Sunday, April 14, 2019

Republic v De Guzman

G.R. No. 175021 June 15, 2011
Art. 1240 – Payment shall be made to person in whose favor obligation has been constituted.

Facts:
·          Respondent is the proprietress of Montaguz General Merchandise (MGM), a contractor accredited by the PNP for the supply of office and construction materials and equipment, and for the delivery of various services.
·          The PNP Engineering Services (PNPES) purchased various building materials for the construction of a four-storey condominium building with roof deck at Camp Crame, Quezon City.
·          Both parties executed a Contract of Agreement, wherein MGM will procure and deliver to the PNP the construction materials itemized in the purchase order, and the PNP will pay the former of ₱2,288,562.60.
·          After delivery, the MGM demanded the payment.
·          The PNP denied any liability as it already paid the respondent as evidenced by LBP Check No. 0000530631 issued to Montaguz Builders (her other company, which was also doing business with the PNP) and not to MGM, with which the contract was made.
·          But respondent averred, the PNP’s own Checking Account Section Logbook or the Warrant Register, showed that it was one Edgardo Cruz (another contractor) who received the check due to MGM, not her.

Issue:
WoN the respondent was paid under the Contract of Agreement.
Held:
            No, the Court holds that the respondent was not paid under the Contract of Agreement in accordance with Article 1240 of the Civil Code.
            Art. 1240. Payment shall be made to the person in whose favor the obligation has been constituted, or his successor in interest, or any person authorized to receive it.
            In the instant case, the LBP check was not received by her or by her authorized personnel as shown in PNP’s own records. In order for PNP’s payment to be effective in extinguishing its obligation, it must be made to the proper person. Since it was received by unauthorized person, its obligation has not been extinguished as it is deemed that she was not paid under the said agreement.
            Thus, the Petition is DENIED.

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