Topic Extinguishment of Obligation - Compensation commission.

Requisites (Art. 1279-1280): Due distinguished from

demandable CA set aside the decision of the lower court and dismissed herein
Case No. 140 petitioner's counterclaim for lack of factual or legal basis. CA found that
Case Name Silahis Marketing Corp. v. Intermediate Appellate Court there was no agreement, verbal or otherwise, nor was there any
Full Case SILAHIS MARKETING CORPORATION, petitioner, vs. contractual obligation between De Leon and Silahis prohibiting any
Name INTERMEDIATE APPELLATE COURT and direct sales to Dole Philippines, Inc. by de Leon; nor was there anything
GREGORIO DE LEON, doing business under the name in the debit memo obligating de Leon to pay a commission to Silahis for
and style of "MARK INDUSTRIAL SALES", respondents. the sale of P111,000.00 worth of sprockets to Dole Philippines although
Ponente FERNAN, C.J in the past, the former did supply certain items to the latter for delivery
to Dole Philippines, Incorporated.
Doctrine Compensation takes place when two persons, in their
own right, are creditors and debtors to each other.
When all the requisites mentioned in Art. 1279 of the Civil
ISSUE
Code are present, compensation takes effect by operation
Is respondent liable to the petitioner for the commission or margin for
of law, even without the consent or knowledge of the
the direct sale which the former concluded and consummated with Dole
creditors and debtors. Article 1279 requires, among others,
Philippines, Incorporated without coursing the same through herein
that in order that legal compensation shall take place, "the
petitioner?
two debts be due" and "they be liquidated and
demandable." Compensation is not proper where the claim
RATIO DECIDENDI
of the person asserting the set-off against the other is not
The Court found nothing in the debit memo of petitioner to show that
clear nor liquidated; compensation cannot extend to
private respondent obligated himself to set-off or compensate petitioner's
unliquidated, disputed claim existing from breach of
outstanding accounts with the alleged unrealized commission from the
contract.
assailed sale of sprockets in the amount of P111,000.00 to Dole
Nature Petition for review on certiorari
Philippines, Inc.
RELEVANT FACTS It cannot be asserted that the debit memo was a contract binding
On various dates in October, November and December, 1975, Gregorio
between the parties considering that the same, as correctly found by the
de Leon doing business under the name and style of Mark Industrial appellate court, was not signed by private respondent nor was there any
Sales sold and delivered to Silahis Marketing Corporation various items
mention therein of any commitment by the latter to pay any commission
of merchandise covered by several invoices in the aggregate amount of to the former involving the sale of sprockets to Dole Philippines, Inc. in
P22,213.75 payable within 30 days from date of the covering invoices.
the amount of P111,000.00
Allegedly due to Silahis' failure to pay its account upon maturity despite
DISPOSITIVE
repeated demands, de Leon filed before the then CFI of Manila a WHEREFORE, in view of the foregoing, the questioned decision of
complaint for the collection of the said accounts
respondent appellate court is hereby AFFIRMED
The lower court confirmed the liability of Silahis for the claim of de Leon
NO SEPARATE OPINION
but at the same time ordered that it be partially offset by Silahis'
counterclaim as contained in the debit memo for unrealized profit and