Joint and solidary obligations, 1207-1208 Ronquillo vs.

CA, 132 SCRA 273 (1984) Right to demand payment, 1216 PNB vs. Conception Mining, 5 SCRA 745 Solidary Debtor, 1217-1218 Wilson vs. Berkenkotter, 49 OG 1410 Defenses of the Solidary Debtor, 1222 Ynchausti vs. Yulo, 34 Phil. 978 Obligations with a Penal Clause, 1226-1230 Makati Development vs. Empire Insurance, 20 SCRA 557 Gabarroguis vs. Vicente, L-14304, March 24, 1960 Extinguishment of Obligations Manner, definition and importance, 1231 Payment or Performance, 1231-1251 Arrieta vs. NARIC, 10 SCRA 79 Kalalo vs. Luz, 34 SCRA 337 St. Paul vs. McCondray, 70 SCRA 112 PNB vs. Pineda, 197 SCRA 1 (1991)

G.R. No. L-55138 September 28, 1984

ERNESTO V. RONQUILLO, petitioner, vs. HONORABLE COURT OF APPEALS AND ANTONIO P. SO, respondents. Gloria A. Fortun for petitioner. Roselino Reyes Isler for respondents. CUEVAS, J.: This is a petition to review the Resolution dated June 30, 1980 of the then Court of Appeals (now the Intermediate Appellate Court) in CA-G.R. No. SP-10573, entitled "Ernesto V. Ronquillo versus the Hon. Florellana Castro-Bartolome, etc." and the Order of said court dated August 20, 1980, denying petitioner's motion for reconsideration of the above resolution. Petitioner Ernesto V. Ronquillo was one of four (4) defendants in Civil Case No. 33958 of the then Court of First Instance of Rizal (now the Regional Trial Court), Branch XV filed by private respondent Antonio P. So, on July 23, 1979, for the collection of the sum of P17,498.98 plus attorney's fees and costs. The other defendants were Offshore Catertrade Inc., Johnny Tan and Pilar Tan. The amount of P117,498.98 sought to be collected represents the value of the checks issued by said defendants in payment for foodstuffs delivered to and received by them. The said checks were dishonored by the drawee bank. On December 13, 1979, the lower court rendered its Decision 1 based on the compromise agreement submitted by the parties, the pertinent portion of which reads as follows: 1. Plaintiff agrees to reduce its total claim of P117,498-95 to only P11,000 .00 and defendants agree to acknowledge the validity of such claim and further bind themselves to initially pay out of the total indebtedness of P10,000.00 the amount of P55,000.00 on or before December 24, 1979, the balance of P55,000.00, defendants individually and jointly agree to pay within a period of six months from January 1980, or before June 30, 1980; (Emphasis supplied) xxx xxx xxx 4. That both parties agree that failure on the part of either party to comply with the foregoing terms and conditions, the innocent party will be entitled to an execution of the decision based on this compromise agreement and the defaulting party agrees and hold themselves to reimburse the innocent party for attorney's fees, execution fees and other fees related with the execution. xxx xxx xxx On December 26, 1979, herein private respondent (then plaintiff filed a Motion for Execution on the ground that defendants failed to make the initial payment of P55,000.00 on or before December 24, 1979 as provided in the Decision. Said motion for execution was opposed by herein petitioner (as one of the defendants) contending that his inability to make the payment was due to private respondent's own act of making himself scarce and inaccessible on December 24, 1979. Petitioner then prayed that private respondent be ordered to accept his payment in the amount of P13,750.00. 2 During the hearing of the Motion for Execution and the Opposition thereto on January 16, 1980, petitioner, as one of the four defendants, tendered the amount of P13,750.00, as his prorata share in the P55,000.00 initial payment. Another defendant, Pilar P. Tan, offered to pay the same amount. Because private respondent refused to accept their payments, demanding from them the full initial installment of P 55,000.00, petitioner and Pilar Tan instead deposited the said amount with the Clerk of Court. The amount deposited was subsequently withdrawn by private respondent. 3

