TUASON, TUASON, INC. v. ANTONIO MACHUCA (1924)
The Universal Trading Company having been declared insol-
Note: Tuason Co. is not the same as Tuason Inc.
Doctrine: (special agreement) While the action brought by the surety against the
principal debtor does not come under the provisions of article 1843, because the
surety has applied for the reimbursement of a certain amount, which remedy is
not authorized by said article, yet it having been proven by the evidence that the
principal debtor has executed a document in favor of the surety, wherein he bound
himself to pay any such amount as he may have paid or become bound to pay by
virtue of the principal obligation, and it having been shown that the surety has
become bound to pay the obligation because a fi􏰄nal judgment had been ren-
dered against him to that effect, the remedy applied for by the surety may be
granted in this particular case, although he may not yet have paid said judgment.
FACTS:
1. A bond of P9,663 given and executed by "Manila Compañia de
Seguros”
2. This allowed the Universal Trading Company to withdraw from
the customhouse sundry goods imported by it and consigned
through BPI.
3. BPI then claimed the value of the goods, and the Insular Collec-
tor of Customs obligated Manila Compañia to pay the bond
amount
— RULING:
4. Before paying the bond, Manila Compañia obtained in is favor a
solidary note of P9,663 executed by the Universal Trading Com-
pany and Tuason, Tuason & Co.
a. Before signing said note, Tuason, Tuason & Co., in turn,
caused the Universal Trading Company and its president
Antonio Machuca, personally, to sign a document, wherein
they bound themselves solidarily to pay, reimburse, and re-
fund to Tuason, Tuason & Co all such sums or amounts of
money as it may pay or become bound to pay, upon its ob-
ligation with Manila Compañia, whether or not it shall have
actually paid such sum or sums or any part thereof.
In a previous case —
5.
vent, Manila Compañia brought an action against Tuason, Tu-
ason & Co. to recover the value of the note for P9,663
6. The fi􏰄nal judgment therein, which was a􏰄ffirmed by SC on ap-
peal, for the total sum of P12,197.27, which includes the value +
interest
7. Subsequently, all the rights of Tuason, Tuason & Co. were
transferred to the plaintiff Tuason, Tuason, Inc.
This case —
8. 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 􏰄led against it by Manila Compañia, + attorney's
fees, costs + 10% interest pa = total of P15,353.19
a. For its cause of action, the Tuason Inc. alleges that it had
paid Manila Compañia P12,197.27, the amount of the judg-
ment against it.
9. Lower court ordered Antonio Machuca to pay Tucson Inc.
ISSUES:
1. WoN Tuason already paid Manila Compañia de Seguros — NO.
2. WoN Tuason is entitled to reimbursement from Machuca — YES.
1st Issue: NOT PAID
1. Tuason In. has not in fact paid the amount of the judgment to
"Manila Compañia de Seguros. Hence, the alleged cause of ac-
tion does not exist.
a. It appears from the evidence that what was alleged to be a
payment made to Manila Compañia for the satisfaction of
the judgment is the execution by Albina Tuason of a docu-
ment in favor of Manila Compañia
b. In this document Albina Tuason declares that she assumes
and makes hers the obligation to pay the amount of said
judgment to Manila Compañia within 1 year and mortgages
a property described in the document as security for this
obligation.
 c. This obligation of Albina Tuason was accepted by the Ma-
nila Compañia
d. The action brought by the plaintiff is that which a surety,
who pays the debt of the debtor, is entitled to bring to re-
cover the amount thus paid (art. 1823, Civil Code).
2nd Issue: ENTITLED TO REIMBURSEMENT
2. The contention that Tuason is entitled to bring this action under
article 1843, which provides that the surety may, even before
making payment, bring action against the principal debtor is un-
tenable.
a. The present action, according to the terms of the complaint,
is clearly based on the fact of payment.
b. The surety may, even before paying the principal obligation,
institute proceeding against the debtor under the provisions
of article 1843; but then he must choose one among the rem-
edies granted by said article, and speci􏰄cally apply for it.
c. And if he does not do so, but brings an action for the recov-
ery of the amount of the principal obligation, which can be
maintained only on the fact of the payment of said obligation
by the surety, the action is groundless and must fail unless
the fact of the payment is proven.
d. At any rate this article does not provide for the reimburse-
ment of any amount, as is sought by the plaintiff.
3. HOWEVER, although Tuason has not yet as paid Manila Com-
pañia the amount of the judgment against it, and even consid-
ering 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.
a. Tuason became bound, by virtue of a fi􏰄nal judgment, to
pay the value of the note executed by it in favor of "Manila
Compañia de Seguros.”
b. According to the document executed solidarily by the Ma-
chuca and the Universal Trading, the defendant bound him-
self to pay the plaintiff:
i. as soon as the latter may have become bound & liable
ii. whether or not it shall have actually paid
c. It is indisputable that the plaintiff became bound and liable
by a 􏰄final judgment to pay Manila Compañia
4. The defendant also contends that the document executed by Al-
bina Tuason in favor of Manila Compañia 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 Compañia
de Seguros.
a. " 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 Compañia de Seguros" accepted. As
above stated, "Manila Compañia de Seguros" accepted this
document only as additional security for its credit and not
as a novation of the contract.
CONCLUSION
5. Tuason Inc. has the right to recover of the Machuca the sum of
P9,663, the value of the note executed by the Tuason in favor of
"Manila Compañia de Seguros" which Tuason is under obliga-
tion to pay by virtue of a 􏰄nal judgment.
6. However, Machuca need not pay the Tuason the expenses in-
curred in the litigation between Tuason and Manila Compañia
7. That litigation was originated by the Tuason having failed to
ful􏰄fill its obligation with Manila Compañia, and it cannot
charge the Machuca with the expenses which it was compelled
to make by reason of its own fault.
8. Tuason is entitled, however, to the expenses incurred by it in
this action brought against the Machuca.
9. The judgment appealed from is modi􏰄ed, and the Machuca is
sentenced to pay P9,663, with interest thereon at the rate of 10
per cent per annum from July 19, 1923, when the complaint was
􏰄led until full payment thereof, plus the sum of P1,653.65 for
attorney's fees, without special pronouncement as to cost.