Tuesday, August 26, 2014

Fermin Ong vs Court of Appeals G.R. No. 75819.September 8, 1989.



Concept: Art. 1279

In order that compensation may be proper,
it is necessary:
(1) That each one of the obligors be bound principally,
and that he be at the same time a principal creditor
of the other;
(2) That both debts consist in a sum of money, or if the
things due are consumable, they be of the same kind,
and also of the same quality if the latter has been
stated;
(3) That the two debts be due;
(4) That they be liquidated and demandable;
(5) That over neither of them there be any retention
or controversy, commenced by third persons and
communicated in due time to the debtor.

Art 1283
If one of the parties to a suit over an obligation
has a claim for damages against the other, the former may set
it off by proving his right to said damages and the amount
thereof.

Facts:
·         Fermin borrowed money to Mariano (his cousin) the amount of P160,000 and secured its payment with three post-dated checks. The check dated in Sept. 6, 1978 for P50,000; The check dated Oct. 8, 1978 for P10,000 and the check dated on Oct. 15, 1978 for P100,000. All were drawn against Fermin’s account with Consolidated Band and Trust Corporation.
·         On January 23, 1979 Fermin issued a fourth check amounting P40,000 in partial settlement of the loan. It was drawn against Fermin’s account in China Banking Corporation.
·         Fermin stored in Mariano’s warehouse a quantity of zipper valuing P181,000. Fermin claims that Mariano is denying access to the zippers because of the non-payment of the loan. Fermin avers that he had requested Mariano not to deposit or encash the post-dated checks on maturity and admits that he had not made good their amount when they were dishonored.
·         Mariano sued Fermin. Fermin denied the liability and contested that the debt was reduced to P120,000 because of the partial payment and that the remaining balance of P120,000 is offset by the P200,000 due from Mariano.
·         Mariano claimed that the payment of P40,000 is from a different obligation. He then abandoned this defense. He then claimed on that the original debt was P200,000 and it was then reduced by the payment of the P40,000, thus leaving a balance of P160,000; on which is the face value of the three post dated checks that he could not encash.
·         Fermin was not consistent either, for he abandoned his original allegation that Mariano owed him P200,000.00 for the rights to the market stalls when the latter showed that the consideration was only P25,000.00. Fermin was thereafter to invoke another set-off, to wit, his outstanding loan against the cost of the zippers, which he said Mariano had unjustly retained.
·         Because of the inconsistencies of the parties which resulted the non-agreement of the trial court and respondent court, Rule 45 of the Rules of Court was applied
·         The Supreme court finds that the findings of the respondent court more conformable because it is more plausible with the evidence.

Issue: W/ON the the balance of Fermin’s debt is deemed set off by the price of the zippers in the possession of Mariano

W/ON Art. 1283 is applicable

Held: No. The instant case does not certainly satisfy Article 1279 because (1) appellant is not a debtor of appellee, it is only the latter who is indebted to appellant; (2) the debts, even admitting that the delivery of the zippers to plaintiff is a debt, do not both consist in a sum of money nor are they of the same quality and kind.

No. Fermin has not proved the right to any damage as a result of the claimed retention of the zippers by Mariano. There was also no proof of the amount of such damages as he could not even say how many of the zippers had been earlier withdrawn by him.

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