CASE NO.

67
ARANAS vs. TUTAAN, 127 SCRA 828, February 29, 1984
Syllabi Class: Judgment l Corporation Law l Contracts l Obligations

FACTS: CFI-Rizal declared petitioner-plaintiff spouses Araas as owner of 400 shares

of stocks in Universal Textile Mills, Inc. UTEX, which the Corp-defendant issued to co-
defendant Gene Manuel and BR Castaneda, including stock dividends which accrued
to said shares. This court a quo rendered decision in August 1971. UTEX made a
motion for clarification and such was answered in 1972 clearly directing UTEX to pay
spouses petitioners as rightful owners of all accruing dividends from their stocks from
after the judgment by the court, and for the transfer of the disputed shares of stocks
to the names of petitioner-spouses. In lieu of the appeal filed by Manuel and
Castaneda, UTEX failed to transfer the names of the shares and pay the dividends to
petitioners. Thus, spouses-petitioner asked for a writ of execution from court a quo for
payment of cash dividends from1972-1979 with interest and to effect the transfer of
the shares to them. Lower court granted such order but absolved UTEX of payment of
cash dividends which they have already paid to Manuel and Castaneda on the ground
of equity.

ISSUE: WON UTEX should be made to pay spouses Araas the cash dividends from
1972-1979 with interests, after it has already paid the same to Manuel and
Castaeda, despite knowledge of the courts decision otherwise.

HELD: The burden of recovering the supposed payments of the cash dividends made
by UTEX to the wrong parties Castaneda and Manuel squarely falls upon itself by its
own action and cannot be passed by it to petitioners as innocent parties.