Andres vs. Mantrust

618 SUPREMECOURTREPORTSANNOTATED

Andres vs. Manufacturers Hanover & Trust Corporation

G.R.No.82670.September15,1989.*

DOMETILAM.ANDRES,doingbusinessunderthenameandstyleIRENESWEARINGAPPAREL,petitioner,vs.MANUFACTURERS HANOVER & TRUSTCORPORATIONandCOURTOFAPPEALS,respondents.

Civil Law; Obligations and Contracts; Solutio Indebiti; For therule on solutio indebiti to apply, it is required that he who paid wasunder no obligation to do so and that payment was made by reasonof an essential mistake of fact.The sole issue in this case iswhetherornottheprivaterespondenthastherighttorecoverthesecond $10,000.00 remittance it had delivered to petitioner. TheresolutionofthisissuewouldhingeontheapplicabilityofArt.2154oftheNewCivilCode.xxxForthisarticletoapplythe followingrequisitesmust

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*THIRDDIVISION.

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concur:(1)thathewhopaidwasnotunderobligationtodoso;and,(2) that payment was made by reason of an essential mistake offact[CityofCebuv.Piccio,110Phil.558,563,(1960)].

Courts; Certiorari; Questions of Fact; The jurisdiction of theSupreme Court in cases brought to it from the Court of Appeals islimited to reviewing and revising errors of law imputed to the latter,its findings of fact being conclusive.TheruleregardingquestionsoffactbeingraisedwiththisCourtinapetitionforcertiorariunderRule45oftheRevisedRulesofCourthasbeenstatedinRemalantev.Tibe,G.R.No.59514,February25,1988,158SCRA138, thus:The rule in this jurisdiction is that only questions of lawmay beraisedinapetitionforcertiorariunderRule45oftheRevisedRulesofCourt.ThejurisdictionoftheSupremeCourtincasesbroughttoitfromtheCourtofAppealsislimitedtoreviewingandrevisingtheerrors of law imputed to it, its findings of fact being conclusive[Chan v. Court of Appeals, G.R. No. L27488, June 30, 1970, 33SCRA 737, reiterating a long line of decisions.] This Court has

emphatically declared that it is not the function of the SupremeCourt to analyze or weigh such evidence all over again, itsjurisdictionbeinglimitedtoreviewingerrorsoflawthatmighthavebeencommittedbythelowercourt[Tiongcov.DelaMerced,G.R.No. L24426, July 25, 1974, 58 SCRA 89; Corona v. Court ofAppeals, G.R. No. L62482, April 28, 1983, 121 SCRA 865;Baniqued v. Court of Appeals, G. R. No. L47531, February 20,1984, 127 SCRA 596]. Barring, therefore, a showing that thefindingscomplainedofaretotallydevoidofsupportintherecord,orthattheyaresoglaringlyerroneousastoconstituteseriousabuseofdiscretion,such findingsmuststand, for thisCourt isnotexpectedor required to examine or contrast the oral and documentaryevidence submitted by the parties [SantaAna, Jr. v.Hernandez,G.R.No.L16394,December17,1966,18SCRA973.] [atpp.144145.]

PETITIONforcertioraritoreviewthejudgmentoftheCourtofAppeals.

ThefactsarestatedintheopinionoftheCourt.Roque A. Tamayoforpetitioner. Romulo, Mabanta, Buenaventura, Sayoc & De los

Angelesforprivaterespondent.

CORTS,J.:

Assailed in this petition for review on certiorari is thejudgment of the Court of Appeals, which, applying thedoctrineof

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solutio indebiti,reversedthedecisionoftheRegionalTrialCourt, Branch CV, Quezon City by deciding in favor ofprivaterespondent.

Petitioner, using the business name Irenes WearingApparel, was engaged in the manufacture of ladiesgarments,childrenswear,mensapparelandlinensforlocaland foreign buyers. Among its foreign buyers was FacetsFunwear, Inc. (hereinafter referred to as FACETS) of theUnitedStates.

In the course of the business transaction between thetwo,FACETSfromtimetotimeremittedcertainamountsofmoney to petitioner in payment for the items it hadpurchased.SometimeinAugust1980,FACETSinstructedtheFirstNationalStateBankofNewJersey,Newark,NewJersey,U.S.A.(hereinafterreferredtoasFNSB)totransfer$10,000.00topetitionerviaPhilippineNationalBank,Sta.Cruz,Branch,Manila(hereinafterreferredtoasPNB).

