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8/3/15 5:28 PMPHILIPPINE REPORTS ANNOTATED VOLUME 094

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[No. L-5942. May l4, 1954]

REHABILITATION FINANCE CORPORATION,petitioner, vs. THE HONORABLE COURT OF APPEALS,ESTELITO MADRID and JESUS ANDUIZA, respondents.

OBLIGATION AND CONTRACTS; PROMISSORY NOTEPAYABLE IN INSTALLMENTS.Where the makers of thepromissory note promised to pay the obligation evidencedthereby "on or before October 31, 1951," although the fullamount of said obligation was not demandable prior toOctober 31, 1951, in view of the provision of the noterelative to the payment in ten annual installments, themakers or debtors were entitled to make a completesettlement of the obligation at any time before said date.

ID.; RIGHT OF CREDITOR.The Bank, as creditor, has noother right than to exact payment, after which theobligation in question, as regards said creditor, and, hence,the latter's status and rights as such, become automaticallyextinguished.

ID.; PAYMENTS MADE BY THIRD PERSONS.Underarticle 1158 of the Civil Code of Spain, which was, in forcein the Philippines when the payments under considerationwere made, "payment may be made by any person, whetherhe has an interest in the perf ormance of the obligation ornot, and whether the payment is known and approved bythe debtor or whether he is unaware of it."

ID.; ID.; PAYMENTS MADE AGAINST WILL OFDEBTOR.The provision that the payor "may only recoverfrom the debtor insofar as the payment has been beneficialto him," when made against his express will, is a defensethat may be availed of only by the debtor, not by the Bank-creditor, for it affects solely the rights of the former. Besides,in order that the rights of the payor may be subject to saidlimitation, the debtor must oppose the payments before or atthe time the same were made, not subsequently thereto.



5. ID.; ID.; EFFECTS OF PAYMENT DETERMINED AT THETIME IT WAS MADE; RIGHTS ACQUIRED BY PAYORDEPEND UPON LAW.The effects of payment must bedetermined at the time it was made and the rights acquiredby the payor should not be dependent upon, or subject tomodification by, subsequent unilateral acts or omissions ofthe debtor. The question whether the payments werebeneficial or not to tHe debtor, depends upon the law, notupon his will.

985

VOL. 94, MAY 14, 1954 985

R. F. C. vs. Court of Appeals, et al.

PETITION for review by certiorari of a decision of the Courtof Appeals.

The facts are stated in the opinion of the Court.Sixto de la Costa, for petitioner.Zacarias Gutierrez Lora for respondent Jesus de Anduiza.Sabido & Sabido for respondent Estelito Madrid.

CONCEPCION, J.:This is an appeal by certiorari, taken by the

Rehabilitation Finance Corporation, hereinafter referred toas the Bank, from a decision of the Court of Appeals. Thepertinent facts are set forth in said decision, from which wequote:

'On or before October 31, 1951 for value received, I/we,jointly executed the following promissory note

'Pl3,800.00 Legaspi, Albay, October 31, 1941'On or before October 31, 1951 for value received, I/we, jointly

and severally, promise to pay the AGRICULTURAL ANDINDUSTRIAL BANK, or order, at its office at Manila or Agency atLegaspi, Albay, Philippines, the sum of THIRTEEN THOUSAND

EIGHT HUNDRED PESOS (P13,800.00), Philippine currency, withinterest at the rate of six per centum, (6%) per annum, from thedate hereof until paid. Payments of the principal and thecorresponding interest are to be made in ten (10 yrs.) years equalannual installments of Pl,874.98 each in accordance with thefollowing schedule of amortizations:

* * * * * * *"All unpaid installments shall bear interest at the rate of six per

centum, (6%) per annum.



