G.R. No. L-5942. May 14, 1954

This is an appeal by certiorari, taken by the Rehabilitation Finance
Corporation, hereinafter referred to as the Bank, from a decision of
the Court of Appeals. The pertinent facts are set forth in said
decision, from which we quote:

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

‘P13,800.00 Legaspi, Albay, October 31, 1941

‘On or before October 31, 1951 for value received, I/we, jointly
and severally, promise to pay the Agricultural and Industrial Bank, or
order, at its office at Manila or Agency at Legaspi, Albay, Philippines,
the sum of Thirteen Thousand Eight Hundred Pesos (P13,800.00),
Philippine currency, with interest at the rate of six per centum, (6%)
per annum, from the date hereof until paid. Payments of the principal
and the corresponding interest are to he made in ten (10 yrs.) years
equal annual installments of Pl,874.98 each in accordance with the
following 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 yearly
amortizations that fell due on October 31, 1942 and 1943. As plaintiff
Estelito Madrid, who was at the outbreak of the last war the manager of
the branch office of the National Abaca and other Fiber Corporation in
Sorsogon, and who temporarily lived in the house of Jesua de Anduiza in
said province during the Japanese occupation, learned of the latter’s
failure to pay the aforesaid amortizations due the creditor Agricultural
and Industrial Bank, he went to its central office in Manila in
October, 1944, and offered to pay the indebtedness of Jesus de Anduiza.
Accordingly, he paid on October 23, 1944, P7,374.83 for the principal,
and 2,625.17 for the interest, of a total of P10,000.00 (Exh. ‘A’),
thereby leaving a balance of P6,425.17 which was likewise paid on
October 30th of the same year (Exh. ‘B’).

“Alleging that defendant Jesus de Anduiza has failed to pay the
plaintiff in the amount of P16,425.17 inspite of demands therefor, and
that defendant Agricultural and Industrial Bank (now E. F. C.) refused
to cancel the mortgage executed by said Anduiza, Estelito Madrid
instituted the present action on July 3, 1948, in the Court of First
Instance of Manila, praying for judgment (a) declaring as paid
the indebtedness amounting to P16,425.17 of Jesus de Anduiza to the
Agricultural and Industrial Bank; (b) ordering the Agricultural
and Industrial Bank (now R. F. C.) to release the properties mortgaged
to it and to execute the corresponding cancellation of the mortgage; (c)
condemning defendant Jesus de Anduiza to pay plaintiff the amount of
Pl6,425.17, with legal interest from the filing of the complaint until
completely paid, declaring such obligation a preferred lien over
Anduiza’s properties which plaintiff freed from the mortgage, and
sentencing the defendants to pay the plaintiff the sum of P2,000.00 as
damages and the costs, without prejudice 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 f 13,800.00 had
not become due and demandable in October, 1944, as the same was payable
in ten years at P1,874.98 annually; that up to October 30, 1944,
plaintiff delivered the total sum of P16.425.17 to the Agricultural Bank
which accepted the same as deposit pending proof of the existence of
Jesus de Anduiza’s authority and approval which plaintiff promised to
present; that it was agreed that if plaintiff could not prove said
authority the deposit will be annulled; and that the Agricultural and
Industrial Bank and its successor the Rehabilitation Finance Corporation
cannot release the properties mortgaged because defendant Anduiza
refused to approve, authorize or recognize said deposit made by
plaintiff. It is further averred, as special defense, that the amount of
P16,425.17, in view of the refusal of defendant Jesus de Anduiza to
approve and authorize same for payment of his loan, was declared null
and void by Executive Order No. 49 of June 6, 1945; that on June 4,
1948, defendant Anduiza personally came to the office of the
Rehabilitation Finance Corporation, apprising it that he did not
authorize the plaintiff to pay for his loan with the Agricultural and
Industrial Bank; and that on June 4, 1948, he paid the sum of P2,000.00
on account of his loan and interest in arrears. Defendant Agricultural
and Industrial Bank (now R. F. C.) therefore prayed (1) to dismiss the
complaint and to declare plaintiff’s deposit in the sum of P16,425.17
null and void in accordance with the provisions of Executive Order No.
49, series of 1945; (2) to concede to defendant Agricultural and
Industrial Bank such other legal remedies which may be justified in the
premises; and (3) to order plaintiff to pay the costs.