On the same day, January 16, 1980, the lower court ordered the issuance of a writ of execution for the balance of the initial amount payable, against the other two defendants, Offshore Catertrade Inc. and Johnny Tan 4 who did not pay their shares. On January 22, 1980, private respondent moved for the reconsideration and/or modification of the aforesaid Order of execution and prayed instead for the "execution of the decision in its entirety against all defendants, jointly and severally." 5 Petitioner opposed the said motion arguing that under the decision of the lower court being executed which has already become final, the liability of the four (4) defendants was not expressly declared to be solidary, consequently each defendant is obliged to pay only his own pro-rata or 1/4 of the amount due and payable. On March 17, 1980, the lower court issued an Order reading as follows: ORDER Regardless of whatever the compromise agreement has intended the payment whether jointly or individually, or jointly and severally, the fact is that only P27,500.00 has been paid. There appears to be a non-payment in accordance with the compromise agreement of the amount of P27,500.00 on or before December 24, 1979. The parties are reminded that the payment is condition sine qua non to the lifting of the preliminary attachment and the execution of an affidavit of desistance. WHEREFORE, let writ of execution issue as prayed for On March 17, 1980, petitioner moved for the reconsideration of the above order, and the same was set for hearing on March 25,1980. Meanwhile, or more specifically on March 19, 1980, a writ of execution was issued for the satisfaction of the sum of P82,500.00 as against the properties of the defendants (including petitioner), "singly or jointly hable." 6 On March 20, 1980, Special Sheriff Eulogio C. Juanson of Rizal, issued a notice of sheriff's sale, for the sale of certain furnitures and appliances found in petitioner's residence to satisfy the sum of P82,500.00. The public sale was scheduled for April 2, 1980 at 10:00 a.m. 7 Petitioner's motion for reconsideration of the Order of Execution dated March 17, 1980 which was set for hearing on March 25, 1980, was upon motion of private respondent reset to April 2, 1980 at 8:30 a.m. Realizing the actual threat to property rights poised by the re-setting of the hearing of s motion for reconsideration for April 2, 1980 at 8:30 a.m. such that if his motion for reconsideration would be denied he would have no more time to obtain a writ from the appellate court to stop the scheduled public sale of his personal properties at 10:00 a.m. of the same day, April 2, 1980, petitioner filed on March 26, 1980 a petition for certiorari and prohibition with the then Court of Appeals (CA-G.R. No. SP-10573), praying at the same time for the issuance of a restraining order to stop the public sale. He raised the question of the validity of the order of execution, the writ of execution and the notice of public sale of his properties to satisfy fully the entire unpaid obligation payable by all of the four (4) defendants, when the lower court's decision based on the compromise agreement did not specifically state the liability of the four (4) defendants to be solidary. On April 2, 1980, the lower court denied petitioner's motion for reconsideration but the scheduled public sale in that same day did not proceed in view of the pendency of a certiorari proceeding before the then Court of Appeals. On June 30, 1980, the said court issued a Resolution, the pertinent portion of which reads as follows: This Court, however, finds the present petition to have been filed prematurely. The rule is that before a petition for certiorari can be brought against an order of a lower court, all remedies available in that court must first be exhausted. In the case at bar, herein petitioner filed a petition without waiting for a resolution of the Court on the motion for reconsideration, which

could have been favorable to the petitioner. The fact that the hearing of the motion for reconsideration had been reset on the same day the public sale was to take place is of no moment since the motion for reconsideration of the Order of March 17, 1980 having been seasonably filed, the scheduled public sale should be suspended. Moreover, when the defendants, including herein petitioner, defaulted in their obligation based on the compromise agreement, private respondent had become entitled to move for an execution of the decision based on the said agreement. WHEREFORE, the instant petition for certiorari and prohibition with preliminary injunction is hereby denied due course. The restraining order issued in our resolution dated April 9, 1980 is hereby lifted without pronouncement as to costs. SO ORDERED. Petitioner moved to reconsider the aforesaid Resolution alleging that on April 2, 1980, the lower court had already denied the motion referred to and consequently, the legal issues being raised in the petition were already "ripe" for determination. 8 The said motion was however denied by the Court of Appeals in its Resolution dated August 20, 1980. Hence, this petition for review, petitioner contending that the Court of Appeals erred in (a) declaring as premature, and in denying due course to the petition to restrain implementation of a writ of execution issued at variance with the final decision of the lower court filed barely four (4) days before the scheduled public sale of the attached movable properties; (b) denying reconsideration of the Resolution of June 30, 1980, which declared as premature the filing of the petition, although there is proof on record that as of April 2, 1980, the motion referred to was already denied by the lower court and there was no more motion pending therein; (c) failing to resolve the legal issues raised in the petition and in not declaring the liabilities of the defendants, under the final decision of the lower court, to be only joint; (d) not holding the lower court's order of execution dated March 17, 1980, the writ of execution and the notice of sheriff's sale, executing the lower court's decision against "all defendants, singly and jointly", to be at variance with the lower court's final decision which did not provide for solidary obligation; and (e) not declaring as invalid and unlawful the threatened execution, as against the properties of petitioner who had paid his pro-rata share of the adjudged obligation, of the total unpaid amount payable by his joint codefendants. The foregoing assigned errors maybe synthesized into the more important issues of 1. Was the filing of a petition for certiorari before the then Court of Appeals against the Order of Execution issued by the lower court, dated March 17, 1980, proper, despite the pendency of a motion for reconsideration of the same questioned Order? 2. What is the nature of the liability of the defendants (including petitioner), was it merely joint, or was it several or solidary? Anent the first issue raised, suffice it to state that while as a general rule, a motion for reconsideration should precede recourse to certiorari in order to give the trial court an opportunity to correct the error that it may have committed, the said rule is not absolutes 9 and may be dispensed with in instances where the filing of a motion for reconsideration would serve no useful purpose, such as when the motion for reconsideration would raise the same point stated in the motion 10 or where the error is patent for the order is void 11 or where the relief is extremely urgent, as in cases where execution had already been ordered 12 where the issue raised is one purely of law. 13 In the case at bar, the records show that not only was a writ of execution issued but petitioner's properties

