Sunday, July 9, 2023

Case Digest: Velez vs. Ramas, 40 Phil. 787

Velez vs. Ramas, 40 Phil. 787

Subject: Obligations and Contracts

FACTS

The defendant Roberto Quirante is the father of Restituta Quirante, who in turn is the wife of the defendant Salomon Ramas. Prior to perfection (birth) of the contract, the plaintiffs, Teodoro Velez and wife, Hermenegilda Chiong Ve loso, were the owners of a pawnshop and had employed Restituta Quirante in some capacity or other therein. While thus employed, Restituta Quirante abstracted various sum of money belonging to the plaintiffs, amounting altogether to P 2,303.60, under condit ions which supposedly constituted the offense of estafa.

Whereas, in order to prevent said woman from being brought before the courts for the unlawful act she has executed, the defendants subscribing the contract in question, have guaranteed to the said plaintiffs the payment of the aforesaid sum plus an interest of 12% per annum to bring against Restituta Quirante. Whereas, by virtue of the foegoing obligation, said Velez and Veloso agree to suspend the action they intend to bring against Restituta Quirante.

Thus action was instituted in the Court of First Instance of the Province of Cebu by the plaintiff, Teodoro Velez and his wife, to recover of the defendants, Salomon Ramas and Roberto Quirante, a sum of money evidenced by a written obligation signed by said defendants on July 30, 1917, wherein they acknowledged themselves to be jointly and severally bound for the payment to the plaintiff of the sum of P 2,303.60. It is admitted that the defendant Ramas had paid P300 upon said obligation prior to the institution of the  suit, leaving a balance of P 2,003.60. Salomon Ramas answered the complaint, admitting in effect the facts alleged therein, and stating as his sole ground of defense that the alleged contract was illegal on its face.

This defendant further interposed a counterclaim, seeking to recover P 300 which he had already paid. The defendant Roberto Quirante did not appear, and no defense was made for him. When the case was submitted for decision the trial court sustained the defense, absolved both the defendants from the complaint and gave judgment upon the counterclaim in favor of Salomon Ramas jointly and severally against the plaintiffs for the sum of P 300, with interest at the legal rate from the date the answer was filed. From this judgment the plaintiffs appealed.

ISSUE

Whether or not the contract is valid.

RULING

No.

Under the law (Art 1352, NCC), contracts without cause, or with unlawful cause, produce no effect whatsoever. The cause is unlawful if it is contrary to law, morals, good customs, public order or public policy.

The Supreme Court is of the opinion that the trial court was correct in the conclusion that an action cannot be maintained upon this contract. And it is so ordered, with costs against the appellants.

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