TUASON, TUASON, INC., PLAINTIFF AND APPELLEE, VS. ANTONIO MACHUCA, DEFENDANT AND APPELLANT.

AVANCEÑA, C.J.:



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By giving a bond in the sum of P9,663 executed by “Manila Compania de
Seguros,” the Universal Trading Company was allowed by the Insular Collector of
Customs to withdraw from the customhouse sundry goods imported by it and
consigned through the Bank of the Philippine Islands. Subsequently, the Bank of
the Philippine Islands claimed the value of the goods, and the Insular Collector
of Customs obligated the “Manila Compania de Seguros” to pay the sum of P9,663,
the amount of the bond. Before paying this amount to the Insular Collector of
Customs, the “Manila Compania de Seguros” obtained from the Universal Trading
Company and Tuason, Tuason & Co., a solidary note for the sum of P9,663
executed by said companies in its favor. Before signing said note, Tuason,
Tuason & Co., in turn, caused the Universal Trading Company and its
president Antonio Machuca, personally, to sign a document (Exhibit B), wherein
they bound themselves solidarily to pay, reimburse, and refund to the company
all such sums or amounts of money as it, or its representatives, may pay or
become bound to pay, upon its obligation with “Manila Compania de Seguros,”
whether or not it shall have actually paid such sum or sums or any part thereof.
The Universal Trading Company having been declared insolvent, “Manila Compania
de Seguros” brought an action in the lower court against Tuason, Tuason &
Co. to recover the value of the note for P9,663 and obtained final judgment
therein, which was affirmed by this court on appeal, for the ttotal sum of
P12,197.27, which includes the value of the note with interest thereon.^[1] Subsequently, all the rights of Tuason,
Tuason & Co. were transferred to the plaintiff Tuason, Tuason, Inc.

Later on Tuason, Tuason, Inc., brought this action to recover of Antonio
Machuca the sum of P12,197.27 which it was sentenced to pay in the case filed
against it by “Manila Compania de Seguros plus P3,000 attorney’s fees, and
P155.92 court’s costs and sheriff’s fees, that is, a total of P15,353.19,
together with P1,180.46 as interest upon the sum of P15,353.19 at the rate of 10
per cent per annum from October 8, 1922, to July 8, 1923, and interest on the
sum of P16,535.65 at the rate of 10 per cent from July 8, 1923, until this sum
was paid, and, in addition the sum of P1,653.65 for attorney’s fees in this
case. For its cause of action, the plaintiff alleges that it had paid “Manila
Compania de Seguros” the sum of P12,197.27, the amount of the judgment against
it. The dispositive part of the judgment appealed from is as follows:

“Judgment is rendered against the defendant Antonio Machuca, and he is hereby
ordered to pay the plaintiff company the sum of fifteen thousand three hundred
fifty-three pesos and nineteen centavos (P15,353.19), with compound interest
thereon at the rate of ten per cent (10%) per annum, to be computed quarterly,
that is, one thousand one hundred eighty pesos and forty-six centavos
(P1,180.46), which is ten per cent interest on the amount of fifteen thousand
three hundred fifty-three pesos and nineteen centavos (P15,353.19) from October
8, 1922, to July 8, 1923, and ten per cent on the sum of sixteen thousand five
hundred thirty-three pesos and sixty-five centavos (16,533.65) from July 8,
1923, until full payment, to be computed quarterly, besides the sum of one
thousand six hundred fifty-three pesos and sixty-five centavos (P1,653.65),
which is ten per cent (10%) on the amount due and the interest thereon, which
said defendant promised to pay as penalty and attorney’s fees in the event of a
suit being necessary to recover the debt, and the costs. So
ordered.”

