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    82 - PNB Madecor Vs Uy

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    R.A. Gregorio
    Legal compensation occurs automatically under law when certain requirements are met, unlike conventional compensation which happens when parties agree to offset mutual debts even if requirements are lacking. The case involved a collection suit filed by a party to whom receivables were assigned against a debtor. The debtor claimed compensation for unpaid rent but the court ruled compensation did not apply because the supposed debt was subject to attachment by a third party, preventing the requirements of compensation from being satisfied. Furthermore, the debtor did not prove the rent amount was actually still unpaid at the time compensation was alleged to take place.

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    82 - PNB Madecor Vs Uy

    Uploaded by

    R.A. Gregorio
    89 views1 page
    Legal compensation occurs automatically under law when certain requirements are met, unlike conventional compensation which happens when parties agree to offset mutual debts even if requirements are lacking. The case involved a collection suit filed by a party to whom receivables were assigned against a debtor. The debtor claimed compensation for unpaid rent but the court ruled compensation did not apply because the supposed debt was subject to attachment by a third party, preventing the requirements of compensation from being satisfied. Furthermore, the debtor did not prove the rent amount was actually still unpaid at the time compensation was alleged to take place.

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    Case Digest

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    82 - PNB Madecor vs Uy

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    Legal compensation occurs automatically under law when certain requirements are met, unlike conventional compensation which happens when parties agree to offset mutual debts even if requirements are lacking. The case involved a collection suit filed by a party to whom receivables were assigned against a debtor. The debtor claimed compensation for unpaid rent but the court ruled compensation did not apply because the supposed debt was subject to attachment by a third party, preventing the requirements of compensation from being satisfied. Furthermore, the debtor did not prove the rent amount was actually still unpaid at the time compensation was alleged to take place.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    89 views1 page

    82 - PNB Madecor Vs Uy

    Uploaded by

    R.A. Gregorio
    Legal compensation occurs automatically under law when certain requirements are met, unlike conventional compensation which happens when parties agree to offset mutual debts even if requirements are lacking. The case involved a collection suit filed by a party to whom receivables were assigned against a debtor. The debtor claimed compensation for unpaid rent but the court ruled compensation did not apply because the supposed debt was subject to attachment by a third party, preventing the requirements of compensation from being satisfied. Furthermore, the debtor did not prove the rent amount was actually still unpaid at the time compensation was alleged to take place.

    Copyright:

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    Download as DOCX, PDF, TXT or read online from Scribd
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    Doctrine: Legal compensation takes place by operation of law when all the requisites are present, as opposed to conventional

    compensation which takes place when the parties agree to compensate their mutual obligations even in the absence of some requisites. PNB Madecor vs Uy G.R. No. 129598 August 15, 2001 Facts: Guillermo Uy assigned to respondent his receivables due from Pantranco North Express Inc. (PNEI). Respondent filed a collection suit with an application for issuance of preliminary attachment against PNEI which was granted by the RTC. The sheriff issued a notice of garnishment addressed to PNB and PNB MADECOR. The RTC rendered judgment against PNEI with writ of execution causing the sheriff to garnish the amount therein from the credits and collectibles of PNEI from petitioner and levy upon the assets of petitioner should its personal assets be insufficient to cover its debt with PNEI. Petitioner claimed that as debtor, it is likewise a creditor for PNEI considering unpaid rentals of PNEI for its parcel of land and by operation of law on compensation; it is actually the PNEI that still has outstanding obligations to it. Issue: Whether or not there was legal compensation between the petitioner and PNEI as a defense of the former? Ruling: There could not be any compensation between PNEIs receivables from PNB MADECOR and the latters obligation to the former because PNB MADECORs supposed debt to PNEI is the subject of attachment proceedings initiated by a third party, herein respondent Gerardo Uy. This is a controversy that would prevent legal compensation from taking place, per the requirements set forth in Article 1279 of the Civil Code. Moreover, it was not clear whether, at the time compensation was supposed to have taken place, the rentals being claimed by petitioner were indeed still unpaid. Petitioner did not present evidence in this regard, apart from a statement of account.

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