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G. URRUTIA & Co. vs. MORENO, 28 Phil.

260
GR No. 8147, October 26, 1914
MORELAND, J.

Facts: Mendozona & Co., a partnership, in liquidation, obtained a judgment on a bond in the Court of
First Instance of Manila in civil case No. 3326 against Mariano Moreno, as principal, and against
Amalia Moreno, Camilo Moreno, and Rafael Serra, as sureties, for the sum of P18,154.24, with interest
at 6 percent per annum from the February 11, 1905; together with costs. Mendezona & Co. on the
July 2, 1908, by the instrument in writing, sold and transferred said judgment to G. Urrutia & Co.
The sheriff sold under execution issued upon the judgment and the clerk of the CFI of Manila
on the June 24, 1908, issued an execution upon a judgment in an action entitled G. Urrutia & Co. vs.
Mariano Moreno, said 'judgment being for the sum of P27,185.90, with interest from July 31, 1906,
at 9 percent per annum. G. Urrutia & Co. presented said execution to the registrar of real estate titles
of the Province of Ambos Camarines on the July 24 of the same year, who entered in his daily registry
of property.
Doña Amalia Moreno, as surety of said Mariano Moreno, and subrogated to the rights of
Mendozona & Co. and its successors in interest, delivered to the defendant sheriff, Leon Reyes, the
sum for which the lands of Mariano Moreno described in the complaint had been sold, together with
interest at 1 per month to the June 16 and July 22, 1909, and said sheriff executed to said Amalia
Moreno two documents to the effect that the said Amalia Moreno had redeemed the said lands as
such surety and under said subrogation within the legal period. No other creditor of Mariano Moreno,
nor any other person, has redeemed the said lands described in the complaint. G. Urritia & Co., on its
own behalf and as successors in interest to Mendozona & Co., refused to receive the sum delivered
by Amalia Moreno and refuses to recognize the validity of such redemption. The amount paid by
Amalia Moreno for the redemption of said lands described in the complaint is in the hands of the
defendant sheriff, Leon Reyes.

Issue: Whether or not a surety against whom a judgment has been obtained jointly with the principal
redeem the real estate belonging to the principal which was sold by virtue of an execution issued
upon said judgment, the surety having been obliged to contribute to the payment thereof.

Held: The Court ruled that in order to be able to redeem, the defendant Amalia Moreno must be either
the judgment-debtor or his successor in interest or must hold a lien by judgment or mortgage upon
the premises to be redeemed, which lien is subsequent to the lien of the judgment under which the
property to be redeemed was sold. Passing without comment the word "lien," as it has been defined
by this court, we observe instantly when he as the question whether or not the defendant Amalia
Moreno falls within the first class entitled under the section to redeem, that she does not fall within
that class unless her contribution to the payment of the judgment against her principal is sufficient
in law to substitute her in the place of the judgment-debtor or to make her his successor in interest
to the extent of conferring upon her the right to redeem. The right of redemption is a right belonging
to the debtor and cannot be taken away from him without authorization of law. If the surety upon
payment of the judgment were to be substituted in his place and allowed to redeem as such, the right
of the judgment-debtor would be thereby destroyed or, better said, would be exercised by another
and he would be unable to exercise it thereafter himself. The surety has no right directly to take the
property of his principal whose debt he has paid or assisted in paying unless he is expressly
authorized to do so by law or has pursued the courses necessary under the law to that end. Courts
are not authorized to take rights from one person and give them to another without notice to the
person from whom they are taken and an opportunity to be heard. Not being the judgment debtor or
his successor in interest, in short, not representing him in such a way as to be able to exercise his
right relative to the redemption, defendant's claim under the first class must fail.

When the surety pays a judgment which has been obtained jointly against him and his
principal, he is subrogated to the rights of the creditor (not the debtor) in the judgment and may
execute that judgment against his principal in the same manner and with the same effects as the
creditor could have executed it; and it is a rule laid down by some courts that the judgment is kept
alive and subsists as a lien in favor of the surety paying it. This principle of subrogation, however,
does not aid the surety in this case. The judgment, to the rights in which she is subrogated, is the same
judgment that the creditor held. Its lien is the same as to time. The code, however, requires, before
the right of redemption can be exercised, that the person who exercises it must be the owner of a
judgment the lien of which is subsequent to the judgment under which the sale of the property to be
redeemed was made. This is provision which prevents the defendant from exercising the right of
redemption under the second class even though we concede to her the benefits of the widest doctrine
of subrogation.
Therefore, defendant Amalia Moreno sold under judgment obtained against him to
Mendezona & Co. and referred to in the stipulation of facts; and that the attempt to redeem and all
the acts performed in relation thereto by said defendant are without force or effect against the
plaintiff.
Chinese Chamber of Commerce vs. Pua Te Ching, 16 Phil. 406
G.R. No. L-5827, August 4, 1910
ARELLANO, C.J.

