G.R. No. L-12471; April 13, 1959
ROSARIO L. DE BRAGANZA, ET AL., petitioners, vs. FERNANDO F. DE VILLA ABRILLE, respondent.

FACTS

Petitioners Rosario L. de Braganza and her sons Rodolfo and Guillermo received a loan from respondent Fernando F. de Villa Abrille on October 30, 1944, in the amount of P70,000 in Japanese war notes. In consideration, they executed a promissory note (Exhibit A) promising to pay Villa Abrille P10,000 “in legal currency of the P. I. two years after the cessation of the present hostilities or as soon as International Exchange has been established in the Philippines,” plus 2% interest per annum. Villa Abrille filed a suit for collection in March 1949 after no payment was made. In their answer, the defendants claimed they received only P40,000 and averred that Guillermo and Rodolfo were minors when they signed the promissory note. The Court of First Instance of Manila rendered judgment against them, which was affirmed by the Court of Appeals, holding them solidarily liable for P10,000 plus interest.

ISSUE

1. Whether the minors, Rodolfo and Guillermo Braganza, can be held liable on the promissory note (Exhibit A) despite their minority.
2. What is the extent of the liability of Rosario L. de Braganza and her minor sons?

RULING

1. On the liability of the minors: The Supreme Court held that Rodolfo and Guillermo Braganza, being minors (aged 16 and 18, respectively, at the time of signing in October 1944), could not be legally bound by their signatures on the promissory note. Their failure to disclose their minority in the note does not constitute active misrepresentation or fraud that would estop them from asserting their incapacity. The Court distinguished the case from Mercado vs. Espiritu, where the minor actively misrepresented his age in the document. Here, the misrepresentation, if any, was merely passive or constructive. The defense of minority was not barred by prescription under Article 1301 of the Civil Code, as it was interposed as a defense in June 1951, within four years from Rodolfo reaching majority in October 1947, and no action for annulment was filed by the minors.
2. On the extent of liability:
* For the minors, Rodolfo and Guillermo: Although the written contract is unenforceable against them due to minority, they are liable to make restitution under Article 1304 of the Civil Code (Old Code) to the extent they profited from the loan. The evidence showed the loan was used for their support. Applying the Ballantine Schedule, P40.00 in Japanese war notes in October 1944 was equivalent to P1.00 in current Philippine currency. As their share of the loan was 2/3 of P70,000 (P46,666.66), they are jointly liable to return P1,166.67 (P46,666.66 / 40), with 6% interest from the filing of the complaint on March 7, 1949.
* For Rosario L. de Braganza: She is liable on the promissory note. The minority of her co-signers is a personal defense that does not release her from her own obligation, though it benefits her only to the extent of the shares for which the minors may be responsible. She is liable for 1/3 of the promised P10,000 (P3,333.33), plus 2% interest per annum from October 1944, as per the terms of Exhibit A.
DISPOSITIVE:
The decision of the Court of Appeals was modified. Rosario L. de Braganza is ordered to pay P3,333.33 plus 2% interest from October 1944. Rodolfo and Guillermo Braganza are ordered to pay jointly P1,166.67 plus 6% interest from March 7, 1949. No costs.