- Petitioner
- Mondragon Personal Sales
- Respondent
- Victoriano S. Sola, Jr.
- Citation
- G.R. No. 174882
- Court
- Supreme Court
- Division
- Third Division
- Ponente
- Peralta, J.
- Decided
- January 21, 2013
Summary
This case involves a service contract dispute between Mondragon Personal Sales, Inc. and Victoriano S. Sola, Jr., where Sola provided bodega facilities for petitioner's products in exchange for service fees. When Sola's wife defaulted on a separate franchise debt, Sola voluntarily acknowledged and bound himself to pay her debt of P1,973,154.73 through a written undertaking. Petitioner subsequently withheld Sola's service fees totaling P125,040.01 and applied them as partial payment to the debt. The Supreme Court upheld the validity of legal compensation under Article 1279 of the Civil Code, finding all requisites present since both parties were principal debtors and creditors of each other with liquidated, due monetary obligations. The Court rejected the contract rescission claim, ruling that Sola breached first by closing his operations, and ordered him to pay the remaining debt balance of P1,543,643.96 with interest.