Digest - Occena vs. Jabson and Sesbreno v. CA

JESUS V. OCCENA and EFIGENIA C.
OCCENA, petitioners,
vs.
HON. RAMON V. JABSON, Presiding Judge of the Court Of First Instance of Rizal, Branch XXVI;
COURT OF APPEALS and TROPICAL HOMES, INC., respondents.
G.R. No. L-44349 October 29, 1976
TEEHANKEE, J.
FACTS:
Under the subdivision contract, respondent Tropical Homes, Inc. "guaranteed petitioners,
Jesus V. Occena and Efigenia C. Occena as landowners a fixed and sole share and participation
an amount equivalent to forty (40%) percent of all cash receipts from the sale of the subdivision
lots".
That due to the increase in price of oil and its derivatives and the concomitant worldwide
spiralling of prices, which are not within the control of plaintiff, of all commodities including basis
raw materials required for such development work, the cost of development has risen to levels
which are unanticipated, unimagined and not within the remotest contemplation of the parties
at the time said agreement was entered into.
The respondent filed a complaint for modification of the terms and conditions of its
subdivision contract.
ISSUE: WHETHER OR NOT THE COURT CAN RENDER JUDGMENT MODIFYING THE TERMS AND
CONDITIONS OF THE CONTRACT BY FIXING THE PROPER SHARES OF THE HEREIN PARTIES.
RULING:
NO, respondent's complaint seeks not release from the subdivision contract but that the
court "render judgment in modifying the terms and Conditions of the Contract by fixing the proper
shares that should pertain to the herein parties out of the gross proceed from the sales of
subdivided lots of subject subdivision". Article 1267 of the Civil Code, does not grant the courts
this authority to remake, modify or revise the contract or to fix the division of shares between the
parties as contractually stipulated with the force of law between the parties, so as to substitute its
own terms for those covenanted by the parties themselves.
Hence, the respondent’s complaint in the lower court is ordered dismissed for failure to
state a sufficient cause of action.
RAUL SESBREÑO, petitioner,
vs.
HON. COURT OF APPEALS, DELTA MOTORS CORPORATION AND PILIPINAS BANK, respondents.
G.R. No. 89252 May 24, 1993
FELICANO, J.
FACTS:
On 9 February 1981, petitioner Raul Sesbreño made a money market placement in the
amount of P300,000.00 with the Philippine Underwriters Finance Corporation (Philfinance); the
placement, with a term of thirty-two (32) days, would mature on 13 March 1981,
Philfinance, also on 9 February 1981, issued the following documents to petitioner:
(a) the Certificate of Confirmation of Sale, "without recourse," No. 20496 of one
(1) Delta Motors Corporation Promissory Note ("DMC PN") No. 2731 for a term of 32
days at 17.0% per annum;
(b) the Certificate of securities Delivery Receipt No. 16587 indicating the sale of
DMC PN No. 2731 to petitioner, with the notation that the said security was in
custodianship of Pilipinas Bank, as per Denominated Custodian Receipt ("DCR")
No. 10805 dated 9 February 1981; and
(c) post-dated checks payable on 13 March 1981 (i.e., the maturity date of
petitioner's investment), with petitioner as payee, Philfinance as drawer, and
Insular Bank of Asia and America as drawee, in the total amount of P304,533.33.
On 13 March 1981, petitioner sought to encash the post-dated checks issued by

Philfinance. However, the checks were dishonored for having been drawn against insufficient
funds.
On 26 March 1981, Philfinance delivered to petitioner the DCR No. 10805 issued by private
respondent Pilipinas Bank ("Pilipinas").
On 2 April 1981, petitioner approached Ms. Elizabeth de Villa of private respondent

Pilipinas, but did not deliver the Note, nor any certificate of participation in respect thereof, to
petitioner.
Petitioner later made similar demand letters; Pilipinas never released DMC PN No. 2731, nor
any other instrument in respect thereof, to petitioner.
On 14 July 1981, petitioner made a written demand letter upon private respondent Delta
for the partial satisfaction of DMC PN No. 2731, explaining that Philfinance, as payee thereof, had
assigned to him said Note to the extent of P307,933.33. Delta, however, denied any liability to
petitioner on the promissory note, and explained in turn that it had previously agreed with
Philfinance to offset its DMC PN No. 2731 (along with DMC PN No. 2730) against Philfinance PN No.
143-A issued in favor of Delta.
ISSUE:
Whether or not compensation may defeat assignee’s rights before notice of the
assignment is given to the debtor.
RULING
Yes, compensation may defeat assignee’s rights before notice of the assignment is given
to the debtor. Petitioner notified Delta of his rights as assignee after compensation had taken
place by operation of law the offsetting instruments had both reached maturity.
It is a firmly settled doctrine that the rights of an assignee are not any greater that the
rights of the assignor, since the assignee is merely substituted in the place of the assignor and that
the assignee acquires his rights subject to the equities – i.e., the defenses – which the debtor could
have set up against the original assignor before notice of the assignment was given to the debtor.
At the time that delta was first put to notice of the assignment in petitioner’s favor on 14
July 1981, DMC PN No. 2731 had already been discharged by compensation. Since the assignor
Philfinances could not have then compelled payment anew by Delta of DMC PN No. 2731,
petitioner, as assignee of Philfinance, is similarly disabled from collecting from Delta the portion of
the Note assigned to him.

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JESUS V. OCCENA and EFIGENIA C.

G.R. No. L-44349 October 29, 1976

G.R. No. 89252 May 24, 1993

Philfinance, also on 9 February 1981, issued the following documents to petitioner:

On 13 March 1981, petitioner sought to encash the post-dated checks issued by

On 2 April 1981, petitioner approached Ms. Elizabeth de Villa of private respondent

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