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Art. 1240Aranas vs. Tutaan [No. L-52807 February 29, 1984]

Facts

On May 3, 1971 the lower court declared that Petitioner Luisa Quijencio(and by her spouse Jose Araas) was the owner of 400 shares including thestock dividends that accrued to said shares, of respondent Universal TextileMills, Inc. (UTEX) as defendant and Gene Manueland B. R. Castaeda as co-defendants, and subsequently ordered UTEX to cancel said certificates andissue new ones in the name of Plaintiff and to deliver all dividendsappertaining to the same, whether in cash or in stocks. UTEX filed a motionfor clarification whether the phrase to deliver to her all dividendsappertaining to the same, whether in cash or in stocks meant dividendsproperly pertaining to plaintiffs after the courtsdeclaration of plaintiffownership of said 400 shares of stock. Defendant UTEX has always

maintained it would rightfully abide by whatever decision may be renderedsince such would be the logical consequence after the ruling in respect to therightful ownership of said shares of stock. The motion was granted whichruled against UTEX, ordering it to pay plaintiff the cash dividends, whichaccrued to the stocks in question after rendition of its current decisionexcluding cash dividends already paid to Gene Manuel and B. R. Castaedawhich accrued before its decision. UTEX alleged that the cash dividends hadalready been paid thereby absolving it from payment thereof.

Issue

Was the contention of UTEX, alleging that the cash dividends of stockhad already been paid and thereby absolving it from any furtherpayment, valid?

Decision

No. The final and executory judgment against UTEX declaredpetitioners as the owners of the questioned UTEX shares of stock against itsco-defendants. It was further made clear in the motion for clarification thatall dividends accruing to the said shares after the rendition of the decision ofAug. 7, 1971 rightfully belonged to petitioners. If UTEX nevertheless chose to

pay the wrong parties, notwithstanding its full knowledge and understandingof the final judgment, it was still liable to pay the petitioners as the lawfuldeclared owners of the questions shares of stocks. The burden of recoveringthe supposed payment of the cash dividends made by UTEX to the wrongparties Castaeda and Manuel falls upon itself by its own action and cannotbe passed by it to the petitioner as the innocent parties. It is elementary thatpayment made by a judgment debtor to a wrong party cannot extinguish thejudgment obligation of such debtor to its creditor.

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