were already scheduled to be sold at public auction on April 2, 1980 at 10:00 a.m. The records likewise show that petitioner's motion for reconsideration of the questioned Order of Execution was filed on March 17, 1980 and was set for hearing on March 25, 1980 at 8:30 a.m., but upon motion of private respondent, the hearing was reset to April 2, 1980 at 8:30 a.m., the very same clay when petitioner's properties were to be sold at public auction. Needless to state that under the circumstances, petitioner was faced with imminent danger of his properties being immediately sold the moment his motion for reconsideration is denied. Plainly, urgency prompted recourse to the Court of Appeals and the adequate and speedy remedy for petitioner under the situation was to file a petition for certiorari with prayer for restraining order to stop the sale. For him to wait until after the hearing of the motion for reconsideration on April 2, 1980 before taking recourse to the appellate court may already be too late since without a restraining order, the public sale can proceed at 10:00 that morning. In fact, the said motion was already denied by the lower court in its order dated April 2, 1980 and were it not for the pendency of the petition with the Court of Appeals and the restraining order issued thereafter, the public sale scheduled that very same morning could have proceeded. The other issue raised refers to the nature of the liability of petitioner, as one of the defendants in Civil Case No. 33958, that is whether or not he is liable jointly or solidarily. In this regard, Article 1207 and 1208 of the Civil Code provides Art. 1207. The concurrence of two or more debtors in one and the same obligation does not imply that each one of the former has a right to demand, or that each one of the latter is bound to render, entire compliance with the prestation. Then is a solidary liability only when the obligation expressly so states, or when the law or the nature of the obligation requires solidarity. Art. 1208. If from the law,or the nature or the wording of the obligation to which the preceding article refers the contrary does not appear, the credit or debt shall be presumed to be divided into as many equal shares as there are creditors and debtors, the credits or debts being considered distinct from one another, subject to the Rules of Court governing the multiplicity of quits. The decision of the lower court based on the parties' compromise agreement, provides: 1. Plaintiff agrees to reduce its total claim of P117,498.95 to only P110,000.00 and defendants agree to acknowledge the validity of such claim and further bind themselves to initially pay out of the total indebtedness of P110,000.00, the amount of P5,000.00 on or before December 24, 1979, the balance of P55,000.00, defendants individually and jointly agree to pay within a period of six months from January 1980 or before June 30, 1980. (Emphasis supply) Clearly then, by the express term of the compromise agreement and the decision based upon it, the defendants obligated themselves to pay their obligation "individually and jointly". The term "individually" has the same meaning as "collectively", "separately", "distinctively", respectively or "severally". An agreement to be "individually liable" undoubtedly creates a several obligation, 14 and a "several obligation is one by which one individual binds himself to perform the whole obligation. 15 In the case of Parot vs. Gemora 16 We therein ruled that "the phrase juntos or separadamente or in the promissory note is an express statement making each of the persons who signed it individually liable for the payment of the fun amount of the obligation contained therein." Likewise in Un Pak Leung vs. Negorra 17 We held that "in the absence of a finding of facts that the defendants made themselves individually hable for the debt incurred they are each liable only for one-half of said amount The obligation in the case at bar being described as "individually and jointly", the same is therefore enforceable against one of the numerous obligors. IN VIEW OF THE FOREGOING CONSIDERATIONS, the instant petition is hereby DISMISSED. Cost against petitioner.

