SILAHIS MARKETING CORP V IAC FERNAN, J. December 7, 1989 FACTS: On various dates in Oct-Dec 1975, De eon doin!

! business under t"e name and st#$e o% &ar' (ndustria$ )a$es, so$d and de$ivered to )i$a"is various items o% merc"andise covered b# severa$ invoices amountin! to *++,+1,.75 -a#ab$e .it"in ,/ da#s %rom date o% t"e coverin! invoices. )i$a"is %ai$ed to -a# u-on maturit# des-ite re-eated demands. De eon %i$ed be%ore 0F( &ani$a a com-$aint %or t"e co$$ection o% t"e said accounts inc$udin! accrued interest in t"e amount o% * 111./, and attorne#2s %ees o% * 5,/// -$us costs o% $iti!ation. )i$a"is admitted t"e a$$e!ations inso%ar as t"e invoices .ere concerned but as de%ense3 o *resented a debit memo %or * ++,+// as unrea$i4ed -ro%it %or a su--osed commission t"at )i$a"is s"ou$d "ave received %rom de eon %or t"e sa$e o% s-roc'ets amountin! to *111,/// made direct$# to Do$e *"i$i--ines, (nc b# de eon .it"out coursin! t"rou!" )i$a"is in vio$ation o% usua$ -ractice o 0$aimed t"at it is entit$ed to return t"e stain$ess stee$ screen %ound de%ective b# its c$ient, 5orden (nternationa$, Davao 0it#, and to "ave t"e corres-ondin! amount o% *1,/// cance$$ed %rom its account .it" de eon. RTC: 0on%irmed t"e $iabi$it# o% )i$a"is %or t"e c$aim o% de eon but ordered t"at it be partially offset b# )i$a"is2 counterc$aim as contained in t"e debit memo %or unrea$i4ed -ro%it and commission. Ordered to -a# *1,.75 .it" 1+6 interest o *roven b# t"e testimonies t"at contrar# to a!reement bet.een )i$a"is and de eon t"at t"e $atter .as to serve t"e account o% DO E in Davao, De eon instead so$d it direct$# to DO E de-rivin! )i$a"is o% its commission. o As to stee$ .ire mes", not a.arded because too $ate to -resent c$aim 7returned on$# on A-ri$ 1971 ."en bou!"t on December 19758 De eon a--ea$ed t"e a.ard o% -artia$ com-ensation and non-a.ard o% interest on "is -rinci-a$ c$aim IAC3 Reversed t"e R90 decision and dismissed )i$a"is: counterc$aim %or $ac' o% %actua$ or $e!a$ basis as t"ere .as no a!reement nor contractua$ ob$i!ation -ro"ibitin! direct sa$es to Do$e *"i$i--ines and not"in! in t"e debit memo ob$i!atin! de eon to -a# commission to )i$a"is. ISSUE: ;"et"er or not De eon is $iab$e to )i$a"is %or t"e commission or mar!in %or t"e direct sa$e ."ic" t"e %ormer conc$uded and consummated .it" Do$e *"i$i--ines, (nc .it"out coursin! t"e same t"rou!" )i$a"is &ar'etin!. HEL : No. 0ourt %ound not"in! to s"o. t"at res-ondent ob$i!ated "imse$% to set-o%% or com-ensate -etitioner:s outstandin! accounts .it" a$$e!ed unrea$i4ed commission %rom assai$ed sa$e o% s-roc'ets to Do$e *"i$i--ines. 0om-ensation ta'es -$ace ."en + -ersons, in t"eir o.n ri!"t, are creditors and debtors o% eac" ot"er. Artic$e 1+79 o% t"e 0ivi$ 0ode -rovides t"at3 <(n order t"at com-ensation ma# be -ro-er, it is necessar#3 =1> t"at eac" one o% t"e ob$i!ors be bound -rinci-a$$#, and t"at "e be at t"e same time a -rinci-a$ creditor o% t"e ot"er? =+> t"at bot" debts consist in a sum o% mone#, or i% t"e t"in!s due are consumab$e, t"e# be o% t"e same 'ind, and a$so o% t"e same @ua$it# i% t"e $atter "as been stated? =,> t"at t"e t.o debts be due?

=A> t"at t"e# be $i@uidated and demandab$e? =5> t"at over neit"er o% t"em t"ere be an# retention or controvers#, commenced b# t"ird -ersons and communicated in due time to t"e debtor. ;"en a$$ t"e re@uisites mentioned in Art. 1+79 o% t"e 0ivi$ 0ode are -resent, com-ensation ta'es e%%ect b# o-eration o% $a., even .it"out t"e consent or 'no.$ed!e o% t"e creditors and debtors. Artic$e 1+79 re@uires t"at %or $e!a$ com-ensation to ta'e -$ace, <t.o debts must be dueB and <t"e# must be $i@uidated and demandab$eB. Co!pe"satio" is "ot proper #$ere t$e %lai! of t$e perso" asserti"& t$e set' off a&ai"st t$e ot$er is "eit$er %lear "or li()i*ate*+ 0om-ensation 0ANNO9 eCtend to un$i@uidated dis-uted c$aim eCistin! %rom breac" o% contract. )i$a"is admits t"e va$idit# o% its outstandin! accounts o% *++, +1,.75 .it" de eon. 5ut ."et"er de eon is $iab$e to -a# )i$a"is a +/6 mar!in or commission on t"e subDect sa$e to Do$e *"i$i--ines, (nc. is vi!orous$# dis-uted. T$is %ir%)!sta"%e pre,e"ts le&al %o!pe"satio" fro! ta-i"& pla%e+ 9"ere is no evidence on record %rom ."ic" it can be in%erred t"at t"ere .as an# a!reement bet.een )i$a"is and de eon -ro"ibitin! t"e $atter %rom direct sa$e to Do$e o 9"e debit memo is not a bindin! contract since it .as not si!ned b# de eon nor .as t"ere an# mention t"erein o% an# commitment b# t"e $atter to -a# an# commission to t"e %ormer invo$vin! t"e subDect sa$e o% s-roc'ets and can be ta'en as se$%-servin! .it" no -robative va$ue absent a s"o.in! or in%erence t"at t"e -art# sou!"t to be bound assented to it content or s"o.ed con%ormit#. o etter .ritten b# de eon:s $a.#er on &arc" 1975 transmittin! its Debit &emo %urt"er stren!t"ened t"eir stand t"at t"e# never a!reed to !ive -etitioner an# commission on direct sa$e to Do$e *"i$i--ines because suc" $etter denied an# uti$i4ation o% -etitioner:s -ersonne$ and %aci$ities. ispositio": Decision a%%irmed.