G.R. No.

L-50638 July 25, 1983

LORETO J. SOLINAP, petitioner,
vs.
HON. AMELIA K. DEL ROSARIO, as Presiding Judge of Branch IV, Court of
First Instance of Iloilo, SPOUSES JUANITO and HARDEVI R. LUTERO, and
THE PROVINCIAL SHERIFF OF ILOILO, respondents.
FACTS:
Spouses Tiburcio Lutero and Asuncion Magalona, owners of
Hacienda Tambal, leased the said property to petitioner Solinap for
10 years at P50K a year.
o The contract also provided that the sum of P25K should be paid by
Solinap to PNB to amortize the indebtedness of the spouses Lutero.
Lutero died in 1971.
His heirs institute testate estate proceedings of the deceased, presided by
public respondent judge Del Rosario.
Respondent judge issued an order stating that in order to protect the estate,
the administrator was authorized to scout among the testamentary heirs who
is financially in a position to pay all the unpaid obligations of the estate, with
right to subrogation.
Juanito Lutero (Tiburcios grandson and heir) paid PNB P25K as partial
settlement of the deceaseds obligations.
Thereafter Juanito filed a motion before the testate court for reimbursement
from Solinap of the amount he paid.
o He argued that the said amount should have been paid by Solinap as
stipulated in the lease contract.
Petitioners contention:
the respondent judge gravely abused her discretion in not declaring the
mutual obligations of the parties extinguished to the extent of their
respective amounts.
He relies on Art 1278 NCC to the effect that compensation shall take place
when two persons, on their own right, are creditors and debtors of each other.
ISSUE: Whether the obligation of Solinap to Lutero may be compensated or set-off
against the amount sought to be recovered in an action for sum of money filed
by Solinap against the Lutero.
HELD: NO.

The argument fails to consider Art. 1279 NCC provides that compensation can
take place if both obligations are liquidated.
In the case at bar, Solinap's claim against the respondent Luteros in
Civil Case No. 12379 is still pending determination by the court.
(NOTE)
While it is not for Us to pass upon the merits of the plaintiffs' cause of action
in that case, it appears that the claim asserted therein is disputed by the
Luteros on both factual and legal grounds.
More, the counterclaim interposed by them, if ultimately found to be
meritorious, can defeat petitioner's demand.
Upon this premise, his claim in that case cannot be categorized as
liquidated credit which may properly be set-off against his
obligation. (NOTE)
As this Court ruled in Mialhe vs. Halili," compensation cannot take place
where one's claim against the other is still the subject of court litigation.
It is a requirement, for compensation to take place, that the amount involved
be certain and liquidated."