Republic of the Philippines

SUPREME COURT
Manila
EN BANC
G.R. No. L-9421 July 24, 1915
L.L. HILL, plaintiff-appellant,
vs.
MAXIMINA CH. VELOSO, ET AL., defendants-appellees.
Martin M. Levering for appellant.
P.E. del Rosario for appellee.
ARELLANO, C.J.
On Decembe !", #$#", Ma%imina Ch. &eloso, the 'ife of Manuel M. (io Cuana, and Domin)o *anco, the fist named 'ith the consent of
he husband, e%ecuted and si)ned a document of the follo'in) teno+
*o value of the )oods 'e have eceived in La Cooperativa Filipina 'e pomise to pa, -ointl, and seveall, to Michael . Co., /. en C., o its
ode, in the municipalit, of Cebu, the sum of si% thousand thee hunded and nineteen pesos and thit,-thee centavos 01,!#$.!!2, in the
manne heeinafte set foth, 'ith inteest on such pat of said pincipal as ma, emain unpaid at the end of each month at the ate of one
and a half pe cent pe month until the pincipal shall have been completel, paid. (he said sum of si% thousand thee hunded and nineteen
pesos and thit,-thee centavos 0P1,!#$.!!2 shall be paid at the ate of five hunded pesos 0P3""2 monthl, on o befoe the #3th da, of
each month, and the inteest shall also be paid monthl,. 4n case said monthl, pa,ments ae not made in the manne that 'e have pomised
heeinabove, then all the unpaid pincipal shall become immediatel, demandable, at the option of the o'ne of this pomisso, note. 4n
case suit be bou)ht fo the collection of the amount of this pomisso, note o an, pat theeof, 'e bind ouselves -ointl, and seveall, to
pa, an additional and easonable sum as fees of the plaintiff5s attone, in said suit.
0/)d.2 MA64M4NA C7. &E8O/O.
DOM4N9O *RANCO.
4 consent to m, 'ife, Ma%imina Ch. &eloso, si)nin) the foe)oin) document.
0/9D.2 MAN:E8 M. (4O C:ANA.
Cebu, P.4., December 30, 110.
(his pomisso, note 'as indosed to 8.8. 7ill on ;anua, #<, #$##. (he follo'in) indosement appeas on the bac=+
;AN:AR> #<, #$##.
Pa, to the ode of 8.8. 7ill.
E. M4C7AE8, /. en C .
B, E. M4C7AE8, !erente.
('o thousand pesos have been paid on this note ? that is, fou installments of P3"" each on *ebua, #", Mach #1, Apil #1, and Ma,
<<, #$##, espectivel,.
On ;ul, 3, #$##, 8.8. 7ill bou)ht the pesent suit to ecove the follo'in) sums+ P@,!#$.!!, 'ith inteest theeon at the ate of # A pe cent
pe month fom ;ul, #, #$##, until said sum should be entiel, paidB P@C!.#D as inteest on the pincipal of said note fom Decembe !" to
;une !", #$##B P#,""" as fees fo plaintiff5s attone, in this suit and fo the costs of the poceedin)s a)ainst the defendants, Ma%imina Ch.
&eloso and Manuel MatineE (io Cuana.
