Occena v. CA - Respondent Tropical Homes Inc.

filed complaint for modification of the terms and conditions of its subdivision contract with petitioners who were landowners of a 55k squaremeter land. They said that the increase of oil prices also increased prices for raw materials and that this wasnt the condition that the parties contemplated when contract was signed and that if contract continues, petitioners would get unjustly enriched (their contract guaranteed petitioners 40% of all cash receipts of lot sales). SC said that they cant just modify the contract. The Civil Code authorizes the release of an obligor, not a modification of contract. (art 1267) All they can do is release them from the contract. Naga Telephone Co. v CA - NATELCO provider of telephone lines, CASURECO provides electricity. They entered into contract where NATELCO uses electric posts in exchange of 10 free telephone connections. After 10 years Casureco said that they wanted to reform contract because subscribers increased, typhoon broke them etc. SC said that Art. 1267 applies because service has become difficult beyond contemplation of parties. Parties stipulate in the light of certain prevailing conditions, and once these conditions cease to exist the contract also ceases to exist. HOWEVER, consequences of releasing them from contract would lead to disruption of an essential service to public. Because of this, court ordered NATELCO to pay for use of posts and for Casureco to pay monthly dues of telephones. PNCC v. CA - PNCC leased a property from the Raymundos, with their contract saying period should start when they get an issuance from Ministry of Human Settlements. They obtained permit (not issuance) and started project. Respondents asked for payment payable upon the execution of contract. Petitioner said dapat as soon as they get issuance and also said they wanted to terminate the contract. It claimed, under Art 1226, that it faced circumstances that made it impossible to fulfill their contract, because of financial and technical difficulties. The SC said that Art1226 only contemplates obligations to do, not obligations to give. Art 1267 is also inapplicable, because PNCC entered into the contract at a time when the political climate of the Philippines was visibly deteriorating. Finally, the mere fact that it was unable to use the property for what it intended was not enough reason to terminate the contract, because motive and purpose do not generally affect a contracts validity Yam v. CA - Petitioners loaned from respondent twice (one for 500k and one for 300k) with 1% service charge (2nd loan was made 1981). First loan was paid. For the 2nd loan, they only paid 410k instead of 727k due so they were demanded of. The petitioners claimed to have entered into an agreement with the corporations president that the penalty and service charges on their loan would be waived if they paid off the total of the interest and principal. (Penalty was up to 250k so 410k lang) SC said that Art. 1270, par 2 provides that express condonation must comply with

the forms of donation. NCC 748, par. 3, provides that the donation and acceptance of a movable, the value of which exceeds P5000, must be made in writing, or else the same shall be void. In this case, the alleged agreement to condone 266k of service charge and penalty was not reduced in writing. Other contention that the check said in full payment of IGLF loan is without merit because it just shows their intention to pay in full. (wouldve been different if it were a certificate of full payment) Gan Tion v. CA - Ong was a tenant in Gan Tions property. Gan filed an ejectment suit against Ong for not paying rent for two months. Ong won this suit so Gan owed him 500 bucks. Afterwards, Gan gave a notice that he was increasing rent rates and asked for arrears worth 4320 pesos. Gan filed for legal compensation. CA ruled for Ong, saying that the 500 pesos cannot be used to pay for the arrears because because its a trust fund for the benefit of the lawyer, which the client must turn over to his counsel. SC disagreed. The award for attorneys fees is made in favor of the litigant, not of his counsel. It is the litigant, not the counsel, who is the judgment creditor and who may enforce the judgment by execution. Such credit may therefore properly be the subject of legal compensation. It would be unjust to compel petitioner to pay his debt of P500 when admittedly his creditor is indebted to him for more than P4, 000. BPI and Romero v. Reyes -Reyes opened a joint account with his grandmother. He regularly deposited US Treasury Warrants in this account. The US Treasury continued sending warrants even after the death of the grandmother, which the latter only received three years later. Reyes closed this account and transferred the funds to another joint account with his wife. The US Treasury demanded a refund and he verbally authorized BPI to deduct this from his account. Because of this, a check he issued was dishonored. Thus, he sued BPI. The SC said that compensation is applicable. In this case, all this requisites are present. BPI is a debtor of Reyes, a depositor. BPI also a creditor of Reyes because of the dishonored USTW warrant check which was illegally transferred to Reyess account. The debts are in sum money, are due, liquidated and demandable. Moreover, the presence of private respondent's wife does not negate the element of mutuality of parties (requisite no.1 in Art 1279). She never asserted her right to the debited USTW and she is not a party to the case. The rule as to mutuality is strictly applied at law. But not in equity, where to allow the same would defeat a clear right or permit irremediable injustice. Doctrine: Legal compensation operates even against the will of the interested parties and even without the consent of them. Since this compensation takes place ipso jure, its effects arise on the very day on which all its requisites concur. When used as a defense, it retroacts to the date when its requisites are fulfilled. PNB v. Sapphire Shipping - PNB doubly credited Sapphire Shippings account which amounted to 87k pesos. To recover this amount, they intercepted amounts of $2600 and 34k pesos

