Osmeña vs. Rama

A written acknowledgment of a debt that includes a condition dependent solely on the debtor's will (a potestative condition) voids only the condition, not the obligation itself. Such an acknowledgment is treated as an absolute admission of the debt, which interrupts the prescriptive period for filing an action.

• In 1890 and 1891, Cenona Rama executed two contracts borrowing money from Victoriano Osmeña, payable in sugar, and pledged her property as security.
• Victoriano Osmeña died; his heir, Agustina Rafols, acquired the contracts and later ceded them to the plaintiff, Tomas Osmeña.
• In 1902, Rama signed an acknowledgment of the debt to Tomas Osmeña, adding: "if the house... is sold, I will pay my indebtedness."
• Rama failed to pay, leading Osmeña to file suit in 1906.

• Filed in the Court of First Instance (CFI) of Cebu.
• CFI rendered judgment in favor of Osmeña for P200 plus interest from 1890, and P20 plus interest from 1891 (though it absolved Rama from liability for P50 of the P70 loan).
• Defendant appealed directly to the Supreme Court on questions of fact and sufficiency of evidence.

• Cenona Rama executed two loan contracts (Exhibits A & B) in 1890 and 1891, payable in sugar, with a general and special security pledge.
• After Victoriano Osmeña's death, the contracts were assigned to Tomas Osmeña.
• On March 15, 1902, Rama signed an indorsement acknowledging the debt but stating payment was conditioned on the sale of her house.
• Osmeña filed a collection suit on June 26, 1906.
• Rama's defense was a general denial and prescription.
• Only Osmeña testified at trial; Rama presented no evidence.

• The contracts and the 1902 written acknowledgment proved the existence and amount of the debt.
• The acknowledgment interrupted the prescriptive period.

• The evidence was insufficient to support the lower court's findings.
• The 1902 acknowledgment imposed a condition (sale of the house) for payment, which should be respected.
• The action was barred by the statute of limitations (prescription).

• Procedural Issues: N/A
• Substantive Issues:
  1. Whether the 1902 acknowledgment, with its conditional language, constituted a valid acknowledgment of the debt that interrupted prescription.
  2. Whether the condition ("if the house... is sold") rendered the obligation unenforceable.

• Procedural: N/A
• Substantive:
  1. Yes. The written acknowledgment was sufficient to interrupt prescription. The SC found it an absolute acknowledgment of the obligation.
  2. No. The condition was void because it was potestative—dependent solely on the will of the debtor (Cenona Rama). Under Article 1115 of the Civil Code, such a condition is void. Therefore, the obligation to pay remained absolute and enforceable.

• Potestative Condition (Article 1115, Civil Code) — A condition in an obligation that depends solely on the will of the debtor is void. The SC applied this to the clause "if the house... is sold," as Rama alone controlled whether to sell her house. The voiding of the condition did not nullify the underlying obligation to pay.
• Acknowledgment Interrupts Prescription — A clear, written acknowledgment of a debt by the debtor restarts the prescriptive period for filing an action to collect. The SC treated the 1902 document, despite the void condition, as such an acknowledgment.

• "If that statement found in her acknowledgment of the indebtedness should be regarded as a condition, it was a condition which depended upon her exclusive will, and is therefore, void. (Art. 1115, Civil Code.) The acknowledgment, therefore, was an absolute acknowledgment of the obligation and was sufficient to prevent the statute of limitation from barring the action upon the original contract."

• N/A (The decision does not cite prior case law; it relies directly on the Civil Code.)

• Article 1115, Civil Code — Defines and voids potestative conditions.
• Article 1969, Civil Code — (Implied) Governs the obligation to repay a loan (mutuum).