“Defendant Jesus de Anduiza filed his answer on August 9, 1948,
with special defenses and counterclaim, alleging that when plaintiff
paid the total amount of P16,425.17 to the Agricultural and Industrial
Bank his indebtedness thereto was not yet due and demandable; that the
payment was made without his knowledge and consent; that the
Agricultural and Industrial Bank did not accept the amount of P16,425.17
from Estelito Madrid as payment of his loan but as mere deposit to be
applied later as payment in the event he would approve the same; that
said deposit was declared null and void by Executive Order No. 49 of
June 6, 1945; that on June 4, 1948, he personally informed the officials
of the Rehabilitation Finance Corporation that he did not authorize the
plaintiff to pay the Agricultural and Industrial Bank for his loan; and
that on the same date he paid the corporation the sum of P2,000.00 on
account of his loan and the interest in arrears.

“On June 20, 1949, the trial court rendered in favor of the
plaintiff a judgment which was set aside later on upon motion of counsel
for the Rehabilitation Finance Corporation on June 28th, in which it
was alleged that his failure to appear at the hearing on June 9, 1949,
was due to a misunderstanding. Consequently, and after dafendant
corporation had introduced its evidence, the court on August 11, 1949,
rendered decision dismissing plaintiff’s complaint without pronouncement
as to costs.

“On or about September 7, 1949, defendant Jesus de Anduiza filed
an amended answer which the trial court, upon considering the same as
well as his co-defendant’s opposition thereto, denied its admissioa on
September 20, 1949. The motion for new trial filed by defendant Anduiza
and plaintiff Estelito Madrid was likewise denied for lack of merit on
the same date, September 20th. Consequently, plaintiff Estelito Madrid
and defendant Jesus de Anduiza 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 the aforementioned decision, the dispositive
part of which reads as follows:

“Wherefore, the judgment appealed from is hereby reversed,
directing the Rehabilitation Finance Corporation, successor in interest
of the Agricultural and Industrial Bank, to cancel the mortgage executed
by Jesus de Anduiza and Quintana Cano in favor of said bank; and
ordering Jesus de Anduiza to pay plaintiff Estelito Madrid the amount of
P16,425.17, without pronouncement as to costs.” (Pp. 17-18, idem.)

The Bank assails said decision of the Court of Appeals upon the
ground that payments by respondent Estelito Madrid had been made against
the express will of Anduiza and over the objection of the Bank; that
the latter accepted said payments, subject to the condition that a
written instrument, 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 name of Anduiza and, therefore, through
misrepresentation and without good faith; that said payments were not
beneficial to Anduiza; and that the obligation in question was not fully
due and demandable at the time of the payments aforementioned.

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.

With reference to the other arguments of petitioner herein, Article
1158 of the Civil Code of Spain, which was in force in the Philippines
at the time of the payments under consideration and of the institution
of the present case (July 3, 1948,) reads:

“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 account 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.”

It is clear therefrom that respondent 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. Commenting on said
Article 1158, Manresa says:

“Si es amplio el prinripio declarado en el art. 1158 por razon de
las personas o que se extiende, no lo es menos por la ausencia de
restriccionnes basadas en la voluntad del deudor. La primera parte de
dicho articulo parece limitar la posibilidad del pago por tin tercero a
los casos en que el deudor conozca y apruebe tal hecho o lo ignore. Pero
los dos parrafos siguientes extienden tal posibilidad al caso en que el
deudor desapruebe el pago y aun se oponga a que lo verifiquen,
puesto que determinando la ley los efectos, si bien parciales,
limitados, que un pago hecho en tales condiciones puede producir contra
el mismo deudor que a el se opuso, es claro que al atribuirle
tales efectos le atribuye plena eficacia respecto del acreedo que no
esta autorizado para hacer oposicion alguna.