SO ORDERED.
G.R. No. L-16968 July 31, 1962

PHILIPPINE NATIONAL BANK, plaintiff-appellee, vs. CONCEPCION MINING COMPANY, INC., ET AL., defendants-appellants. Ramon B. de los Reyes for plaintiff-appellee. Demetrio Miraflor for defendants-appellants. LABRADOR, J.: Appeal from a judgment or decision of the Court of First Instance of Manila, Hon. Gustavo Victoriano, presiding, sentencing defendants Concepcion Mining Company and Jose Sarte to pay jointly and severally to the plaintiff the amount of P7,197.26 with interest up to September 29, 1959, plus a daily interest of P1.3698 thereafter up to the time the amount is fully paid, plus 10% of the amount as attorney's fees, and costs of this suit. The present action was instituted by the plaintiff to recover from the defendants the face of a promissory note the pertinent part of which reads as follows: Manila, March 12, 1954 NINETY DAYS after date, for value received, I promise to pay to the order of the Philippine National Bank . . . . In case it is necessary to collect this note by or through an attorney-at-law, the makers and indorsers shall pay ten percent (10%) of the amount due on the note as attorney's fees, which in no case shall be less than P100.00 exclusive of all costs and fees allowed by law as stipulated in the contract of real estate mortgage. Demand and Dishonor Waived. Holder may accept partial payment reserving his right of recourse again each and all indorsers. (Purpose mining industry) CONCEPCION MINING COMPANY, INC., By: (Sgd.) VICENTE LEGARDA President (Sgd.) VICENTE LEGARDA (Sgd.) JOSE S SARTE "Please issue check to Mr. Jose S. Sarte" Upon the filing of the complaint the defendants presented their answer in which they allege that the comaker the promissory note Don Vicente L. Legarda died on February 24, 1946 and his estate is in the process of judicial determination in Special Proceedings No. 29060 of the Court of First Instance of Manila. On the basis of this allegation it is prayed, as a special defense, that the estate of said deceased Vicente L. Legarda be included as party-defendant. The court in its decision ruled that the inclusion of said defendant is unnecessary and immaterial, in accordance with the provisions of Article 1216 of the Deny Civil Code and section 17 (g) of the Negotiable Instruments Law. A motion to reconsider this decision was denied and thereupon defendants presented a petition for relief, asking that the effects of the judgment be suspended for the reason that the deceased Vicente L. Legarda

should have been included as a party-defendant and his liability should be determined in pursuance of the provisions of the promissory note. This motion for relief was also denied, hence defendant appealed to this Court. Section 17 (g) of the Negotiable Instruments Law provides as follows: SEC. 17. Construction where instrument is ambiguous. Where the language of the instrument is ambiguous or there are omissions therein, the following rules of construction apply: xxx xxx xxx (g) Where an instrument containing the word "I promise to pay" is signed by two or more persons, they are deemed to be jointly and severally liable thereon. And Article 1216 of the Civil Code of the Philippines also provides as follows: ART. 1216. The creditor may proceed against any one of the solidary debtors or some of them simultaneously. The demand made against one of them shall not be an obstacle to those which may subsequently be directed against the others so long as the debt has not been fully collected. In view of the above quoted provisions, and as the promissory note was executed jointly and severally by the same parties, namely, Concepcion Mining Company, Inc. and Vicente L. Legarda and Jose S. Sarte, the payee of the promissory note had the right to hold any one or any two of the signers of the promissory note responsible for the payment of the amount of the note. This judgment of the lower court should be affirmed. Our attention has been attracted to the discrepancies in the printed record on appeal. We note, first, that the names of the defendants, who are evidently the Concepcion Mining Co., Inc. and Jose S. Sarte, do not appear in the printed record on appeal. The title of the complaint set forth in the record on appeal does not contain the name of Jose Sarte, when it should, as two defendants are named in the complaint and the only defense of the defendants is the non-inclusion of the deceased Vicente L. Legarda as a defendant in the action. We also note that the copy of the promissory note which is set forth in the record on appeal does not contain the name of the third maker Jose S. Sarte. Fortunately, the brief of appellee on page 4 sets forth said name of Jose S. Sarte as one of the co-maker of the promissory note. Evidently, there is an attempt to mislead the court into believing that Jose S. Sarte is no one of the co-makers. The attorney for the defendants Atty. Jose S. Sarte himself and he should be held primarily responsible for the correctness of the record on appeal. We, therefore, order the said Atty. Jose S. Sarte to explain why in his record on appeal his own name as one of the defendants does not appear and neither does his name appear as one of the co-signers of the promissory note in question. So ordered. Bengzon, C.J., Padilla, Bautista Angelo, Concepcion, Barrera, Paredes, Dizon, Regala and Makalintal, JJ., concur. Reyes, J.B.L., J., took no part.

