G.R. No. L‑2777
December 10 1906

FACTS
1. Manuel Escudero pawned jewelry with the Monte de Piedad (Manila) on 6 Sept 1898 for ₱700.
2. He died on 26 Mar 1899 without redeeming the items. His will appointed Maria Casal as executrix.
3. After the statutory redemption period lapsed, the Monte sold the jewelry at public auction, applied the proceeds to the loan, interest and expenses, and credited the balance of ₱984.66 to Escudero’s account.
4. In Nov 1900 an unknown person, impersonating the deceased, claimed loss of the original pawn tickets. Acting under a new internal rule (effective 1 Sept 1899) that allowed issuance of duplicate tickets without newspaper publication, the Monte issued six duplicate tickets and paid the impersonator the full balance (₱474.05 + ₱510.61).
5. The executrix sued for recovery of the said amount, alleging the payment was unlawful.
6. The Monte contended it complied with its statutes and the Civil Code article 1873, which it claimed exempted it from liability once duplicate tickets were properly issued.

ISSUE
Whether the Monte de Piedad’s payment to the impersonator was valid, i.e., whether the new rule allowing issuance of duplicate pawn tickets without public notice was duly authorized and, consequently, whether the institution could be relieved of liability under article 1873 of the Civil Code.

RULING
The Supreme Court affirmed the trial court judgment for the plaintiff. It held that:

– The “new” rule adopted on 1 Sept 1899 was not shown to have been authorized or approved by the Consejo de Administración, as required by Article 14 of the Monte’s statutes.
– Because the Monte failed to follow the authorized procedure (which mandated public‑press notice), the issuance of duplicate tickets and the subsequent payment were ultra vires and cannot invoke the exemption of article 1873.
– Consequently, the Monte remained liable for the ₱984.66 improperly paid to the impostor, plus interest at 6 % from 19 Nov 1902.

Costs were awarded to the appellant.