“Menos duda aun puede ofrecer la validez del pago, conociendolo el
deudor y omitiendo expresar su conformidad; hipotesis menos extrema que
la anterior, y en la cual puede verse incluso una aprobacion tacita,
aprobacion que autoriza, inclusa la subrogacion misma del tercero, segun
veremos al hablar de la novacion.

“Tenemos, por tanto, que sea cual fuere la situacion en que este o
se coloque el deudor respecto del pago hecho por un tercero, no impide a
este verificarlo con eficacia respecto del acreedor, y aun tambien
respecto de aquel mismo, segun se expresa luego.

“La jurisprudencia, confirmando el sentido de la ley, ha venido a
declarar tambien que no es necesario para el pago el concurso del
deudor; asi vienen a establecerlo la sentencia de 4 de Noviembre de
1897, que ratifica los preceptos contenidos en el art. 1158 y en el
siguiente, y la de 5 de Abril de 1913, declarativa de que, siendo el
pago de una deuda el medio mas directo de extinguir la obligacion, acto
que mejora la situacion del prestatario, puede realizarlo cualquiera aun
contradidendolo o ignordndolo aquel. En la jurisprudencia
hipotecaria hay una resolucion de la Direccion general de los Registros
de 22 de Marzo de 1893, muy explicita e importante, en la cual se
declara respecto de esta cuestion que ‘el pago es un acto juridico tan independiente
del deudor, que puede ser firme y valedero hecho por tercera
persona que no tenga interes en la obligacion, y aun cuando el deudor lo
ignore totalmente, segun el art. 1158 del Codigo Civil1; que de ese
principio legal se deduce que no cabe reputar nulo el pago de una
obligacion porque falte el consentimiento del deudor, ni menos estimar
nula la escritura en que el pago conste, por carecer de ni la firma de
este’; que ‘en ese modo de extinguirse las obligaciones, lo
verdaderamente capital es la voluntad del acreedor, y asi lo ha
entendido el articulo 82 de la Ley Hipotecaria, al no exigir para la
cancelacior de las hipotecas mas que el consen tinner to de aquel en
cuyo favor se hallen constituidas; y por ultimo, que ‘aunque el art. 27
de la Ley del Notariado exige bajo pena de nulidad que se firmen las
escrituras, se refiere a los que en ellas intervienen en calidad de
otorgantes, denomination que en los actos unilaterales cuadra tan solo
al que en virtud de los mismos queda obligado’.

“No ha sido menos explicita y fundada la jurisprudencia en cuanto a
declarar que tampoco el acreedor puede impedir validamente el pago
kecho por un tercero, declarandose en la sentencia de 4 de
Noviembre de 1897, a que antes se hizo referencia, que ni estos
preceptos que comentamos, ni los demas de esta seccion o de otros
lugares del Codigo”, aplicables a la materia, ‘ni el art. 1161 de la Ley
Procesal, requieren el consentimiento del acreedor para la eficacia del
pago y para la consiguiente subrogacion, porque su derecho, que no
va mas alia del cumplimiento de la obligaciones, se acoba o extingue con
el pago. Pudiera creerse que la doctrina de dicha sentencia era
opuesta a la de la Direction, que antes hemos transcrito, y que esta
reconocia la facultad del acreedor para consentir o impedir el pago;
pero lejos de ser asi no hay contradiction, limitandose dicho Centro
registro no pueden considerarse extinguidos los derechos del acreedor
sin que este intervenga en el pago; pero esto no incluyo que se le
pueda imponer la admision de este contra su voluntad.” (8 Manresa,
4th ed., pp. 242-243; Italics supplied.)

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

“En efecto; el unico derecho del acreedor en las obligaciones
es el de que se le pague. No puede, por lo tanto, oponerse a que la
obligacion le sea cumplida por una persona distinta del deudor. Por
otra parte, el deudor queda libre de su compromiso desde el momento en
que el credito esta, satisfecho, puesto que, a partir de entonces, nada
se debe. Podran, pues, discutirse los efectos del pago hecho por una
tercera persona en cuanto a la relacion que de esto se deduzca para lo
sucesivo entre el tercero y el deudor; pero negar que la deuda
quede liberada, desatado el vinculo, perdida en el acreedor la facultad
de redamar e insubsistente sobre el deudor el peso de su compromiso,
seria de todo punto temerario.