Defendants, in ans'e to the complaint, alle)ed as a special defense that Fabout the middle of Decembe, #$#", the deceased Domin)o
*anco, 'ho 'as thei son-in-la', had stated to them that attone, Matin M. 8evein), in his capacit, as )uadian of the mino childen of
Potenciano Chion) &elos, had su))ested to the said *anco the necessit, of the defendants5 e%ecutin) in 8evein)5s behalf a document in
'hich it should be set foth that the defendants 'ould pa, to 8evein), in his capacit, of )uadian of said minos, the sum of PD,""" 'hich
defendants had boo'ed fom Damasa Ricablanca, the fome )uadian of these minos, in vie' of the fact that the cout had emoved this
latte fom office and appointed said attone, in he steadB that, b, eason of this statement b, 8evein) to *anco, and havin), as the, did
have, confidence in said decedent, Domin)o *anco, on account of his bein) a membe of thei famil,, defendants 'ee 'illin) to e%ecute
in behalf of the said attone,, 8evein), a document that should be set foth the sum o'ed b, them to the 'ads epesented b, 8evein)B
that, conseGuentl,, said Domin)o *anco had defendants said pape 'ould be filled out inside his office b, ecodin) on the sheet the
obli)ation contacted b, them in behalf of said 'adsB that defendants did in fact si)n the said pape fo the pupose indicated, and, up to
the death of said Domin)o *anco, 'hich occued in Ma, of the pesent ,ea 0#$##2 confided in his )ood faith and in the belief that the
pape 'hich the, had si)ned had been dul, filled out 'ith the obli)ation contacted b, them in behalf of said 'ads and had been deliveed
to attone, Matin M. 8evein) as )uadian of said minos, but that afte the said *anco died the, leaned that at no time had he eve
deliveed to said attone, an, document 'hateve si)ned b, defendantsB that the, believed that the pape 'hich said deceased had them
si)n fo the alle)ed pupose afoementioned 'as filled out 'ith a totall, diffeent obli)ation fom that 'hich the, had been made to believe
'ould be set foth theein. Defendants theefoe alle)ed that, as the, had had no tansaction 'hateve 'ith Michael . Co., /. en C., no
'ith the plaintiff, and as the, had not eceived an, =ind of )oods 'hateve fom said fim, and it appeain) that the,, to)ethe 'ith the
deceased Domin)o *anco, seemin)l, si)ned the pomisso, note, plaintiff5s E%hibit A, all these easons induced them to believe, and the,
so alle)ed, that the said deceased, 'ithout thei consent, utiliEed the afoementioned pape fo the e%ecution of said pomisso, note.
Defendants futhe alle)ed that at no time did the, intended to e%ecute an, pomisso, note in behalf of Michael . Co., /. en C.B that it 'as
false that Michael . Co. deliveed )oods to them inLa Cooperativa Filipina" and that, of thei o'n fee 'ill, the, did not e%ecute an,
document 'hateve in behalf of the cedito mentioned in said pomisso, note.F
Evidence 'as adduced b, the paties, afte 'hich the Cout of *ist 4nstance of Cebu, 'ho tied the case, endeed -ud)ment absolvin)
defendants fom the complaint, 'ith thei costs.
Plaintiff appealed, and his appeal havin) been head and the evidence evie'ed, it appeas+
(hat the tial cout sustained defendants5 special defense in all its pats, ma=in) it the pincipal )ound fo his -ud)ment, to 'it, that
defendants5 si)natues on the pomisso, note 'ee obtained b, means of the faud alle)ed in thei ans'e to the complaint and that
defendants at the tial e%plicitl, ac=no'led)ed thei si)natues. (he defendant Ma%imina Ch. &eloso testified that he son-in-la', Domin)o
*anco, had he si)n the document in blan=B that 'hen she did so contained no 'itin)B and that if he made he si)n it, and if she did si)n it,
it 'as because *anco had told he that 8evein) compelled he to e%ecute a document in his behalf Ffo the mino childen of Damasa
Ricablanca,F he siste-in-la' and 'ido' of Potenciano Ch. &eloso, 'ho had deposited 'ith he PD,""" belon)in) to he mino childen to
'hom 'itness ac=no'led)ed heself to be indebted in the said sum of PD,""".
