G.R. No. 46458; September 29, 1939
ERLANGER & GALINGER, INC., petitioner, vs. HERMENEGILDO G. ALAGAR, ET AL., respondents.

FACTS

Petitioner Erlanger & Galinger, Inc. filed a suit in the Court of First Instance of Ilocos Sur against respondents for the recovery of a sum of money and foreclosure of a mortgage. The trial court rendered judgment in favor of the petitioner. On appeal, the Court of Appeals set aside the part of the judgment regarding the amount due, holding that Exhibit D (a promissory note) was an inadmissible offer of compromise, not a confession of indebtedness, and remanded the case for reception of evidence on the obligation’s amount. Petitioner elevated the case via certiorari, arguing the Court of Appeals erred in excluding Exhibit D as an admission of liability.

ISSUE

Whether Exhibit D (the promissory note) is an admissible confession of indebtedness or an inadmissible offer of compromise.

RULING

The Supreme Court granted the petition and reversed the decision of the Court of Appeals. Exhibit D is an admissible confession of indebtedness, not an offer of compromise. The document expressly and unqualifiedly acknowledges a debt of P5,316.23, specifying its components (collectible rentals and a current account balance). The inclusion of a proposal to pay in monthly installments does not alter its nature as an admission of the fact of indebtedness. The rule excluding compromise negotiations does not apply where the obligation is not denied and the only issue is the manner of payment. The guaranty clause does not affect the debtor’s acknowledgment. The trial court’s judgment was reinstated in full.

AI Generated by Armztrong.