Facts: The plaintiff had prosecuted three suits against Pua Te Ching, registered under Nos.
6347, 6348 and 6349, all for the recovery of a sum of money. The court decided them by judging that
Pua Te Ching should pay the amounts claimed. Pua Te Ching, for the purpose of staying the execution
of the judgments rendered, during the pendency of his appeal, presented as sureties in the three
aforesaid cases, Pua Ti, of Calle Rosario No. 150, and Jose Temprado Yap Chatco, of Calle Sagasta, San
Fernando, Pampanga, executed the proper bonds: In case No. 6347, for P3,784; in No. 6348, for P4.00;
and in No. 6349, for P1,000, "for which payments well and truly made," the bond reads, "we, the
appellant and the sureties, jointly and severally bind ourselves," it being expressly stipulated "that
the appellant and the sureties are held and firmly bound to the appellee, jointly and severally, in the
sum expressed in each bond, to secure the fulfillment and payment of the judgment so appealed,
together with the costs, in case the same should be affirmed, in whole or in part, or in case the
judgment should become effective on account of the appellant's having abandoned or withdrawn the
appeal, or in case it should be dismissed or declared to be improperly allowed.
Pua Te Ching died intestate on September 2, 1909, and the decision of this court was rendered
after his death; that the estate of the late Pua Te Ching was in the course of administration; and that,
therefore, the decision of the Supreme Court was null and of no value, it having been pronounced
against a person already dead, and that an execution thereof could not be issued against the said Pua
Te Ching. These sureties filed notice of appeal and, having forwarded their bill of exceptions, alleged
error against the judgment appealed from it that therein the execution of a judgment was ordered
notwithstanding the death of the appellant which occurred before the affirmation of the decision of
the lower court. In support of their allegation they invoke sections 119 and 448 of the Code of Civil
Procedure, the provisions of which, especially those of sections 448, may be invoked by the sureties
in their favor by virtue of the provisions of articles 1148 and 1853, in relation to article 1822, of the
Civil Code.
Issue: Whether the sureties Pua Ti and Yap Chatco have set up against the creditor any
exception which pertains to the principal debtor, Pua Te Ching, and which may be inherent to the
debt.
Held: The Court held that the provisions contained in articles 1148 and 1853 of the Civil Code
do not apply to the sureties, the appellants; and the judgment of the trial court, which finds the
sureties liable for the payment of the debt, put into execution by virtue of final decision, is entirely in
accord with the law.
The exceptions which, according to the appellants, pertains to the principal debtor Pua Te
Ching in as much as he died, is that provided by sections 119 and 448 of the Code of Civil Procedure.
Section 119 relates to the continuance of the action by or against the executor, administrator or other
legal representative of the deceased, and, if the action is for the recovery of money, the payment of a
debt or of damages, to its discontinuance and prosecution in the proceeding instituted for the
settlement of the estate of the deceased; and section 448 provides that, notwithstanding the death of
a party after the judgment, "execution thereon may be issued, or one already issued may be enforced
as follows:(1) In case of the death of the judgment creditor, upon the application of his executor or
administrator or successor in interest; (2), in case of the death of the judgment debtor, if the judgment
be for the recovery of real or personal property, or the enforcement of a lien thereon." All these
provisions concern the manner of execution relative to the obligation against the estate of Pua Te
Ching, but in nowise effect the validity and force of the obligation contracted by Pua Te Ching toward
the Chinese Chamber of Commerce in such a way as to serve the joint and several sureties of Pua Te
Ching as a defense inherent to the latter's debt to be set up against the execution, now that they are
the judgment debtors made liable for payment. They are all defenses to oppose an execution against
the estate of Pua Te Ching, as the appellants say, and all of them are against the execution of the
obligation, but not against the obligation itself. They are not even personal defenses of the principal
debtor against the obligation; still less are they defenses inherent to the debt itself, which are the only
ones that, as pertaining to the principal debtor, may be utilized by the sureties.
LIZARES VS HERNAEZ
40 PHIL 981, G.R. NO. 14977
MARCH 30, 1920
STREET, J.

FACTS: The case commenced on April 15, 1918, in the CFI of Occidental Negros, by the
plaintiff, Nicolas Lizares, as lessee of two haciendas, located in the municipality of Talisay, in the
province aforesaid, known respectively as panaogao and matagoy No. 2, against the defendant,
Rosendo Hernaez, as lessor of said haciendas, to rescind the contract of lease and to recover a sum of
money as damages alleged to have been suffered by the plaintiff by reason of the failure of the
defendant to comply with certain obligations incumbent upon him under the contract. The defendant
answered, denying all liability, and interposed a counterclaim for the purpose of recovering damages
alleged to have been suffered by him by reason of the default of the plaintiff in the performance of
the obligations of the latter under the same contract. One of the items of damages thus claimed by
the defendant consists of unpaid rents; and for the purpose of obtaining the satisfaction of this claim,
Sra. Enrica Alunan was named as a party defendant in the cross-complaint, she has obligated herself
jointly and severally with the plaintiff in the contract of lease, in the character of surety for him.