Assumin) this to be tue, b, the eco)nition of the si)natue of this pomisso, note, the document became completel, effective, unless
thee be poof of some e%ception pemitted b, la'. Hee thee such an e%ception, the ma=e 'as the peson obli)ed to poved it and, in
the pesent case, that peson is the defendantB and the latte has pesented absolutel, no poof of the mista=e b, eason of 'hich she sa,s
she si)ned the pomisso, note, no of the faud o deceit she cha)es to he son-in-la', Domin)o *anco, no' deceased. *a fom it,
somethin) else 'as sho'n to have been poven b, he o'n testimon, and acts. On he bein) coss-Guestioned as to 'hethe it 'as tue
that, as she sa,s, she si)ned the pomisso, note in blan= thin=in) that she 'as si)nin) an obli)ation in behalf of 8evein) as )uadian of
the estate belon)in) to the mino childen of he deceased bothe, she eplied that it 'as, that she had been told b, the said Domin)o
*anco that it 'as such an obli)ation, and so she 'as 'illin) to si)n it, because Fit 'as eall, a debt.F
*om this testimon, of Ma%imina Ch. &eloso and fom he 'itten ans'e, it appeas that in Decembe, #$#", she si)ned in blan= the
pomisso, note no' in GuestionB that she si)ned it in the belief that the obli)ation 'hich it 'ould contain 'ould be that of ac=no'led)in)
he debt of PD,""" in favo of the mino childen of Damasa Ricablanca and of pa,in) it to 8evein), 'ho at that time 'as the )uadian of
then said minosB that fo this eason, in he 'itten ans'e of Au)ust @, #$##, she set up that special defense of eo and deceit, 'hen she
sa' that the obli)ation contained in the document si)ned in blan= 'as a pomisso, note made out to Michael . Co. fo P1,!#$ and some
centavos.
4t appeas that 8evein), as )uadian of the mino childen of Damasa Ricablanca, commenced poceedin)s on Novembe #, #$##, to
ecove the PD,""" o'ed b, the defendant Ma%imina Ch. &eloso, and that the latte, on ;anua, #3, #$#<, ans'eed the complaint statin)
that he debt 'as o'in) to Damasa Ricablanca heself in he o'n i)ht, but not he capacit, of )uadian of he mino childen. 0Recod, pp.
!@ and !1.2
4f she said this in #$#<, it cannot be maintained that in #$#", on bein) eGuied to eco)niEe and pa, the debt of PD,""", she consented to
si)n a document in blan= eco)niEin) the debt and bindin) heself to pa, it to 8evein) as the then )uadian of the mino childen of
Damasa Ricablanca. Hhat 'ould have been natual and lo)ical is that then, as in #$#<, she 'ould have efused to e%ecute said obli)ation
in 'itin) in favo of 8evein), as she did e-ect it on ;anua, #D, #$#<, since she did not conside heself to be in debt to the minos, but to
thei mothe.
(his bein) sho'n b, the ecod, the alle)ation of that othe fact, entiel, contadicted at tial b, the same peson, cannot be consideed as
poof of the eo and deceit alle)ed in this action.
4t is li=e'ise poven in this case that duin) the tial, afte the defendant &eloso had ac=no'led)ed the debt o'in) the minos epesented
b, 8evein), she 'as coss-Guestioned as to 'h, she had denied it in #$#< 'hen she 'as sued fo its pa,mentB she eplied that possibl,
demand had been made upon he fo pa,ment, but that she did not emembe, and on bein) coss-Guestioned as to 'hethe she
emembeed that -ud)ment had been endeed a)ainst he, she eplied that she did and that she had been infomed of it b, he o'n
attone,.
(his is the onl, thin) in the ecod 'hich ma, be opposed to the tuth and pesumption of tul, offeed b, the contents of a document feel,
and 'illin)l, si)ned.
(his is not poof, much less pepondeant poof, that can out'ei)h the contents of the pomisso, note that is the basis of the complaintB on
the conta,, it is conclusive poof of the falsit, of the othe cause of debt alle)ed in the special defense.
