- Petitioner
- Rodzssen Supply Co. Inc.
- Respondent
- Far East Bank & Trust Co.
- Citation
- G.R. No. 109087
- Court
- Supreme Court
- Division
- Third Division
- Ponente
- Panganiban, J.
- Decided
- May 9, 2001
Summary
Rodzssen Supply obtained a letter of credit from Far East Bank to purchase hydraulic loaders from Ekman Company. While three loaders were delivered and paid within the LC period, two loaders worth P76,000 were delivered after the LC expired on October 16, 1979. Despite the expiration, the bank paid Ekman on March 14, 1980, then demanded reimbursement from Rodzssen, which refused. The Supreme Court ruled that although the bank erred in paying under an expired LC, Rodzssen's voluntary acceptance and retention of the goods for almost four years created a quasi-contractual obligation under Article 2142 of the Civil Code. Both parties were mutually negligent, but equity demanded payment to prevent unjust enrichment. The Court modified the judgment to impose 6% interest (not 12%) and deleted attorney's fees, recognizing mutual fault between the parties.