The trial court decisions, the salient features of which are these: (1) The contract of lease is
declared to be rescinded, with leave to the plaintiff to make use of the leased property until May 30,
1919, for the purpose of harvesting the crops planted by him thereon and completing the milling of
the cane. (2) The defendant, Rosendo Hernaez, as lessor, was found to be liable in damages to the
plaintiff, in the sum of P1,736.01, with interest, by reason of his failure to reconstruct within a
reasonable time a camarin which had existed upon the leased premises, but which had been
destroyed by fire. (3) The plaintiff, Nicolas Lizares, was found to be indebted to the defendant for
rents due and unpaid in the sum of P3,583.33, with interest from April 16, 1918; and for this amount
judgment was rendered in favor of the defendant upon the cause of action stated in the cross-
complaint against the plaintiff, Nicolas Lizares, and Enrica Alunan, as his surety. (4) The plaintiff was
further ordered to cause an artesian well to be bored, before May 30, 1919, on the hacienda Panaogao.
in accordance with a stipulation in the contract of lease. Both parties appealed from this decision,
each manifesting disapproval of such features of the judgment as were not in conformity with his
particular pretensions. It appears in evidence that on August 21, 1916, the plaintiff, Nicolas Lizares,
and the defendant, Rosendo Hernaez, entered into a contract (Exhibit A), whereby the former became
the lessee of the two haciendas Panaogao and Matagoy No. 2. Among the improvements existing upon
the hacienda Panaogao, and which the plaintiff was entitled to use, was a large iron-roofed camarin,
containing furnaces, boilers, mills, engines, and other apparatus for the manufacture of sugar.

March 16, 1918, a fire of unknown origin occurred at this sugar mill, which destroyed the
camarin and greatly damaged the sugar-milling apparatus. Soon after the fire the plaintiff informed
the defendant of the calamity and made demand upon him for the reconstruction of the camarin. The
defendant refused to recognize the existence of any obligation on his part to reconstruct the camarin.
Insisting that the plaintiff, being the lessee, and not himself, as lessor, was responsible for the fire and
answerable for the damage occasioned thereby. These antagonistic views presently culminated in
the litigation now before us.

ISSUE: Which attention must first be directed, has reference to the responsibility for the loss
due to the fire.
HELD: The Court held that when leased property is destroyed by fire, there arises a
presumption, under article 1563 of the Civil Code, against the lessee, which makes him responsible
to the owner for the resulting damages, in the absence of proof that the loss happened without the
lessee’s fault. But when the lessee proves that the fire occurred without negligence on his part and
that it could not be arrested by him in the exercise of reasonable care, the presumption is rebutted,
and the lessee is not liable.
The obligation imposed upon the lessor in the second paragraph of article 1554 of the Civil
Code to make such repairs on the leased property as are necessary in order to keep it in serviceable
condition for the purpose for which it was intended does not extend to the obligation to reconstruct
the property when it has been totally destroyed by fire. The obligation to make repairs must be
understood to apply to the restoration of property which has deteriorated from use or has been
partially destroyed, without total loss of identity. A stipulation was inserted in a contract of lease
obligating the lessee to maintain the property in good condition and to deliver it in the same state to
the lessor upon the termination of the lease. Held: That the contractual obligation thus assumed was
substantially identical with the obligation which would have been imposed by law in the absence of
special stipulation; and the duty thus defined must be considered subject to the limitations and
exceptions recognized by law. The lessee is therefore not bound to reconstruct the property in case
of total loss resulting from fire which occurred without his fault.
PHILIPPINE TRUST CO. VS BALLESTEROS
98 PHIL 1007,

FACTS:
The case commenced that the appeal from an order of the Court of First Instance of Ilocos
Norte approving the inventory-account, with the exception of the deduction in the amount of
P5,841.46, holding that this loss should be for the account of the appellant.

The Phil. Trust Co. (appellant) was appointed by the Ct. of First Instance of Ilocos Norte as
guardian of the property of incompetent Braulio Marcelino, while the latter’s wife Marcela
Ballesteros (appellee) was appointed as- guardian of his person.

ISSUE: Whether or not that the fund for mortgage investment is for safekeeping.

HELD:
The pension that accrued in favor of the ward from the U.S. Veterans Administration
were turned over to the appellant, which since its appointment rendered yearly accountings of its
ward’s funds. On July 1, 1947, the appellant filed its inventory account covering the period from
January 1, 1942 to May 31, 1947, showing under “Recapitulation,” a deduction from the cash balance
of the sum of P5,841.46. This represented payment received by the appellant before the war and paid
during the Japanese occupation in military notes which were invalidated. Appellee filed an opposition
to the deduction contending that, the mortgage investments made by the appellant must be deemed
to pertain to its private enterprise, and that it held the funds of the ward merely for safekeeping
exclusively intended for his maintenance and support.

Order appealed from is reversed and the inventory-account covering the period from January
1, 1942 to May 31, 1947.