But even )anted that no such poofs e%isted in the caseB even )anted that it 'as poven at tial that Domin)o *anco acted in the manne
stated in the ans'e and in the defendant Ma%imina Ch. &eloso5s testimon,, ,et even so, the deceit and eo alle)ed could not annul the
consent of the contactin) paties to the pomisso, note, no e%empt this defendant fom the obli)ation incued. (he deceit, in ode that it
ma, annul the consent, must be that 'hich the la' defines as a cause. F(hee is deceit 'hen b, 'ods o insidious machinations on the
pat of one of the contactin) paties, the ot#er is induced to e%ecute a contact 'hich 'ithout them he 'ould not have made.F 0Civ. Code,
at. #<1$.2
Domin)o *anco is not one of the contactin) paties 'ho ma, have deceitfull, induced the ot#er contactin) pat,, Michael . Co., to
e%ecute the contact. (he one and the othe contactin) paties, to 'hom the la' efes, ae the active and the passive sub-ects of the
obli)ation, the pat, of the fist pat and the pat of the second pat 'ho e%ecute the contact. (he active sub-ect and pat, of the fist pat of
the pomisso, note in Guestion is Michael . Co., and the passive sub-ect and the pat, of the second pat ae Ma%imina Ch. &eloso and
Domin)o *ancoB t'o, o be the, moe, 'ho ae one sin)le sub-ect, one sin)le pat,. Domin)o *anco is not one contactin) pat, 'ith
e)ad to Ma%imina Ch. &eloso as the othe contactin) pat,. (he, both ae but one sin)le contactin) pat, in contactual elation 'ith, o
as a)ainst, Michael . Co. Domin)o *anco, li=e an, othe peson 'ho mi)ht have been able to to induce Ma%imina Ch. &eloso to act in the
manne she is said to have done, unde the influence of deceit, 'ould be, fo this pupose, but a thid peson. (hee 'ould then not be
deceit on the pat of the one of the contactin) paties e%ecised upon the othe contactin) pat,, but deceit pacticed b, a thid peson.
F4n accodance 'ith the te%t of the Code, 'hich coincides 'ith that of othe foei)n codes, deceit b, a thid peson does not in )eneal annul
consent, and in suppot of this opinion it is alle)ed that, in such a case, the t'o contactin) paties act in )ood faith, 0on the h,pothesis set
foth, Michael . Co., and Ma%imina Ch. &eloso2B that thee is no eason fo ma=in) one of the paties suffe fo the conseGuences of the act
of a thid peson in 'hom the othe contactin) pat, ma$ #ave eposed an impudent confidence. Not'ithstandin) these easons, the
deceit caused b, a thid peson ma, poduce effects and, in some cases, bin) about the nullification of the contact. (his 'ill happen 'hen
the thid peson causes the deceit in connivance 'ith, o at least 'ith the =no'led)e, 'ithout potest, of the favoed contactin) pat,+ the
most pobable suppositions, in 'hich the latte cannot be consideed e%empt fom the esponsibilit,. Moeove, and even 'ithout the
attendance of that cicumstance, the deceit caused b, a thid peson mi)ht lead the contactin) pat, upon 'hom it 'as pacticed into eo,
and as such, thou)h it be not deceit, ma, vitiate consent. 4n an$ case, this deceit ma, )ive ise to moe o less e%tensive and seious
esponsibilit, on the pat of the thid peson, and a corresponding i)ht of action fo the contactin) pat, pe-udicedF 0in the pesent
h,pothesis, Ma%imina Ch. &eloso a)ainst Domin)o *anco2. 0D Manesa, 13$, <d Ed.2
Hith espect to the tue cause of the debt o cause of the contact, it is not necessa, to set foth an, consideation 'hateve, because, as
the deceit and eo alle)ed cannot be estimated, it is of no impotance 'hethe the La Cooperativa Filipina, 'hose )oods 'ee the cause
of the debt, e%clusivel, belon)ed to one o the othe of the debtos, the obli)ation of debt and pa,ment bein) -oint. But if an, consideation
'ith espect to this eo alle)ed on appeal 'ee necessa,, it 'ould be that the evidence a)ainst the findin) contained in the -ud)ment
appealed fom is ve, conclusive. 4sabelo Albuo, a 'itness fo the defense and mana)e of La Cooperativa Filipina, testified that the )oods
funished b, Michael 'ee eceived in the stoe La Cooperativa Filipina" that he si)ned the bills fo collectionB that the bill-heads boe the
pinted le)end %La Cooperativa Filipina de Ma&imina C#. 'eloso"% and that all the foms, boo=s and accounts 'ee pinted in the same
manne. (he municipal teasue e%hibited the e)ist, boo=s and testified that the license fo that establishment 'as issued in the name of
Ma%imina Ch. &eloso, and the appellee heself testified that she 'as a'ae that it 'as conducted in he name.