(Sgd.) QUINTANA CANO (Sgd.) JESUS DE ANDUIZA

Mortgagor Mortgagor

(Exhibit "C")

"Mortgagors Anduiza and Cano failed to pay the yearlyamortizations that fell due on October 31, 1942 and 1943. Asplaintiff Estelito Madrid, who was at the outbreak of the last warthe manager of the branch office of the National Abaca and otherFiber Corporation in Sorsogon, and who temporarily lived in thehouse of Jesus de Anduiza in said province during the Japaneseoccupation, learned of the latter's failure to pay the aforesaidamortizations due the creditor Agricultural and Industrial Bank, hewent to its central office in Manila in October, 1944, and offered topay the indebtedness

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986 PHILIPPINE REPORTS ANNOTATED


of Jesus de Anduiza. Accordingly, he paid on October 23, 1944,P7,374.83 for the principal, and 2,625.17 for the interest, or a totalof P10,000.00 (Exh. 'A'), thereby leaving a balance of P6,425.17which was likewise paid on October 30th of the same year (Exh.'B').

"Alleging that defendant Jesus de Anduiza has failed to pay theplaintiff in the amount of F16,425.17 inspite of demands therefor,and that defendant Agricultural and Industrial Bank (now R. F. C.)refused to cancel the mortgage executed by said Anduiza, EstelitoMadrid instituted the present action on July 3, 1948, in the Court ofFirst Instance of Manila, praying for judgment (a) declaring as paidthe indebtedness amounting to P16,425.17 of Jesus de Anduiza tothe Agricultural and Industrial Bank; (b) ordering the Agriculturaland Industrial Bank (now R. F. C.) to release the propertiesmortgaged to it and to execute the corresponding cancellation of themortgage; (c) condemning defendant Jesus de Anduiza to payplaintiff the amount of P16,425.17, with legal interest from thefiling of the complaint until completely paid, declaring suchobligation a preferred lien over Anduiza's properties which plaintifffreed .from the mortgage, and sentencing the def endants to pay theplaintiff the sum of P2,000.00 as damages and the costs, withoutprejudice to conceding him other remedies just and equitable.

"On July 14, 1948, defendant Agricultural and Industrial Bank(now R. F. C.) filed its answer, alleging that the loan of P13,800.00had not become due and demandable in October, 1944, as the same



was payable in ten years at P1,874.98 annually; that up to October30, 1944, plaintiff delivered the total sum of P16,425.17 to theAgricultural Bank which accepted the same as deposit pendingproof of the existence of Jesus de Anduiza's authority and approvalwhich plaintiff promised to present; that it was agreed that ifplaintiff could not prove said authority the deposit will be annulled;and that the Agricultural and Industrial Bank and its successor theRehabilitation Finance Corporation cannot release the propertiesmortgaged because defendant Anduiza refused to approve,authorize or recognize said deposit made by plaintiff. It is furtheraverred, as special defense, that the amount of P16,425.17, in viewof the refusal of defendant Jesus de Anduiza to approve andauthorize same for payment of his loan, was declared null and voidby Executive Order No. 49 of June 6, 1945; that on June 4, 1948,def endant Anduiza personally came to the office of theRehabilitation Finance Corporation, apprising it that he did notauthorize the plaintiff to pay for his loan with the Agricultural andIndustrial Bank; and that on June 4, 1948, he paid the sum ofP2,000.00 on account of his loan and intereSt in arrears. DefendantAgricultural and Industrial Bank (now R. F. C.) therefore

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VOL. 94, MAY 14, 1954 987


prayed (1) to dismiss the complaint and to declare plaintiff's depositin the sum of P16,425.17 null and void in accordance with theprovisions of Executive Order No. 49, series of 1945; (2) to concedeto defendant Agricultural and Industrial Bank such other legalremedies which may be justified in the premises; and (3) to orderplaintiff to pay the costs.

"Defendant Jesus de Anduiza filed his answer on August 9,1948, with special defenses and counterclaim, alleging that whenplaintiff paid the total amount of P16,425.17 to the Agricultural andIndustrial Bank his indebtedness thereto was not yet due anddemandable; that the payment was made without his knowledgeand consent; that the Agricultural and Industrial Bank did notaccept the amount of P16,425.17 from Estelito Madrid as paymentof his loan but as mere deposit to be applied later as payment in theevent he would approve the same; that said deposit was declarednull and void by Executive Order No. 49 of June 6, 1945; that onJune 4, 1948, he personally inf formed the officials of theRehabilitation Finance Corporation that he did not authorize theplaintiff to pay the Agricultural and Industrial Bank for his loan;



and that on the same date he paid the corporation the sum ofP2,000.00 on account of his loan and the interest in arrears.