G.R. No. L-4476

April 20, 1953

SAMUEL J. WILSON, plaintiff-appellee, vs. B. H. BERKENKOTTER, defendant-appellant. Amador E. Gomez for appellant.

Cirilo Paredes for appellee. MONTEMAYOR, J.: In April, 1950, plaintiff Samuel J. Wilson, consigned in the Court of First Instance of Manila the sum of P625.51. In his petition he alleged that said amount consigned was the equivalent of P37,530.40 in Japanese currency which defendant B.H. Berkenkotter paid for him in November, 1944, to the Chartered Bank of India, Australia and China; that he had made an offer of payment of P625.51 to the defendant but the latter refused to accept payment without any justifiable cause. He prayed that after due hearing the court declare the consignation as properly made. Defendant Berkenkotter in his answer alleged that in 1938 he and plaintiff Wilson and one Paul A. Gulick obtained a loan of P90,000 from the Chartered Bank of India, Australia and China with interest at 7 per cent which was later increased to 8 per cent payable monthly, and that they signed a promissory note wherein they jointly and severally promised to pay said loan to the bank; that during the occupation of the Philippines during the Pacific war the Japanese Military authorities placed the Chartered Bank of India, Australia and China and other enemy banks under liquidation and for that purpose designated the Bank of Taiwan as liquidator of enemy banks; that upon demand by the Bank of Taiwan he (Berkenkotter) paid the sum of P112,591.22 (in military notes) as full payment of the P90,000 loan including interest from December 1, 1941 up to November 4, 1944, the date of payment; that the payment to the bank by him inured to his codebtors in the amount of P37,530.40 each; that as subrogee of all the rights of the bank, he, in 1949, made a demand on both Wilson and Gulick for the settlement of their shares in said obligation with a certain offer; that while Gulick accepted the offer and paid P18,902, Wilson refused to take advantage thereof and instead tendered the amount of P625.51 as payment of his share in the solidary and joint obligation; that this tender of payment was refused and so he made demand upon Wilson for payment of his share of the P90,000 with interest from December 1, 1941 but Wilson refused to make payment. In his prayer defendant asked that the petition accompanying the consignation be dismissed, and that Wilson be ordered to pay him P30,000 as his share in the original loan with interest of 8 per cent from December, 1941, plus P3,000 as collection expenses as stipulated in the promissory note signed by them, equivalent to 10 per cent of the share of each. After hearing, the trial court rendered judgment in favor of plaintiff Wilson and against defendant Berkenkotter and ordered the latter to receive from the clerk of court the P625.51 consigned by Wilson as the just and full payment of the indebtedness. From that decision Berkenkotter is appealing to this court on questions of law making the following assignment of errors: I The trial court erred in holding such payment subject the plaintiff-appellee liable to the defendantappellant to the full amount of his one-third share (capital as well as interest) in the solidary obligation (Exhibit 1), which they contracted in 1938 from the Chartered Bank of India, Australia and China, and which solidary obligation was discharged by the payment made by the defendantappellant to the Japanese liquidator during the Japanese occupation. II The trial court erred in holding such payment subject to adjustment under the Ballantyne schedule of values in determining the amount to be reimbursed by the plaintiff-appellee as a co-solidary debtor of the defendant-appellant. III. The trial court erred in not sentencing plaintiff-appellee to pay to defendant-appellant as collection expenses provided for in the promissory note, Exhibit "1", the sum of P3,000, which represents 10 per cent of one-third of the principal of the solidary obligation. IV.

