Digest - Gan Tion v CA

GAN TION v CA, JUDGE AGUSTIN MONTESA (CFI, Manila), ONG WAN SIENG, SHERIFF OF MANILA 21 May 1969 Ponente: Makalintal, J. DOCTRINE: Compensation possible only when two parties are each other’s creditor and debtor FACTS 1. 1961 – P filed an ejectment case against Ong Wan Sieng (OWS) 2. P contends that OWS was in default for 2 months of rent at 180/month 3. OWS contends that rent was only 160/month, and that he tried to pay P but was refused 4. CFI ruled in favor of OWS, awarding latter P500 in attorney’s fees 5. 1963 – P notified OWS that rent would increase 180/month, and demanded payment of unpaid rent amounting to 4k from 19611963 6. OWS able to obtain writ of execution for P500 attorney’s fees 7. P complained that P500 should be considered partial legal compensation to him for the 4k debt owed by OWS 8. CA ruled against P, stating that P500 can only be considered legal compensation if P and OWS were creditors and debtors of one another, but the P500 attorney’s fees did not belong to P but to his attorney, and therefore the attorney was the creditor, not P ISSUES 1. WON attorney’s fees can be subject of legal compensation RULING 1. Yes a. P500 does not belong to attorney but to P b. P is the proper creditor of the P500 c. P500 may properly be the subject of legal compensation against OWS’ debts d. Unjust to ask P to pay P500 when OWS owes him 4k CA decision reversed