G.R. No. L-5486
JOSE DE LA PEÑA Y DE RAMON, plaintiff-appellant, vs. FEDERICO HIDALGO, defendant-appellant.
August 17, 1910

FACTS:
Jose de la Peña y de Ramon, as judicial administrator of the estate of Jose de la Peña y Gomiz, filed a complaint against Federico Hidalgo, alleging four causes of action:
1. First Cause: That Federico Hidalgo, as agent from November 12, 1887, to January 7, 1904, administered properties belonging to Peña y Gomiz, collected P50,244 in rents, but failed to deposit it with interest as verbally agreed, remitting only P1,289.03. Plaintiff sought P72,548.24 plus interest.
2. Second Cause: That on December 20, 1888, Federico Hidalgo, as agent, withdrew P6,751.60 (principal deposit plus interest) from the Spanish Government treasury, belonging to Peña y Gomiz, and appropriated it. Plaintiff sought this sum with compounded interest.
3. Third Cause: That Federico Hidalgo received P6,000 remitted by Peña y Gomiz from Singapore but only sent back P737.24 and P860, appropriating the balance of P4,402.76. Plaintiff sought this sum with compounded interest. (This cause of action was later renounced and withdrawn by the plaintiff).
4. Fourth Cause: That on January 23, 1904, the plaintiff, unaware of the true state of affairs, paid Federico Hidalgo P2,000 from the deceased’s property, which the defendant has not returned. Plaintiff sought the return of this P2,000.

Federico Hidalgo, in his answer, filed a counterclaim. He alleged that Jose de la Peña y de Ramon (the administrator/plaintiff) had, on January 15, 1904, signed a document acknowledging his father’s (Jose de la Peña y Gomiz’) debt of P11,000 to Federico Hidalgo, to be paid out of the proceeds of property sales. The plaintiff had already paid P2,000 towards this debt.

The trial court initially ruled in favor of the plaintiff for P13,606.19. Both parties appealed and a new trial was granted. The Supreme Court then reviewed the evidence and claims. It was established that Federico Hidalgo’s administration as agent ended on January 1, 1894, and subsequent administrations were by Antonio and Francisco Hidalgo.

ISSUE:
1. Is Federico Hidalgo liable for the sums alleged by the plaintiff, including those purportedly handled by other administrators or for which he was absolved by acknowledgement of debt?
2. Is the plaintiff, Jose de la Peña y de Ramon, as administrator, liable for the acknowledged debt of his deceased father to Federico Hidalgo?
3. When should legal interest begin to accrue on the respective obligations?

RULING:
The Supreme Court partially affirmed and partially reversed the lower court’s judgment:

1. Regarding Plaintiff’s Claims against Federico Hidalgo:
First Cause of Action: Federico Hidalgo was held liable for P6,774.50, representing the balance of accounts during his actual period of administration (up to January 1, 1894). He was absolved from responsibility for the administration periods of Antonio and Francisco Hidalgo.
Second and Fourth Causes of Action: Federico Hidalgo was absolved from the demand for payment under the second and fourth causes of action. The P2,000 payment made by the plaintiff (fourth cause) was deemed a valid payment towards his father’s acknowledged debt to Federico, not an undue payment.
Third Cause of Action: This was renounced and withdrawn by the plaintiff.

2. Regarding Federico Hidalgo’s Counterclaim against the Plaintiff:
The Court found that the plaintiff, Jose de la Peña y de Ramon, validly acknowledged his deceased father’s debt to Federico Hidalgo, which was determined to be P9,000 after accounting for the P2,000 payment already made by the plaintiff. Therefore, the plaintiff, as administrator, was ordered to pay this sum to Federico Hidalgo.

3. Regarding Interest:
The Court held that, under Article 1755 of the Civil Code, interest is only owed when expressly stipulated. In the absence of such stipulation, legal interest as indemnity for losses and damages (Article 1108) only accrues from the date of judicial or extrajudicial demand (Article 1100).
Since no express stipulation for interest was found for either the agent’s balance or the acknowledged debt, and no demand was proven prior to the legal actions:
Federico Hidalgo was ordered to pay P6,774.50 with legal interest at 6% per annum from May 23, 1906 (date of the original complaint).
Jose de la Peña y de Ramon (administrator) was ordered to pay Federico Hidalgo P9,000 with legal interest at 6% per annum from May 21, 1907 (date of the counterclaim).

No special finding was made as to costs, and the plaintiff’s rights against Antonio Hidalgo were reserved.