Case Digest: Inchausti & Co. vs Yulo, 34 Phil 978, G.R. No. 7721

Inchausti & Co. vs Yulo, 34 Phil 978, GR No. 7721, March 25, 1914

Subject: Obligations and Contracts

FACTS

Teodoro Yulo has been borrowing money from Inchausti & Co under specific conditions for the exploitation of his hacienda. When he and his wife died, his sons continued their account with plaintiff. Gregorio Yulo and his brothers then had a series of letters, transactions documents, and instruments with the plaintiff admitting their indebtedness and expressing their conformity regarding the amount of their debts and their balance. They obligated themselves to play but failed to pay right at the first instalment. An action was brought against Gregorio Yulo. However, another notarial instrument was executed by the Yulos in recognition of the debt and the obligation of payment, and then asking plaintiff to include in the filed suit Pedro Yulo, and in that case, they’d procure all means for the judgment to be in favour of the plaintiff. However, the court ruled in favour of Gregorio instead. Court reversed the judgment and held that plaintiff can sue Gregorio Yulo alone since the Yulos obligated themselves in solidum.

ISSUE

Whether or not when the debtors of a solidary obligation are bound by different terms and conditions, may the creditor sue one of them.

RULING

Yes, the debtors of a solidary obligation are bound by different terms and conditions, may the creditor sue one of them.

Under the law (1211), solidarity may exist although the creditors and the debtors may not be bound in the same manner and by the same periods and conditions.

In this case, the creditor may sue the one shoes share has already become due and demandable, but the creditor cannot recover yet from the debtors sued, the shares of the other debtors, until the conditions or terms of the others have already been fulfilled. In other words, Inchausti and Co., Inc. may recover now from George Yulo only George’s share; and when the conditions and terms have been fulfilled for the shares of the others, the creditor can recover their shares from George. This, after all, is still a solidary obligation.