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G.R. No. L-18330 July 31, 1963 DE BORJA vs GELLA

Facts:
Jose de Borja has been delinquent in the payment of his real estate taxes
since 1958 for properties located in the City of anila and !asay City
and has offered to pay them "ith t"o ne#otiable certificate of
indebtedness$ Borja "as% ho"e&er% a mere assi#nee of the aforesaid
ne#otiable certificates$ 'he offers to pay the estate taxes in question "ere
rejected by the city treasurers of both anila and !asay cities on the
#round of their limited ne#otiability% that the ne#otiable certificates
cannot be accepted as payment of real estate taxes inasmuch as the la"
pro&ides for their acceptance from their bac(pay holder only or the
ori#inal applicant himself% but not his assi#nee$
)ssues:
1* has appellee the ri#ht to apply to the payment of his real estate
taxes to the #o&ernment$
+* can compensation be in&o(ed to extin#uish appellee,s real estate
tax liability bet"een the latter,s obli#ation and the credit
represented by said certificates of indebtedness-
.eld:
1* 'o be#in "ith% it cannot be contended that appellants are in duty
bound to accept the ne#otiable certificates of indebtedness held by
appellee in payment of his real estate taxes for the simple reason
that they "ere not obli#ations subsistin# at the time of the
appro&al of /epublic 0ct 1o$ 234 "hich too( effect on June 18%
1948$ )t should be noted that the real estate taxes in question ha&e
reference to those due in 1958 and subsequent years$ 'he la" is
explicit that in order that a certificate may be used in payment of
an obli#ation the same must be subsistin# at the time of its
appro&al e&en if "e hold that a tax parta(es of this character%
neither can it be contended that appellee can compel the
#o&ernment to accept the alle#ed certificates of indebtedness in
payment of his real estate taxes under pro&iso 1o$ + abo&equoted
also for the reason that in order that such payment may be allo"ed
the tax must be o"ed by the applicant himself $ 'his is the correct
implication that may be dra"n from the use by the la" of the
"ords 5his taxes5$ 6erily% the ri#ht to use the bac(pay certificate
in settlement of taxes is #i&en only to the applicant and not to any
holder of any ne#otiable certificate to "hom the la" only #i&es
the ri#ht to ha&e it discounted by a Filipino citi7en or corporation
under certain limitations$ .ere appellee is not himself the
applicant of the certificate% in question$ .e is merely an assi#nee
thereof% or a subsequent holder "hose ri#ht is at most to ha&e it
discounted upon maturity 8 or to ne#otiate it in the meantime$ 0
fortiori% it may be included that% not ha&in# the ri#ht to use said
certificates to pay his taxes% appellee cannot compel appellants to
accept them as he requests in the present petition for mandamus$
0s a consequence% "e cannot but hold that mandamus does not lie
a#ainst appellants because they ha&e in no "ay ne#lected to
perform an act enjoined upon them by la" as a duty% nor ha&e
they unla"fully excluded appellee from the use or enjoyment of a
ri#ht to "hich be is entitled$
+* 9ith re#ard to the second issue% i$e$% "hether compensation can be
in&o(ed insofar as the t"o obli#ations are concerned% 0rticles
1+:8 and 1+:9 of the ne" Ci&il Code pro&ide:
0/'$ 1+:8$ Compensation shall ta(e place "hen t"o persons% in
their o"n ri#ht% are creditors and debtors of each other$
0/'$ 1+:9$ )n order that compensation may be proper% it is
necessary:
;1* 'hat each one of the obli#ors be bound principally% and that he
be at the same time a principal creditor of the other<
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;+* 'hat both debts consist in a sum of money% or if the thin#s due
are consumable% they be of the same (ind% and also of the same
quality if the latter has been stated<
;2* 'hat the t"o debts be due<
;4* 'hat they t"o liquidated and demandable<
;5* 'hat o&er neither of them there be any retention or
contro&ersy% commenced by third persons and communicated in
due time to the debtor$
)t is clear from the abo&e le#al pro&isions that compensation cannot be
effected "ith re#ard to the t"o obli#ations in question$ )n the first place%
the debtor insofar as the certificates of indebtedness are concerned is the
/epublic of the !hilippines% "hereas the real estate taxes o"ed by
appellee are due to the City of anila and !asay City% each one of "hich
ha&in# a distinct and separate personality from our /epublic$ 9ith re#ard
to the certificates% the creditor is the appellee "hile the debtor is the
/epublic of the !hilippines$ 0nd "ith re#ard to the taxes% the creditors
are the City of anila and !asay City "hile the debtor is the appellee$ )t
appears% therefore% that each one of the obli#ors concernin# the t"o
obli#ations is not at the same time the principal creditor of the other$ )t
cannot also be said for certain that the certificates are already due$
0lthou#h on their faces the certificates issued to appellee state that they
are redeemable on June 18% 1958% yet the la" does not say that they are
redeemable from its appro&al on June 18% 1948 but 5"ithin ten years from
the date of issuance5 of the certificates$ 'here is no certainty% therefore%
"hen the certificates are really redeemable "ithin the meanin# of the la"$
=ince the requisites for the accomplishment of le#al compensation cannot
be fulfilled% the latter cannot ta(e place "ith re#ard to the t"o obli#ations
as found by the court a quo$
9.>/>F?/>% the decision appealed from is re&ersed$ 'he petition for
mandamus is dismissed$ 'he injunction issued a#ainst respondents@
appellants is hereby lifted$ 1o costs$