from remittances of SSs plaintiffs abroad. The 2nd remittance was made with knowledge of SS, but SS made a written demand for the 1st remittance. This remittance was supposed to be for National Commercial Bank of Jeddah SC said compensation made by PNB is not legally justified.
With respect to the amount of $2,627.11, requisites numbers 2 to 5 are present. However, the parties are not both principally bound with respect to the said amount; neither are they at the same time principal creditor of the other. They are debtor and creditor only with respect to the double payments, but are trustee-beneficiary as to the fund transfer of $2,627.11. PNB is the local correspondent of NCB of Jeddah. It is in effect acting as an agent of NCB. All that PNB could do under the remittance arrangement is to transmit the telegraphic money transfer to the Citibank so that the amount can be promptly credited to the account of Sapphire Shipping with the said bank. Only Sapphire Shipping is principally bound as a debtor of PNB to the extent of the double credits. On the other hand, the PNB was an implied trustee, who was obliged to deliver to Citibank for the benefit of Sapphire Shipping the sum of $2.627.11. PNBs actuation in intercepting the amount of $2,627.11 supposed to be remitted to another bank is not only improper; it will also erode the trust and confidence of the international banking community in the banking system of the country. As regards the intercepted amount of P34, 340.58, all requirements of Art. 1279 are present, thus, the said amount may properly be the subject of compensation or set-off.

CKH Industrial Devt v. CA - CKH was a corporation owned by Cheng Kim Heng. CKH owned two lands. He died so ownership of CKH transferred to his 2nd wife Rubi Saw. Rubi Saw sold these lands to Century-Well, which was owned by children of 1st wife for a purchase price of 800k. Vendees failed to pay so a case for rescission was filed. Century-well allege that payment was by legal compensation thru promissory notes by the late Cheng to his sons. SC said that there was no compensation because CKH and Century-Well are not creditors and debtors in their own name. The promissory notes do not indicate the late Cheng, as then CKH president, acknowledging any indebtedness to Century-Well. As worded, the promissory notes reveal CKHs indebtedness to his sons Choi and Kei. Choi and Kei are not parties to the DoAS. Thus, their interest in the promissory notes cannot be off-set against the obligations between CKH and Century-Well arising out of the DoAS. Deed should be rescinded. Mirasol v. CA - The Mirasols are sugar planters. President Marcos passed a law (PD 579) establishing a body that buys export sugars from local planters, with PNB in charge of financing. The Mirasols failed to settle their loans with PNB. They banked on their hopes that the proceeds of their sugar sales would be enough to cover their loans, they asked for an accounting of such proceeds but this was denied by the bank. They argued that compensation would offset their outstanding loans. The SC held that there cannot be compensation because the proceeds were still unliquidated.

Doctrine: Compensation cannot take place where one claim, as in the instant case, is still the subject of litigation, as the same cannot be deemed liquidated (4th requirement of Art 1279). Associated Bank v. Vicente Henry Tan - Respondent Tan deposited a post-dated check with Petitioner Bank amounting to 101k. He was advised check was cleared so he withdrew 240k. He deposited 50k more which made his balance 107k. He issued 9 checks but they all bounced due to insufficiency of funds. Tan filed a case against Bank cos of this. Issue is WON Bank, as a collecting bank, can debit account of client for a check deposite which was dishonored by drawee bank. SC said collecting bank cannot do that. A bank generally has a right of set-off over the deposits therein for the payment of any withdrawal on the part of a depositor. The relationship between banks and depositors is that creditor-debtor. Thus, legal compensation under Art. 1278 may take place when the requisites in Art. 1278 are present. But the right of Associated Bank to debit Tans account is of no moment. What is being questioned is the manner in which it exercised such right. They shouldnt have authorized Tan to withdraw 240k. Villanueva v. Tantuico jr. - Villanueva was part of the Bureau of Records Management and he was assigned Coordinator for two regional seminars. For these seminars, he disbursed 41k pesos. However, it was later found out that participants already collected the fees. He was charged with malversation of funds amounting to 32k. Auditor said that this could be off-set by his salary and other monetary benefits given to him. SC said this indeed could be done. Although Sec 624 of RAC authorizes the setoff of a persons indebtedness to the Government against any money due him or his estate, the indebtedness must be admitted by the alleged debtor or pronounced by final judgment of a competent court. The Court is satisfied that his disbursements were within the letter and contemplation of the Seminar Operation Plans in question. No showing that Villanueva had knowledge, at the time of making the disputed disbursements, that some of the seminar participants had already collected said fees. The liability for the duplicity in disbursements should ne exacted from the participants and not from Villanueva. Perez v. CA Something with loans I dont get. SC said no compensation because not due and demandable on that date yet. (oct. 4 and 11)

Silahis Marketing Corp v. IAC and de Leon - de Leon delivered various goods to Silahis worth 22k. Silahis failed to pay so de Leon sued. Silahis said that De Leon also owed them 22k as commission and unrealized profit for the sale of sprockets to Dole in the amount of 111k. (de Leon didnt course sprockets through silahis which is against their usual practice). SC said that there is no compensation because there is no proof that De Leon not allowed to sell directly to Dole. No agreement prohibiting him and nothing in debit memo obligates him to pay commission. Not clear and liquidated. Compensation cannot extend to unliquidated, disputed claim existing from breach of contract