G.R. No. L-36847 - Yngson vs. Secretary of Agriculture and Natural Resources

Petitioner: Fermin Ong, who is also a businessman with extensive experience and familiarity with business transactions.
Respondent: Mariano Ong, a private individual and cousin of Fermin Ong.
Relationship Context: Although cousins, their dealings were strictly commercial in nature, and such personal ties did not prevent either from enforcing business discipline.

Fermin Ong borrowed money from Mariano Ong.
The parties' positions differed on the actual amount in controversy: Fermin claimed the indebtedness was only P120,000.00 (asserting a reduction due to a partial payment) while Mariano maintained it was P160,000.00.

On January 23, 1979, a fourth check for P40,000.00 was issued as a partial payment, drawn against a different bank (China Banking Corporation).
Fermin contended that this payment reduced the overall liability from P200,000.00 to P160,000.00.

Fermin deposited a quantity of zippers valued at P181,000.00 in Mariano’s warehouse.
Fermin claimed that the zippers were kept in the warehouse merely for safekeeping, not as collateral to secure the debt.

Fermin later asserted Mariano improperly retained the zippers as leverage over the alleged pending payment.
He showed inconsistencies by first downplaying the zippers’ value (calling them worthless) and then demanding their return as a condition for settling his debt.
Mariano, on the other hand, maintained that he never unlawfully withheld the zippers and even imposed storage fees for their safekeeping.

Claimed that the fourth check reduced his indebtedness, thereby implying a remaining balance of P120,000.00 instead of P160,000.00.
Advanced a claim of set-off by alleging that a sum due to him (from transactions involving the rights to market stalls) should offset his debt.
Later, he also argued that the value of the zippers (which he contended Mariano wrongfully retained) should serve as a compensation against his obligation.
Reliance was placed on provisions under Article 1279 (mutual compensation) and Article 1283 (judicial set-off for damages) of the Civil Code.

Asserted that the original loan was for P200,000.00, from which the fourth check of P40,000.00 reduced the balance to P160,000.00.
Supported his claim by emphasizing that the face value of the three remaining post-dated checks corresponded exactly to the outstanding loan balance.
Denied any obligation regarding the return of the zippers, noting that they were not intended as a security or as a subject of any set-off claim.

The trial court held in favor of Fermin, ruling that his indebtedness was reduced to P120,000.00.
The Court of Appeals reversed this, upholding Mariano’s claim that the debt was P160,000.00.

Fermin sought review from the Supreme Court, challenging the Court of Appeals' ruling.
The petition raised factual disputes, particularly regarding the effective reduction of the loan through the fourth check and the nature of the zippers’ deposit as a set-off.

Lack of documentary evidence (e.g., receipts) to confirm the alleged partial payment or agreement regarding the treatment of the zippers.
Inconsistencies in Fermin’s arguments across different pleadings about the amounts and obligations relating to the market stalls and deposit of zippers.

Whether the partial payment represented by the fourth check for P40,000.00 should properly reduce the overall indebtedness from P200,000.00 to P160,000.00 (or even further to P120,000.00 as claimed by the petitioner).
Whether the fact that the post-dated checks totaling P160,000.00 remained unaltered in face value supports Mariano’s claim of an outstanding loan amount of P160,000.00.
Whether Fermin’s claim of set-off—based on the value of the deposited zippers and the alleged damages—meets the requisites under Article 1279 and Article 1283 of the Civil Code.
Whether the review under Rule 45 of the Rules of Court is justified given that the principal issue pertains to a factual matter rather than a purely legal question.