Kuenzle v. Quibiao
REITERATIONFacts
The Antecedents: Prior to October 14, 1909, Anastasio C. Chiong conducted a business in Manila and owed plaintiffs Kuenzle & Streiff P1,700. Chiong sold his business to Eusebio Sanchez Quibiao with the plaintiffs' consent. Quibiao agreed to assume the debt, which was reduced to P880, payable at P80 monthly, and to provide a guaranty for this amount plus future merchandise purchases up to P3,000. Procedural History: Silverio Jiongco y Felix and Sotera Roco y De Vera executed a contract of guaranty (Exhibit A) for Quibiao's obligations. Quibiao failed to comply with his agreement, leading plaintiffs to file suit, claiming P1,279.99 was due. The trial court found Quibiao liable for P1,279.99 and the guarantors jointly and severally liable. Defendant Quibiao appealed. The Appeal: The appellant, Quibiao, argued that he was not responsible for the P880 debt because the agreement was not in compliance with Section 335 of the Code of Procedure in Civil Actions. He also contested the lower court's treatment of the contract of guaranty (Exhibit A) as a mortgage lien on two parcels of land described therein, noting the contract was not registered.
Issue(s)
Whether the appellant Quibiao is liable for the assumed debt despite the alleged non-compliance with Section 335 of the Code of Procedure in Civil Actions. Whether the contract of guaranty, which described two parcels of land, constituted a mortgage lien on said properties.
Ruling
The Supreme Court affirmed the judgment of the lower court with modifications. The Court held that Quibiao was liable for the amount due. However, the Court modified the ruling regarding the execution of the judgment against the properties mentioned in the guaranty contract, stating they could only be subjected to payment through an execution sale and not as a mortgage lien due to lack of registration.
Ratio Decidendi
On Issue 1: The Supreme Court ruled that the appellant Quibiao could not raise the issue of non-compliance with Section 335 of the Code of Procedure in Civil Actions for the first time on appeal. The Court emphasized that Section 335 pertains to the form of proof required for certain contracts. Since no objection was made in the lower court regarding the admissibility of the evidence proving Quibiao's liability, the right to object was deemed waived. Therefore, Quibiao remained liable for the assumed debt as found by the trial court. On Issue 2: The Supreme Court clarified that the contract of guaranty (Exhibit A), which described two parcels of land, did not constitute a mortgage lien on those properties. The Court explained that for a contract to be considered a mortgage, it must be registered in the registry of property. As Exhibit A was not recorded, it could not be treated as a mortgage. Consequently, the lands could not be subjected to the payment of the judgment under the theory of a mortgage lien. Instead, they could only be subjected to payment through an execution sale, in accordance with the law.
Main Doctrine
The Supreme Court affirmed the lower court's decision, holding that a defendant who fails to object to the admissibility of evidence during the trial waives their right to raise such objections on appeal. The Court also clarified that a contract of guaranty, which mentions specific parcels of land, does not create a mortgage lien on those properties unless it is registered in the registry of property. Such properties can only be subjected to the payment of a judgment through an execution sale.