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G.R.No.L29139

TodayisThursday,August25,2016

RepublicofthePhilippines
SUPREMECOURT
Manila
SECONDDIVISION

G.R.No.L29139November15,1974
CONSUELOP.PICZON,RUBENO.PICZONandAIDAP.ALCANTARA,plaintiffsappellants,
vs.
ESTEBANPICZONandSOSINGLOBOS&CO.,INC.,defendantsappellees.
VicenteC.Santosforplaintiffsappellants.
JacintoR.BoholfordefendantappelleeSosingLobos&Co.,Inc.
VicenteM.MacabidangfordefendantappelleeEstebanPiczon.

BARREDO,J.:p
AppealfromthedecisionoftheCourtofFirstInstanceofSamarinitsCivilCaseNo.5156,entitledConsueloP.
Piczon, et al. vs. Esteban Piczon, et al., sentencing defendantsappellees, Sosing Lobos and Co., Inc., as
principal,andEstebanPiczon,asguarantor,topayplaintiffsappellants"thesumofP12,500.00with12%interest
fromAugust6,1964untilsaidprincipalamountofP12,500.00shallhavebeendulypaid,andthecosts."
AfterissueswerejoinedandattheendofthepretrialheldonAugust22,1967,thetrialcourtissuedthefollowing
order:
"When this case was called for pretrial, plaintiffs and defendants through their lawyers, appeared
andenteredintothefollowingagreement:
1.ThatdefendantsadmitthedueexecutionofAnnexes"A"and"B"ofthecomplaint
2. That consequently defendant SosingLobos and Co., Inc. binds itself to the plaintiffs for
P12,500.00,thesametobepaidonorbeforeOctober31,1967togetherwiththeinterestthatthis
courtmaydetermine.
Thattheissuesinthiscasearelegalonesnamely:
(a)WillthepaymentoftwelvepercentinterestofP12,500.00commencetorunfromAugust6,1964
whenplaintiffsmadethefirstdemandorfromAugust29,1956whentheobligationbecomesdueand
demandable?
(b)IsdefendantEstebanPiczonliableasaguarantororasurety?
That the parties are hereby required to file their respective memorandum if they so desire on or
before September 15, 1967 to discuss the legal issues and therewith the case will be considered
submittedfordecision.
WHEREFORE,theinstantcaseisherebyconsideredsubmittedbasedontheaforesaidfactsagreed
uponanduponsubmissionofthepartiesoftheirrespectivememorandumonorbeforeSeptember
15,1967.
SOORDERED.1(RecordonAppealpp.2830.)
Annex"A",theactionabledocumentofappellantsreadsthus:
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AGREEMENTOFLOAN
KNOWYEALLMENBYTHESEPRESENTS:
ThatI,ESTEBANPICZON,oflegalage,married,Filipino,andresidentofandwithpostaladdressin
themunicipalityofCatbalogan,ProvinceofSamar,Philippines,inmycapacityasthePresidentofthe
corporation known as the "SOSINGLOBOS and CO., INC.," as controlling stockholder, and at the
sametimeasguarantorforthesame,dobythesepresentscontractaloanofTwelveThousandFive
HundredPesos(P12,500.00),PhilippineCurrency,thereceiptofwhichisherebyacknowledged,from
the "Piczon and Co., Inc." another corporation, the main offices of the two corporations being in
Catbalogan,Samar,forwhichIundertake,bindandagreetousetheloanassuretycashdepositfor
registrationwiththeSecuritiesandExchangeCommissionoftheincorporationpapersrelativetothe
"SosingLobos and Co., Inc.," and to return or pay the same amount with Twelve Per Cent (12%)
interestperannum,commencingfromthedateofexecutionhereof,tothe"PiczonandCo.,Inc.,as
soonasthesaidincorporationpapersaredulyregisteredandtheCertificateofIncorporationissued
bytheaforesaidCommission.
IN WITNESS WHEREOF, I hereunto signed my name in Catbalogan, Samar, Philippines, this 28th
dayofSeptember,1956.
(Sgd.)ESTEBANPICZON
(RecordonAppeal,pp.67.)
Thetrialcourthavingrenderedjudgmentinthetenoraforequoted,appellantsassignthefollowingallegederrors:
I
THETRIALCOURTERREDINORDERINGTHEPAYMENTOF12%INTERESTONTHEPRINCIPAL
OFP12,500.00FROMAUGUST6,1964,ONLY,INSTEADOFFROMSEPTEMBER28,1956,WHEN
ANNEX"A"WASDULYEXECUTED.
II
THE TRIAL COURT ERRED IN CONSIDERING DEFENDANT ESTEBAN PICZON AS GUARANTOR
ONLYANDNOTASSURETY.
III
THE TRIAL COURT ERRED IN NOT ADJUDICATING DAMAGES IN FAVOR OF THE PLAINTIFFS
APPELLANTS.(Appellants'Brief,pp.atob.)
Appellants'firstassignmentoferroriswelltaken.Insteadofrequiringappelleestopayinterestat12%onlyfrom
August 6, 1964, the trial court should have adhered to the terms of the agreement which plainly provides that
EstebanPiczonhadobligatedSosingLobosandCo.,Inc.andhimselfto"returnorpay(toPiczonandCo.,Inc.)
thesameamount(P12,500.00)withTwelvePerCent(12%)interestperannumcommencingfromthedateofthe
