GR 74027; (December, 1989) (Digest)
G.R. No. L-74027, December 7, 1989
SILAHIS MARKETING CORPORATION, petitioner, vs. INTERMEDIATE APPELLATE COURT and GREGORIO DE LEON, doing business under the name and style of “MARK INDUSTRIAL SALES”, respondents.
FACTS
Private respondent Gregorio de Leon filed a complaint for collection of sum of money against petitioner Silahis Marketing Corporation for the unpaid purchase price of merchandise amounting to P22,213.75. Silahis admitted the debt but interposed a counterclaim, seeking to offset the amount with an alleged unrealized commission of P22,200.00. This commission claim was based on a debit memo issued by Silahis, asserting that de Leon made a direct sale of sprockets worth P111,000.00 to Dole Philippines, Inc., bypassing Silahis and thereby depriving it of a 20% commission under an alleged prior arrangement.
The trial court ruled in favor of de Leon for the principal amount but allowed the offset, reducing the net payable to a minimal sum. It found that a prior arrangement existed wherein Silahis was to service the Dole account, entitling it to the commission from the direct sale. De Leon appealed this offset to the Intermediate Appellate Court (IAC).
ISSUE
Whether the petitioner’s counterclaim for an alleged unrealized commission can legally compensate or set off its admitted debt to the private respondent.
RULING
The Supreme Court affirmed the IAC’s decision, disallowing the counterclaim and setting aside the compensation. The legal logic centers on the requisites for legal compensation under Article 1279 of the Civil Code. For compensation to operate by law, the debts must be mutual, due, and liquidated. The Court found that Silahis’ claim for commission was neither liquidated nor demandable, as it was vigorously disputed by de Leon.
Critically, there was no evidence of a clear agreement, verbal or written, obligating de Leon to pay a commission for the direct sale to Dole or prohibiting such direct transactions. The debit memo, being unsigned by de Leon and lacking his conformity, was deemed a self-serving document with no probative value to establish a contractual obligation. Since the claim for commission was unliquidated and contested, it could not legally compensate the liquidated and admitted debt for merchandise. Therefore, compensation was improper, and Silahis remained liable for the full purchase price. The ruling underscores that set-off requires clear, liquidated, and mutually owed debts.