103. Sycip V Ca.docx

G.R. No. L-38711

FRANCISCO VS. HONORABLE COURT PHILIPPINES, Respondent.

SYCIP, Petitioners, OF

APPEALS

and

PEOPLE

OF

THE

Article 1278. Compensation January 31, 1985

FACTS OF THE CASE: Lapuz received 2,000 stocks from Albert Smith and was supposed to sell the latter’s share at present market value out of which he was supposed to get commission. Thereafter, the accused approached him and told Lapuz that the former had good connections in the Stock Exchange, assuring him that he could send them at a good price. Later on, when the accused issued payment to Lapuz, it was subsequently dishonored by the bank for lack of funds. Lapuz filed an estafa case against Sycip and was convicted. In a petition for review on certiorari, petitioner claims that respondent court erred in refusing to uphold the provisions on compensation, Art 1278 of the Civil Code, despite evidence showing that Lapuz still owed him an amount of more than P5,000.

ISSUE/S: Whether or not Sycip’s contention is correct

CONCLUSION: No. Compensation cannot take place in this case since the evidence shows that Lapuz is only an agent of Albert Smith. Compensation takes place only when two persons in their own right are creditors and debtors of each other, and that each one of the obligors is bound prinicipally and is at the same time a principal creditor of the other.