"On June 20, 1949, the trial court rendered in favor of theplaintiff a judgment which was set aside later on upon motion ofcounsel for the Rehabilitation Finance Corporation on June 28th, inwhich it was alleged that his failure to appear at the hearing onJune 9, 1949, was due to a misunderstanding. Consequently, andafter defendant corporation had introduced its evidence, the courton August 11, 1949, rendered decision dismissing plaintiff'scomplaint without pronouncement as to costs.

"On or about September 7, 1949, defendant Jesus de Anduizafiled an amended answer which the trial court, upon consideringthe same as well as his co-defendant's opposition thereto, denied itsadmission on September 20, 1949. The motion for new trial filed bydefendant Anduiza and plaintiff Estelito Madrid was likewisedenied for lack of merit on the same date, September 20th.Consequently, plaintiff Estelito Madrid and defendant Jesus deAnduiza brought this case to this Court by way of appeal, * * *. Pp.1-6, Decision, C. A.)

Upon the foregoing facts, the Court of Appeals rendered theaforementioned decision, the dispositive part of which readsas follows:

"Wherefore, the judgment appealed from is hereby reversed,directing the Rehabilitation Finance Corporation, successor ininterest of the Agricultural and Industrial Bank, to cancel themortgage executed by Jesus de Anduiza and Quintana Cano infavor of said

988



bank; and ordering Jesus de Anduiza to pay plaintiff EstelitoMadrid the amount of P16,425.17, without pronouncement as tocosts." (Pp. 17-18, idem.)

The Bank assails said decision of the Court of Appeals uponthe ground that payments by respondent Estelito Madridhad been made against the express will of Anduiza and overthe objection of the Bank; that the latter accepted saidpayments, subject to the condition that a writteninstrument, signed by Anduiza, authorizing the same,would be submitted by Madrid, who has not done so; that



the payments in question were made by Madrid in the nameof Anduiza and, therefore, through misrepresentation andwithout good faith; that said payments were not beneficialto Anduiza; and that the obligation in question was not fullydue and demandable at the time of the paymentsaforementioned.

At the outset, it should be noted that the makers of thepromissory note quoted above promised to pay theobligation evidenced thereby "on or before October 31,1951." Although the full amount of said obligation was notdemandable prior to October 31, 1951, in view of theprovision of the note relative to the payment in ten (10)annual installments, it is clear, therefore, that the makersor debtors were entitled to make a complete settlement ofthe obligation at any time before said date.

With reference to the other arguments of petitionerherein, Article 1158 of the Civil Code of Spain, which was inforce in the Philippines at the time of the payments underconsideration and of the institution of the present case (July3, 1943,) reads:

"Payment may be made by any person, whether he has an interestin the performance of the obligation or not, and whether thepayment is known and approved by the debtor or whether he isunaware of it.

"One who makes a payment for the account of another mayrecover from the debtor the amount of the payment, unless it wasmade against his express will.

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VOL. 94, MAY 14, 1954 989


"In the latter case he can recover from the debtor only in so far asthe payment has been beneficial to him."

It is clear therefrom that respondent Madrid was entitled topay the obligation of Anduiza irrespective of the latter's willor that of the Bank, and even over the objection of either orboth. Commenting on said Article 1158, Manresa says:

"Si es amplio el principio declarado en el art. 1158 por razn de laspersonas o que se extiende, no lo es menos por la ausencia derestriccionnes basadas en la voluntad del deudor. La primera partede dicho artculo parece limitar la posibilidad del pago por un tercero



a los casos en que el deudor conozca y apruebe tal hecho o lo ignore.Pero los dos prrafos siguientes extienden tal posibilidad al caso enque el deudor desapruebe el pago y aun se oponga a que loverifiquen, puesto que determinando la ley los efectos, si bienparciales, limitados, que un pago hecho en tales condiciones puedeproducir contra el mismo deudor que a l se opuso, es claro que alatribuirle tales efectos le atribuye plena eficacia respecto delacreedor, que no est autorizado para hacer oposicin alguna.

