Dominion Insurance Corp v CA

G.R. No. 129919 February 6, 2002

Art. 1236 – Creditor not bound to accept payment or performance by third person.

Facts:

·          Guevarra instituted civil case against the petitioner to recover sum of money, which he claimed to have advanced in his capacity as manager of defendant to satisfy certain claims filed by defendant’s clients.

·          Dominion denied any liability to Guevarra and asserted that the latter was appointed only as Agency Manager by virtue of Special Power of Attorney.

·          Moreover, it contended that respondent had  deviated from the instructions of the principal so that the expenses he incurred in the settlement of the claims of the insured may not be reimbursed from petitioner Dominion.

Issue:

WoN respondent Guevarra is entitled to reimbursement of amounts he paid out of his personal money in settling the claims of several insured

Held:

            Yes, the Court holds that while the law on agency prohibits respondent Guevarra from obtaining reimbursement, his right to recover may still be justified under the general law on obligations and contracts.

            Article 1236, second paragraph, Civil Code, provides “Whoever pays for another may demand from the debtor what he has paid, except that if he paid without the knowledge or against the will of the debtor, he can recover only insofar as the payment has been beneficial to the debtor.”

In this case, when the risk insured against occurred, petitioner’s liability as insurer arose. This obligation was extinguished when respondent Guevarra paid the claims and obtained Release of Claim Loss and Subrogation Receipts from the insured who were paid.

Thus, to the extent that the obligation of the petitioner has been extinguished, respondent Guevarra may demand for reimbursement from his principal. To rule otherwise would result in unjust enrichment of petitioner. But the amount of the revolving fund/ collection that was then in the possession of respondent Guevarra was P3,604.84. Deducting this from P116,276.95, the amount of P112,672.11 may be reimbursed to respondent.

Lim v CA

G.R. No. 104819 July 20, 1998

Art. 1236 – Creditor not bound to accept payment or performance by third person

Facts:

·          Petitioner Lim and respondent Lea Whelan executed a conditional deed of sale over a parcel of land. But the property was mortgaged to the Bank of the Philippine Islands.

·          Whelan then paid an earnest money as stipulated in the contract, thereafter she occupied the premises.

·          Subsequently, Whelan paid Lim. So, a deed of absolute sale was signed by the parties. Lim gave Whelan xeroxed copies of title, realty tax receipts and bills for light and water.

·          After 5 months, Lim demanded Whelan to vacate the subject property. Whelan countered that she was already the owner thereof. Hence, a complaint for ejectment was filed against Whelan.

·          In her defense, Whelan had paid more than enough of what was required from her for the property when she paid the mortgage loan and the capital gains tax over it.

·          Lim asserted that this was done in bad faith as he had no prior knowledge thereof.

Issue:

WoN the payment of the loan and capital gains tax undoubtedly relieved the petitioner from such obligations.

Held:

            Yes, the Court rules that the recourse taken by Whelan is sanctioned by law and jurisprudence and Lim can be bound thereby although he had no prior knowledge thereof considering that the payments made were clearly to his benefit as he was thus spared of being burdened with interests and penalty charges.

            Art. 1236 of the Civil Code provides in part that “Whoever pays for another may demand from the debtor what he has paid, except that if he paid without the knowledge or against the will of the debtor, he can recover only insofar as the payment has been beneficial to the debtor.”

            In the case at bar, the payment of the loan and capital gains tax undoubtedly relieved the appellant from such obligations. The benefit had even been mutual, both appellant and appellee had obtained advantages on their sides — the appellant from his loan and appellee being secured of the possession.

            Thus, the CA decision is affirmed.

De Castro v Artigo

G.R. No. 115838 July 18, 2002

Art. 1236 – Creditor not bound to accept payment or performance by third person.

Facts:

·          Respondent Francisco Artigo sued petitioners the De Castros to collect the unpaid balance of his broker's commission from them.

·          Petitioners were co-owners of four (4) lots located at Quezon City.

·          They authorized Artigo to act as real estate broker in the sale of these properties for 5% commission.

·          When the sale of 2 lots was consummated, Artigo received only P48,893.76 as commission.

·          Hence, he sued below to collect the balance of P303,606.24.

·          On appeal, the De Castros contended that Artigo's inaction and failure to protest estops him from recovering more than what was actually paid him by virtue of Article 1234 of the Civil Code.

Issue:

WoN Artigo's acceptance of partial payment of his commission amounts to a waiver of the balance and puts him in estoppel.

Held:

            No, the Court holds that the De Castros' reliance on Article 1235 of the Civil Code is misplaced.

            As used in Article 1235, The word accept means to take as satisfactory or sufficient, or agree to an incomplete or irregular performance. Hence, the mere receipt of a partial payment is not equivalent to the required acceptance of performance as would extinguish the whole obligation.

            In this case, it is evident that Artigo merely received the partial payment without waiving the balance. Thus, there is no estoppel to speak of.

            Thus, the petition is denied for lack of merit.