Pioneer Insurance & Surety Corporation vs. Court of Appeals 180 SCRA 156, December 15, 1989
Pioneer Insurance & Surety Corporation vs. Court of Appeals 180 SCRA 156, December 15, 1989
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THIRD DIVISION.
157
Code). ‘When all the requisites mentioned in Art. 1279 of the Civil
Code are present, compensation takes effect by operation of law,
even without the consent or knowledge of the debtors.’ (Art. 1290,
Civil Code). Art. 1279 of the Civil Code requires among others,
that in order that legal compensation shall take place, ‘the two
debts be due’ and ‘they be liquidated and demandable.’
Compensation is not proper where the claim of the person
asserting the set-off against the other is not clear nor liquidated;
compensation cannot extend to unliquidated, disputed claim
arising from breach of contract. (Compania General de Tabacos v.
French and Unson, 39 Phil. 34; Lorenzo & Martinez v. Herrero, 17
Phil. 29).
Same; Same; Legal compensation can take place between
petitioner and the private respondents; Reasons; Case at bar.—
Clearly, the petitioner can demand reimbursement from the
respondents even before it has actually paid its obligations to the
Bureau of Customs. It can, in principle, be held liable under the
warehouse bonds even before actual payment to the Bureau of
Customs. The liability has been fixed. What remains is simply its
liquidation. The respondents who defaulted on the agreement to
make staggered payments thereby causing the petitioner’s
liability to the Bureau of Customs cannot refuse the set-off.
Consequently, legal compensation can take place between the
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petitioner and the private respondents, that is, the petitioner can
partially set-off the insurance proceeds in the amount of
P1,144,744.49 against its liability under the warehousing bonds
which has been computed in the amount of P9,031,000.00 as of
1983.
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and demandable.
In the recent case of Mercantile Insurance Co., Inc. v.
Felipe Ysmael, Jr., & Co., Inc. (G.R. No. L-43962, January
13, 1989), we ruled:
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——o0o——
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