G.R. No. 179395 ; December 15, 2010
MAXWELL HEAVY EQUIPMENT CORPORATION, Petitioner, vs. ERIC UYCHIAOCO YU, Respondent.

FACTS

Petitioner Maxwell Heavy Equipment Corporation obtained two loans from the Bank of the Philippine Islands (BPI) totaling ₱8.8 million. The loans were secured by a real estate mortgage over properties owned by respondent Eric Uychiaoco Yu. Yu also signed as a co-maker for the ₱8 million promissory note. Maxwell defaulted on the loans. To prevent foreclosure of his properties, Yu paid BPI the total amount of ₱8,888,932.33, representing the principal and accrued interest, using funds borrowed from his mother. Yu then demanded reimbursement from Maxwell, which refused. Consequently, Yu filed a complaint for sum of money.
Maxwell denied liability, contending the loans were mere “accommodation loans” obtained purely for Yu’s benefit. It argued that Yu, as a solidary co-maker, was primarily liable and that Yu’s mother, as the alleged real payor, was the proper party to sue. The Regional Trial Court ruled in favor of Yu, ordering Maxwell to reimburse the amount paid. The Court of Appeals affirmed the decision with modifications, deleting the award of attorney’s fees and specifying the interest rate.

ISSUE

Whether respondent Eric Uychiaoco Yu is entitled to reimbursement from petitioner Maxwell Heavy Equipment Corporation for the payment of the loan obligation to BPI.

RULING

Yes, Yu is entitled to reimbursement. The Supreme Court denied Maxwell’s petition, affirming the Court of Appeals’ decision. The Court emphasized that it is not a trier of facts and generally upholds the factual findings of the lower courts when supported by evidence. Both the trial court and the Court of Appeals found that Maxwell was the principal borrower, not Yu. This conclusion was based on evidence including corporate resolutions authorizing the loan, promissory notes signed by Maxwell’s president, and demand letters from BPI addressed to Maxwell as the borrower. The claim that the loans were accommodation arrangements for Yu’s sole benefit was unsupported by credible evidence.
Legally, Yu’s payment extinguished Maxwell’s obligation to BPI. Under Article 1236 of the Civil Code, whoever pays on behalf of another without the latter’s knowledge may recover only what benefited the debtor. Since Yu’s payment was made with Maxwell’s knowledge and consent, and it indisputably benefited Maxwell by discharging its loan, Maxwell is obligated to reimburse Yu for the full amount paid. The Court found no reversible error in the lower courts’ application of this legal principle.