(digest) Rehabilitation Finance Corp V Ca 4c6b39

Rehabilitation Finance Corp. v. CA 94 Phil. 984

May 14, 1954

Justice Concepcion

petitioners REHABILITATION FINANCE CORPORATION respondents COURT OF APPEALS, ESTELITO MADRID and JESUS ANDUIZA summary Anduiza & Cano borrowed money from RFC. They failed to pay. Madrid

paid for their debt. Madrid instituted the present action asking the court to (a) declare as paid the P16,425.17 Anduiza owed the AIB/RFC; (b) order AIB/RFC to cancel the mortgage and release the properties; (c) condemn Anduiza to pay Madrid the P16,425.17 with legal interest, etc. The bank argued that Madrid’s payment was null and void since he was not authorized to do so. Anduiza, on the other hand, alleged that when Madrid paid his debt, the same was not yet due and demandable; hence, he may not be compelled to pay the latter. Court held that Madrid’s payment was valid since Article 1158 of the Civil Code of Spain, which was in force in the Phils. at the time of the payments under consideration and of the institution of the present case provides: "Payment may be made by any person, whether he has an interest in the performance of the obligation or not, and whether the payment is known and approved by the debtor or whether he is unaware of it. One who makes a payment for the of another may recover from the debtor the amount of the payment, unless it was made against his express will. In the latter case he can recover from the debtor only in so far as the payment has been beneficial to him." There was also no objection on the part of Anduiza.

facts of the case  Jesus de Anduiza & Quinatana Cano borrowed money from the Agricultural and Industrial Bank (now RFC), as evidenced by a promissory note dated October 31, 1941. In said note, they promised to pay the AIB, or order, on or before October 31, 1951, the sum of P13,800.00, with interest at the rate of 6% p.a.. Said note also recited that payments were to be made in ten equal annual installments in accordance with the given schedule of amortizations.  Mortgagors Anduiza and Cano failed to pay the yearly amortizations that fell due on October 31, 1942 and 1943. Learning of this, Estelito Madrid (who temporarily lived in the house of Anduiza) offered to pay and actually paid on October 30, 1944 the full amount of said indebtedness to AIB/RFC.  July 30, 1948: Madrid instituted the present action asking the court to (a) declare as paid the P16,425.17 Anduiza owed the AIB/RFC; (b) order AIB/RFC to cancel the mortgage and release the properties; (c) condemn Anduiza to pay Madrid the P16,425.17 with legal interest, etc.  In answer, AIB/RFC prayed that the complaint be dismissed. The bank argued that in as much as Madrid’s payment was unauthorized by Anduiza, Madrid’s deposit in the sum of P16,425.17 was null and void in accordance with EO No. 49, series of 1945. Anduiza, on the other hand, alleged that when Madrid paid his debt, the same was not yet due and demandable; hence, he may not be compelled to pay the latter.  RTC dismissed the complaint. On appeal, the CA reversed and directed AIB/RFC to cancel the mortgage and Anduiza to pay Madrid the P16,425.17. Hence this appeal by certiorari.  AIB/RFC’s Arguments: that payments by Madrid were made against the express will of Anduiza and over the objection of the Bank, hence not valid; that the obligation in question was not fully due and demandable at the time of the payments

issue + ratio 1. WON the debtors were entitled to pay the obligation prior to Oct. 15, 1951 (YES) 1



At the outset, it should be noted that the makers of the promissory note quoted above promised to pay the obligation evidenced thereby "on or before October 31, 1951." Although the full amount of said obligation was not demandable prior to October 31, 1951, in view of the provision of the note relative to the payment in ten (10) annual installments, it is clear, therefore, that the makers or debtors were entitled to make a complete settlement of the obligation at any time before said date

2. WON payment by third person was valid (YES)



Madrid was entitled to pay the obligation of Anduiza irrespective of the latter's will or that of the Bank, and even over the objection of either or both.



Article 1158 of the Civil Code of Spain, which was in force in the Phils. at the time of the payments under consideration and of the institution of the present case provides: "Payment may be made by any person, whether he has an interest in the performance of the obligation or not, and whether the payment is known and approved by the debtor or whether he is unaware of it. One who makes a payment for the of another may recover from the debtor the amount of the payment, unless it was made against his express will. In the latter case he can recover from the debtor only in so far as the payment has been beneficial to him."



Payments in question were not made against the objection either of Anduiza or of the Bank. Anduiza impliedly, but clearly, acquiesced in the validity of the payment when he ed Madrid in appealing the decision of CFI Manila. Also, AIB/RFC issued receipts acknowledging payment w/out qualification and demanded a signed statement of Anduiza sanctioning said payments merely as a condition precedent, not to its acceptance, which had already been made, but to the execution of the deed of cancellation of the mortgage constituted in favor of said institution.



This condition was null and void, for the creditor Bank had no other right than to exact payment. After such payment, the obligation in question, as regards said creditor, and the latter’s status and rights as such creditor, become automatically extinguished. Hence: (1) The good or bad faith of the payor is immaterial. The exercise of a right, vested by law without any qualification, can hardly be legally considered as tainted with bad faith. (2) The Bank cannot invoke the provision that the payor "may only recover from the debtor insofar as the payment has been beneficial to him," when made against his express will. 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.

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