G.R. No. 82233 March 22, 1990
JOSE BARITUA and EDGAR BITANCOR, petitioners, vs. HONORABLE COURT OF APPEALS, NICOLAS NACARIO and VICTORIA RONDA NACARIO, respondents.

FACTS

On November 7, 1979, a tricycle driven by Bienvenido Nacario collided with a bus owned by Jose Baritua and driven by Edgar Bitancor, resulting in the death of Bienvenido and damage to the tricycle. No criminal case was filed. Subsequently, the petitioners and their bus insurer negotiated an extrajudicial settlement with Alicia Baracena Vda. de Nacario, the widow of Bienvenido. On March 27, 1980, Alicia received P18,500.00 and executed a “Release of Claim,” discharging the petitioners and the insurer from all actions arising from the accident. She also executed an affidavit of desistance.
On September 2, 1981, the parents of the deceased, Nicolas and Victoria Nacario (private respondents), filed a complaint for damages against the petitioners. They alleged that the petitioners had promised to indemnify them for their son’s death, funeral expenses, and the damaged tricycle, which they claimed to have financed. The Regional Trial Court dismissed the complaint, ruling that payment to the widow, as a compulsory heir, extinguished the obligation. The Court of Appeals reversed this decision, holding the petitioners liable to the parents for the tricycle damage and funeral expenses, totaling P20,505.00, on the grounds that the release by the widow did not bind the parents who had suffered their own damages.

ISSUE

Whether the Court of Appeals erred in holding the petitioners liable to the deceased’s parents despite a prior extrajudicial settlement and release of claim executed by the widow.

RULING

The Supreme Court granted the petition, reversing the Court of Appeals and reinstating the trial court’s dismissal. The legal logic centers on the extinction of obligations by payment to the proper party under the Civil Code. Article 1231 provides that obligations are extinguished by payment or performance. Article 1240 states payment must be made to the person in whose favor the obligation is constituted, their successor-in-interest, or any authorized person.
The Court held that Alicia, the surviving spouse, and her child with the deceased were the rightful successors-in-interest and compulsory heirs under Articles 887 and 985 of the Civil Code. As Bienvenido died with a legitimate descendant (his child), his parents were not compulsory heirs and thus not successors-in-interest entitled to receive payment for the liability arising from his death. The petitioners correctly settled their obligation with the widow, who was legally authorized to receive it. The release she executed was valid and extinguished the petitioners’ liability.
The claims of the parents—for the tricycle loan and funeral expenses—were merely money claims against the estate of their deceased son, not direct liabilities of the petitioners. The estrangement of the widow from the deceased was irrelevant, as it did not disqualify her as a compulsory heir. Therefore, the payment to the widow constituted a complete and legal discharge of the obligation.