Gonzalez vs. De Jose

An action to have the court fix the period of an obligation under Article 1128 of the Civil Code is a separate civil action subject to the ten-year prescriptive period under Section 43(1) of the Code of Civil Procedure, and when that period has elapsed, both the action to fix the term and the action for recovery on the obligation are barred.

Benito Gonzalez (plaintiff-appellee) was the payee of two promissory notes executed by Florentino de Jose (defendant-appellant), both stipulating payment "as soon as possible." The notes were dated June 22, 1922 and September 13, 1922, respectively. The governing statute at the time was the old Civil Code of the Philippines, particularly Article 1128, which addressed obligations whose terms, though not expressly fixed, were intended by the nature and circumstances of the obligation to grant the debtor a period for performance, leaving it to the court to fix the duration. The Code of Civil Procedure then in force governed the prescriptive periods for civil actions.

Benito Gonzalez was the payee of two promissory notes executed by Florentino de Jose. The first note, dated June 22, 1922, stated that de Jose promised to pay Gonzalez the sum of P403.55 "as soon as possible." The second note, dated September 13, 1922, similarly stated that de Jose promised to pay Gonzalez the sum of P373.30 "as soon as possible." Neither note fixed a definite date for payment.

On June 1, 1934 — more than ten years after the execution of both notes — Gonzalez instituted an action in the Court of First Instance of Manila to recover the aggregate amount due on the two notes. In his answer, de Jose interposed the special defenses that the complaint was uncertain, as it did not specify when the indebtedness was incurred or when it was demandable, and that the action had already prescribed. The trial court resolved the defense of prescription against de Jose, holding that the action had not prescribed under Article 1128 of the Civil Code, which provides that when the obligation does not specify a term but it is inferable from its nature and circumstances that a period was intended, the court shall fix the duration of the term. The trial court accordingly ordered de Jose to pay Gonzalez the sum of P547.95 within thirty days from notification, plus costs.

On appeal, the parties practically admitted that the obligations arising from the two promissory notes should be governed by Article 1128, inasmuch as it was the intention of the plaintiff, evidenced by the terms of the notes, to grant the debtor a period within which to pay the debts. De Jose nonetheless contended that Article 1113 should apply because the obligations were demandable from the time of their execution, and further argued that even assuming Article 1128 applied, the action to ask the court to fix the period had already prescribed under Section 43(1) of the Code of Civil Procedure.

• Uncertainty of Complaint: Defendant-appellant argued that the complaint was uncertain inasmuch as it did not specify when the indebtedness was incurred or when it was demandable.
• Prescription: Defendant-appellant maintained that the cause of action, if any existed, had already prescribed in accordance with law.
• Applicability of Article 1113: Defendant-appellant contended that Article 1113 of the Civil Code should govern, the obligations derived from the promissory notes being demandable from the time of their execution.
• Prescription of the Action to Fix the Period: Defendant-appellant argued that even assuming Article 1128 was applicable, the action to ask the court to fix the period had already prescribed under Section 43(1) of the Code of Civil Procedure.

• Applicability of Article 1128: Whether Article 1128 of the Civil Code, rather than Article 1113, governs promissory notes that are payable "as soon as possible" and do not fix a definite term.
• Prescription of the Action to Fix the Period: Whether the action to ask the court to fix the period under Article 1128 has prescribed under Section 43(1) of the Code of Civil Procedure, thereby barring the action for recovery on the notes.

• Applicability of Article 1128: Yes. The promissory notes are governed by Article 1128 because their terms evidence the plaintiff's intent to grant the debtor a period for payment; since no period was fixed, it is for the court to fix the same.
• Prescription of the Action to Fix the Period: Yes. The action to ask the court to fix the period has prescribed under Section 43(1) of the Code of Civil Procedure, the ten-year prescriptive period having elapsed from the execution of the notes in 1922 to the filing of the action on June 1, 1934.

