GR L 12005; (March, 1918) (Digest)
G.R. No. and Date: G.R. No. L-12005, March 21, 1918
Case Title: THE SUN LIFE INSURANCE COMPANY OF CANADA, plaintiff-appellee, vs. RUEDA HERMANOS & CO. and JOSE DELGADO, defendants. RUEDA HERMANOS & CO., appellant.
FACTS:
Sun Life Insurance Company of Canada filed an action of interpleader, depositing with the court the sum of P4,234.75, which was the amount due on a matured life insurance policy (No. 90854) issued on the life of defendant Jose Delgado. Both defendants claimed the proceeds. Delgado had assigned the policy to Rueda Hermanos & Co. as security for the payment of the balance of a running account between them. The business relationship involved Delgado sending timber to Rueda for sale, and Rueda providing Delgado with money and merchandise. Rueda also sold a piece of real property for Delgado for P3,000, crediting this amount to his account. After the interpleader was filed, Rueda rendered a final account showing a balance of P4,211.93 due from Delgado. Delgado objected to several items in this account, including interest charges and the P3,000 credit from the property sale. He also counterclaimed for damages, alleging that Rueda’s failure to remit the P3,000 to him directly caused business losses.
ISSUE:
1. What is the correct balance of the running account between Jose Delgado and Rueda Hermanos & Co.?
3. Is Jose Delgado entitled to damages for Rueda’s alleged failure to deliver the P3,000?
RULING:
2. On the P3,000 Credit: The Court held that Rueda had the right to credit the P3,000 proceeds from the property sale to Delgado’s account. At the time the money was received (January and May 1912), the insurance policy had not yet been effectively assigned as security (this occurred around March 1913), and Delgado was indebted to Rueda for an amount exceeding P3,000. No demand for its remittance was made at the time.
3. On the Claim for Damages: Delgado’s claim for consequential damages (lost business profits) was denied. The Court ruled such damages were too remote, speculative, and not recoverable. Even if Rueda had wrongfully withheld the money, the only recoverable damages under the Civil Code would have been legal interest.
Disposition: The judgment was modified. Out of the P4,234.75 deposited, Rueda Hermanos & Co. is entitled to P3,369.86, and Jose Delgado is entitled to the balance of P864.89. No costs.
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