628 Phil. 353
PERALTA, J.:
WHEREFORE, the appealed decision is hereby set aside and judgment is herein rendered declaring that the subject Deed of Assignment has not condoned all of UPSUMCO's obligations to APT as assignee of PNB.
To determine how much APT is entitled to recover on its counterclaim, it is required to render an accounting before the Regional Trial Court on the total payments made by UPSUMCO on its obligations including the following amounts:
(1) The sum seized from it by APT whether in cash or in kind (from UPSUMCO's bank deposits as well as sugar and molasses proceeds):
(2) The total obligations covered by the following documents:(a) Credit agreement dated November 05, 1974 (Exh. "1," Record p. 528); and(3) The P450,000,000.00 proceeds of the foreclosure
(b)
(c) The Restructuring Agreements dated (i) June 24, 1982, (ii) December 10, 1982, and (3) May 9, 1984 and
Should there be any deficiency due APT after deducting the foregoing amounts from UPSUMCO's total obligation in the amount of (P2,137,076,433.15), the latter is hereby ordered to pay the same. However, if after such deduction there should be any excess payment, the same should be turned over to UPSUMCO.
The Regional Trial Court is hereby directed to receive APT's accounting and thereafter, to render the proper disposal of this case in accordance with the foregoing findings and disposition.
Costs against appellees.
SO ORDERED.
1. The order of the Honorable Court En Banc reinstating the decision of the Honorable Court of Appeals would be inconsistent with the facts of the case and the findings of this Honorable Court.
2. There is no valid ground to conclude that APT has still the right to the deposit of UPSUMCO after the August 27, 1987 friendly foreclosure, and the withdrawal of P80,200,806.41 as payment could be applied either as repayment on the Take-off Loans or for the Operational Loans.
3. The findings that the condonation took effect only after the execution of the Deed of Assignment hence upholds the validity of APT's taking of the deposit of P80,200,806.41 in UPSUMCO's PNB account as payment of the deficiency is without basis.
4. The admission of the case by Honorable Court En Banc after the denial of the Second Division of the Second Motion for Reconsideration and the referral of the case to the Honorable Court En Banc appear not to be in accordance with the Rules of Procedure.
5. The basis for admission of the case to the Honorable Court En Banc are belated issues which have no other purpose but to give apparent reasons for the elevation of the case.
6. There is no legal basis for the withdrawals of UPSUMCO's deposit on the ground of conventional compensation.
7. Since the amount of P17,773,185.24 could not be the subject of conventional compensation, it should be returned to petitioner immediately by respondents.
The rulings of the lower courts, as well as the petition itself, are not clear as to the amount extended by way of takeoff loans by PNB to UPSUMCO. However, the Court of Appeals did enumerate the following transactions consisting of the operational loans, to wit:
(1) Trust Receipts dated August 26, 1987; February 5, 1987; and July 10, 1987; (2) Deed of Assignment By Way of Payment dated November 16, 1984 (Exh. 3 [PNB]; Exh. 12 [APT]; Record, p. 545); (3) Two (2) documents of Pledge both dated February 19, 1987; (4) Sugar Quedans (Exh. 13 to 16; Record, pp 548 to 551); (5) Credit Agreements dated February 19, 1987 (Exhs. "2" [PNB] & "4" [APT]; Record, pp. 541-544) and April 29, 1987 (Exh. "11" [APT]; Record, pp. 314-317). (6)Promissory Notes dated February 20, 1987 (Exh. "17"; Record, p. 573); March 2, 1987 (Exh. "18"; Record, p. 574); March 3, 1987 (Exh. "19"; Record, p. 575); March 27, 1987; (Exh. "20"; Record, p. 576); March 30, 1987(Exh. "21"; Record, p. 577); April 7, 1987 (Exh. "22"; Record, p. 578); May 22, 1987 (Exh. "23"; Record, p. 579); and July 30, 1987 (Exh. "24"; record p. 580).
