De los Reyes vs. Alojado

A stipulation obliging a debtor to serve as a domestic servant without remuneration until repayment of a loan is contrary to law and morality and is void; domestic services are always to be remunerated, and unpaid wages may be offset against the debt.

Benito de los Reyes and Veronica Alojado were creditor and debtor under a loan arrangement that also contemplated Alojado's domestic service in Reyes's household. The dispute implicated the Civil Code provisions on obligations and contracts and on the hiring of domestic servants, as well as the police regulations governing domestic service dated September 9, 1848. The suit originated in a justice of the peace court and reached the Court of First Instance before Act No. 1627 took effect on July 1, 1907; that Act limited verbal actions to two instances.

Benito de los Reyes and Veronica Alojado were creditor and debtor. On or about January 22, 1905, Alojado received from Reyes a loan of P67.60 for the purpose of paying a debt she owed to Olimpia Zaballa. It was agreed that Alojado would remain as a servant in Reyes's house and in his service, without any remuneration whatever, until she should find someone who would furnish her with the sum with which to repay the loan.

Between January 22, 1905, and March 10, 1906, Alojado also received from Reyes various small amounts under the same conditions, aggregating P11.97, which she did not repay. On March 12, 1906, Alojado left Reyes's house without having paid her debt, and she did not pay at any subsequent date notwithstanding his demands. On March 15, 1906, Reyes filed suit in the justice of the peace court of Santa Rosa, La Laguna, to recover the sum or, in the contrary case, to compel Alojado to return to his service.

Alojado denied the allegations and conditions of the complaint. She alleged that although she had left Reyes's service, she did so because Reyes had paid her no sum whatever for the services she rendered in his house. She also averred that the effects purchased to the amount of P11.97 were in Reyes's possession and that he refused to deliver them to her. She sought absolution from the complaint and payment of the wages due her for her services.

The Court of First Instance found that Reyes delivered P67.60 to Hermenegildo de los Santos to pay a debt, and that De los Santos paid it with the knowledge and in behalf of Alojado, who voluntarily entered Reyes's service and promised to pay as soon as she found the money. It likewise found that Alojado had received P11.97 in small amounts while in Reyes's house. The court computed Alojado's debt at P79.57 and the wages due her for services at P82, leaving a balance of P2.43 in her favor.

• Timeliness of Appeal: Petitioner moved to disallow respondent's appeal, alleging that it was filed on the sixth day following the April 14, 1906 judgment and therefore fell outside the five-day period prescribed by section 76 of the Code of Civil Procedure.
• Enforcement of the Loan Agreement: Petitioner maintained that respondent was obliged under their agreement to serve in his house without remuneration until she repaid the loan, and he sought to compel her to comply with that contract.
• Recovery of Debt: Petitioner sought payment of the P67.60 loan and the additional P11.97 in small advances, totaling P79.57, together with costs.
• New Trial: Petitioner moved for a new trial on the ground that the findings of fact in the judgment were manifestly contrary to the weight of the evidence.

• Denial of the Complaint's Allegations: Respondent denied the allegations in paragraphs 1 and 2 of the complaint and denied the conditions expressed in paragraph 4.
• Nonpayment of Wages: Respondent alleged that although she left petitioner's service, she did so because petitioner had paid her no sum whatever for the services she rendered in his house.
• Possession of Purchased Effects: Respondent averred that the effects purchased to the amount of P11.97 were in petitioner's possession and that he refused to deliver them to her.
• Counterclaim for Wages: Respondent sought absolution from the complaint and payment of the wages due her for services rendered.

• Validity of Gratuitous Domestic Service: Whether the agreement requiring Veronica Alojado to serve as a domestic servant in Benito de los Reyes's house without remuneration until she repaid the loan is valid and enforceable.
• Liability for the Loan and Advances: Whether Alojado is liable to Reyes for the P67.60 loan and the additional P11.97 in small advances, totaling P79.57.
• Right to Wages and Offset: Whether Alojado is entitled to wages for the domestic services she rendered and whether those wages may be offset against her debt, leaving a balance in her favor.
• Propriety of the CFI Judgment: Whether the Court of First Instance correctly absolved Alojado from the complaint and ordered Reyes to pay her P2.43.

• Validity of Gratuitous Domestic Service: No. The stipulation is contrary to law and morality and is void; domestic services are always to be remunerated, and no agreement for absolutely gratuitous domestic service may subsist.
• Liability for the Loan and Advances: Yes. The P67.60 and P11.97 are positive debts demandable from Alojado under Articles 1754 and 1170 of the Civil Code, though the CFI's judgment applied her wages as an offset.
• Right to Wages and Offset: Yes. Alojado is entitled to wages for her domestic services; the CFI found wages of P82 against a debt of P79.57, leaving P2.43 in her favor.
• Propriety of the CFI Judgment: Yes. The judgment appealed from was affirmed, with costs against appellant Reyes.

