G.R. No. L-5515 / February 1, 1911
LEVY HERMANOS, plaintiff-appellee, vs. PEDRO A. PATERNO, defendant-appellant.

FACTS

On March 28, 1906, defendant Pedro A. Paterno executed a promissory note in favor of plaintiff Levy Hermanos for P6,177.35, stating it was payable “in partial payments.” No specific installment amount or schedule was fixed. Paterno made several partial payments of varying amounts (P100, P50, P25, and P30). Later, he claimed the right to fix future payments at P30 per month, which the plaintiffs refused. Levy Hermanos filed suit to recover the unpaid balance, requesting either immediate payment or a court-specified period for payment. During trial, the parties agreed the principal debt as of March 28, 1906, was P5,317.35. The trial court found that a monthly payment of P200 was reasonable and ordered Paterno to pay the balance at that rate. Paterno appealed, arguing that his prior P30 monthly payments, accepted by the plaintiffs, established an implied agreement for that rate.

ISSUE

Whether the court may fix the duration and terms of the payment period when an obligation is payable in installments but no specific period or installment amount is stipulated.

RULING

Yes. The Supreme Court affirmed the trial court’s authority to fix the payment period under Article 1128 of the Civil Code. The obligation was one of payment by installments, but the period was undetermined and granted solely for the debtor’s benefit. The court held that the trial court properly exercised its discretion in setting a monthly payment of P200, considering the debt’s amount and the absence of stipulated interest. The appellant’s claim that an implied agreement for P30 monthly payments arose from prior accepted payments was rejected, as the payments varied in amount and the plaintiffs had protested the P30 rate. The Court modified the amount due, deducting all partial payments (totaling P315) from the principal debt of P5,317.35, resulting in a balance of P5,002.35. The judgment was affirmed with this modification.