On 27 February 1987, through a Deed of Transfer, PNB assigned to the Government its "rights" titles and interests over UPSUMCO, among several other assets. The Deed of Transfer acknowledged that said assignment was being undertaken "in compliance with Presidential Proclamation No. 50." The Government subsequently transferred these "rights" titles and interests" over UPSUMCO to respondent Asset and Privatization Trust (APT), [now PMO].
x x x x
This much is clear. The Deed of Assignment condoned only the take-off loans, and not the operational loans. The Deed of Assignment in its operative part provides, thus:
That United Planter[s] Sugar Milling Co., Inc. (the "Corporation") - pursuant to a resolution passed by its board of Directors on September 3, 1087, and confirmed by the Corporation's stockholders in a stockholders' Meeting held on the same (date), for and in consideration of the Asset Privatization Trust ("APT") condoning any deficiency amount it may be entitled to recover from the Corporation under the Credit Agreement dated November 5, 1974 and the Restructuring Agreement[s] dated June 24, and December 10, 1982, and May 9, 1984, respectively, executed between the Corporation and the Philippine National Bank ("PNB"), which financial claims have been assigned to APT, through the National Government, by PNB, hereby irrevocably sells, assigns and transfer to APT its right to redeem the foreclosed real properties covered by Transfer Certificates of Titles Nos. T-16700 and T-16701.
IN WITNESS WHEREOF, the Corporation has caused this instrument to be executed on its behalf by Mr. Joaquin S. Montenegro, thereunto duly authorized, this 3rd day of September, 1997.
x x x x
This notwithstanding, the RTC Decision was based on the premise that all of UPSUMCO's loans were condoned in the Deed of Assignment. In contrast, the Court of Appeals acknowledged that only the take-off loans were condoned, and thus ruled that APT was entitled to have the funds from UPSUMCOS's accounts transferred to its own account "to the extent of UPSUMCO's remaining obligation, less the amount condoned in the Deed of Assignment and the 450,000,000.00 proceeds of the foreclosure."
The challenged acts of respondents all occurred on or after 27 August 1987, the day of the execution sale. UPSUMCO argues that after that date, respondents no longer had the right to collect monies from the PNB bank accounts which UPSUMCO had opened and maintained as collateral for its operational take-off loans. UPSUMCO is wrong. After 27 August 1987, there were at least two causes for the application of payments from UPSUMCO's PNB accounts. The first was for the repayment of the operational loans, which were never condoned. The second was for the repayment of the take-off loans which APT could obtain until 3 September 1987, the day the condonation took effect.
The error of the Court's earlier rulings, particularly the Resolution dated 11 July 2007, was in assuming that the non-condonation of the operational loans was immaterial to the application of payments made in favor of APT from UPSUMCOS's PNB accounts that occurred after 27 August 1987. For as long as there remained outstanding obligations due to APT (as PNB's successor-in-interest), APT would be entitled to apply payments from the bank accounts of PNB. That right had been granted in favor of PNB, whether on account of the take-off loans or the operational loans.
Petitioner filed with the RTC the complaint which alleged that "among the conditions of the `friendly foreclosure' are: (A) That all the accounts of [United Planters] are condoned, including the JSS notes at the time of the public bidding." It was incumbent on petitioner, not respondents, to prove that particular allegation in its complaint. Was petitioner able to establish that among the conditions of the "friendly foreclosure' was that "all its accounts are condoned"? It did not, as it is now agreed by all that only the take-off loans were condoned.
This point is material, since the 2007 Resolution negated the findings that only the take-off loans were condoned by faulting respondents for failing to establish that there remained outstanding operational loans on which APT could apply payments from UPSUMCO's bank accounts. By the very language of the Deed of Assignment, it was evident that UPSUMCO's allegation in its complaint that all of its accounts were condoned was not proven. Even if neither PNB nor APT had filed an answer, there would have been no basis in fact for the trial court to conclude that all of UPSUMCO's loans were condoned (as the RTC in this case did), or issue reliefs as if all the loans were condoned (as the 2007 Resolution did).
As noted earlier, APT had the right to apply payments from UPSUMCO's bank accounts, by virtue of the terms of the operational loan agreements. Considering that UPSUMCO was spectacularly unable to repay the take-off loans it had earlier transacted, it simply beggars belief to assume that it had fully paid its operational loans. Moreover, APT had the right to obtain payment of the operational loans by simply applying payments from UPSUMCO's bank accounts, without need of filing an action for collection with the courts. The bank accounts were established precisely to afford PNB (and later APT) extrajudicial and legal means to obtain repayment of UPSUMCO's outstanding loans without hassle.B.
There is no question that the Deed of Assignment condoned the outstanding take-off loans of UPSUMCO due then to APT. The Deed of Assignment was executed on 3 September 1987 as was the UPSUMCO Board Resolution authorizing its President to sign the Deed of Assignment. However, despite the absence of any terms to that effect in the Deed of Assignment, it is UPSUMCO's position that the condonation actually had retroacted to 27 August 1987. The previous rulings of the Court unfortunately upheld that position.