• Validity of Gratuitous Domestic Service: The condition that Alojado serve without remuneration until repayment was contrary to law and morality under Article 1255 of the Civil Code. The Court reasoned that domestic services are always to be remunerated and that no agreement may subsist in law stipulating absolutely gratuitous domestic service, unless slavery could be established by covenant. Articles 1583, 1584, and 1585 of the Civil Code govern the hiring of domestic servants, including conditions, term, wages, and duties; Article 1583 voids a hiring for life by either contracting party, and Article 1585 requires observance of special laws and local ordinances. The police regulations on domestic service dated September 9, 1848, Article 19, prohibited usurious conduct toward servants and employees and required a master who, under pretext of advance pay or payment of the servant's debts or taxes, retained the servant in his service to pay all arrears and damages and to be fined. Because such regulations prohibited even usurious contracts and abuses concerning servants' wages, the Court held that a compact for gratuitous domestic service was reprehensible and that Reyes's contention was inadmissible.
• Liability for the Loan and Advances: Notwithstanding Alojado's denial, the Court treated as clearly proven the CFI's finding that Reyes delivered P67.60 to Hermenegildo de los Santos to pay a debt, and that De los Santos paid it with the knowledge and in behalf of Alojado, who voluntarily entered Reyes's service and promised to pay as soon as she found the money. The P11.97 delivered to Alojado in small amounts while she was in Reyes's house was likewise a positive debt demandable by her creditor under Articles 1754 and 1170 of the Civil Code. The reason Reyes alleged as the basis for the loan—that Alojado was obliged to serve gratuitously until repayment—was untenable because that condition was contrary to law and morality.
• Right to Wages and Offset: Because domestic services must be remunerated, Alojado was entitled to wages for the services she rendered. The CFI found that her debt totaled P79.57 and that the wages due her by Reyes amounted to P82, leaving a balance of P2.43 in her favor. The Supreme Court found no legal reason to reject the CFI's findings of fact and law or to allow the errors attributed to the judgment, and it accepted the CFI's computation.
• Propriety of the CFI Judgment: The record disclosed no legal reason to reject the findings or to allow the assigned errors. The reasons stated by the Court showed the propriety of the judgment appealed from, so it was affirmed with costs against appellant Reyes.

• Gratuitous Domestic Service Is Void — A stipulation requiring a debtor to serve as a domestic servant without remuneration until repayment of a loan is contrary to law and morality and cannot be enforced. Domestic services are always to be remunerated, and no agreement may subsist in law stipulating that domestic service shall be absolutely gratuitous, unless slavery may be established by covenant. The Court applied this rule to invalidate the condition in the loan agreement between Reyes and Alojado.
• Domestic Servants' Right to Wages — Under Articles 1583, 1584, and 1585 of the Civil Code and the police regulations on domestic service dated September 9, 1848, domestic service is compensable and usurious conduct or abuses concerning servants' wages are prohibited. A master who, under pretext of advance pay or payment of the servant's debts or taxes, retains the servant in his service must pay all arrears and damages and is subject to fine. The Court relied on these provisions to hold that Alojado was entitled to wages for her services.
• Positive Debts Are Demandable — A loan and small advances received by a debtor are positive debts demandable by the creditor under Articles 1754 and 1170 of the Civil Code. The Court recognized the duty to pay the P67.60 and P11.97, even as it invalidated the gratuitous-service condition attached to the loan.
• Offset of Wages Against Debt — The Court affirmed the lower court's offset of the servant's unpaid wages against the debt she owed, leaving a balance in her favor. In this case, the debt of P79.57 was offset by wages of P82, resulting in a P2.43 balance payable to Alojado.

• "Domestic services are always to be remunerated, and no agreement may subsist in law in which it is stipulated that any domestic service shall be absolutely gratuitous, unless it be admitted that slavery may be established in this country through a covenant entered into between the interested parties." — This is the Court's canonical statement of the rule invalidating gratuitous domestic service and the core ratio decidendi.
• "However, the reason alleged by the plaintiff as a basis for the loan is untenable, to wit, that the defendant was obliged to render service in his house as a servant without remuneration whatever and to remain therein so long as she had not paid her debt, inasmuch as this condition is contrary to law and morality. (Art. 1255, Civil Code.)" — This passage applies Article 1255 to the loan condition and directly resolves the validity issue.
• "The duty to pay the said sum, as well as that of P11.97 delivered to the defendant in small amounts during the time that she was in the plaintiff's house, is unquestionable, inasmuch as it is a positive debt demandable of the defendant by her creditor. (Arts. 1754, 1170, Civil Code.)" — This excerpt establishes that the loan and advances remained demandable debts despite the invalid service condition.
• "When legal regulations prohibit even a usurious contract and all abuses prejudicial to subordinates and servant, in connection with their salaries and wages, it will be understood at once that the compact whereby service rendered by a domestic servant in the house of any inhabitant of this country is to be gratuitous, is in all respects reprehensible and censurable; and consequently, the contention of the plaintiff, that until the defendant shall have paid him her debt she must serve him in his house gratuitously is absolutely inadmissible." — This passage synthesizes the statutory and regulatory basis for prohibiting gratuitous domestic service and rejecting Reyes's contention.

• Article 1255, Civil Code — The Court cited this provision for the rule that stipulations contrary to law and morality are void, applying it to invalidate the condition requiring Alojado to serve gratuitously until repayment.
• Articles 1583, 1584, and 1585, Civil Code — These provisions govern the hiring of domestic servants, including conditions, term, wages, and duties. Article 1583 voids a hiring for life by either contracting party, and Article 1585 requires observance of special laws and local ordinances. The Court used them to support the rule that domestic services must be remunerated.
• Article 19, Police Regulations on Domestic Service, September 9, 1848 — This regulation prohibited usurious conduct toward servants and employees and required a master who, under pretext of advance pay or payment of the servant's debts or taxes, retained the servant in his service to pay all arrears and damages and to be fined. The Court treated it as the special law referenced by Article 1585 and relied on it to condemn gratuitous domestic service.
• Articles 1754 and 1170, Civil Code — The Court cited these articles in holding that the P67.60 loan and the P11.97 in small advances were positive debts demandable from Alojado by her creditor.
• Section 76, Code of Civil Procedure — The decision recites that Reyes invoked this provision in moving to disallow Alojado's appeal as filed beyond the five-day period; the Court of First Instance overruled the motion because Alojado was not notified of the judgment until April 16, 1906, and filed her appeal on April 20, 1906.

Arellano, C.J., Johnson, Moreland and Trent, JJ., concur.