• Applicability of Article 1128: The terms of the two promissory notes — each stipulating payment "as soon as possible" — demonstrated that the plaintiff intended to grant the debtor a period within which to pay, even though no definite date was fixed. This brought the obligations within the purview of Article 1128 of the Civil Code, which provides that when the obligation does not specify a term but it is inferable from its nature and circumstances that a period was intended, the court shall fix the duration. The defendant's reliance on Article 1113 was therefore misplaced, as that article governs obligations that are demandable from the time of their execution — a characterization inconsistent with the "as soon as possible" language, which implies a deferment of demand. Precedents including Eleizagui vs. Manila Lawn Tennis Club, Barretto vs. City of Manila, Floriano vs. Delgado, and Levy Hermanos vs. Paterno were cited in support of the rule that when promissory notes do not fix a period but intent to grant one exists, the court should fix the period.

• Prescription of the Action to Fix the Period: Although Article 1128 governs the substantive obligation, the action to have the court fix the period is itself a civil action subject to the rules of prescription. Under Section 43(1) of the Code of Civil Procedure, the prescriptive period for such an action is ten years. More than ten years had elapsed from the execution of the promissory notes in 1922 to the filing of the complaint on June 1, 1934. The Court distinguished the action to fix the period from the action for recovery of the amount of the notes, noting that while the effects of both are the same, they are separate actions, and both — like all civil actions — are subject to prescription. Because the action to fix the period had prescribed, the action for recovery could not prosper, and the defendant was accordingly absolved.

• Prescription of the Action to Fix the Period under Article 1128 — When an obligation does not specify a term but the nature and circumstances show that a period was intended to be granted to the debtor, Article 1128 of the Civil Code authorizes the court to fix the duration of the term. However, the action to have the court fix that period is a distinct civil action, separate from the action for recovery on the obligation, and is subject to the prescriptive periods of the Code of Civil Procedure. Under Section 43(1), the applicable period is ten years. If that period elapses, both the action to fix the term and the action for recovery are barred. The two actions, though different, produce the same effect and are equally subject to prescription.

• "The action to ask the court to fix the period has already prescribed in accordance with section 43 (1) of the Code of Civil Procedure. This period of prescription is ten years, which has already elapsed from the execution of the promissory notes until the filing of the action on June 1, 1934." — This passage states the ratio decidendi: the action to fix the period under Article 1128 is itself subject to prescription, and the ten-year period had lapsed.

• "The action which should be brought in accordance with article 1128 is different from the action for the recovery of the amount of the notes, although the effects of both are the same, being, like other civil actions, subject to the rules of prescription." — This passage defines the doctrinal distinction between the action to fix the period and the action for recovery, clarifying that both are civil actions subject to prescription.

• Eleizagui vs. Manila Lawn Tennis Club, 2 Phil. 309 — Cited as supporting authority for the rule that when a promissory note does not fix a period but intent to grant one is evident from its terms, the court should fix the period under Article 1128.
• Barretto vs. City of Manila, 7 Phil. 416 — Cited in the same line of authority supporting the application of Article 1128 to obligations with an implied but unspecified period.
• Floriano vs. Delgado, 11 Phil. 154 — Cited as further authority for the court's power to fix the period of an obligation when none is expressly stated.
• Levy Hermanos vs. Paterno, 18 Phil. 353 — Cited as additional precedent reinforcing the application of Article 1128 to obligations whose terms imply a deferred period of payment.

• Article 1128, Civil Code (old) — Provides that when an obligation does not specify a term but it is inferable from its nature and circumstances that a period was intended, the court shall fix the duration of the term; likewise when the term is left to the debtor's will. Applied as the governing provision for the two promissory notes payable "as soon as possible," since the terms evidenced an intent to grant the debtor a period.
• Article 1113, Civil Code (old) — Defendant contended this article should apply because the obligations were demandable from the time of their execution. The Court rejected this contention, finding Article 1128 applicable instead.
• Section 43(1), Code of Civil Procedure — Establishes a ten-year prescriptive period for actions upon a judgment or upon a liability created by statute, or upon a sealed instrument. Applied to bar the action to fix the period under Article 1128, more than ten years having elapsed from the execution of the notes in 1922 to the filing of the complaint on June 1, 1934.

Avanceña, C.J., Villa-Real, Abad Santos, Diaz, Laurel, and Concepcion, JJ., concurred.