Barons Marketing Corp vs Court of Appeals and Phelp Dodge Phils Inc [G. R. No. 126486. February 9, 1998] 286 SCRA 96 Case Digest

Concept:

Article 1248. Unless there is an express stipulation to that

effect, the creditor cannot be compelled partially to receive the

prestation in which the obligation consists. Neither may the

debtor be required to make partial payments.

However, when the debt is in part liquidated and in

part unliquidated, the creditor may demand and the debtor

may effect the payment of the former without waiting for the

liquidation of the latter.

Facts:

·         August 31, 1973. Phelps Dodge appointed Barons Marketing as one of its dealers of electrical wires and cables effective Sept. 1, 1973. Defendant was given 60 days credit for its purchases of Phelps Dodge’s electrical products

·         Barons Marketing purchased, on credit, from Phelps Dodge’s electrical wires and cable in the total amount of P4,102,483.30. This was then sold to MERALCO, Baron Mktg being the accredited supplier of the electrical requirements of MERALCO.

·         Under the sales invoices issued by Phelps Dodge to Barons Mktg for the subject purchases, it is stipulated that interest at 12% on the amount of atty’s fees and collection. Baron’s Mktg paid P300,000 out of its total purchases leaving an unpaid account of P3,802,478.20. Phelps Dodge wrote Barons Mktg demanding payment of its outstanding obligations due Phelps Dodge. Baron Mktg responded by requesting if it could pay its outstanding account in monthly installments of P500,000 plus 1%interest per month until full payment, this request was rejected and Phelps Dodge demanded full payment

·         Phelps Dodge then filed a complaint before the Pasig Trial Court for the recovery of P3,802,478.20 and it also prayed to be awarded with attorney’s fee  at the rate of 25% of the amount demanded, exemplary damages in the amount of P100,000, the expenses of litigation and the costs of suit.

·         The court ruled in favor of Phelps Dodge with the exemplary damages of P10,000 and recovery of P3,108,000

·         Both parties appealed. Phelps Dodge claimed that court should have awarded the sum of P3,802,478.20. It also said that the amount awarded was a result of a typographical error.

·         Barons Mktg claimed that Phelps Dodge’s claim for damages is a result of “creditor’s abuse” and it also claimed that Phelps Dodge failed to prove its cause of action against it.

·         CoA ruled in favor of Phelps Dodge with the correct amount but only with the 5% for the Atty’s fee. No costs.

·         Barons Mktg then alleged that the Coa erred its decision

Issue: W/ON private respondent is guilty of abuse of right

Held: No. a creditor cannot be considered in delay if he refuses to accept partial performance because, unless otherwise provided by law or stipulated by the parties, a creditor cannot be compelled to accept

partial performance; however, if good faith necessitates acceptance or if the creditor abuses his right in not accepting, the creditor will incur in delay if he does not accept such partial performance.