Case Digest (G.R. No. 30111)
Facts:
The case involves the Bank of the Philippine Islands as the plaintiff and May McCoy, acting as the executrix of the estate of H. B. McCoy, along with six other individuals as defendants. The action was initiated on February 23, 1929, to recover a claim exceeding P16,000 against the deceased H. B. McCoy, which had been disallowed by a committee on claims. The plaintiff appealed this disallowance. The original complaint was amended to include six co-defendants: C. H. Sleeper, A. G. Moody, Milton E. Springer, John B. McCord, George E. Brown, and B. A. Green. Before the hearing commenced, May McCoy entered into a compromise with the bank, paying P12,000 to settle the claim. Subsequently, she substituted herself as the plaintiff against her former co-defendants to seek contribution for the amount paid. The trial court ruled in favor of McCoy, ordering each of the six defendants to pay her P1,714.28, which represented their proportional share of the total amount. The defendants app...
Case Digest (G.R. No. 30111)
Facts:
Origins of the Case:
The Bank of the Philippine Islands (BPI) filed a claim against the estate of H.B. McCoy, deceased, for over P16,000. The claim was disallowed by the committee on claims, prompting BPI to appeal. The court required BPI to include six individuals—C.H. Sleeper, A.G. Moody, Milton E. Springer, John B. McCord, George E. Brown, and B.A. Green—as co-defendants alongside May McCoy, the executrix of H.B. McCoy's estate.Compromise Agreement:
Before the trial, May McCoy, as executrix, settled the claim by paying P12,000 to BPI. This payment satisfied the entire claim, and the case proceeded with May McCoy now acting as the plaintiff against her former co-defendants. She sought contribution from them for their proportionate shares of the P12,000 paid.Trial Court Decision:
The trial court ruled in favor of May McCoy, ordering each of the six defendants to pay P1,714.28 (their proportional share of the P12,000). The court also held that if any defendant failed to pay, the others would be liable for the unpaid share proportionally, with legal interest from August 21, 1924.Background of the Debt:
H.B. McCoy and the six appellants were jointly and severally liable for a debt of P235,000 owed to BPI by the Cooperative Coconut Products Co., Inc. The debt was secured by two mortgages executed by the corporation in favor of BPI.Proposal to BPI:
On August 16, 1922, the six appellants and H.B. McCoy proposed to BPI that the bank foreclose the mortgages, bid for the properties at auction, and then sell the properties to them for P65,114.99 plus interest and expenses. They agreed to pay P15,000 upfront and the remainder in three installments via promissory notes.BPI's Acceptance:
BPI accepted the proposal on August 21, 1922, and proceeded to foreclose the mortgages. The properties were sold at auction for P75,590, and BPI demanded that the appellants fulfill their agreement. However, the appellants failed to comply, leading BPI to sell the properties to the Philippine Food Company for P65,000, resulting in a loss of approximately P16,000.Subsequent Legal Action:
BPI initially sued for the P16,000 loss. After May McCoy settled the claim, she sought contribution from the six appellants for their shares of the payment.
Issue:
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Ruling:
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Ratio:
Subrogation and Contribution:
When a party pays a joint and several obligation, they are subrogated to the rights of the original creditor and may seek contribution from their co-obligors.Form of Acceptance:
An acceptance of an offer need not follow the exact form requested by the offeror, as long as it clearly communicates the intent to accept the terms.Joint and Several Liability:
Co-obligors in a joint and several obligation are liable for their proportionate shares of the debt. If one party pays the entire debt, they may seek reimbursement from the others.Proportional Liability for Insolvent Parties:
In cases where one co-obligor is insolvent, the solvent parties are only liable for the unpaid share in proportion to their numbers, ensuring equitable distribution of the burden.