G.R. No.

L-23191      December 19, 1967

Esguerra v. Villanueva

MAIN TOPIC – Modes of Extinguishment of Obligations (Payment or Performance - Exceptions)

I. FACTS:
1. Spouses Esguerra and Isidro de Guzman entered into a contract whereby Esguerra leased to De Guzman a portion of
the building, belonging to the Esguerra, for a term of 10 years.
2. De guzman failed to pay the rental, and his mother, Segunda De Guzman, executed a promissory note.
3. None of the aforementioned payments having been made when due, the Esguerras commenced an action against Mrs.
De Guzamn for the collection of the said money.
4. The parties reached a compromised agreement, which was approved by Judge Villanueva.
5. Judge Villanueva acknowledged that De Guzman delivered to Esguerra P800 and P1,460, and that the receipt of said
sums by the Esguerras constituted full satisfaction of the aforementioned judgment by compromise.
6. Respondents claim that the “receipt” of said sums of P800 and P1,460 by the Esguerras constituted “acceptance” of
the incomplete and irregular performance of respondent’s obligation.
7. Without any protest or objection on the part of the Esguerras, said obligation must be deemed fully complied with.

II. ISSUE/s
1. WON the receipt of the sums of money constitutes acceptance of the irregular performance?

III. HELD
1. The Supreme Court ruled in favor of Esguerra. The obligation in this case is deemed not extinguished. The verb
“accept” as used in Art 1235 means to take as “satisfactory or sufficient”, or “to give assent to”, or “to agree or
accede” to an incomplete performance. In the case at bar, the Esguerras had neither acceded or assented to said
payment, nor taken the same as satisfactory or sufficient compliance with the rendered. The day immediately
following that of the first payment of P800, the Esguerras asked Judge Villanueva to issue the corresponding writs of
execution in the 2 cases. Thus, the Esguerras patently manifested their dissatisfaction with- which necessarily implied
an objection or protest to- said partial payment. The law does not require the protest or objection of the creditor to be
made in a particular manner or at a particular time. In the case at bar, the Esguerras had performed said acts within
such time.

IV. APPLICABLE ARTICLE:

Article 1235 – when the obligee accepts the performance, knowing its incompleteness or irregularity and without
expressing any protest or objection, the oblgation is deemed fully complied with.

V. DISCUSSION AND APPLICATION

A person entering into a contract has a right to insist on its performance in all particulars, according to its meaning
and spirit. But if he chooses to waive any of the terms introduced for his own benefit, he may do so. Art. 1235
connotes a waiver of the creditor of damages arising from the breach of contract which resulted in the incompleteness
or irregularity of the obligation. By not expressing any protest or objection, the creditor accepts the performance of
the obligation as fully complied with despite knowledge of such irregularity or incompleteness .

In the case at bar, the Esguerras patently manifested their dissatisfaction with said partial payment made by the de
Guzmans. The Esguarras insisted the writ of execution of de guzman’s property be implemented which shows that the
petioner did not regard those partial payments as a compliance in fulfilling the obligations of the private respondents
to them. Therefore, the petitioner expressly gave their objection in the said case and the obligation of the de Guzman
where not extinguished.