G.R. No. L-12277, December 29, 1959
BENITO ORIT, plaintiff-appellee, vs. BALDROGAN COMPANY, LTD., defendant-appellant.

FACTS

On November 22, 1955, plaintiff Benito Orit filed an action in the Court of First Instance of Camarines Norte to recover from defendant Baldrogan Company, Ltd. the sum of P5,000 (the balance due for exported logs purchased by the defendant), plus attorney’s fees, moral damages, exemplary damages, and costs. The defendant filed an answer on January 7, 1956. On September 25, 1956, the parties, assisted by counsel, entered into a stipulation of facts submitted to the Court. The stipulation provided: (1) the defendant admitted its obligation of P5,000, plus interest from December 8, 1955, and costs; (2) the parties agreed to submit to the Court a fixed date for payment by the defendant, with such submission to be made no later than November 6, 1956; and (3) if they failed to submit the agreed payment date by November 6, 1956, the Court would have full power to fix a reasonable time for payment, and judgment would be rendered based on the stipulation. The parties failed to submit a payment date by November 6, 1956. Consequently, on November 6, 1956, the plaintiff filed an ex-parte motion for judgment based on the stipulation, requesting the Court to fix the payment time. On November 28, 1956, the Court rendered judgment, ordering the defendant to pay the plaintiff P5,000 with legal interest from December 8, 1955, within thirty days from receipt of notice, and to pay costs. The defendant’s motion for reconsideration was denied on January 21, 1957, prompting this appeal.

ISSUE

Whether the Court of First Instance acted within its authority and reasonably in fixing a thirty-day period for the defendant to pay its debt, pursuant to the stipulation of facts entered into by the parties.

RULING

The Supreme Court affirmed the judgment of the lower court. The Court held that the judgment was in pursuance of the compromise agreement embodied in the stipulation of facts, which the parties entered into freely and voluntarily with the assistance of counsel. Under the stipulation, the parties authorized the Court to fix a reasonable time for payment if they failed to agree on a date by November 6, 1956. The appellant’s claim that the thirty-day period fixed by the Court was unreasonable and benefited only the creditor (appellee) was without merit. The Court ruled that Article 1196 of the Civil Code, cited by the appellant, applies only when the parties themselves have fixed a period in a contract, not to a compromise agreement where the Court is authorized to set the time. The appeal was deemed manifestly intended to delay payment, and thus, treble costs were imposed against the appellant. The appellee’s motion in the Supreme Court for attorney’s fees and damages was denied, as such sums were not agreed upon in the stipulation.