The plaintiff in this  case  is a capitalist and broker of the City of Iloilo who, for a number of years prior to the controversy which gave rise to this lawsuit; had been accustomed  to make  advances to the defendant Mariano Aguilar to enable him  to grow sugar cane upon the hacienda San Agustin, in the municipality of Hinigaran, Province  of  Occidental  Negros.  The  course of dealing between the two appears to have  been  that the plaintiff would advance money to the defendant upon credit of the latter's growing crop, while the defendant was expected to repay these loans out of the proceeds of sugar produced on  the  plantation.  The defendant was also required to allow the plaintiff, in the capacity of broker, to market his sugar, for which service the plaintiff received a commission of 2 per centum upon the sales.  On July 28, 1921, Mariano Aguilar and his wife, Dolores Siguenza de Aguilar,  entered into a written contract with the plaintiff, whereby  they mortgaged to him thirty head of carabao, thirty head of other cattle, and the crop of sugar cane then growing upon the hacienda, for the purpose of securing a liquidated prior indebtedness of P61,504.52,  plus P13,495.48 of advances which it was agreed that the creditor would, or might, make to assist the mortgagors in cultivating and marketing the crop for the current year.  The mortgagors  not having complied with the terms of the mortgage within the period of two years from the date thereof, as contemplated in the agreement, the plaintiff instituted the present action in the Court of First Instance of Iloilo for the purpose of foreclosing  the chattel mortgage upon  the carabao and other cattle described  in the schedule attached  to the mortgage.  Upon hearing the cause the trial court found that the plaintiff had made out a case for relief, but instead of ordering the foreclosure of the mortgage, as  asked in the complaint, his Honor declared the contract resolved for noncompliance on the part of the defendants with the stipulations of the contract  and gave  judgment  for the  plaintiff to recover from the defendants the sum of P88,274.93, plus the further sum of P8,827.49, pursuant to stipulation for the payment of an  attorney's fee of 10 per cent of the indebtedness, and requiring the further payment of interest on the principal amount of P70,100.98, at  the rate of 12 per centum per annum from June 12, 1925 (the date of the judgment) until the indebtedness should be satisfied.  In  view of the fact that the relief granted was not in conformity with the petitory part of the complaint, the court ordered the complaint to be amended; and  in accordance with this requirement  the plaintiff at once amended by asking in the alternative for the  resolution  of the contract or the foreclosure of  the mortgage.  From  the  judgment entered in the sense of resolution, as  above  indicated, the defendants appealed.

The assignments of error contained in the brief of the appellants  presented in this court raise two questions of a basic  nature.  These we shall proceed to examine in turn. The  appellants'  first proposition  is  that  the  judgment declaring the resolution of the mortgage, Exhibit A, is in contravention of the express provisions of the  contract. To the proper elucidation  of this point  a brief exposition of some of the more important stipulations in  the contract is necessary.

At  the time the mortgage was executed it was foreseen that the indebtedness would probably  not be paid off from the produce of the hacienda San Agustin during the first year, and it was accordingly stipulated that the mortgage should be  renewed from year to year so as to cover the crop  of  each successive year  (art. XVIII  of mortgage), and still another stipulation  was  inserted by which the debtors  obligated themselves  to  deliver to  the mortgagee not only the crop already planted upon the hacienda but the crop  for the year  1922-1923  (art. VI  of mortgage).  It was also agreed that after the sugar grown upon the land for the current and succeeding year should have been delivered  by the mortgagors to  the  mortgagee, the latter should sell the sugar, under certain  restrictions, and apply two-thirds of  the proceeds towards  the satisfaction of the mortgage debt, leaving  one-third to the  mortgagors  for expenses  (arts.  VII, XI  of  mortgage).  The mortgagors further undertook  to deliver  to the mortgagee  annually during the life of the contract the amount of 6,000 piculs of muscovado sugar, or 3,000 piculs of centrifugal sugar (art VII of mortgage).  This stipulation  appears to have reflected an exaggerated notion of the productive capacity of the hacienda,  for the proof shows that even under the most  favorable  conditions the  harvest  was  not  likely to reach the figures mentioned.  In fact, from the harvest of 1921-1922, the mortgagors delivered to the  plaintiff  only 3,024.11  piculs  of muscovado  sugar  of the  value  of P18,880.63; and  the total crop did  not  reach the  limit of 6,000 piculs.  Testifying as a witness  in  his own behalf, the defendant Mariano Aguilar  stated that he  actually harvested from the farm during that year some 4,087 piculs of muscovado sugar.

