Payment of P50 on April 1, 1907.
• Three separate payments of P30 each on August 3, September 3, and October 3, 1907.
• The aggregate of these payments amounted to P315, which the defendant argued should be deducted from his debt.
• After the initial partial payments, the defendant claimed the right to establish a fixed rate of P30 a month for future payments, basing his argument on the notion that by making and receiving partial payments at that rate, an implied agreement had been reached.

Litigation and Trial Court’s Findings

• The plaintiffs contested the defendant’s claim regarding the fixed installment rate and instead demanded payment of the remaining balance of either P5,862.35 or a sum determined by the court as equitable.
• During trial, the parties agreed that the debt due as of March 28, 1906, was P5,317.35.
• Evaluating the evidence, the trial court determined that a monthly installment of P200 would be reasonable for the payment of the debt.
• The trial court accordingly ordered the defendant to pay the sum of P6,317.35 at a rate of P200 per month, commencing on April 15, 1909.

Appeal and Legal Contention

• The defendant appealed the judgment, asserting that the partial payments made, particularly those of P30 a month, constituted an agreed-upon installment plan.
• The defendant also argued that the debt had not fully matured due to the language of the instrument allowing payment in installments and the absence of a fixed payment schedule.

Issue:

• Whether the absence of a fixed payment period in the promissory note allowed the court to determine a reasonable installment rate under Article 1128 of the Civil Code.
• Whether the defendant’s conduct—making various partial payments, including repeated P30 deposits—established an implied agreement for payment at that fixed rate.
• Whether the trial court abused its discretion by setting the monthly installment amount at P200 instead of recognizing the defendant’s claim for a fixed P30 monthly payment.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)