Dawn Mae M.

Navarro
CASE 26

GALAR VS. SASI

47 O.G. 6241

FACTS:

Luis Galar borrowed Php 15,000 from Juan Isasi for which the former drew two promissory notes. As a
payment, Galar paid to PNB on behalf of Aberri Inc., which was controlled by Isasi and his wife, the
outstanding balance of Php 15,848.90. In turn, PNB cancelled the indebtedness of Aberri Inc., released
the mortgage that had been constituted, and delivered the title to Galar. Upon notifying Isasi of the
payment made, Isasi refused to recognize the payment of Galar to PNB. Hence the attorney of Galar
advised Isasi that they would consign in the court the sum of Php 20,000, representing the face value of
the promissory notes. They then filed a case in the court to declare the promissory notes paid and
discharged. Isasi, on the other hand, tendered the sum of Php 15,848.90 paid by Galar to the PNB for
the account and in the name of Aberri Inc. Upon refusal by Galar, Isasi, on behalf of the company,
consigned the amount in the CFI of Manila and filed a complaint, praying that Galar be ordered to
restore to Aberri Inc. all documents relative to the obligation formerly due to the PNB and to reimburse
the amount paid by Galar to the bank be considered cancelled in view of the consignation.

ISSUE:
1. Can Luis Galar legally pay the debt without awaiting the demand on the part of Isasi?
2. Should Galar’s payment of the debt of Aberri Inc. to the bank be set off against the notes?

RULING:

1. Yes. A demand note was subject neither to suspensive condition nor a suspensive period. The
demand was not a condition precedent since the effectivity and binding effect of the note does not
depend upon the making of the demand. The note was binding even before the demand is made.
Neither did the note constitute an implied suspensive period since there was nothing to prevent the
creditor for making demand at any time. It follows, therefore, that the demand note was strictly a pure
obligation as defined in Article 1179. The periods of 15 and 30 days after demand stipulated in the
promissory notes could have no other purpose but to protect the debtor by giving him sufficient time to
raise money to meet the demand. The period being solely for the debtor’s protection and benefit, the
debtor could renounce it validly at any time. Galar was lawfully entitled to make payment even if no
demand had yet been made by Isasi.

2. Yes. The payment of Galar of the indebtedness of Aberri Inc to the PNB redounded to the
benefit of Isasi who had absolute control of said corporation. Thus, said payment was valid and
discharged the obligation, even if such payment was not authorized by Isasi or Aberri Inc., for which
Galar had the right to demand reimbursement for the amount paid. However, such reimbursement was
unnecessary. Such reimbursement was extinguished by its total absorption in the larger amount due
from Galar to Isasi. The consignation, therefore, of Isasi was invalid since it no longer had any obligation
towards Galar. On the other hand, the balance of Php 4,151.10 due and owing from Galar to Isasi was
extinguished upon the consignation of Galar in the court the sum of Php 20,000.