(he thid assi)nment of eo should be consideed li=e the foe)oin) t'o. (he statement is in all espects inadmissible that the pomisso,
note in Guestion is absolutel, null and void, not meel, annulable, and that is such cases the /upeme Cout has decided that no i)hts can
be acGuied b, a peson 'ho obtains a pomisso, note b, indosement, in suppot of 'hich avement the decisions in the cases of Palma
vs. Ca(i)ares 0# Phil. Rep., 1"<2 and Lic#a*co vs. Martine) 01 Phil. Rep., 3$@2 ae cited.
4n neithe of these decisions is such a doctine set up (he s,llabus in the fist case sa,s+ FA pomisso, note 'hich epesents a )amblin)
debt and is theefoe unenfoceable in the hands of the pa,ee, obtains no )eate validit, in the hands of an assi)nee in the absence of
sho'in) that the debto has consented to and appoved of the assi)nment.F
And that of the second case+F Mone, lost at a pohibited )ame cannot be ecoveed, thou)h the lose delive to the 'inne his note fo the
amount lost.
An assi)nee of such note 'ho too= it afte it became due has no moe i)hts than assi)no.
Both of these decisions deal 'ith a pomisso, note fo a sum of mone, lost at a pohibited )ameB and, in the case at ba, 'e have not to
do 'ith a pomisso, note of this natue. F(he pomisso, note in Guestion ? sa,s the tial cout ? 'as indosed to 8.8. 7ill on ;anua, #<,
#$##. (he note had then alead, become due, althou)h the date specified in the note fo the pa,ment of the fist amount of P3"" of the
pincipal had not ,et aived.F 0Bill of e%., p. #!.2.
4f the date fo the pa,ment of the fist amount of P3"" had not ,et aived, it follo's that the note had not ,et fallen due, because it could
have no othe due date than that of the fist installment, and this fact 'as finall, eco)niEed b, the cout in anothe ode 'heein he sa,s+
F4t appeas that the cout eed in that pat of his ode 'hee he held that the pomisso, note in Guestion fell due on the date of its
conve,ance b, indosement to 8.8. 7ill.F 0Bill of e%., p. #1.2
/o that, neithe b, eason of the indosement, no b, eason of its ob-ect, is the pomisso, note null, o annulable, and the afoecited
decisions ae absolutel, inapplicable to the case at ba.
(he absolution of the defendants fom the complaint bein) unsuppoted b, an, )ounds of fact o la', it devolves upon this cout to set
foth the conclusions of fact and la' on 'hich this decision ests.
(he defendants5 si)natues on the pomisso, note heein concened 'ee identified at the tial.
(hese si)natues 'ee 'itten and the obli)ation 'as contacted, 'ithout eo o deceit.
(hee is no evidence 'hateve that Michael . Co. theatened to bin) suit a)ainst Domin)o *anco unless Ma%imina Ch. &eloso si)ned
'ith Domin)o *anco a pomisso, note fo the said sum.
(he facts constitutin) the consideation fo the contact contained in the pomisso, note ae full, poven 0thou)h poof 'as not necessa,,
as a pesumption of la', not desto,ed b, an, evidence 'hateve to the conta,, lies in its favo2, because it has been full, poven that the
)oods, the consideation fo the debt, 'ee eceived in the La Cooperativa Filipina. 4t 'as li=el, full, poven that the La Cooperativa
Filipina belon)ed to the defendant, 'ith o 'ithout Domin)o *anco havin) a shae theein, and that the )oods came fom Michael . Co.
