1. CONTRACTS; CONSIDERATION CONTRARY TO LAW, MORALS OR PUBLIC ORDER. — If the consideration for the promissory note upon which plaintiff’s cause of action relies were contrary to law, morals, good customs, public policy or public order, the contract between the parties thereto would, legally, be "inexistent and void from the beginning." (Art. 1409, par. (1), Civil Code of the Philippines.)

2. APPEAL AND ERROR; QUESTION RAISED FIRST TIME ON APPEAL; WHEN CONSIDERED. — Where the findings of the trial court on the question raised for the first time on appeal were based upon the evidence on records, it is proper for the Court of Appeals to consider the said evidence in the decision appealed from.

This is a petition for review, by certiorari, of a decision of the Court of Appeals, reversing that of the Court of First Instance of Manila, and absolving respondent, J. Perez Cardenas, from the complaint, without costs.

It appears that on May 26, 1941, said respondent and Pedro Camus executed, in favor of petitioner, Jose Garrido, the promissory note Exhibit A, which is of the following tenor:jgc:chanrobles.com.ph

"For value received, PEDRO CAMUS as principal, and J. Perez Cardenas as guarantor in solidum hereby promise to pay to the order of JOSE GARRIDO, the sum of TWO Thousand (P2,000.00) PESOS Philippine Currency, in the following manner:chanrob1es virtual 1aw library

During the first twelve consecutive months beginning June 1941, the sum of P360.00 in twelve equal installments of P30.00, each installments to be paid on or before the fifth day of every month;

Then the balance of P1,640 in thirty-two equal installments of P50.00 and one last installment of P40.00 beginning the thirteenth month and consecutively thereafter, each installment to be paid on or before the fifth day of every month;.

And PEDRO CAMUS as principal, and J. PEREZ CARDENAS as guarantor in solidum hereby agree that if any two installments are not paid according to the tenor of this instrument, the whole principal sum then remaining unpaid shall forthwith become due and payable immediately;

And PEDRO CAMUS as principal, and J. PEREZ CARDENAS as guarantor in solidum, also promise and agree to pay a sum equivalent to 20% of the unpaid principal as attorney’s fees in case this note is not paid according to its tenor and is placed in the hands of an attorney for collection."cralaw virtua1aw library

The amount thereof not having been paid, despite demands, Garrido brought an action for its recovery in the Municipal Court of Manila (Civil Case No. 15799). Said action was dismissed, however, for want of jurisdiction, whereupon petitioner instituted the case at bar, against Camus and Perez Cardenas, in the Court of First Instance of Manila, for the same purpose. Only Perez Cardenas filed his answer, for Camus could not be summoned, his whereabouts being unknown. In due course, said court subsequently rendered a decision, the dispositive part of which reads:jgc:chanrobles.com.ph

"FOR THE FOREGOING CONSIDERATIONS, the Court hereby renders judgment in favor of plaintiff Jose Garrido and against Defendant Jose Perez Cardenas, sentencing the latter to pay the former the sum of P2,000.00 with 6% interest thereon from the filing of the complaint on December 15, 1953, until its full payment, plus the sum of P200.00 for attorney’s fees. No pronouncement is made as to costs."cralaw virtua1aw library

On appeal, taken by Perez Cardenas, this decision was reversed by the Court of Appeals, upon the ground that the promissory note in question is unenforceable, its cause or consideration being unlawful and contrary to public order and to the proper administration of justice. Hence, this petition for review by certiorari, filed by Garrido, who now maintains that the Court of Appeals erred:jgc:chanrobles.com.ph

"1. . . . in holding that the question of illegality of consideration of the promissory note may be raised for the first time on appeal inspite of the fact that the same was never raised in the court below and is not within the issues made by the parties in their pleadings.

"2. . . . in holding the contract, which is but a promise to civilly indemnify petitioner of the amount embezzled from him, as null and void, and in not applying the doctrine laid down in the case of Hibberd v. Rhode and McMillian, 32 Phil., 476."cralaw virtua1aw library

The first assignment or error is untenable. If the consideration for the promissory note upon which plaintiff’s cause of action relies were contrary to law, morals, good customs, public policy or public order, the contract between the parties thereto would legally, be "inexistent and void from the beginning." (Art 1409, par. [1], Civil Code of the Philippines.) Inasmuch as the finding of the lower court, on this point, was based upon petitioner’s own evidence, it was proper to consider the same in the decision appealed from. The petitioner could not be entitled to a judgment in his favor if his own proof showed that he has no cause of action, because the contractual relation upon which his claim relies is inexistent, from a legal viewpoint.

As regards the second assignment of error, the finding of the Court of Appeals is as follows:jgc:chanrobles.com.ph

". . . el mismo apelado, libre y voluntariamente, tal vez sin darse cuenta de la consequencia de su acto, retalo antes y durante el juicio que la causa o consideracion del pagare en cuestion era para evitar que Pedro Camus, el codemandado del apelante, fuese procesado por estafa (Exh. B. y Trans. n.t., pp. 2 y 4). Como que immediatamente despues de su otorgamiento, la denuncia por estafa que ya estaba en manos de la fiscalia, fue retirada o ’dismissed’ — segun declaracion del mismo apelado (Trans. n.t., p. 6)

"De las mismas pruebas del apelado, resulta claro y evidente que la causa del pagare cuya redencion se trata de compeler es ilegal, por ser contrario a la ley, a la moral y al orden p