Acting on said instruction, FNSB instructed privaterespondentManufacturersHanoverandTrustCorporationtoeffecttheabovementionedtransferthroughitsfacilitiesand to charge the amount to the account of FNSB withprivate respondent.Althoughprivate respondentwasabletosendatelextoPNBtopaypetitioner$10,000.00throughthe Pilipinas Bank, where petitioner had an account, the

payment was not effected immediately because the payeedesignatedinthetelexwasonlyWearingApparel.UponquerybyPNB,privaterespondentsentPNBanothertelexdatedAugust27,1980statingthatthepaymentwastobemade to IrenesWearing Apparel. On August 28, 1980,petitioner received the remittance of $10,000.00 throughDemandDraftNo.225654ofthePNB.

Meanwhile,onAugust25,1980,afterlearningaboutthedelayintheremittanceofthemoneytopetitioner,FACETSinformedFNSBaboutthesituation.OnSeptember8,1980,unaware that petitioner had already received theremittance, FACETS informed private respondent aboutthedelayandatthesametimeamendeditsinstructionbyasking it to effect the payment through the PhilippineCommercialandIndustrialBank(hereinafterreferredtoasPCIB)insteadofPNB.

Accordingly,privaterespondent,whichwasalsounawarethat petitioner had already received the remittance of$10,000.00 from PNB instructed the PCIB to pay$10,000.00topetitioner.

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Hence,onSeptember11,1980,petitionerreceivedasecond$10,000.00remittance.

PrivaterespondentdebitedtheaccountofFNSBforthesecond $10,000.00 remittance effected through PCIB.However, when FNSB discovered that private respondenthad made a duplication of the remittance, it asked for arecreditofitsaccountintheamountof$10,000.00.Privaterespondentcompliedwiththerequest.

Privaterespondentaskedpetitionerforthereturnofthesecond remittance of $10,000.00 but the latter refused topay. On May 12, 1982 a complaint was filed with theRegionalTrialCourt,BranchCV,QuezonCitywhichwasdecided in favorofpetitionerasdefendant.ThetrialcourtruledthatArt.2154oftheNewCivilCodeisnotapplicabletothecasebecausethesecondremittancewasmadenotbymistakebutbynegligenceandpetitionerwasnotunjustlyenrichedbyvirtuethereof [Record,p.234].Onappeal,theCourt of Appeals held that Art. 2154 is applicable andreversed the RTC decision. The dispositive portion of theCourtofAppealsdecisionreadsasfollows:

WHEREFORE, the appealed decision is hereby REVERSED andSETASIDEandanotheroneenteredinfavorofplaintiffappellantand against defendantappellee Domelita (sic) M. Andres, doingbusiness under the name and style Irenes Wearing Apparel toreimburse and/ or return to plaintiffappellant the amount of$10,000.00, itsequivalent inPhilippinecurrency,with interestsatthelegalratefromthefilingofthecomplaintonMay12,1982untilthe whole amount is fully paid, plus twenty percent (20%) of theamountdueasattorneysfees;andtopaythecosts.

Withcostsagainstdefendantappellee.SOORDERED.[Rollo,pp.2930.]

Thereafter,thispetitionwasfiled.Thesoleissueinthiscaseiswhetherornottheprivate

respondenthas the right to recover the second$10,000.00remittanceithaddeliveredtopetitioner.Theresolutionofthis issuewouldhinge on theapplicability ofArt. 2154oftheNewCivilCodewhichprovidesthat:

Art.2154.Ifsomethingreceivedwhenthereisnorighttodemandit,anditwasundulydeliveredthroughmistake,theobligation

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toreturnitarises.

ThisprovisionistakenfromArt.1895oftheSpanishCivilCodewhichprovidedthat:

Art.1895.Ifathingisreceivedwhentherewasnorighttoclaimitand which, through an error, has been unduly delivered, anobligationtorestoreitarises.

