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Question
Marina mistakenly transfers PHP 860,000 to Diego, believing Diego is owed a settled business amount. In truth, no debt existed. Diego accepts the money in good faith and uses PHP 520,000 to pay his suppliers and PHP 340,000 to renovate his shop. After discovery, Marina demands the return of PHP 860,000. Diego argues that his good faith and the funds used to discharge his obligations justify keeping part of the money and that he should not be liable for the full amount. a)Identify the primary doctrine governing this scenario and state the controlling rule. b)Does Diego's good faith affect his obligation to return the money? Explain with respect to restitution and possible damages. c)Apply the rule to the facts and state the result for Marina and Diego, including whether any interest or fruits are involved and why.