FACTS:

In the evening of November 7, 1979, a tricycle driven by Bienvenido Nacario figured in an accident with a bus driven by petitioner Edgar Bitancor and owned by petitioner Jose Baritua. As a result, Bienvenido and his passenger died, and the tricycle was damaged. On March 27, 1980, a settlement was negotiated between the petitioners, the bus' insurer, and Alicia Baracena Vda. de Nacario, the widow of the deceased. Alicia received P18,500.00 in consideration of the settlement and executed a release of claim and an affidavit of desistance in favor of the petitioners. On September 2, 1981, the parents of Bienvenido filed a complaint for damages against the petitioners, alleging that the petitioners promised to indemnify them for the death of their son and the damage to the tricycle during the vigil for their son's wake. The court a quo dismissed the complaint, but the Court of Appeals reversed the decision, ruling that the release executed by Alicia did not discharge the petitioners' liability and that the petitioners failed to establish that they were the ones who bought the tricycle. The Court of Appeals ordered the petitioners to pay the private respondents the aggregate amount of P20,505.00. The petitioners appealed to the Supreme Court, arguing that their obligation was extinguished by payment and that Alicia, as the surviving spouse and the one who received the payment, is entitled to it. The Supreme Court held that the payment made by the petitioners to Alicia, as the widow and natural guardian of their child, who is the sole compulsory heir of Bienvenido, extinguished their obligation. The Supreme Court also ruled that the private respondents, as alleged creditors, cannot seek compensation from the petitioners as the loaned amount and funeral expenses are money claims against the estate of their deceased son. The Supreme Court reversed the decision of the Court of Appeals and reinstated the decision of the Regional Trial Court.

ISSUES:

1. Whether or not the petitioners are still liable to pay the private respondents despite the extrajudicial settlement between the petitioners and the victim's compulsory heirs.

RULING:

1. The petition is meritorious. The Court held that the petitioners have already fulfilled their obligation by making payment to the surviving spouse and legitimate child of the deceased. The private respondents, who are the parents of the deceased, are not the successors-in-interest or compulsory heirs of the deceased. Therefore, they cannot claim payment from the petitioners. The Court emphasized that the private respondents' claim for loaned purchase price and funeral expenses are money claims against the estate of their deceased son, and not the liabilities of the petitioners.

PRINCIPLES:

• Obligations are extinguished by payment or performance.

• Payment should be made to the person in whose favor the obligation has been constituted, or his successor in interest, or any person authorized to receive it.

• The surviving spouse and legitimate child of the deceased are considered successors in interest and authorized persons to receive payment.

• Parents of the deceased succeed only when the deceased dies without a legitimate descendant.

• Mere estrangement is not a legal ground for the disqualification of a surviving spouse as an heir of the deceased spouse.