InVelez v. Balzarza,73Phil.630(1942),theCourt,speakingthrough Mr. Justice Bocobo explained the nature of thisarticlethus:

Article 1895 [now Article 2154] of the Civil Code abovequoted, istherefore applicable. This legal provision, which determines thequasicontract of solutio indebiti, is one of the concretemanifestations of the ancient principle that no one shall enrichhimself unjustly at the expense of another. In the Roman LawDigestthemaximwasformulatedthus:Jurenaturaeacquumest,neminemcumalteriusdetrimentoetinjuriafierilocupletiorem.Andthe Partidas declared: Ninguno non deue enriquecersetortizeramente con dano de otro. Such axiomhas grown throughthe centuries in legislation, in the science of law and in courtdecisions.The lawmakerhas found it one of thehelpful guides inframing statutes and codes. Thus, it is unfolded in many articlesscatteredintheSpanishCivilCode.(Seeforexample,articles,360,361, 464, 647, 648, 797, 1158, 1163, 1295, 1303, 1304, 1893and1895, Civil Code.) This timehonored aphorism has also beenadoptedbyjuristsintheirstudyoftheconflictofrights.Ithasbeenacceptedby the courts,whichhavenothesitated toapply itwhenthe exigencies of right and equity demanded its assertion. It is apart of that affluent reservoir of justice upon which judicialdiscretion draws whenever the statutory laws are inadequatebecause they do not speak or do so with a confused voice. [at p.632.]

For this article to apply the following requisites mustconcur:(1)thathewhopaidwasnotunderobligationtodoso;and,(2)thatpaymentwasmadebyreasonofanessentialmistakeof fact [CityofCebuv.Piccio,110Phil.558,563(1960).]

It is undisputed that private respondent delivered thesecond$10,000.00remittance.However,petitionercontendsthatthedoctrineofsolutio indebiti doesnotapplybecauseitsrequisitesareabsent.

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First, it isarguedthatpetitionerhadtherighttodemandandthereforetoretainthesecond$10,000.00remittance.Itis alleged that even after the two $10,000.00 remittancesare credited to petitioners receivables from FACETS, thelatterallegedlystillhadabalanceof$49,324.00.Hence,itisargued that the last $10,000.00 remittance being inpayment of a preexisting debt, petitionerwas not therebyunjustlyenriched.

Thecontentioniswithoutmerit.The contract of petitioner, as regards the sale of

garmentsandothertextileproducts,waswithFACETS.Itwas the latter and not private respondent which wasindebtedtopetitioner.Ontheotherhand, thecontract forthe transmittal of dollars from the United States topetitioner was entered into by private respondent withFNSB. Petitioner, although named as the payee was notprivy to the contract of remittance of dollars.Neitherwasprivaterespondentaparty to thecontractofsalebetweenpetitioner and FACETS. There being no contractualrelationbetweenthem,petitionerhasnorighttoapplythesecond $10,000.00 remittance delivered by mistake byprivaterespondenttotheoutstandingaccountofFACETS.

Petitionernextcontendsthatthepaymentbyrespondentbankofthesecond$10,000.00remittancewasnotmadebymistakebutwastheresultofnegligenceofitsemployees.

In connectionwith this theCourt ofAppealsmade thefollowingfindingoffacts:

The fact thatFacets sent onlyone remittanceof$10,000.00 isnotdisputed. In the written interrogatories sent to the First NationalState Bank of New Jersey through the Consulate General of thePhilippines in New York, Adelaide C. Schachel, the investigationandreconciliationclerk in thesaidbanktestified thatarequest toremitapaymentforFacetFunwearInc.wasmadeinAugust,1980.The total amount which the First National State Bank of NewJersey actually requested the plaintiffappellant ManufacturersHanover&TrustCorporation to remit to IrenesWearingApparelwas US$10,000.00. Only one remittance was requested by FirstNational State Bank of New Jersey as per instruction of FacetsFunwear(ExhibitJ,pp.45).

That there was a mistake in the second remittance ofUS$10,000.00 is borne outby the fact thatboth remittanceshavethesamereferenceinvoicenumberwhichis26380.(ExhibitsA1Deposition of Mr. Stanley Panasow and A2Deposition of Mr.StanleyPanasow).

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Plaintiffappellant made the second remittance on the wrong

assumption that defendantappellee did not receive the firstremittanceofUS$10,000.00.[Rollo,pp.2627.]

