G.R. No. 178527 - Yuki, Jr. vs. Co

Samuel J. Wilson (plaintiff and appellee) and B. H. Berkenkotter (defendant and appellant) are the principal litigants.
Along with Paul A. Gulick, they entered into a joint and solidary promissory note in 1938 for a loan amounting to P90,000 from the Chartered Bank of India, Australia and China.
The original note provided for interest at 7% per annum payable monthly, which was later increased to 8%.

During World War II, when the Philippines was occupied by Japanese forces, enemy banks were put under liquidation.
The Bank of Taiwan was designated as the liquidator of these banks, including the Chartered Bank of India, Australia and China.
On November 4, 1944, upon demand by the liquidator, Berkenkotter paid the entire indebtedness (principal plus interest), amounting to P112,591.22 in Japanese military notes.
This payment extinguished the collective obligation with each co-debtor’s share computed as P37,530.40.

After the war, Berkenkotter, acting as subrogee and holder of the bank’s rights, demanded that his co-debtors settle their respective shares of the discharged loan.
While Paul A. Gulick accepted Berkenkotter’s offer and paid P18,902, Samuel J. Wilson refused to do so.
In April 1950, Wilson consigned the sum of P625.51 in the Court of First Instance of Manila, which he claimed was the equivalent value in genuine Philippine currency of his share (P37,530.40) as determined by the Ballantyne schedule conversion of Japanese military notes.
Wilson alleged that despite his tender of payment, Berkenkotter unjustifiably refused to accept it.

Wilson, through his petition accompanying the consignation, sought a declaration that his consignation of P625.51 was proper and sufficient as payment of his share in the joint obligation.
In his answer, Berkenkotter asserted that the payment he made in 1944 extinguished the loan and established a new obligation whereby Wilson must pay him his one-third share in the discharged debt.
Berkenkotter further demanded that in addition to the principal, Wilson should be ordered to pay collection expenses amounting to P3,000 as stipulated in the promissory note.
The trial court rendered judgment in favor of Wilson, holding that his consignation was a just and full payment of the indebtedness, and ordered Berkenkotter to receive the consigned amount from the clerk of court.

Whether Wilson’s obligation to pay Berkenkotter his share in the discharged loan was created at the time of the original contract (1938) or at the moment of Berkenkotter’s payment in November 1944.
Whether the obligation to pay is real and immediate or conditional and contingent upon the extinguishment of the original debt.

Whether the adjustment of the payment amount under the Ballantyne schedule was proper since it revaluates the amount due in Philippine currency.
Whether the schedule applies only to obligations contracted during the occupation or also to those whose enforceability or payment demand falls during the occupation.

Whether Wilson should be held liable to Berkenkotter for the full one-third share including both principal and interest as well as the additional collection expenses of P3,000 per the promissory note.
Whether the payment made by Berkenkotter to settle the bank’s demand extinguished the original obligation and gave rise to an entirely new, albeit contingent, obligation on Wilson.

Whether the trial court erred in refusing Berkenkotter’s motion for a new trial and in not setting aside its judgment.
The correct interpretation of the evidence regarding the creation versus the demandability of the obligation.