The trial court erred in denying defendant-appellant's motion for new trial and to set aside the judgment. As already stated, the defendant appealed the case to this court on questions of law. He is consequently bound by the findings of the fact of the trial court. The plaintiff did not appeal from the decision. He is equally bound by said findings of the trial court. For the purposes of reference we reproduce said findings of fact: 1. That on June 30, 1938, Samuel J. Wilson, plaintiff, B.H. Berkenkotter, defendant, and one Paul A. Gulick jointly and severally signed a promissory note in the amount of P90,000 in favor of the Chartered Bank of India, Australia and China payable on demand with interest thereon at the rate of 7 per cent per annum payable monthly; 2. That the three debtors agreed by and among themselves to pay the obligation in equal proportions, that is, each one would pay their creditor the amount of P30,000 plus of course, the corresponding interests; 3. That after the Philippines had been occupied by the Japanese Forces, the Bank of Taiwan became the liquidator of all enemy banks, among which was the Chartered Bank of India, Australia and China; 4. That defendant B.H. Berkenkotter, upon demand by the Taiwan Bank paid the promissory note referred to above, plus the corresponding interests which amounted in all, principal and interests to P112,591.22; 5. That after liberation, B.H. Berkenkotter demanded payment from his co-debtors of their corresponding shares in the obligation contracted by them jointly and severally with the Chartered Bank of India, Australia and China; 6. That for reasons of personal consideration B.H. Berkenkotter accepted payment from Paul A. Gulick only in the amount of P18,902; 7. That plaintiff Samuel J. Wilson refused to pay to B.H. Berkenkotter the full amount of P37,530.40 in Philippine currency, and 8. That because of the refusal of B.H. Berkenkotter to receive from the plaintiff the amount of P625.51 which is the equivalent value as of November, 1944 of the P37,530.40 in Japanese military notes, said plaintiff consigned with this court the said amount of P625.51. In several cases involving the application of the Balantyne schedule this court has held that said schedule is applicable to obligations contracted during the Japanese occupation where said obligations are made payable on demand or during said Japanese occupation but not after the war or at a specified date or period which may indicate that the parties were speculating on the continuation or cessation of the war at the time of payment. If the obligation on the part of Wilson to pay Berkenkotter the amount paid by the latter to wipe out their debt to the bank was created during the occupation, then the Balantyne schedule is applicable; but if said obligation was created before the war, particularly on the date when plaintiff and defendant signed the promissory note in favor of the bank, then the Ballantyne schedule may not be applied. Counsel for the appellant contends that said obligation was created in 1938 because by signing the promissory note Wilson impliedly undertook to pay anyone of his co-debtors who might pay off the whole debt. He also claims that by paying the entire loan in 1944 to the bank, appellant became a subrogee of said bank and the entire credit was transmitted to him with all the rights inherent therein either against the debtor or against third persons (article 1212, Civil Code). The amici curiae who appeared in this case and who support appellant's contention, hold the theory that the obligation of Wilson in favor of Berkenkotter was created in 1938 and has continued since then but that its payment was not demandable until 1944 when appellant made payment. They give the example of one issuing a promissory note payable after 30 days; the obligation to pay is created at the date of the issuance of the note but the obligation to pay is not demandable

