G.R. No. 167003 - Abaigar vs. Abaigar

On June 22, 1925, defendant Juan Barcia y Zanuy, a resident of Pontevedra, Occidental Negros, borrowed P20,000 from creditor Jose Ledesma y Rosario, with a term of two years.
The loan carried an interest rate of 12% per annum, payable annually.
To secure the debt, Barcia mortgaged the hacienda Cambaros—a lot (No. 1500) in the cadastral survey of Pontevedra, Occidental Negros containing over 294 hectares—which was registered in transfer certificate No. 4890.
Although the property mortgaged belonged to Miguel Perez y Tejido (the plaintiff), he had given prior authorization for the creation of the mortgage.

Among the stipulations in the mortgage was a clause providing that, if the debtor failed to comply with any obligation, all pending payment periods would lapse (se dieron por vencidos todos los plazos que entonces hubiere pendientes).
At the end of the first year, Barcia defaulted by failing to pay the interest due.
In response to the creditor’s threat to foreclose the mortgage upon default, and to prevent the loss of his property, plaintiff Miguel Perez intervened for his own protection.

To secure the property, Perez obtained a temporary indulgence from creditor Ledesma, and later paid the interest due on the mortgage amounting to P2,400.
On April 22, 1927, Perez instituted an action in the Court of First Instance of Occidental Negros. The complaint sought two main reliefs:

A declaration that by default, the defendant had forfeited his right to the extended period for payment allowed by the mortgage.
An order requiring the defendant to pay the sum of P20,000, with interest, so that Perez could clear the lien on his property.

Recovery of P20,000 as the capital of the loan, with interest computed at 12% per annum from June 23, 1927.
Recovery of P2,400 (the amount Perez had advanced to pay the mortgage interest), with interest accruing on that sum from the date of the judgment.

The defendant appealed the judgment, particularly contesting the award of the principal sum of P20,000.

Whether article 1843 of the Civil Code, which allows the surety to proceed against the principal debtor before paying the debt in case of insolvency, permits a money judgment for the principal debt.
Whether the specific relief enumerated in the closing paragraph of article 1843 (release from the contract or obtaining security) precludes the awarding of a monetary sum for the principal debt.

Whether the plaintiff’s voluntary renunciation of his right to obtain security from the defendant (as evidenced in the executed memorandum) barred him from the remedy provided under article 1843.
Whether this waiver affected his right of action to recover the principal debt under the circumstances presented.

Whether the suit, instituted two months before the expiration of the extended payment period, was premature under the provisions of the mortgage and the relevant articles of the Civil Code.