GR L 14989; (January, 1920) (Digest)
G.R. No. L-14989; January 30, 1920
MARIA SETON DONNA, plaintiff-appellee, vs. M. INOUYE, as administrator of the estate of K. S. Ohta, defendant-appellant.
FACTS:
The plaintiff, Maria Seton Donna, filed a complaint to recover upon five promissory notes totaling P30,000, plus interest and attorney’s fees, from the estate of K. S. Ohta. The notes were executed by I. Ihara as the principal debtor, with K. S. Ohta signing as “guarantor” below Ihara’s signature. The notes originated from a sale of real property. No payments were made on the principal, and interest payments ceased after October 3, 1917, accelerating the maturity of all notes under their terms. Ohta died, and the plaintiff’s claim was presented to and allowed by the commissioners of his estate. The administrator appealed to the Court of First Instance. The trial court found for the plaintiff but ordered that execution against Ohta’s estate be stayed until execution against the principal debtor, Ihara (against whom a separate judgment had already been rendered), was returned unsatisfied. The defendant administrator appealed, arguing the judgment was indefinite and that the stay of execution did not properly secure the guarantor’s right to exhaust the principal debtor’s assets.
ISSUE:
Whether the trial court’s judgment, which ordered a stay of execution against the guarantor’s estate until the assets of the principal debtor are exhausted, is proper and definite.
RULING:
Yes, the judgment is affirmed with modification. The Supreme Court held that the trial court’s order staying execution until a return is made on the execution against the principal debtor is the proper method to secure the guarantor’s right to the exhaustion of the principal’s property under Article 1830 of the Civil Code. The Court found no merit in the claim that the judgment was indefinite, as the provision crediting payments from the principal debtor merely stated what the law already required. However, the Court modified the award of interest on the stipulated attorney’s fees (P30,000), ruling that interest should run only from the date of the trial court’s judgment (November 22, 1918) and not from the earlier date when the claim was presented to the estate (December 5, 1917), as liability for such fees accrues upon the rendition of services. The judgment was affirmed as modified.