"Menos duda an puede ofrecer la validez del pago, conocindoloel deudor y omitiendo expresar su conformidad; hiptesis menosextrema que la anterior, y en la cual puede verse incluso unaaprobacin tcita, aprobacin que autoriza, inclusa la subrogacinmisma del tercero, segn veremos al hablar de la novacin.

"Tenemos, por tanto, que sea cul fuere la situacin en que est ose coloque el deudor respecto del pago hecho por un tercero, noimpide a ste verificarlo con eficacia respecto del acreedor, y auntambin respecto de aqul. mismo, segn se expresa luego.

"La jurisprudencia, confirmando el sentido de la ley, ha venido adeclarar tambin que no es necesario para el pago el concurso deldeudor; as vienen a establecerlo la sentencia de 4 de Noviembre de1897, que ratifica los preceptos contenidos en el art. 1158 y en elsiguiente, y la de 5 de Abril de 1913, declarativa de que, siendo elpago de una deuda el medio ms directo de extinguir la obligacin,acto que mejora la situacin del prestatario, puede realizarlocualquiera aun contradicindolo o ignorndolo aqul. En lajurisprudencia hipotecaria hay una resolucin de la Direccingeneral de los Registros de 22 de Marzo de 1893, muy explcita eimportante, en la cual se declara respecto de esta cuestin que 'elpago es un acto jurdico tan independiente del deudor, que puedeser firme y valedero hecho por tercera persona que no tenga intersen la obligacin, y aun cuando el deudor lo ignore totalmente, segnel art. 1158 del Cdigo Civil'; que 'de se principio legal se deduceque no cabe reputar

990



nulo el pago de una obligacin porque falte el consentimiento deldeudor, ni menos estimar nula la escritura en que el pago conste,por carecer de ni la firma de ste'; que 'en ese modo de extinguirselas obligaciones, lo verdaderamente capital es la voluntad delacreedor, y as lo ha entendido el artculo 82 de la Ley Hipotecaria,al no exigir para la cancelacin de las hipotecas ms que el



consentimiento de aquel en cuyo favor se hallen constitudas; y porltimo, que 'aunque el art. 27 de la Ley del Notariado exige bajopena de nulidad que se firmen las escrituras, se refiere a los que enellas intervienen en calidad de otorgantes, denominacin que en losactos unilaterales cuadra tan slo al que en virtud de los mismosqueda obligado'.

"No ha sido menos explcita y fundada la jurisprudencia 4ncuanto a declarar que tampoco el acreedor puede impedirvlidamente el pago hecho por un tercero, declarndose en lasentencia de 4 de Noviembre de 1897, a que antes se hizoreferencia, que ni eStos preceptos que comentamos, ni los dems deesta seccin o de otros lugares del Cdigo, aplicables a la materia,'ni el art. 1161 de la Ley Procesal, requieren el consentimiento delacreedor para la eficacia del pago y para la consiguientesubrogacin, porque su derecho, que no va ms all delcumplimiento de la obligaciones, se acoba o extingue con el pago.Pudiera creerse que la doctrina de dicha sentencia era opuesta a lade la Direccin, que antes hemos transcrito, y que sta reconoca lafacultad del acreedor para consentir o impedir el pago; pero lejos deser as no hay contradiccin, limitndose dicho Centro registro nopueden considerarse extinguidos los derechos del acreedor sin queste intervenga en el pago; pero esto no incluyo que se 1e puedaimponer la admisin de ste contra su voluntad." (8 Manresa, 4thed., pp. 242-243; Italics supplied.)

This is in line with the view of Mucius Scaevola, which is asfollows:

"En efecto; el nico derecho del acreedor en las obligaciones es el deque se le pague. No puede, por lo tanto, oponerse a que la obligacinle sea cumplida por una persona distinta del deudor. Por otra parte,el deudor queda libre de su compromiso desde el momento en que elcrdito est satisfecho, puesto que, a partir de entonces, nada sedebe. Podrn, pues, discutirse los efectos del pago hecho por unatercera persona en cuanto a la relacin que de esto se deduzca paralo sucesivo entre el tercero y el deudor; pero negar que la deudaquede liberada, desatado el vnculo, perdida en el acreedor lafacultad de reclamar insubsistente sobre el deudor el peso de sucompromiso, sera de todo punto temerario.

