Soriano V People Soriano V People

G.R. No. 181692 | August 14, 2013 Extinguishment of Obligations: Compensation (Arts.
1279 & 1290)

Soriano v People Soriano v People
I. Recit-ready Summary Judicial Proceedings” in favor of Soriano as lender-mortgagee for

Evelyn Alagao (Evelyn) as borrower-mortgagor, daughter of the loan amount of P40,000.
Consolacion Alagao (Alagao) contracted a loan secured by real estate 2. The agreement was that the loan was to be paid two years from the
mortgage in favor of Adelaida Soriano (Soriano) as lender-mortgagee for execution of the contract, plus Evelyn will give Soriano ¼ of every
the loan amount of P40,000 to be paid in 2 years from execution and to give harvest from her cornland until the loan is fully paid.
¼ of every harvest of corn grain. Algao claimed that there was only one 3. Based on Alagao, only the first harvest made in September 1994,
harvest that ocurred but Soriano claimed that there were already four from but Soriano contended that there were already four harvests from
Evelyn’s obtainment of the loan. Algao admitted that she received P40,000
the time the loan was obtained.
and P51,730 from the cash advances and fertilizers. When Algao and her
companions delivered 398 sacks of corn grain, Soriano made her sign a cash 4. Alagao admitted that she did not only receive P40,000 but also
voucher amounting to P85,607 but she claimed she only received P3,000. P51,730 from the fertilizers and cash advances.
Moreover, Algao claimed that only 64 of the sacks were for the payment of 5. Alagao and her companions delivered 398 sacks of corn grains to
the P40,000 while the balance of P85,607 in cash that she was supposed to Soriano to which the latter prepared a voucher indicating that the
receive as payment for the corn grains was so that she can redeem her former received P85,607 as full payment, and although the former
daughter’s land title. Alagao still demanded for the payment but Soriano only received P3,000, she still signed the voucher.
moved to an unknown place with the corn grains already disposed. 6. Alagao contended that 64 of 398 sacks will serve as the partial
Misamis Oriental RTC found Soriano guilty of estafa, sentenced her to payment of her P40,000 loan while the balance will be from the
suffer imprisonment and ordered her to pay P85,607 for the 398 sacks. CA P85,607 cash she was supposed to receive as payment for the corn
set aside the imprisonment as deceit was absent when Alagao admitted that grains so she can redeem Evelyn’s land title.
she delivered the sacks to pay her obligation and get the land title of her 7. Perplexed, Alagao demanded payment from Soriano but the latter
daughter. CA said that Soriano only had civil liability and ordered the latter transferred to an unknown location and had already disposed of the
to pay P74,807 for the remaining cash value of the 398 sacks1.
398 sacks of corn grains.
Soriano contended that her indebtedness only offset P40,000 instead of
P51,730 (amount stipulated in pre-trial) 2, which she claims should be the 8. Misamis Oriental RTC found Soriano guilty beyond reasonable
latter. The issue is whether or not the legal compensation of the CA is doubt for the crime of estafa, sentenced her to suffer imprisonment
proper? The SC agreed there is legal compensation as it complied with the and ordered Soriano to pay P85, 607 for the 398 sacks of corn
requisites of Articles 1279 and 1290 of the Civil Code, however, based on grains.
its computation3, Soriano’s net civil liability is only P30,877, and with 9. CA set aside Soriano’s conviction as the prosecution failed to
respect to the ¼ share in harvests due petitioner, it is not capable of establish fraudulent means to induce Alagao to deliver the sacks
determination as it cannot be considered legal compensation nor it was and emphasized that Alagao admitted that she delivered the sacks
liquidated. to pay her obligation when Soriano demanded, and get the land title
of her daughter. With absence of deceit, Soriano’s liability is only
II. Facts of the Case (Material Facts) civil and was ordered to pay P74,807 (see Additional Notes) 1.
1. Evelyn as borrower-mortgagor, daughter of private complainant 10. Soriano contended that her indebtedness only offset P40,000
Alagao, executed a “Contract of Loan Secured by Real Estate instead of P51,730, (amount stipulated in pre-trial; see Additional
Mortgage with Special Power to Sell Mortgage Property without Notes) 2 which should be the latter that must be offset.
Obligations and Contracts (2020) PETITIONER: Adelaida Soriano 1

