ASJ CORPORATION vs EVANGELISTA Case Digest


ASJ CORPORATION, plaintiff-appellant VS. EVANGELISTA, defendant-appellee

February 14, 2008

 FACTS

 This case is a petition for review on certiorari on the decision of the Court of Appeals affirming the decision of the Regional Trial Court of Malolos, Bulacan Branch 9 in Civil Case No. 745-M-93.
Respondents Efren and Maura Evangelista are owners of R.M. Sy Chicks, a business engaged in selling chicks and egg by-products. For hatching and incubation of eggs, they availed the services of ASJ Corp., owned by San Juan and his family. After years of doing business with the ASJ Corp., the respondents delayed payments for the services of ASJ Corp, prompting owner San Juan to refuse the release of the hatched egg. The respondents tendered Php 15,000 to San Juan for partial payment which San Juan accepted but he still insisted on the full settlement of respondents’ accounts before releasing the chicks and by-products. He also threated the respondents that he would impound their vehicle and detain them at the hatchery compound if they should come back unprepared to fully settle their accounts with him. The parties tried to settle amicably before police authorities but failed. The respondents then filed with the RTC an action for damages based on the retention of the chicks and by-products by the petitioners.  The RTC held ASJ Corp. and San Juan solidarily liable for the actual and moral damages and attorney’s fees. On appeal, the Court of Appeals affirmed the decision and added exemplary damages. Hence, this petition.

 ISSUE

 Whether or not the petitioner’s retention of the chicks and by-products on account of respondents’ failure to pay the corresponding fees justified.

 HELD

 Yes. The retention has legal basis, although the threats had none. Under Article 1248 of the Civil Code, the creditor cannot be compelled to accept partial payments from the debtor, unless there is an express stipulation to that effect. It was the respondents who violated the reciprocity in contracts, hence, the petitioners have the right of retention. This case is a case on non-performance of reciprocal obligation. Reciprocal obligations are those which arise from the same cause, wherein each party is a debtor and a creditor of the other such that the performance of one is conditioned upon the simultaneous fulfillment of the other. Since respondents are guilty of delay in the performance of their obligations, they are liable to pay petitioners actual damages. The petition was partly granted. The respondents were ordered to pay petitioners for actual damages. The actual, exemplary and moral damages laid down by the Court of Appeals were retained.

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