In explanation of his short deliveries from the harvest of 1921-1922, Aguilar says that  it was a bad-crop year, owing to destructive storms and floods.  This explanation may be-accepted as explanatory of the failure of the hacienda to produce the full 6,000 piculs of sugar  which the defendants had agreed to deliver during that year; but this did not relieve them from  the obligation to deliver the entire produce of the  farm during that year.  As  we  have already  seen, Aguilar retained in said season more  than 1,000 piculs.  This was an act of bad faith, in direct violation of the stipulations of the mortgage, and this breach of the contract affords in our opinion a sufficient basis for the resolution of the contract which was decreed by the  trial court.  From the language used in the appealed decision, it might seem that his Honor considered the defendants in default in the fact that they had not delivered for the year mentioned the total stipulated  amount of  sugar (6,000 piculs), but this is not quite accurate.  The default was in the failure of  the defendants to deliver the full amount of sugar  resulting from the harvest.  Under article 1124 of the Civil Code, the right of one of the obligors in  a  contract to insist upon a  resolution upon the  failure of the other obligor to comply with what is incumbent upon  him is implied in every contract; and it is not necessary  that there should be  inserted in  the  contract any stipulation expressly  allowing resolution.

But there are  certain provisions in the contract  which are relied upon by the  defendants as negativing the right of the plaintiff to obtain a resolution of the contract.  Thus, in clause IX, it is agreed that, if the debtors should not be able to pay  the  entire  indebtedness in the  period of two years specified in the contract, then the mortgagee would extend the contract  for another year upon the same  conditions and terms  as are expressed  in the contract  itself. Again, in clause  XXII, it is  stipulated that, if the mortgagee should fail to  consign to the mortgagors any portion of the sugar which  the mortgagors had agreed to deliver, the latter would  pay the mortgagee a commission of 2 per centum upon the value  of the sugar necessary to complete the 6,000  piculs.

We are of the  opinion that neither of these clauses  has the effect  of suppressing the right of the plaintiff to insist upon resolution.   These provisions  contemplate  the case where the creditor elects to insist upon performance,  and they cannot be taken to affect a right of resolution when the creditor sees  fit to  insist  upon resolution, an alternative  which  is  expressly reserved  to the creditor in  the second paragraph of article  1124  of the  Civil Code even after he has requested fulfilment.  It is also insisted  for the defendants that article XXIV in the mortgage is  inconsistent with the right of resolution, since said article provides especially that the mortgage should be cancelled upon compliance with its  conditions.  But this clause is nothing more than the ordinary resolutory  clause commonly found in mortgages providing that it shall be of no effect upon payment of the secured debt.   The insertion of this clause in the contract certainly is in no wise inconsistent with the exercise  of the right  of resolution  to which reference is made in  the  article cited.

The second proposition  advanced for the appellants is to the effect  that the plaintiff himself had violated  the contract  by refusing  to make  advances  to the defendants for their agricultural  needs during  the  agricultural years 1922-1923 and 1923-1924.  As a consequence of this alleged default on  the  part  of the plaintiff, the defendants were compelled, so it is claimed, to seek financial  assistance from other  sources.   As  a consequence, it  is argued that the  plaintiff is not entitled to insist upon  the strict fulfilment of the obligations incumbent upon the defendants. The contention is in our opinion not  sustained by the terms of the contract or by the facts appearing in  evidence. There is  no stipulation in the mortgage for other advances to be made  by the  plaintiff than  those therein specified amounting to  about  P14,000.   The  plaintiff in  fact  did advance  to the defendants somewhat overP18,000,  a  sum considerably  in excess of the advances which the plaintiff had  obligated himself to  make.  It further appears  that as the time approached for the planting of the crop for the agricultural year  1923-1924, an interview between Aguilar and  the  plaintiff was held in  which the latter  agreed to furnish the defendants with some P26,000 for agricultural outlay by the defendants for said  year.  Pursuant  to this agreement the plaintiff advanced some P1,500, after which he found that  the  defendant Aguilar had already mortgaged the crop for that  year to the Philippine  National Bank,  for advances to be received from it.  In view of this discovery  the  plaintiff withdrew  from his commitment with respect to  the making of advances for the year mentioned and the special contract that had been made for that  year was abrogated by mutual consent.   At the same time Aguilar returned the P1,500 then lately advanced to him  by the plaintiff.

Before  passing to the final phase of our discussion, attention should be directed to  the fact that the original complaint in this case was filed after the expiration of the period of  two  years fixed for the payment of the mortgage debt; but as we have already seen, the mortgagee agreed, in clause IX, that if the mortgagors should be unable to pay all the debt by the termination of said period, he would extend the contract for another year.  The action  was instituted before this third year had passed.  Upon this it is insisted  for the appellants  that the action was  prematurely  brought.