until after the expiration of 30 days. We regret to disagree to the contention of counsel for appellant and amici curiae. The obligation in favor of appellant to pay to him what he paid in favor of Wilson was created in November, 1944 and not before. Before said payment was made Wilson was under no obligation whatsoever to pay appellant any amount. True, as a solidary obligor or debtor under the law, he would be under obligation to pay any of his solidary co-debtor who may be required by the creditor to pay and who actually pays the latter the entire loan. But that obligation on the part of Wilson is contingent and conditional. If Berkenkotter had not paid the entire loan note to the bank Wilson would never have been under any obligation to pay him for his share of the loan. This is quite different from the example of the promissory note just mentioned where the obligation to pay the amount of the note is created at the time of the issuance thereof because sooner or later the promissor has to make payment. In other words, the obligation is real and existing, not conditional or contingent. Counsel for appellant himself says in his brief, pp. 17-18, "it is the extinction or discharge of the solidary obligation by the payment made which gives birth to that right in favor of the paying co-debtor, and which correlatively imposes on the other co-debtors the duty to pay him their shares in the discharged obligation." We agree with him that the right in favor of appellant and the corresponding duty on the part of Wilson were born when payment was made in November, 1944 and the solidary obligation was extinguished. When appellant paid the entire loan plus interests in November, 1944, the whole obligation was extinguished. The solidary co-debtors were no longer under any obligation to the bank but a new obligation was created in favor of the appellant and against the appellee. That is why the appellant to enforce his claim against the appellee has based his claim not on the obligation created in 1938 in favor of the bank by virtue of the promissory note signed by the three co-debtors, but on his having paid the entire loan. The present is not a real case of subrogation as contended by appellant because as Manresa says, in a case like the present the original obligation is extinguished and a new one is created. Es de notar que no hay verdadera subrogacion en el caso de que pague uno de los codeudores solidarios, puesto que entonces, segun el articulo 1145 (por el cual y sus concordantes se rige el supuesto), queda extinguida la obligacion, si bien el codeudor que pago y puede repetir contra los demas su reclamacion, invocara como base y titulo el pago, en vez de la novacion. (8 Manresa, 4th ed., p. 404.) In other words, appellant does not as claimed by his counsel step into the shoes of the bank. He cannot enforce the original obligation created in 1938. The bank could collect the whole amount of the loan from anyone of the solidary co-debtors, and in fact did from one of them. This, the appellant may not do just because he paid the entire loan. According to article 1145 of the Civil Code, payment by one of the solidary debtors entitles him to claim from his co-debtors only the share pertaining to each with interest on the amount advanced, and this is what the appellant is doing, only that he wants to collect the whole amount paid by him for Wilson in genuine Philippine currency instead of the equivalent thereof under the Ballantyne schedule. Moreover, on grounds of equity appellant may not be allowed to collect from the appellee more than the real value of what he paid for him specially when the difference between the military notes and the genuine Philippine currency in November, 1944, was so great. In conclusion, we find and hold that the obligation in favor of the appellant to pay to him the share of the appellee in the original loan was created during the Japanese occupation, particularly in November, 1944, and so comes under the ruling of this court regarding the application of the Ballantyne schedule. Finding no reversible error in the decision appealed from, the same is hereby affirmed. No costs. Paras, C.J., Pablo, Bengzon, Tuason, Reyes, Jugo, Bautista Angelo and Labrador, JJ., concur. Separate Opinions PADILLA, J., concurring: I concur in the result. I do not agree to the statement in the opinion that "when appellant paid the entire loan

plus interest in November, 1944, the whole obligation was extinguished." I am of the opinion that the payment made to the Bank of Taiwan, Ltd., of a pre-war obligation or debt is invalid as far as the Chartered Bank of India, Australia and China is concerned, for the reasons stated in my opinion in the case of La Orden de PP. Benedictinos vs. Philippine Trust Co.,* 47 Off. Gaz., 2894, 2897. FERIA, J., concurring and dissenting: On June 30, 1938, a promissory note was signed by appellee Samuel J. Wilson, B.H. Berkenkotter and Paul A. Gulick, as joint and solidary debtors in favor of the Chartered Bank of India, Australia and China in the sum of P90,000 Philippine Commonwealth currency payable on demand, with interest at the rate of 7 per cent per annum payable monthly. On November 4, 1944, upon demand by the Bank of Taiwan, the defendant Berkenkotter paid said bank the whole indebtedness evidenced by the above-mentioned promissory note, in Japanese military notes. And in April, 1950, plaintiff Samuel J. Wilson, consigned in the Court of First Instance of Manila the sum of P625.51, and in his petition he alleged that said amount consigned was the equivalent of P37,530.40 in Japanese currency which defendant B.H. Berkenkotter paid for him in November, 1944, to the Chartered Bank of India, Australia and China; that he had made an offer of payment of P625.51 to the defendant but the latter refused to accept payment without any justifiable cause. He prayed that after due hearing the court declare the consignation as properly made. After hearing, the trial court rendered judgment in favor of plaintiff Wilson and against defendant Berkenkotter and ordered the latter to receive from the Clerk of Court the P625.51 consigned by Wilson as the just and full payment of the indebtedness. From that decision Berkenkotter appealed to this court, and assigned, among others, the following assignment of error: The trial court erred in holding such payment subject to adjustment under the Ballantyne schedule of values in determining the amount to be reimbursed by the plaintiff-appellee as a co-solidary debtor of the defendant-appellant. The amici curiae in the present case, Attorneys Ozaeta and Lichauco, contend that the Ballantyne schedule of values cannot be applied in determining the amount the plaintiff must pay to the defendant-appellant, because said schedule is applicable only in obligation to pay money contracted or created during the Japanese occupation, and the obligation in question was created before the Japanese occupation. In their memorandum, said amici curiae state the following support of their opinion. . . . We have carefully examined the pertinent cases, from Hilado vs. De la Costa, 46 Off. Gaz., 5472, to De Asis vs. Agdamag, et al., G.R. No. L-3709, promulgated October 25, 1951. From said decisions and Justice Feria's concurring opinion in Gomez vs. Tabia, 47 Off. Gaz., 641, wherein he set forth certain rules for the guidance of the courts and members of the bar, it is quite apparent that the overruling considerations in the cases where revaluation of obligations has been allowed by the court are the following: (1) Obligation must arise from contract entered into during the occupation. The inescapable fact invariably present in all the cases wherein revaluation has been allowed is that the monetary obligation arose from contract which entered into by the parties during the period of enemy occupation. In other words, revaluation or adjustments of obligations has been confined and restricted to wartime (or occupation-time, to be exact) contracts. This must be so for there is no conceivable legal nor moral justification to revalue pre-war monetary obligations still outstanding after the occupation. This will become all the more plain from the next conjunctive condition patent from the decisions. xxx xxx xxx It should thus be very evident that the rules advocated by Justice Feria were intended to cover only