"Lo presumible es que tenga inters en el cumplimiento de laobligacin quien trata de sustituirse al deudor en el pago; es natural

991

VOL. 94, MAY 14, 1954 991




la defensa de los intereses propios, y poco corriente y pocoacostumbrado que, por pura generosidad, se satisfaga la deuda deotro sin algn beneficio por parte del que de esta manera procede.En este sentido, el fiador, que es, si no un deudor principal, deudoral fin, puesto que ha enlazado sus intereses, con su cuenta y razn,a los de la persona obligada, y se ha comprometido subsidiariamentecon ella al pago de lo que deba, se adelantar muchas veces, pordistintos motivos, a pagar la deuda, teniendo en ello propio ylegtimo beneficio. Aparte del inters jurdico, motivos particularesde otro orden, que implican un gnero cualquiera de provecho,pueden mover tambin el nimo de una tercera persona parasustituirse en el lugar del deudor.

"Pero ni siquiera se necesita que esto suceda. Las doctrinasjuridicas han permitido que haga el pago cualquiera persona, tenga no inters en el cumplimiento de la obligacin, segnexpresamente determine, el art. 1158 del Cdigo. Es de suponer elinters, naturalmente, por lo que decimos ms arriba; pero la ley sereconoce sin facultades para entrar en este terreno, y obedeciendo alas meras consideraciones jurdicas de la satisfaccin del compromisopor la entrega de la cosa prestacin del hecho y de la liberacinconsiguiente del deudor, prescinde del gnero de motivos interesados desinieresados, incluso de mera liberalidad, que hayan podidoproducir la determinacin de la tercera persona que ofrece alacreedor la realizacin del compromiso.

"Y no para en esto; sino que el mismo art. 1158 establece quepodr hacer el pago cualquiera persona, ya lo conozca lo apruebe,ya lo ignore el deudor. Anticipndose, adems, a la pregunta de loqu suceder en el caso de que el deudor lo conozca y no lo apruebe,aade a continuacin que el que pague por cuenta de otro podrreclamar del deudor lo que hubiese pagado, a no haberlo hechocontra su expresa voluntad. Es lo que se deca en la ya citada Ley dePartidas; 'aunque el deudor lo supiese y lo contradijese'.

"Ahora bien; en algn caso de stos, podr el acreedor negarse arecibir la deuda? Ya hemos dicho que no. Su derecho se reduce entodo caso a pedir y a recibir lo que se le debe. Es indiferente para ella cualidad de la persona que llega a su presencia, poniendo en susmanos el hecho la cosa que son debidas. Habr ocasiones en que,por motivos de ndole particular, el acreedor se sienta contrariadoen recibir la prestacin de un tercero. El prestamista, por ejemplo,que crea haberse asegurado el disfructe perpetuo de las rentas de sudeudor, se ver amargamente sorprendido con el pago hecho por untercero, que da al traste de esta manera en un segundo con lasrisueas esperanzas de toda la vida. Motivos de este orden, ytambin otras veces algunos ms elevados, impulsarn al acreedor a



992



resistir el pago de lo que se debe. Sin embargo, el derecho no hapodido tomar en cuenta ninguna de tales consideraciones, con lasque se ira en definitiva contra el principio de haber de aceptarsetodo aquello que resulte favorable para el deudor. Por lo tanto, encaso de resistencia, el tercero que ofrece el pago tendr derecho aconsignar la cosa debida como si fuese al deudor mismo, dando a laconsignacin cuantos efectos le estn asignados por la ley." (19Scaevola, pp. 881-883; italics' supplied.)

The opinion of Sanchez Roman is couched in the followinglanguage:

"Los terceros extraos a la obligacin pueden pagar, ignorndolo eldeudor, sabindolo y no contradicindolo sabindolo ycontradicindolo. En el primer caso existe una gestin de negocios;en el segundo, un mandato tcito; y en el tercero, se produce unacesin de crdito * * *."