It is easy to see why UPSUMCO would pose such an argument. It appears that between 27 August 1987 and 3 September 1987. APT applied payments from UPSOMCO's bank accounts in the amount of around 80 Million Pesos. UPSUMCO obviously desires the return of the said amount. But again, under the terms of the loan arguments, APT as successor-in-interest of PNB, had the right to seize any amounts deposited in UPSUMCO'S bank accounts as long as UPSUMCO remained indebted under the loan agreements. Since UPSUMCO was released from its take-off loans only on 3 September 1987, as indicated in the Deed of Assignment, then APT's application of payments is perfectly legal.
The earlier rulings of the Court were predicated on a finding that there was a "friendly foreclosure" agreement between APT and UPSUMCO, whereby APT agreed to condone all of UPSUMCO's outstanding obligations in exchange for UPSUMCO's waiver of its right to redeem the foreclosed property. However, no such agreement to the effect was ever committed to writing or presented in evidence. The written agreement actually set forth was not as contended by UPSUMCO. For one, not all of the outstanding loans were condoned by APT since the take-off loans were left extant. For another, the agreement itself did not indicate any date of effectivity other than the date of the execution of the agreement, namely 3 September 1987.
It is argued that the use of the word "any" in "any deficiency amount" sufficiently establishes the retroactive nature of the condonation. The argument hardly convinces. The phrase "any deficiency amount" could refer not only to the remaining deficiency amount after the 27 August foreclosure sale, but also the remaining deficiency amount as of 3 September 1987, when the Deed of Assignment was executed and after APT had exercised its right as creditor to apply payments from petitioner's PNB accounts. The Deed of Assignment was not cast in intractably precise terms, and both interpretations can certainly be accommodated.
It is in that context that the question of parol evidence comes into play. The parol evidence rule states that generally, when the terms of an agreement have been reduced into writing, it is considered as containing all the terms agreed upon and there can be no evidence of such terms other than the contents of the written agreement. Assuming that the Deed of Assignment failed to accurately reflect an intent of the parties to retroact the effect of condonation to the date of the foreclosure sale, none of the parties, particularly UPSUMCO, availed of its right to seek the reformation of the instrument to the end that such true intention may be expressed. As there is nothing in the text of Deed of Assignment that clearly gives retroactive effect to the condonation, the parol evidence rule generally bars any other evidence of such terms other than the contents of the written agreement, such as evidence that the said Deed had retroactive effect.
It is argued that under Section 9, Rule 130, a party may present evidence to modify, explain or add to the terms of the written agreement if it is put in issue in the pleading, "[t]he failure of the written agreement to express the true intent and the agreement of the parties thereto."
Petitioner did not exactly state in its Amended Complaint that the condonation effected in the Deed of Assignment had retroacted to the date of the foreclosure sale. What petitioner contented in its amended complaint was that the Deed of Assignment "released and discharged plaintiff from any and all obligations due the defendant PNB and defendant APT," that "after the foreclosure by PNB/APT plaintiff is entitled to all the funds it deposited or being held by PNB in all its branches," and that "among the conditions of the `friendly foreclosure' are that all the accounts of the plaintiff are condoned." It remains unclear whether petitioner had indeed alleged in its Amended Complaint that the Deed of Assignment executed on 3 September1987 had retroacted effect as of the foreclosure sale, or on 27 August 1987. If petitioner were truly mindful to invoke the exception to the parol evidence rule and intent on claiming that the condonation had such retroactive effect, it should have employed more precise language to the effect in their original and amended complaints.
x x x x
The right of respondent PNB to set-off payments from UPSUMCO arose from conventional compensation rather than legal compensation, even if all the requisites for legal compensation were present between those two parties. The determinative factor is the mutual agreement between PNB and UPSUMCO to set-off payments. Even without an express agreement stipulating compensation, PNB and UPSUMCO would have been entitled to set-off of payments, as the legal requisites for compensation under Article 1279 were present.
As soon as PNB assigned its credit to APT, the mutual creditor-debtor relation between PNB and UPSUMCO ceased to exist. However, PNB and UPSUMCO had agreed to a conventional compensation, a relationship which does not require the presence of all the requisites under Article 1279. And PNB too had assigned all its rights as creditor to APT, including its rights under conventional compensation. The absence of the mutual creditor-debtor relation between the new creditor APT and UPSUMCO cannot negate the conventional compensation. Accordingly, APT, as the assignee of credit of PNB, had the right to set-off the outstanding obligations of UPSUMCO on the basis of conventional compensation before the condonation took effect on 3 September 1987.V.