monetary obligations founded or arising from (1) contracts entered, and (2) executory judgment rendered, during the occupation. The trial court, however, committed the error of concluding that the rules means that any obligation incurred or payable during the enemy occupation may be paid with its equivalent value in Philippine currency. It should be clear from the language employed by Justice Feria that, in order that an obligation may be revalued, it must, among other things, have been contracted during the occupation, i.e., it must be one arising from a contract entered into during the occupation. Thus, a pre-war obligation which may became payable during the occupation but which remained unpaid is not subject to adjustment because it was not contracted during the occupation. And the decision of the majority, misled by the foregoing argument of the amici curiae, held the following: In several causes involving the application of the Ballantyne schedule this court has held that said schedule is applicable to obligations contracted during the Japanese occupation where said obligation are made payable on demand or during said Japanese occupation but not after the war or at a specified date or period which may indicate that the parties were speculating on the continuation or cessation of the war at the time of payment. If the obligation on the part of Wilson to pay Berkenkotter the amount paid by the latter to wipe out their debt to the Bank was created during the occupation, then the Ballantyne schedule is applicable; but if said obligation was created before the war, particularly on the date when plaintiff and defendant signed the promissory note in favor of the Bank, then the Ballantyne schedule may not be applied (page 5.) xxx xxx xxx In conclusion, we find and hold that the obligation in favor of the appellant to pay to him the share of the appellee in the original loan was created during the Japanese occupation, particularly in November, 1944, and so comes under the ruling of this court regarding the application of the Ballantyne schedule. Finding no reversible error in the decision appealed from, the same is hereby affirmed. No costs. (page 8.) The above-quoted conclusion of the majority, based on the opinion or argument of the amici curiae to the effect that, according to the decisions of this court and especially the concurring opinion of the undersigned in the case of Gomez vs. Tabia,1 47 Off. Gaz., 641, adopted with approval by this court in the case of De Asis vs. Agdamag,2 G.R. No. L-3709, promulgated on October 25, 1951, the Ballantyne schedule is applicable only to monetary obligation created and payable during, and not those created before the Japanese occupation. The contention or argument of the amici curiae and the conclusion of the majority is not correct, for in our concurring opinion we held the following, quoted on page 7 of the very memorandum of the amici curiae: An obligation incurred or payable during the occupation shall be revalued on the basis of the relative value of the Japanese military notes in Philippine currency at the date of the obligation was payable, according to Ballantyne sliding scale of value in the absence of evidence to the contrary. Because to compel the debtor to pay his obligation in Philippine currency at the rate of one Philippine peso for each peso due in Japanese military notes would be to make him pay, as damages or penalty for the delay in making the payment, the difference in values between the Japanese military notes at the time the obligation was incurred and the Philippine currency, at the time of the payment. According to the above-quoted opinion, monetary obligations which shall be revalued according to Ballantyne schedule if paid after the occupation, are those payable during the Japanese occupation, irrespective of whether they were created or constituted before or during said occupation. However, I concur in the conclusion of the majority that the obligation of Wilson to pay to Berkenkotter his share in the obligation paid by the former to the bank, arose and was payable from the time the latter paid the whole obligation due from them to the bank of on November 4, 1944. In view of the foregoing, we are of the opinion that the decision appealed from must be affirmed for the

Ballantyne schedule is applicable, not because the obligation of the plaintiff to pay the defendant his share in the obligation was created during the Japanese occupation, but because it was payable during the said occupation.