DIGEST AUTHOR: Joses RESPONDENT: People of the Philippines, Evelyn, & Consolacion Alagao
G.R. No. 181692 | August 14, 2013 Extinguishment of Obligations: Compensation (Arts. 1279 & 1290)
11. “People” contends that Alagao’s loan is only P40,000 not P51,713, Overall Ruling
that she only owns 154 sacks of the 398, and the amount of the 64 The SC determined if compensation was proper by applying Article
sacks should be P13,765.95. 1279 of the Civil Code:
First, petitioner and Alagao are debtors and creditors of each other. Soriano
III. Issue/s owes P85,607 for the value of the corn grains delivered to her by Alagao
1. W/N the legal compensation is proper? PARTLY YES. while the latter owes Soriano P51,730 by virtue of a loan. Second, both
debts consist in a sum of money. Third, both debts are due. Upon delivery of
IV. Holding/s the 398 sacks to Soriano, she was under the obligation to pay for the value
thereof as buyer. As to Alagao’s debt, though it was not yet due in when she
Issue #1 delivered the 398 sacks of corn grains to petitioner, it eventually became
PARTLY YES, compensation is a mode of extinguishing to the concurrent due at the time of trial of the instant case. Fourth, both debts are liquidated
amount, the debts of persons who in their own right are creditors and debtors and demandable as the amount is known or is determinable by inspection of
of each other. However, the ¼ share in the harvest due to the petitioner is still in the terms and conditions of relevant documents. There is no dispute that the
dispute as it was not yet liquidated. value of the 398 sacks of corn grains is P85,607. And lastly, neither of the
Petitioner’s Arguments Court’s Rebuttals debts are subject of a controversy commenced by a third person. As to
• Based on Soriano’s • SC agreed that Soriano’s Soriano’s P85,607 debt representing the 398 sacks of corn grains, the
computation2, since Alagao is indebtedness is P30,877 alleged other owners have not commenced any action to protect their claim
indebted in the amount of • With respect to the ¼ share in over it.
P43,930, deducting her harvests due petitioner, it is not Since all requisites of compensation in Article 1279 is present, the SC
indebtedness of P74,807 to capable of determination as it applied Article 1290 of the Civil Code and based on its computation (see
Alagao, she should only be cannot be considered legal Additional Notes)3, and found that Soriano’s civil liability is P30,887.
indebted in the amount of compensation nor was it With respect to the ¼ share in harvests due petitioner, it is not capable
P30,877 liquidated. of determination as it cannot be considered legal compensation nor was it
• CA failed to consider Alagao’s liquidated.
obligation to deliver to her ¼ of
every harvest, and her ¼ share in
the harvest amounted to 57,200
for four harvests and must set V. Law or Doctrine Applied
off. Thus, it is Alagao who is
indebted to Soriano the amount ARTICLE 1279 OF THE CIVIL CODE
of P26,323 (57,200-30,877) Article 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;

G.R. No. 181692 | August 14, 2013 Extinguishment of Obligations: Compensation (Arts. 1279 & 1290)
(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.
ARTICLE 1290 OF THE CIVIL CODE

Article 1290. When all the requisites mentioned in article 1279 are present, • 3
SC’S COMPUTATION OF SORIANO’S CIVIL LIABILITY:
compensation takes effect by operation of law, and extinguishes both debts to the
concurrent amount, even though the creditors and debtors are not aware of the
compensation.
VI. Disposition
WHEREFORE, the May 19, 2005 Decision and January 11, 2008
Resolution of the Court of Appeals in CA-G.R. CR No. 23108 are hereby
AFFIRMED with MODIFICATION. Petitioner Adelaida Soriano is hereby
ordered to pay P30,877 as payment for the remaining balance of the cash VII. Random Facts
value of the 398 sacks of corn grains, plus legal interest at the rate of 6% per
• Ponente: Villarama, Jr., J.
annum computed from finality of this Decision until its full satisfaction.
No pronouncement as to costs.
SO ORDERED.
VII. Additional Notes

• 1
CA COMPUTATION OF SORIANO’S CIVIL LIABILITY
85,607 (total value of 398 sacks delivered)
– 3,000 (petitioner had paid Alagao)
– 7,800 (value of 64 sacks intended for partial payment of
P40,000 loan)
________________
= P74,807 (balance)
• 2
SORIANO CONTENDS THAT THE COMPENSATION SHOULD
BE AS FOLLOWS:


Soriano V People Soriano V People

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G.R. No. 181692 | August 14, 2013 Extinguishment of Obligations: Compensation (Arts.

1279 & 1290)

I. Recit-ready Summary Judicial Proceedings” in favor of Soriano as lender-mortgagee for

Obligations and Contracts (2020) PETITIONER: Adelaida Soriano 1

Obligations and Contracts (2020) PETITIONER: Adelaida Soriano 2

(3) That the two debts be due;

(4) That they be liquidated and demandable;

ARTICLE 1290 OF THE CIVIL CODE

VII. Additional Notes

Obligations and Contracts (2020) PETITIONER: Adelaida Soriano 3

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