Case Digest (G.R. No. 257697)
Facts:
In the case of Gan Tion vs. Court of Appeals (G.R. No. L-22490, May 21, 1969), Gan Tion owned premises in Manila leased to Ong Wan Sieng. In 1961, Gan Tion filed an ejectment suit in the Municipal Court of Manila for non-payment of rent for August and September 1961 at P180 per month, alleging a total arrearage of P360. Ong Wan Sieng denied the claim, insisting the rent was P160 per month, which he had offered to pay. The Municipal Court ruled in favor of Gan Tion, but upon appeal the Court of First Instance of Manila reversed on July 2, 1962, dismissed the complaint, and awarded Ong Wan Sieng P500 as attorney’s fees, a decision which became final. On October 10, 1963, Gan Tion notified Ong Wan Sieng of a rent increase to P180 per month effective November 1 and demanded arrears of P4,320 from August 1961 to October 1963. Over objection, Ong Wan Sieng obtained a writ of execution for the P500 award. Gan Tion then filed a petition for certiorari before the Court of Appeals, assertCase Digest (G.R. No. 257697)
Facts:
- Parties and Lease Agreement
- Petitioner Gan Tion owned premises leased to respondent Ong Wan Sieng.
- Agreed monthly rental contested: Gan Tion claimed P180, Ong Wan Sieng claimed P160.
- Ejectment Proceedings
- In 1961, Gan Tion filed ejectment for non-payment of August–September rent (P360 at P180/month).
- Municipal Court ruled for plaintiff; on appeal, Court of First Instance (July 2, 1962) reversed, dismissed complaint, and ordered Gan Tion to pay Ong P500 as attorney’s fees. Judgment became final.
- Subsequent Rent Demand and Execution
- On October 10, 1963, Gan Tion notified Ong of a rent increase to P180 effective November 1 and demanded arrears of P4,320 (August 1961–October 1963 at P160).
- Despite Gan Tion’s opposition, Ong obtained a writ of execution for the P500 attorney’s fees. Gan Tion filed a certiorari petition in the Court of Appeals pleading legal compensation against the rent arrears.
- Court of Appeals Decision
- The CA accepted the petition but ruled that the P500 award was a “trust fund for the benefit of the lawyer,” not subject to legal compensation.
- It held that the attorney was the real creditor, hence the mutual-debt requisites of Articles 1278–1279, Civil Code, were not satisfied.
Issues:
- Existence of Legal Compensation
- Whether the P500 attorney’s fees award constitutes a debt of Ong Wan Sieng in his own right.
- Whether the requisites for legal compensation under Articles 1278 and 1279, Civil Code, are present between the P500 award and P4,320 rent arrears.
- Enforcement of Execution
- Whether the writ of execution for P500 should be set aside pending determination of compensation.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)