CARANDANG V.

DE GUZMAN

FACTS:

Spouses Carandang (Arcadio and Maria Luisa) and the decedent Quirino de Guzman were stockholders and
corporate officers of Mabuhay Broadcasting System (MBS). The Carandangs have equities at 54 % while Quirino has
46%.

When the capital stock of MBS was increased on November 26, 1983, the Carandangs subscribed P345,000 from
it, P293,250 from the said amount was loaned by Quirino to the Carandangs. In the subsequent increase in MBS capital
stock on March 3, 1989, the Carandangs subscribed again to the increase in the amount of P93,750. But, P43,125 out of
the mentioned amount was again loaned by Quirino.

When Quirino sent a demand letter to the Carandangs for the payment of the loan (P336.375), the Carandangs
refused to pay. They contend that a pre-incorporation agreement was executed between Arcadio Carandang and Quirino,
whereby Quirino promised to pay for the stock subscriptions of the Arcadio without cost, in consideration for Arcadios
technical expertise, his newly purchased equipment, and his skill in repairing and upgrading radio/communication
equipment therefore, there is no indebtedness on the part of the Carandangs.

Quirino then filed a complaint seeking to recover the P336,375 total amount of the loan together with damages.
The RTC ruled in favor of Quirino and ordered the Carandangs to pay the loan plus interest, attorneys fees, and costs of
suit. The Carandangs appealed the trial courts decision to the CA, but the CA affirmed the same. The subsequent Motion
for Reconsideration filed by the Carandangs were also denied. Hence, this appeal to the SC.

ISSUE: Whether or not the spouses Carandang are liable to pay de Guzman

Held: Yes, the Carandangs claim that the de Guzmans failed to prove the alleged loan for which the
Carandangs were held liable.

The Carandangs are mistaken in assuming that payment by a third party is not equivalent to a loan.

If indeed a Mr. A decided to pay for a Mr. Bs obligation, the presumption is that Mr.B is indebted to Mr. A for such amount
that has been paid.

Articles 1236 and 1237 are clear that, even in cases where the debtor has no knowledge of payment by a third
person, and even in cases where the third person paid against the will of the debtor, such payment would produce a
debt in favor of the paying third person.

The only consequences for the failure to inform or get the consent of the debtor:

a. The third person can only recover only insofar as the payment has been beneficial to the debtor

b. The third person is not subrogated to the rights of the creditor, such as those arising from a mortgage,
guarantee, or penalty

However, this is merely a presumption. By virtue of the parties freedom to contract, the parties could stipulate
otherwise and thus, as suggested by the Carandangs, there is a possibility that such payment by Mr. A was purely out
of generosity or that there was a mutual agreement between them.

But such mutual agreement, being an exception to presumed course of events as laid down by Articles 1236 and
1237, must be adequately proven.

The Supreme Court ruled that, because of lack of evidence, there was no pre-incorporation agreement rendering de
Guzman liable for the spouses Carandangs stock subscription.

Therefore, the payment by spouses de Guzman of the stock subscriptions of the spouses Carandang are by way of
loan which the spouses Carandang are liable to pay.