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PHILIPPINE SUPREME COURT DECISIONS

EN BANC

[G.R. No. 10418. December 23, 1915. ]

VICENTE LOPEZ, Plaintiff-Appellee, v. ROSENDO HERNAEZ, Defendant-Appellant.

Ruperto Montinola for Appellant.

Laguda, Ledesma, Jalbuena & Villalobos for Appellee.

SYLLABUS


1. CONTRACTS; PENAL CLAUSE; ARTICLE 1152, CIVIL CODE. — The stipulation contained in a contract that the debtor shall pay P400 in case of nonperformance is a contractural clause which is not penal, but an accessory obligation to pay determined losses and damages in addition to interest, and the contracting parties are free to make such a stipulation. Consequently the present case does not call for the application of article 1162 of the Civil Code, in accordance with which, in obligations with a penal clause in case of nonfulfillment the penalty shall take the place of indemnity for damages and the payment of interest.

2. ID.; ID.; ID. — Payment of interest could not well be substituted in the contract in question, for the reason that the interest was expressly stipulated and its amount fixed in the contract; otherwise, instead of guaranteeing the fulfillment of the principal obligation, the penal obligation would be availed of for the purpose of leaving it unfulfilled and the creditor would be unable to require its enforcement.

3. ID.; ID.; ID. — Of course the presumption of article 1152 is not violated if, as expressly authorized therein, a definite stipulation has been made in the contract to the contrary.

4. ID.; ID.; ID. — Nor can the indemnity in question be construed as being for costs of the suit, because the payment of the said P400 appears to have been so stipulated that it must be made, whcther demanded judicially or extrajudicially, and nothing is left to the discretion of the courts.


D E C I S I O N


ARELLANO, C.J. :


On October 23, 1912, Rosendo Hernaez executed and signed the following instrument:jgc:chanrobles.com.ph

"Whereas, in the Court of First Instance of Iloilo there is a case pending between the undersigned, as defendant, and Vicente Lopez, as plaintiff, for the recovery of a certain sum of money, and whereas I have come to an agreement with the said plaintiff with respect to the payment of the sum aforementioned; therefore, I promise to pay to Mr. Vicente Lopez and to his order in the city of Iloilo, the sum of P4,925 in the following manner: On the 1st day of January, 1913, the sum of P1,500 Philippine currency, or before said date, provided Don Maximo Jalandoni, residing in Jaro, Iloilo, makes payment of the value of the lands of the estate of the deceased Juana Espinosa, situated in the sitio of Imbang, Occidental Negros. The remaining sum of P3,425, which is the principal and the legal interest, shall be paid in the city of Iloilo during the month of May, 1914, and shall bear interest at the rate of 6 per cent per annum from this date until its complete payment; provided, however, that in case the first sum is not paid at maturity, I promise to pay to Mr. Vicente Lopez the sum of P150 as losses and damages, and the sum of P400 as losses and damages in case of failure to pay the second sum.

"Iloilo, this 23d day of October, 1912.

(Sgd.) "R. HERNAEZ."cralaw virtua1aw library

At the foot of the document there appears this memorandum signed by Vicente Lopez: "I have received from Don Rosendo Hernaez the sum of P1,500, corresponding to the first installment due upon this promissory note.

"OCTOBER 24, 1912.

(Sgd.) "VICENTE LOPEZ."cralaw virtua1aw library

On June 2, 1914, Vicente Lopez entered proceedings for the collection of the second installment — that is, for the P3,425, together with the interest there on at 6 per cent per annum from the 23d of October, 1912, the P400 stipulated as losses and damages, and the costs of the suit.

And the Court of First Instance of Iloilo, rendering judgment in accordance with the prayer of the complaint, ordered defendant to pay to plaintiff P3,425, with interest thereon at 6 per cent per annum from October 23, 1912, until it was wholly paid; P400, as indemnity for losses and damages, with interest thereon at 6 per cent from July 1, 1914; and the costs of the trial.

Defendant appealed.

The first assignment of error cannot be sustained, in so far as it is alleged that appellant was ordered to pay interest and, besides, indemnity for damages, contrary to the provisions of article 1152 of the Civil Code, to wit, that "the penalty shall substitute indemnity for damages and the payment of interest in case of nonfulfillment," inasmuch as, immediately following this citation, the same article reads "should there be no agreement to the contrary." And it was stipulated: (1) That the sum of P3,425 "shall bear interest at the rate of six per cent per annum from this 23d day of October, 1912, until its complete payment . . .," and (2) "the sum of P400 as losses and damages in case of failure to pay the second sum." Such is the law made by the contracting parties.

Neither can the second assignment of error be sustained, because the sum of P400 was not stipulated as payment of costs but merely as indemnity for loss and damage which, whether proceedings were brought or not, the debtor should pay if he did not perform his contract. Then it would become necessary to bring an action for debt, in which case the question of costs would arise.

The judgment appealed from is affirmed, with the costs against the Appellant. So ordered.

Torres, Johnson, Carson, Trent and Araullo, JJ., concur.

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