* * * * * * *"En el caso de pago hecho por un tercero, el acreedor no puede

negarse a recibirlo, y cualquiera resistencia le constituir en laresponsabilidad de la mora accipiendi. Cierto que sta no es reglaexpresa de ley ni de jurisprudencia, pero es buena doctrina deDerecho cientfico, generalizada entre los escritores, y de la cual diceGoyena, con razn: 'La ley no puede permitir que el acreedor seobstine maliciosamente en conservar la facultad de atormentar a sudeudor, que un hijo no pueda extinguir la obligacin de su padre, niste la de su hijo su amigo, un hombre benfico la de undesgraciado ausente. Y no se diga que el tercero no tiene ms queentregar el dinero al deudor para que haga directamente el pago;pues en el caso de ausencia esto es imposible, y en otras ocasiones ladelicadeza frustrara las miras del hombre bienhechor." (4 SanchezRoman, 259-260; Italics supplied.)

It may not be amiss to add that, contrary to petitioner'spretense, the payments in question were not made againstthe objection either of Anduiza or of the Bank. Andalthough, later on, the former questioned the validity of thepayments, subsequently, he impliedly, but clearly,acquiesced therein, for he joined Madrid in his appeal fromthe decision of the Court of First Instance of Manila,referred to above. Similarly, the receipts issued by the Bank



acknowledging said payments without qualification, belieits alleged objection thereto. The Bank merely demanded a

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VOL. 94, MAY 14, 1954 993


signed statement of Anduiza sanctioning said payments, asa condition precedent, not to its acceptance, which hadalready been made, but to the execution of the deed ofcancellation of the mortgage constituted in favor of saidinstitution.

Needless to say, this condition was null and void, for, aspointed out above, the Bank, as creditor, had no other rightthan to exact payment, after which the obligation inquestion, as regards said creditor, and, hence, the latter'sstatus and rights as such, become automaticallyextinguished.

Two other consequences flow from the foregoing, namely:(1) The good or bad faith of the payor is immaterial to theissue before us. Besides, the exercise of a right, vested bylaw without any qualification, can hardly be legallyconsidered as tainted with bad faith. Again, according toSanchez Roman "para que el pago hecho por el terceroextinga la obligacin, es preciso que se realice a nombre deldeudor". (4 Sanchez Roman, 260.) Accordingly, thecircumstance that payment by Madrid had been effected inthe name of Anduiza, upon which the Bank relies in supportof its aforesaid allegation of bad faith, does not prove theexistence of the latter.

(2) The Bank can not invoke the provision that the payor"may only recover from the debtor insofar as the paymenthas been beneficial to him," when made against his expresswill. This is a defense that may be availed of by the debtor,not by the Bank, for it affects solely the rights of the former.At any rate, in order that the rights of the payor may besubject to said limitation, the debtor must oppose thepayments before or at the time the same were made, notsubsequently thereto.

"Entendemos como evidente, que los preceptos del art. 1158 quecomentamos, y las distintas hiptesis que establece, giran sobre labase de que la oposicin del deudor al pago ha de mostrarse conanterioridad a la realizacin de ste pues de ser aquella posterior, no



cabe estimar verdadera y eficaz oposicin de buena fe, ya que en

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Royal Shirt Factory, Inc. vs. Co

el caso de que antes hubiera conocido el proyecto de pago, habra ensu silencio una aprobacin tcita que autorizara incluso lasubrogacin del tercero, y si lo haba ignorado antes de realizarse, seestara en la situacin distinta prevista y regulada en los dosprimeros prrafos del artculo 1158 y en el 1159." (8 Manresa, 4thed., pp. 248-249.)

Indeed, it is only fair that the effects of said payment bedetermined at the time it was made, and that the rightsthen acquired by the payor be not dependent upon, orsubject to modification by, subsequent unilateral acts oromissions of the debtor. At any rate, the theory thatAnduiza had not been benefited by the payments inquestion is predicated solely upon his original refusal toacknowledge the validity of said payments. Obviously,however, the question whether the same were beneficial ornot to Anduiza, depends upon the law, not upon his will.Moreover, his former animosity towards Madrid sufficed tonegate the beneficial effects of the payment underconsideration, the subsequent change of front of Anduiza,would constitute an admission and proof of said beneficialeffects,

Being in conformity with law, the decision appealed fromis hereby affirmed, therefore, in toto.

Pars, C. J., Pablo, Bengzon, Montemayor, Reyes, Jugo,and Bautista Angelo, JJ., concur.

Judgment affirmed.

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