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    Lao Vs Special Plans, Inc. Vs CA, 234 SCRA 78 (1994)

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    Rebuild Bohol
    The Petitioners (Lao and Manansala) entered into a lease contract with Special Plans Inc. (SPI) and upon expiration renewed the contract for another 8 months. Petitioners did not pay rental fees, prompting SPI to demand payment. Petitioners counterclaimed, arguing SPI failed to deliver the premises and they incurred 422,000 pesos in repairs, including structural defects. The lower court found Petitioners owed 95,000 pesos but SPI was responsible for structural repairs. The appellate court disagreed about offsetting repair costs with unpaid rent. The Supreme Court dismissed the Petition, finding the requirements for compensation were not met as Petitioners failed to show their claim was liquidated and demandable.

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    Lao Vs Special Plans, Inc. Vs CA, 234 SCRA 78 (1994)

    Uploaded by

    Rebuild Bohol
    76 views2 pages
    The Petitioners (Lao and Manansala) entered into a lease contract with Special Plans Inc. (SPI) and upon expiration renewed the contract for another 8 months. Petitioners did not pay rental fees, prompting SPI to demand payment. Petitioners counterclaimed, arguing SPI failed to deliver the premises and they incurred 422,000 pesos in repairs, including structural defects. The lower court found Petitioners owed 95,000 pesos but SPI was responsible for structural repairs. The appellate court disagreed about offsetting repair costs with unpaid rent. The Supreme Court dismissed the Petition, finding the requirements for compensation were not met as Petitioners failed to show their claim was liquidated and demandable.

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    6. 3. Lao vs Special Plans, Inc. vs CA, 234 SCRA 78 (1994)

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    The Petitioners (Lao and Manansala) entered into a lease contract with Special Plans Inc. (SPI) and upon expiration renewed the contract for another 8 months. Petitioners did not pay rental fees, prompting SPI to demand payment. Petitioners counterclaimed, arguing SPI failed to deliver the premises and they incurred 422,000 pesos in repairs, including structural defects. The lower court found Petitioners owed 95,000 pesos but SPI was responsible for structural repairs. The appellate court disagreed about offsetting repair costs with unpaid rent. The Supreme Court dismissed the Petition, finding the requirements for compensation were not met as Petitioners failed to show their claim was liquidated and demandable.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    76 views2 pages

    Lao Vs Special Plans, Inc. Vs CA, 234 SCRA 78 (1994)

    Uploaded by

    Rebuild Bohol
    The Petitioners (Lao and Manansala) entered into a lease contract with Special Plans Inc. (SPI) and upon expiration renewed the contract for another 8 months. Petitioners did not pay rental fees, prompting SPI to demand payment. Petitioners counterclaimed, arguing SPI failed to deliver the premises and they incurred 422,000 pesos in repairs, including structural defects. The lower court found Petitioners owed 95,000 pesos but SPI was responsible for structural repairs. The appellate court disagreed about offsetting repair costs with unpaid rent. The Supreme Court dismissed the Petition, finding the requirements for compensation were not met as Petitioners failed to show their claim was liquidated and demandable.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    Facts that will show how parties will compensate each other.

    SELWYN F. LAO and EDGAR MANANSALA, Petitioners,


    vs.
    SPECIAL PLANS, INC., Respondent.

    G. R. No. 164791               June 29, 2010

    DEL CASTILLO, J.:

    DOCTRINE:As the contract contrastingly treats necessary repairs, which are


    on the account of the lessee, and repairs of structural defects, which are the
    responsibility of the lessor, the onus of the petitioners is two-fold: (1) to
    establish the existence, amount and demandability of their claim; and (2) to
    show that these expenses were incurred in the repair of structural defects.

    FACTS:
    The Petioners Lao and Manansala entered into a Contract of Lease with
    Special Plans Incorporated (SPI). Upon expiration of the contract, it was
    further renewed for another eight months. Petitioners did not pay the allotted
    rental fees which prompted SPI to send a demand letter asking for full
    payment of rentals in arrears. Petitioners did not give payment, giving the
    reason that SPI failed to deliver the leased premises for their intended use and
    because of this they incurred expenses for necessary repairs as well as
    expenses for the repair of structural defects.. They counterclaimed SPI to pay
    the sum of 422,000 pesos as actual damages against the claim of SPI of 118,000
    for accumulated unpaid rentals.

    The Metropolitan Court found that the unpaid rentals only amounted to
    95,000 pesos and declared SPI responsible for repairing the structural defects
    of the leased premises and thus dismissed SPI’s case. SPI then appealed to
    the Regional Trail Court of Quezon City which then modified the decision of
    the lower court, disagreeing on the off-setting of the amount allegedly spent
    by the petitioners for the repairs of the structural defects of subject property
    with their unpaid rentals and ordered the Petitioners to pay 95,000 for unpaid
    rentals. The petitioners then appealed to the Court of Appeals wherein they
    asserted that the amount of 545,000.00 that they spent for repairs, P125,000.00
    of which was spent on structural repairs, should be judicially compensated
    against the said unpaid rentals amounting to 95,000.00.

    Issue:
    Whether or not the unpaid rentals should be judicially compensated with the
    expenses incurred by the Plaintiffs?
    Held:
    NO. The Petition was dismissed.
    In order that compensation to take place two persons, in their own right,
    should be creditors and debtors of each other. In order for compensation to be
    proper, it is necessary that:

    1. Each one of the obligors be bound principally and that he be at the


    same time a principal creditor of the other;

    2. Both debts consist in a sum of money, or if the things due are


    consumable, they be of the same kind, and also of the same quality
    if the latter has been stated;

    3. The two debts are due:

    4. The debts are liquidated and demandable;

    5. Over neither of them be any retention or controversy, commenced


    by third parties and communicated in due time to the debtor. 

    The Petitioners failed to properly discharge their burden to show that the
    debts are liquidated and demandable. A claim is liquidated when the amount
    and time of payment is fixed. If acknowledged by the debtor, although not in
    writing, the claim must be treated as liquidated. When the defendant, who
    has an unliquidated claim, sets it up by way of counterclaim, and a judgment
    is rendered liquidating such claim, it can be compensated against the
    plaintiff’s claim from the moment it is liquidated by judgment. Compensation
    takes place only if both obligations are liquidated.

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