G.R. No. L-12021; February 15, 1918

FACTS:
The case involves an action to enforce payment of a promissory note dated June 17, 1914, executed by the defendants. The defendants initially raised a defense of legal fraud in the procurement of the original loan contract, alleging an overvaluation of the security provided. However, the trial court found that when the promissory note in question was executed, the parties were fully aware or had ample opportunity to ascertain the true value of the security. The trial judge held that the alleged fraud related to the original contract and subsequent agreements but did not affect the execution and consideration of the promissory note, which was issued after the parties, including Mr. Berbari (presumably associated with the defendant company), had knowledge of the ice plant’s approximate value and consented to the dissolution of a partnership between Sharruf and Ginainati. The trial court rendered judgment holding the defendants “jointly” liable. The defendant company appealed, and the appellee (Sharruf) also raised an issue regarding the trial court’s refusal to award an additional sum for stipulated costs as provided in the note.

ISSUE:
1. Whether the promissory note evidences a joint obligation or a joint and several (solidary) obligation.
2. Whether the trial court erred in not awarding the additional sum for stipulated costs as provided in the promissory note.

RULING:
1. On the Nature of the Obligation: The Supreme Court agreed with the appellant that the promissory note created a joint obligation, not a joint and several (solidary) one. The Court clarified that in Philippine jurisprudence, the term “jointly” used in an English judgment is equivalent to the Spanish term “mancomunadamente,” meaning each obligor is liable only for their proportionate share of the debt. To impose a solidary obligation (where each debtor is liable for the entire obligation), the term “joint and several” or “solidariamente” must be expressly used. The trial court’s judgment used the term “jointly,” which was correct based on the nature of the obligation evidenced by the note. Therefore, no modification of the judgment was necessary.

2. On the Claim for Stipulated Costs: The Supreme Court declined to review the trial court’s refusal to award the additional sum for stipulated costs (10% of the note amount). The appellee failed to except to the judgment on that ground in the lower court or take any prescribed steps to appeal that specific ruling. As such, the issue was not properly raised for review.

DISPOSITIVE PORTION:
The judgment of the trial court was affirmed in its entirety. Costs of the appeal were imposed against the appellant, The Tayabas Land Co.

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