execution hereof", Annex A, which was on September 28, 1956. Under Article 2209 of the Civil Code "(i)f the
obligationconsistsinthepaymentofasumofmoney,andthedebtorincursindelay,theindemnityfordamages,
therebeingnostipulationtothecontrary,shallbethepaymentoftheinterestagreedupon,andintheabsenceof
stipulation,thelegalinterest,whichissixpercentperannum."Inthecaseatbar,the"interestagreedupon"by
thepartiesinAnnexAwastocommencefromtheexecutionofsaiddocument.
Appellees' contention that the reference in Article 2209 to delay incurred by the debtor which can serve as the
basisforliabilityforinterestistothatdefinedinArticle1169oftheCivilCodereadingthus:
Those obliged to deliver or to do something incur in delay from the time the obligee judicially or
extrajudiciallydemandsfromthemthefulfillmentoftheirobligation.
However,thedemandbythecreditorshallnotbenecessaryinorderthatdelaymayexist:
(1)Whentheobligationorthelawexpresslysodeclaresor
(2)Whenfromthenatureandthecircumstancesoftheobligationitappearsthatthedesignationof
thetimewhenthethingistobedeliveredortheserviceistoberenderedwasacontrollingmotivefor
theestablishmentofthecontractor
(3) When demand would be useless, as when the obligor has rendered it beyond his power to
perform.
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Inreciprocalobligations,neitherpartyincursindelayiftheotherdoesnotcomplyorisnotreadyto
comply in a proper manner with what is incumbent upon him. From the moment one of the parties
fulfillshisobligation,delaybytheotherbegins.
is untenable. In Quiroz vs. Tan Guinlay, 5 Phil. 675, it was held that the article cited by appellees (which was
Article 1100 of the Old Civil Code read in relation to Art. 1101) is applicable only when the obligation is to do
somethingotherthanthepaymentofmoney.AndinFirestoneTire&RubberCo.(P.I.)vs.Delgado,104Phil.920,
theCourtsquarelyruledthatifthecontractstipulatesfromwhattimeinterestwillbecounted,saidstipulatedtime
controls,and,thereforeinterestispayablefromsuchtime,andnotfromthedateofthefilingofthecomplaint(at
p.925).Werethatnotthelaw,therewouldbenobasisfortheprovisionofArticle2212oftheCivilCodeproviding
that"(I)nterestdueshallearnlegalinterestfromthetimeitisjudiciallydemanded,althoughtheobligationmaybe
silentuponthispoint."Incidentally,appellantswouldhavebeenentitledtothebenefitofthisarticle,hadtheynot
failed to plead the same in their complaint. Their prayer for it in their brief is much too late. Appellees had no
opportunitytomeettheissuesquarelyatthepretrial.
As regards the other two assignments of error, appellants' pose cannot be sustained. Under the terms of the
contract,AnnexA,EstebanPiczonexpresslyboundhimselfonlyasguarantor,andtherearenocircumstancesin
therecordfromwhichitcanbededucedthathisliabilitycouldbethatofasurety.Aguarantymustbeexpress,
(Article2055,CivilCode)anditwouldbeviolativeofthelawtoconsiderapartytobeboundasasuretywhenthe
verywordusedintheagreementis"guarantor."
Moreover,aswellpointedoutinappellees'brief,underthetermsofthepretrialorder,appellantsacceptedthe
expressassumptionofliabilitybySosingLobos&Co.,Inc.forthepaymentoftheobligationinquestion,thereby
modifyingtheiroriginalposturethatinasmuchasthatcorporationdidnotexistyetatthetimeoftheagreement,
Piczonnecessarilymusthaveboundhimselfasinsurer.
Asalreadyexplainedearlier,appellants'prayerforpaymentoflegalinterestuponinterestduefromthefilingof
the complaint can no longer be entertained, the same not having been made an issue in the pleadings in the
court below. We do not believe that such a substantial matter can be deemed included in a general prayer for
"anyotherreliefjustandequitableinthepremises",especiallywhen,asinthiscase,thepretrialorderdoesnot
mentionitintheenumerationoftheissuestoberesolvedbythecourt.
PREMISES CONSIDERED, the judgment of the trial court is modified so as to make appellees liable for the
stipulatedinterestof12%perannumfromSeptember28,1956,insteadofAugust6,1964.Inallotherrespects,
saidjudgmentisaffirmed.Costsagainstappellees.
Fernando(Chairman),Antonio,FernandezandAquino,JJ.,concur.

Footnotes
1Annex"B"isadocumententitled"MutualQuitClaims.CessionsandAmicableSettlement"under
whichtherightofactionofPiczonandCo.,Inc.underAnnex"A"wastransferredtotheheirsof
AlejandroPiczonwhoaretheappellants.
TheLawphilProjectArellanoLawFoundation

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