It  is undoubtedly true that the  stipulation above referred to would have  been a serious  and perhaps insuperable obstacle to the maintenance of the action to foreclose; but as the case was finally dealt with, the resolution of the contract was decreed.  Of course in this aspect the defense of the prematurity of the action is not available,  as resolution  can be at once had upon the occurrence of the breach giving rise to the right  to resolve.

From what  has been  said it results that the trial judge committed no  fundamental error in granting a  resolution upon the  facts appearing before  him; and it  only remains to consider whether  the different elements of the appealed judgment are compatible with the fundamental  character of the relief which the court  undertook to grant.  Upon this  point an  analysis of the dispositive part of said decision will  show that  important errors  were  made  in the solution of the problem before the court.  In this connection it will be noted that the  contract contains  a  stipulation  for the payment by the debtors of interest at 12 per centum per annum  upon the entire  indebtedness.  The mortgage also contains a stipulation for the payment of a 10 per  centum attorney's fee, apart from legal costs, in case the debtors should default in the payment of the debt and  it should become necessary for the mortgagee to employ an attorney.  The trial judge allowed full interest at stipulated rate, as well as the stipulated attorney's fee.

The allowance of these items was of course fundamentally  inconsistent  with the notion of  resolution.  When a contract is resolved, rescinded, or annulled, it is the duty of the court to require the parties to surrender that which they have severally received and to place each as far  as practicable in his original  situation; and when a resolution is granted, it has the effect of abrogating the contract in all its parts.  The party seeking resolution cannot have performance as to part and resolution as to the remainder.  It results that when the contract in question was resolved, the plaintiff could no longer rely upon the stipulations with respect to the payment of interest and attorney's fee; and the sole duty incumbent upon the defendants is to restore what they have received from the plaintiff, with legal interest from the date when the benefits accruing to them were respectively conferred (Salas Rodriguez vs. Leuterio, 47 Phil., 818).

Applying the rule above announced to the case before us, the rights of the litigants may be defined as follows: The plaintiff is  entitled  to recover from the defendants the original indebtedness, as liquidated upon July 28, 1921, in the amount of P61,504.52, with interest thereon at the rate of 6 per centum from said date until said indebtedness shall have been satisfied.  The plaintiff is also entitled to recover the additional amounts of money advanced by him to the defendants since July 28, 1921, with  lawful interest upon the various advancements  from the respective dates when made and until said indebtedness shall  have been paid.  The plaintiff is also entitled to recover from the defendants the amounts due him  for  merchandise, supplies, and other items of account, with lawful interest thereon from  the dates  when  such obligations were  incurred until  the indebtedness shall have been satisfied.  The defendants, on the other hand, are entitled to credit for  the amount of P2,691, the proceeds of property belonging to the defendants which was attached and sold at the instance of the plaintiff soon after the action was instituted.  The defendants  are  also entitled to credit for the sum of P18,880.63, the value of 3,024.11 piculs of muscovado sugar which they delivered to the plaintiff from the harvest of 1921-1922.  The two items last above-mentioned should be deducted as partial payments upon the indebtedness as it existed upon the dates when said items respectively  came to the hands of the plaintiff; or what amounts to the  same thing, interest may be allowed upon said items from those dates, and the total  deducted from the capital upon the date of final liquidation.

The statements of account submitted by the plaintiff in the form of exhibits in this action are not in conformity with the rule above stated, inasmuch as compound interest has been charged at the rate of 12 per centum per annum, and the interest charges are so involved in the account that it is not practicable or possible for this court upon the record before us to state an  exact balance.

It will therefore be necessary to return the record to  the lower  court for a liquidation of the account;  and if the parties should be able to agree in the lower court upon a balance in  harmony with the conclusions above stated, judgment in favor of the plaintiff shall be entered therefor. If, however, they should be unable to agree upon a balance, the plaintiff shall be required to submit a statement of account along the lines indicated, with liberty to the defendants to submit their exceptions to the same; and  upon hearing the matter, the court will state a balance and enter judgment in favor of the plaintiff, requiring the defendants to pay the same.

Therefore, affirming the appealed judgment in the part consistent herewith and reversing the  same in the parts inconsistent, the cause is hereby remanded to the court of origin,  for further proceedings in conformity with this opinion.  So ordered,  without express pronouncement as to costs.

Avanceña, C. J., Villamor, Ostrand, Johns, Romualdez, and Villa-Real JJ., concur.