G.R. No. 19996 ; March 12, 1923
THE BANK OF THE PHILIPPINE ISLANDS, plaintiff-appellant, vs. LAGUNA COCOANUT OIL COMPANY and FIDELITY AND SURETY COMPANY OF THE PHILIPPINE ISLANDS, defendants-appellees.

FACTS

The Bank of the Philippine Islands (plaintiff-appellant) filed an amended complaint against Laguna Cocoanut Oil Company and Fidelity and Surety Company. Paragraph 3 of the complaint alleged, in Spanish, that the surety company “se obligo a pagar a cualquier tenedor de dicho pagare el importe del mismo, en el caso de que Laguna Cocoanut Oil Co. no lo satisficiere” (bound itself to pay any holder of said promissory note the amount thereof, in case Laguna Cocoanut Oil Co. did not satisfy it). The defendant surety company demurred to the complaint. The lower court sustained the demurrer, holding that the allegation “se obligo” was a mere conclusion of law and not an allegation of fact. The bank appealed.

ISSUE

Whether the allegation in the complaint that the surety company “se obligo” (bound itself) to pay is a conclusion of law or a sufficient allegation of fact to withstand a demurrer.

RULING

The Supreme Court REVERSED the order of the lower court and OVERRULED the demurrer. The Court, applying a liberal rule of pleading as enjoined by the Code of Civil Procedure and considering the conditions prevailing in the jurisdiction, held that the allegation was sufficient. The Court reasoned that the Spanish term “obligarse” is synonymous with “comprometerse” (to promise or agree), implying an obligation based on a promise or agreement. Therefore, alleging that the company “se obligo a pagar” could be considered equivalent to alleging that it “promised” or “agreed” to pay, which is a statement of fact. The case was remanded to the lower court for further proceedings.