It appears from the evidence that what the plaintiff alleges to be a payment
made to “Manila Compania de Seguros” for the satisfaction of the judgment
rendered in favor of the latter is.the execution by Albina Tuason of a document
Exhibit D in favor of “Manila Compania de Seguros.” In this document Albina
Tuason declares that she assumes and makes hers the obligation to pay the amount
of said judgment to “Manila Compania de Seguros” within one year and mortgages a
property described in the document as security for this obligation. This
obligation of Albina Tuason was accepted by the “Manila Compania de Seguros,” in
the following terms: “I accept the foregoing security executed by Miss
Albina Tuason in favor of “Manila Compania de Seguros.’ “ It, thus, appears
that the plaintiff has not in fact paid the amount of the judgment to “Manila
Compania de Seguros.” The action brought by the plaintiff is that which a
surety, who pays the debt of the debtor, is entitled to bring to recover the
amount thus paid (art. 1823, Civil Code). It is evident that such a payment not
having been made, the alleged cause of action does not exist.

The plaintiff company argues that, at all events, it is entitled to bring
this action under article 1843 of the Civil Code, which provides that the surety
may, even before making payment, bring action against the principal debtor. This
contention of the plaintiff is untenable. The present action, according to the
terms of the complaint, is clearly based on the fact of payment. It is true
that, under article 1843, an action lies against the principal debtor even
before the surety pays the debt, but it clearly appears in the complaint that
this is not the action brought by the plaintiff. Moreover this article 1843
provides several cumulative remedies in favor of the surety, at his election,
and the surety who brings an action under this article must choose the remedy
and apply for it specifically. At any rate this article does not provide for the
reimbursement of any amount, as is sought by the plaintiff.

But although the plaintiff has not as yet paid “Manila Compania de Seguros”
the amount of the judgment against it, and even considering that this action
cannot be held to come under article 1843 of the Civil Code, yet the plaintiff
is entitled to the relief sought in view of the facts established by the
evidence. The plaintiff became bound, by virtue of a final judgment, to pay the
value of the note executed by it in favor of “Manila Compania de Seguros.”
According to the document executed solidarily by the defendant and the Universal
Trading Company, the defendant bound himself to pay the plaintiff as soon as the
latter may have become bound and liable, whether or not it shall have actually
paid. It is indisputable that the plaintiff became bound and liable by a final
judgment to pay the value of the note to “Manila Compania de Seguros.”

The defendant also contends that the document executed by Albina Tuason in
favor of “Manila Compania de Seguros” assuming and making hers the obligation of
Tuason, Tuason & Co., was a novation of the contract by substitution of the
debtor, and relieved Tuason, Tuason & Co. from all obligation in favor of
“Manila Compania de Seguros.” As to this, it is enough to say that if this was
what Albina Tuason contemplated in signing the document, evidently it was not
what “Manila Compania de Seguros” accepted. As above stated, “Manila Compania de
Seguros” accepted this document only as additional security for its credit and
not as a novation of the contract.

Our conclusion is that the plaintiff has the right to recover of the
defendant the sum of P9,663, the value of the note executed by the plaintiff in
favor of “Manila Compailia de Seguros” which the plaintiff is under obligation
to pay by virtue of a final judgment. We do not believe, however, that the
defendant must pay the plaintiff the expenses incurred by it in the litigation
between it and “Manila Compania de Seguros.” That litigation was originated by
the plaintiff having failed to fulfill its obligation with “Manila Compania de
Seguros,” and it cannot charge the defendant with the expenses which it was
compelled to make by reason of its own fault. It is entitled, however, to the
expenses incurred by it in this action brought against the defendant, which are
fixed at Pl,653.65 as attorney’s fees.

The judgment appealed from is modified, and the defendant is sentenced to pay
the plaintiff the sum of P9,663, with interest thereon at the rate of 10 per
cent per annum from July 19, 1923, when the complaint was filed until full
payment thereof, plus the sum of P1,653.65 for attorney’s fees, without special
pronouncement as to costs. So ordered.

Johnson, Street, Malcolm,
Villamor, Ostrand, and Romualdez, JJ., concur.