G.R. No. L-11162, December 4, 1958
FIRESTONE TIRE and RUBBER CO., (P.I.), plaintiff-appellee, vs. MARIO DELGADO and LEONOR DELGADO DEE, doing business under the trade name of CALTEX QUICK SERVICE STATION, defendants-appellants.

FACTS

The defendants, Mario Delgado and Leonor Delgado Dee, received goods from the plaintiff, Firestone Tire and Rubber Co., valued at P6,966.73, payable on October 31, 1953, with stipulations for interest and attorney’s fees in case of default. After demand, the defendants proposed a six-month installment plan to pay the outstanding balance of P5,865.00. The plaintiff accepted this proposal on the condition that failure to comply would result in immediate legal action for the entire balance. The defendants paid the May installment of P500.00. For the June installment, they paid only P450.00 (P200.00 in June and P250.00 in July), leaving a balance of P4,915.62 unpaid. The plaintiff filed a collection suit for this amount on July 19, 1954. During the proceedings, the trial court suppressed the depositions of the defendants’ witnesses taken on November 1, 1954 (a declared holiday) and, as the defendants had no other evidence, decided the case based on the plaintiff’s evidence.

ISSUE

The primary issues raised by the defendants on appeal were: (1) whether the trial court had jurisdiction over the case; (2) whether the trial court erred in suppressing the depositions taken on a holiday; (3) whether the plaintiff’s acceptance of partial payments constituted a waiver of strict compliance with the payment schedule or a novation of the contract; and (4) whether the defendants were in delay, justifying the award of the entire balance with interest and damages.

RULING

The Supreme Court affirmed the trial court’s decision.
1. On Jurisdiction: The court held that jurisdiction is determined by the amount claimed in the complaint, not by the sum ultimately recoverable. Since the complaint demanded P4,915.62 plus interest and damages, the amount was within the jurisdiction of the Court of First Instance.
2. On the Suppressed Depositions: The Court noted conflicting authorities on taking depositions on a holiday. However, it ruled that even assuming the depositions should have been admitted, their contents would not affect the outcome. The depositions alleged that a plaintiff’s official assured the defendants that delays in payment “did not matter.” The Court found this doubtful as binding on the plaintiff, especially since the plaintiff’s acceptance of the installment plan was explicitly conditioned on strict compliance.
3. On Novation and Waiver: The Court found no novation or waiver. The defendants’ proposal and the plaintiff’s conditional acceptance did not extinguish the original obligation but merely provided a grace period. The defendants failed to comply with the new schedule, thereby triggering the condition that allowed the plaintiff to sue for the entire balance.
4. On Liability: The Court characterized the case as a plain failure to pay a clear obligation. The defendants admitted the principal debt and the stipulated 12% interest per annum from November 1, 1953, in their pleadings. Therefore, the award of the unpaid balance of P4,915.62 with 12% interest from November 1, 1953, plus 25% as attorney’s fees and liquidated damages, was proper.