(hee is nothin) to suppot the findin) that the sale of the )oods b, Michael . Co. 'as a sale to Domin)o *anco onl,. (hee is no poof
'hateve that 8evein), as the )uadian of the mino childen of Potenciano &eloso, had eGuied Ma%imina &eloso in Decembe, #$#", to
si)n a document eco)niEin) he debt to said minos, no that Domin)o *anco acted, fo this pupose, as the defendants5 attone, and
advise. Hith e)ad to the defendants5 debt of PD,""" to the mino childen of Potenciano &eloso and Damasa Ricablanca, the instument
attestin) this debt, e%ecuted b, the defendants in favo of Damasa Ricablanca 'as 'ho then the )uadian of said minos, had alead,
e%isted since ;une !", #$"C, and appeas on pa)e !@ of the ecod.
(he facts alle)ed in the special defense can not in an, 'ise be held to be poven, as above demonstated in ou e%amination of the paol
evidence adduced in this case, and, besides, because of this othe consideation+ 4f, as stated in the special defense, FDomin)o *anco,
'ho 'as a son-in-la' of the defendants, had told them that attone, Matin M. 8evein), in his capacit, as )uadian of the mino childen of
Potenciano Ch. &eloso, had su))ested to *anco the necessit, of the defendants+ e%ecutin) an instument settin) out that the, 'ould pa,
to the said Attone, Matin M. 8evein), in his capacit, of )uadian of said minos, the sum of PD,""" 'hich defendants had boo'ed fom
Damasa Ricablanca, the fome )uadian of said minosBF and if, as held b, the tial cout in his -ud)ment, Domin)o *anco had then acted
as defendants5 attone, and advise, thee is nothin) in the ecod to sho' 'h, Domin)o *anco had to si)n such an instument attestin) a
debt to the minos, as the pincipal obli)o, 'hen the cedito eGuied no one but the defendants to si)n such a documentB no 'as it
sho'n 'h,, on such a supposition, Manuel MatineE did not have to si)n the instument e%cept meel, to authoiEe his 'ife, b, his
pemission as he husband, to si)n it, 'hen in the special defense it is admitted that the document in Guestion contains an ac=no'led)ment
of the debt of PD,""" F'hich the defendants had boo'ed fom Damasa Ricablanca.F
(he alle)ed eo Cannot be sustained. (hee is no othe si)ned document than the pomisso, note pesented 'ith the intention, on its
bein) si)ned, of secuin) the pa,ment of the )oods sold to the La Cooperativa Filipina.
(hat is 'hat the document sa,s, and its contents must be accepted, pusuant to section <$C of Act No. #$" 0Code of Civil Pocedue2.
(he emainde of the pincipal o'in), P@,!#$.!!, must be paid. Pa,ment must also be made of the covenanted inteest at the ate of #A
pe cent pe month fom ;ul, #, #$##, until the 'hole of the said sum be completel, paidB and, finall, the P#,""" stipulated in the contact
as fees fo the plaintiff5s attone, in this case must be paid.
Hith espect to the P@C!.#D, inteest on the pincipal of said pomisso, note fom Decembe !", #$#", to ;une !", #$##, this amount
cannot be ecoveed, because, in confomit, 'ith aticle ###" of the Civil Code, a eceipt fom the cedito fo the pincipal, that contains no
stipulation e)adin) inteest, e%tin)uishes the obli)ation of the debto 'ith e)ad theeotB and the eceipts issued b, the 4ntenational Ban=
sho' that no esevation 'hateve 'as made 'ith espect to the inteest on the P<,""" paid on account.
(he -ud)ment appealed fom is evesed. ('ent, da,s afte notification of this decision, let -ud)ment be enteed a)ainst the defendant
Ma%imina Ch. &eloso odein) the pa,ment of P@,!#$, 'ith the stipulated inteest theeon at the ate of #A pe cent pe month fom ;ul, #,
#$##, and of P#,""" as attone,5s fees, 'ith costs of fist instance, 'ithout special findin) as to the costs of this second instance, it is so
odeed.
,orres, -o#nson, Carson, ,rent, and .ra*llo, --., concu.