“Lo presumible es que tenga interes en el cumplimiento de la
obligacion quien trata de sustituirse al deudor en el pago; es natural
la defensa de los intereses propios, y poco corriente y poco
acostumbrado que, por pura generosidad, se satisfaga la deuda de otro
sin algun beneficio por parte del que de esta manera procede. En este
sentido, el fiador, que es, si no un deudor principal, deudor al fin,
puesto que ha enlazado sus intereses, con su cuenta y razon, a los de la
persona obligada, y se ha comprometido subsidiariamente con ella al
pago de lo que debia, se adelantara muchas veces, por distintos motivos,
a pagar la deuda, teniendo en ello proplio y legitimo beneficio. Aparte
del interns juridico, motivos particulares de otro orden, que iraplican
un genero cualquiera de provecho, pueden mover tambie”n el animo de una
tercera persona para sustituirse en el lugar del deudor.

“Pero ni siquiera se necesita que esto suceda. Las doctrinas
juridicas han permitido que kaga el pago cualquiera persona, tenga o
no interes en el cumplimiento de la obligation, segun expresamente
determina el art. 1158 del Codigo. Es de suponer el interes,
naturalmente, por lo que decimos mas arriba; pero la ley se reconoce sin
t’acultades para entrar en este terreno, y obedeciendo a las meras
consideraciones juridicas de la satisfaccion del compromiso por la
entrega de la cosa o prestacion del hecho y de la liberation
consiguiente del deudor, prescinde del genero de motivos interesados o
desinieresados, incluso de mera liberalidad, que hayan podido producir
la determination de la tercera persona que ofrece al acreedor la
realization del compromiso.

“Y no para en esto; sino que el mismo art. 1158 establece que
podra hacer el pago cualquiera persona, ya lo conozca o lo apruebe, ya
lo ignore el deudor. Anticipandose, ademas, a la pregunta de lo que
sucedera en el caso de que el deudor lo conozca y no lo apruebe, anade a
continuation que el que pague por cuenta de otro podra reclamar del
deudor lo que hubiese pagado, a no haberlo hecho contra su expresa
voluntad. Es lo que se decia en la ya citada Ley de Partidas; ‘aunque el
deudor lo supiese y lo contradijese’,

“Ahora bien; en algun caso de estos, podra el acreedor negarse a
recibir la deuda? Ya hemos dioho que no. Su derecho se reduce en todo
caso a pedir y a recibir lo que se le debe. Es indiferente para el la
cualidad de la persona que llega a su presencia, poniendo en sus manos
el hecho o la cosa que son debidas. Habra ocasiones en que, por motivos
de endole particular, el acreedor se sienta contrariado en recibir la
prestacion de un tercero. El prestamista, por ejemplo, que crea haberse
asegurado el disf ructe perpetuo de las rentas de su deudor, se vera
amargamente sorprendido con el pago hecho por un tercero, que da al
traste de esta manera en un segundo con las risuenas esperanzas de toda
la vida. Motivos de este orden, y tambien otras veces algunos mas
elevados, impulsaran al acreedor a resistir el pago de lo que se debe.
Sin embargo, el derecho no ha podido tomar en cuenta ninguna de tales
consideraciones, con las que se iria en definitiva contra el principio
de haber de aceptarse todo aquello que resulte favorable para el deudor.
Por lo tanto, en caso de resistencia, el tercero que ofrece el pago
tendra derecho a consignar la ccsa debida como si fuese al deudor mismo,
dando a la consignation cuantos efectos le estan asignados por la ley.”
(19 Scaevola, pp. 881-883; italics supplied.)

The opinion of Sanchez Roman is couched in the following language:

“Los terceros extranos a la obligacion pueden pagar, ignorandolo
el deudor, sabiendolo y no contradiciendolo o sabiendolo y
contradidendolo. En el primer caso existe una gestion de negocios;
en ei aegundo, un mandato tacito; y en el tercero, se produce una cesion
de credito. * * *.”