Itisevidentthattheclaimofpetitionerisanchoredontheappreciationof theattendant factswhichpetitionerwouldhavethisCourtreview.TheCourtholdsthatthefindingbytheCourtofAppealsthatthesecond$10,000.00remittancewasmadebymistake,beingbasedonsubstantialevidence,isfinalandconclusive.Theruleregardingquestionsoffactbeing raised with this Court in a petition for certiorariunderRule45oftheRevisedRulesofCourthasbeenstatedinRemalante v. Tibe, G.R.No. 59514, February 25, 1988,158SCRA138,thus:

The rule in this jurisdiction is that only questions of lawmay beraisedinapetitionforcertiorariunderRule45oftheRevisedRulesofCourt.ThejurisdictionoftheSupremeCourtincasesbroughttoitfromtheCourtofAppealsislimitedtoreviewingandrevisingtheerrors of law imputed to it, its findings of fact being conclusive[Chan v. Court of Appeals,G.R. No. L27488, June 30, 1970, 33SCRA 737, reiterating a long line of decisions.] This Court hasemphatically declared that it is not the function of the SupremeCourt to analyze or weigh such evidence all over again, itsjurisdictionbeinglimitedtoreviewingerrorsoflawthatmighthavebeencommittedbythelowercourt[Tiongcov.DelaMerced,G.R.No. L24426, July 25, 1974, 58 SCRA 89; Corona v. Court ofAppeals, G.R. No. L62482, April 28, 1983, 121 SCRA 865;Baniqued v. Court of Appeals, G. R. No. L47531, February 20,1984, 127 SCRA 596]. Barring, therefore, a showing that thefindingscomplainedofaretotallydevoidofsupportintherecord,orthattheyaresoglaringlyerroneousastoconstituteseriousabuseofdiscretion,such findingsmuststand, for thisCourt isnotexpectedor required to examine or contrast the oral and documentaryevidence submitted by the parties [SantaAna, Jr. v.Hernandez,G.R.No.L16394,December17,1966,18SCRA973]. [atpp.144145.]

Petitionerinvokestheequitableprinciplethatwhenoneoftwo innocentpersonsmust sufferby thewrongfulact ofathird person, the loss must be borne by the one whosenegligencewastheproximatecauseoftheloss.

Theruleisthatprinciplesofequitycannotbeappliedifthere isaprovisionof lawspecificallyapplicable toa case[Phil.RabbitBusLines,Inc.v.Arciaga,G.R.No.L29701,March16,

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1987,148SCRA433;Zabat, Jr. v. Court of Appeals,G.R.No.L36958,July10,1986,142SCRA587;RuralBankofParanaque, Inc. v. Remolado,G.R. No. 62051, March 18,1985,135SCRA409;Cruzv.Pahati,98Phil.788(1956).]Hence, the Court in the case of De Garcia v. Court ofAppeals, G.R. No. L20264, January 30, 1971, 37 SCRA129, citingAznar v. Yapdiangco,G.R.No.L18536,March31,1965,13SCRA486,held:

... The common law principle that where one of two innocentpersons must suffer by a fraud perpetrated by another, the lawimposes the lossupon thepartywho, byhismisplaced confidence,hasenabledthefraudtobecommitted,cannotbeappliedinacasewhich is covered by an express provision of the new Civil Code,specifically Article 559. Between a common law principle and astatutoryprovision,thelattermustprevailinthisjurisdiction.[atp.135.]

Having shown that Art. 2154 of the Civil Code, whichembodiesthedoctrineofsolutio indebiti,appliesinthecaseat bar, the Court must reject the common law principleinvokedbypetitioner.

Finally, in her attempt to defeat private respondentsclaim,petitionermakesmuchofthefactthatfromthetimethe second$10,000.00 remittancewasmade, fivehundredand ten days had elapsed before private respondentdemanded the return thereof. Needless to say, privaterespondent instituted the complaint for recovery of thesecond $10,000.00 remittance well within the six yearsprescriptiveperiod foractionsbaseduponaquasicontract[Art.1145oftheNewCivilCode.]

WHEREFORE,thepetitionisDENIEDandthedecisionoftheCourtofAppealsisherebyAFFIRMED.

SOORDERED.

Fernan, (C.J.), Gutierrez, Jr.andBidin, JJ.,concur.Feliciano, J.,onleave.

Petition denied and decision affirmed.

Note.Jurisdiction of the Supreme Court in casesbrought to it from the Court of Appeals is limited to thereviewoferrorsoflaw.(Rizal Cement Co., Inc. vs. Villareal,135SCRA15.)

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Andres vs. Mantrust