Sharruf v. Tayabas Land
REITERATIONFacts
The Antecedents: Salomon M. Sharruf filed a case against The Tayabas Land Co. and A. M. Ginainati. The case involved a loan contract and a subsequent promissory note dated June 17, 1914. The defense against the enforcement of the original loan contract was predicated on alleged legal fraud in its procurement, specifically the overvaluation of the security. Procedural History: The trial judge found that the obligation to pay the promissory note was binding on the parties. The judge also concluded that the alleged fraud had nothing to do with the execution and delivery of the promissory note in question or its consideration. The trial court rendered judgment holding the defendant "jointly" liable. The Petition: The Tayabas Land Co. appealed the decision. The appellant agreed with the trial court that the promissory note evidenced a joint and not a joint and several obligation, but argued that the trial judge correctly rendered judgment holding the defendant "jointly" liable, thus no modification was necessary. The appellee insisted that the trial judge erred in refusing to include an additional sum for stipulated costs for recovery.
Issue(s)
Whether the promissory note dated June 17, 1914, is binding on the parties thereto, despite allegations of fraud in the original loan contract. Whether the trial court erred in holding the defendant "jointly" liable instead of "joint and several" liable. Whether the appellee is entitled to the additional sum of P684.13 as stipulated costs for recovery.
Ruling
The Supreme Court affirmed the judgment of the trial court, holding that the promissory note is binding on the parties and that the defendant is jointly liable. The Court also ruled that the appellee's contention regarding the additional sum for costs cannot be considered on appeal.
Ratio Decidendi
On the binding nature of the promissory note: The Court agreed with the trial judge that the obligation to pay the promissory note dated June 17, 1914, is binding on the parties. It was sufficiently established that at the time the note was executed, the parties were aware of, or had every opportunity to inform themselves about, the alleged overvaluation of the security on which the original loan contract rested. Therefore, any alleged fraud inducing the original contract did not affect the execution, delivery, or consideration of the promissory note in question. The Court noted that a new contract was made after the alleged fraud was known and consented to. On the nature of the obligation ('joint' vs. 'joint and several'): The Court agreed with the appellant that the promissory note evidenced a joint and not a joint and several obligation. However, it found that the trial judge correctly rendered judgment holding the defendant "jointly" liable. The Court clarified that in Philippine jurisprudence, the word "jointly" when used by itself in a judgment rendered in English is equivalent to the Spanish term mancomunadamente. To convey the idea of solidariamente (in solidum), the phrase "joint and several" must be used. A contract or judgment that fails to specify an obligation as "joint and several" implies it is merely "joint" (mancomunada). On the additional sum for stipulated costs: The Court held that the appellee's insistence on including the additional sum of P684.13 as stipulated costs for recovery cannot be considered on this appeal. This is because the appellee did not except to the judgment in the court below on that ground, nor did they take the prescribed steps for a review of the alleged erroneous ruling by the Supreme Court.
Main Doctrine
A promissory note executed after the parties had knowledge of the alleged overvaluation of security, or had the opportunity to ascertain it, binds the parties thereto, and the term 'jointly' in a judgment, when used alone, is equivalent to 'mancomunadamente' and not 'solidariamente' unless 'joint and several' is explicitly stated.