* * * * * * *

“En el caso de pago hecho por un tercero, el acreedor no puede
negarse a recibirlo, y cualquiera resistencia le constituira en la
responsabilidad de la mora accipiendi. Cierto que esta no es regla
expresa de ley ni de jurisprudencia, pero es buena doctrina de Derecho
cientifico, generalizada entre los escritores, y de la cual dice Goyena,
con razcn: ‘La ley no puede permitir que el acreedor se obstine
maliciosamente en conservar la facultad de atormentar a su deudor, que
un hijo no pueda extinguir la obligacion de su padre, ni este la de su
hijo o su amigo, o un hombre benefico la de un desgraciado ausente. Y no
se diga que el tercero no tiene mas que entregar el dinero al deudor
para que haga directamente el pago; pues en el caso de ausencia esto es
imposible, y en otras ocasiones la delicadeza frustraria las miras del
hombre bienhechor.” (4 Sanchez Roman, 259-260; Italics supplied.)

It may not be amiss to add that, contrary to petitioner’s pretense,
the paynrente in question were not made against the objection either of
Anduiza or of the Bank. And although, later on, the former questioned
the validity of the payments, subsequently, he impliedly, but clearly,
acquiesced therein, for he joined Madrid in his appeal from the decision
of the Court of First Instance of Manila, referred to above. Similarly,
the receipts issued by the Bank acknowledging said payments without
qualification, belie its alleged objection thereto. The Bank merely
demanded a signed statement of Anduiza sanctioning said payments, 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. Needless to say, this
condition was null and void, for, as pointed out above, the Bank, as
creditor, had no other right than to exact payment, after which the
obligation in question, as regards said creditor, and, hence, the
latter’s status and rights as such, become automatically extinguished.

Two other consequences flow from the foregoing, namely:

(1) The good or bad faith of the payor is immaterial to the issue
before us. Besides, the exercise of a right, vested by law without any
qualification, can hardly be legally considered as tainted with bad
faith. Again, according to Sanchez Roman “para que el pago hecho por el
tercero extinga la obligacion, es preciso que se realice a nombre
del deudor”. (4 Sanchez Roman, 260.) Accordingly, the circumstance
that payment by Madrid had been effected in the name of Anduiza, upon
which the Bank relies in support of its aforesaid allegation of bad
faith, does not prove the existence of the latter.

(2) The Bank can not 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. At any rate, in order that the rights of the payor
may be subject to said limitation, the debtor must oppose the payments
before or at the time the same were made, not subsequently thereto.

“Entenderaos como evidente, que los preceptos del art. 1158 que
comentamos, y las distintas hipotesis que establece, giran sobre la base
de que la oposicion del deudor al pago ha de mostrarse con anterioridad
a la realizacion de este pues de ser aquella posterior, no cabe esthnar
verdadera y eficaz oposicion de buena fe, ya que en el caso de que
antes hubiera conocido el proyecto de pago, habria en su silencio una
aprobacion tacita que autorizaria incluso la subrogacion del tercero, y
si lo habia ignorado antes de realizarse, se estaria en la situation
distinta prevista y regulada en los dos primeros parrafos del articulo
1158 y en el 1159.” (8 Manresa, 4th ed., pp. 248-249.)

Indeed, it is only fair that the effects of said payment be
determined at the time it was made, and that the rights then acquired by
the payor be not dependent upon, or subject to modification by,
subsequent unilateral acts or omissions of the debtor. At any rate, the
theory that Anduiza had not been benefited by the payments in question
is predicated solely upon his original refusal to acknowledge the
validity of said payments. Obviously, however, the question whether the
same were beneficial or not to Anduiza, depends upon the law, not upon
his will. Moreover, his former animosity towards Madrid sufficed to
negate the beneficial effects of the payment under consideration, the
subsequent change of front of Anduiza, would constitute an admission and
proof of said beneficial effects.

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

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