The conclusions are clear. First. Between 27 August to 3 September 1987, APT had the right to apply payments from UPSUMCO's bank accounts maintained with PNB as repayment for the take-off loans and/or the operational loans. Considering that as of 30 June 1987, the total indebtedness of UPSUMCO as to the take-off loans amounted to P2,137,076,433.15, and because the foreclosed properties were sold during the execution sale for only 450 Million Pesos, it is safe to conclude that the total amount of P80,200,806.41 debited from UPSUMCO's bank accounts from 27 August to 3 September 1987 was very well less than the then outstanding indebtedness for the take-off loans. It was only on 3 September 1987 that the take-off loans were condoned by APT, which lost only on that date too the right to apply payments from UPSUMCO'S bank accounts to pay the take-off loans.
Second. After 3 September 1987, APT retained the right to apply payments from the bank accounts of UPSUMCO with PNB to answer for the outstanding indebtedness under the operational loan agreements. It appears that the amount of P17,773,185.24 was debited from UPSUMCO's bank accounts after 3 September. At the same time, it remains unclear what were the amounts of outstanding indebtedness under the operational loans at the various points after 3 September 1987 when the bank accounts of UPSUMCO were debited.
The Court of Appeals ordered the remand of the case to the trial court, on the premise that it was unclear how much APT was entitled to recover by way of counterclaim. It is clear that the amount claimed by APT by way of counterclaim - over 1.6 Billion Pesos - is over and beyond what it can possibly be entitled to, since it is clear that the take-off loans were actually condoned as of 3 September 1987. At the same time, APT was still entitled to repayment of UPSUMCO's operational loans. It is not clear to what extent, if at all, the amounts debited from UPSUMCO's bank accounts after 3 September 1987 covered UPSUMCO's outstanding indebtedness under the operational loans. Said amounts could be insufficient, just enough, or over and beyond what UPSUMCO actually owed, in which case the petitioner should be entitled to that excess amount debited after 3 September 1987. Because it is not evident from the voluminous records what was the outstanding balance of the operational loans at the various times post-September 3 UPSUMCO's bank accounts were debited, the remand ordered by the Court of Appeal is ultimately the wisest and fairest recourse.[1]
(1) UPSUMCO remains indebted to APT (for an undetermined amount) because APT, as assignee of respondent Philippine National bank (PNB), condoned only some but not all of UPSUMCO's loans, because (a) by its terms, the contract of condonation (Deed of Assignment dated 3 September 1987) mentioned only the "take-off" loans, leaving out the "operating loans"; and (b) the admission of parole evidence modifying the terms of the Deed of Assignment to cover UPSUMCO's "operating loans" owing to APT is improper and, at any rate, UPSUMCO introduced no parole evidence; and
(2) PNB's post-foreclosure diversion of UPSUMCO's bank deposits to APT without UPSUMCO's knowledge or consent was a valid act of "conventional compensation."
[P]NB assigned to APT its "take-off loans" to UPSUMCO x x x, including the mortgages on these take-off loans. PNB did not assign to APT any "operating loans" of UPSUMCO. x x x x On 27 August 1987, APT foreclosed the mortgages on the take-off loans. The foreclosure price was P450,000,000, leaving a deficiency of P1,687,076,433. On 3 September 1987, in consideration of UPSUMCO's assignment to APT of UPSUMCO's right to redeem the foreclosed assets, APT condoned "any deficiency amount" of UPSUMCO after the foreclosure.[3] (Emphasis supplied)
The earlier rulings of the Court were predicated on a finding that there was a "friendly foreclosure" agreement between APT and UPSUMCO, whereby APT agreed to condone all of UPSUMCO's outstanding obligations in exchange for UPSUMCO's waiver of its right to redeem the foreclosed property. However, no such agreement to that effect was ever committed to writing or presented in evidence. The written agreement actually set forth was not as contended by UPSUMCO.[10] (Emphasis supplied)
Defendant [PHILSUCOR] ha[d] notice of the friendly foreclosure conducted by APT and PNB. x x x x [UPSUMCO], due to the conduct of the defendant [PHILSUCOR], and the other parties, PNB and APT[,] was made to believe that when it assigned its right of redemption, it was in consideration of the condonation of deficiency claims against it including that which pertains to the defendant [PHILSUCOR].
x x x x
The doctrine of estoppel x x x, precludes [a party] from repudiating an obligation voluntarily assumed after its having accepted benefits therefrom. x x x x
Under the aforesaid principle of estoppel, defendant [PHILSUCOR] in the case at bar, after having made [UPSUMCO] believed [sic] in good faith that the foreclosure proceedings, including[] a part of it, i.e. condonation of deficiency claims against plaintiff, and after having benefited from such conduct, [cannot] undertake an inconsistent claim subsequently and proceed with its concealed intention to collect deficiency claim against [UPSUMCO].
