G.R. No. L-16870; May 25, 1922
GENATO & CO., LTD., plaintiff-appellant, vs. FLORENTINO PAREJA, ET AL., defendants-appellants.

FACTS

The defendants had an account current with the plaintiff, Genato & Co., Ltd., from which they received various sums of money, resulting in an indebtedness of P14,301.16 as of August 31, 1919. The defendants admitted the debt but contested the applicability of the terms in documents Exhibits A and B, which stipulated an annual interest of 12% and, for certain defendants, an additional 10% of the debt as attorney’s fees in case of collection suits. The plaintiff also claimed a commission for undelivered copra under a second cause of action.

ISSUE

The main issues were: (1) whether the defendants were liable under the terms of Exhibits A and B, including interest and attorney’s fees; (2) whether the plaintiff was entitled to commissions for undelivered copra; and (3) the nature of the defendants’ liability (whether solidary, joint, or with suretyship).

RULING

The Supreme Court ruled that the defendants were indeed indebted under the terms of Exhibits A and B. The plaintiff’s second cause of action for commissions was dismissed due to lack of evidence that the copra was delivered or sold. The Court found all defendants to be principal debtors, not sureties, but their obligation was joint, not solidary. The modified judgment ordered all defendants, as principal and joint debtors, to pay the plaintiff P14,301.16 with 12% annual interest from October 21, 1919. Additionally, defendants Florentino Pareja, Pedro Altea, Ponciano Espinosa, Valeriano Altea, and Juan Deseo were ordered to pay P1,430.12 as attorney’s fees per their agreement. All defendants were liable for costs.