In fact, according to Atty. Buñag, defendant [PHILSUCOR] did not make any reservation to claim for deficiency after having received its share of the auction sale in the amount of P58 million from APT. x x x However, defendant [PHILSUCOR] left the matter of deficiency balance to APT. x x x But, what happened was that APT condoned said deficiency claim against [UPSUMCO]. x x x x
WHEREFORE, premises considered, this Court renders the following judgment:
On Civil Case No. 63-B
1. [UPSUMCO] is hereby ordered released and discharged from any and all claims that the defendant [PHILSUCOR] may have against the former[.] (Emphasis supplied).[13]
[P]NB, in setting-off, acted as a third person using its own funds to pay the debt of UPSUMCO to its creditor APT. PNB can recover from UPSUMCO to the extent that the payment benefited UPSUMCO.[19] (Emphasis supplied)
To finance its operations, UPSUMCO also obtained loans from PNB evidenced by, among others, the Deed of Assignment by Way of Payment, notarized on 16 November 1984 and the Credit Agreements dated 19 February 1987 and 29 April 1987 ("operating loans"). The Credit Agreements, which also carried set-off clauses, were secured by Pledge contracts dated 19 February 1987 and 30 March 1987. By these contracts, UPSUMCO undertook to assign to PNB all its sugar produce for PNB to sell and apply the proceeds to satisfy UPSUMCO's unpaid obligation under the operating loans. The promissory notes for the funds released under the operating loans also carried set-off clauses. In the Deed of Assignment by Way of Payment, UPSUMCO undertook to assign to PNB its milled sugar and molasses beginning the crop year 1984-1985. To keep track of UPSUMCO's sugar assignments and the payments to UPSUMCO's loans, PNB maintained "sugar accounts payable" under UPSUMCO's name. (United Planters Sugar Milling Co., Inc. (UPSUMCO) v. Court of Appeals (Decision), G.R. No. 126890, 28 November 2006, 508 SCRA 310, 314-315; emphasis supplied, internal citations omitted).
[5] As held in the Resolution of 11 July 2007:
[T]he Court of Appeals never distinguished UPSUMCO's obligation to APT or PNB in terms of UPSUMCO's operating or take-off loans. Instead, the Court of Appeals relied on a rule of statutory construction [of expressio unios est exclusio alterios] in examining the Deed of Assignment. Thus, the appellate court held that since that document only mentioned the Credit Agreement dated 5 November 1974 and the Restructuring Agreements dated 24 June 1982, 10 December 1982, and 9 May 1984, it could not have covered the loans and other security instruments not mentioned in the contract. Accordingly, the Court of Appeals did not determine what loans PNB assigned to APT on 27 February 1987 which is determinative of the extent of APT's interest in the foreclosure proceedings of UPSUMCO's assets and consequently of what APT condoned under the Deed of Assignment of 3 September 1987. (United Planters Sugar Milling Co., Inc. (UPSUMCO) v. Court of Appeals (Resolution), G.R. No. 126890, 11 July 2007, 527 SCRA 336, 346 [2007]; emphasis supplied, internal citations omitted).
Until it filed its motion for reconsideration, PNB made no mention of any outstanding obligation of UPSUMCO under the operational loans. In the Answer it filed with the trial court, PNB counterclaimed not for UPSUMCO's alleged unpaid obligation under the operational loans but for moral damages and attorney's fees. Indeed, at no time during the pendency of this case in the trial court, the Court of Appeals, or this Court did PNB hint of any proof of such alleged debt. (United Planters Sugar Milling Co., Inc.(UPSUMCO) v. Court of Appeals (Resolution), G.R. No. 126890, 11 July 2007, 527 SCRA 336, 348 [2007]; internal citations omitted).
[I]t was evident UPSUMCO's allegation in its complaint that all of its account were condoned was not proven. Even if neither PNB nor APT had filed an answer, there would have been no basis in fact for the trial court to conclude that all of UPSUMCO's loans were condoned x x x. (United Planters Sugar Milling Co., Inc.(UPSUMCO) v. Court of Appeals (Resolution), G.R. No. 126890, 2 April 2009, p. 19; emphasis supplied).
[T]he Deed of Assignment itself speaks of condonation of "any deficiency amount," an amount that is determined right after the foreclosure. None of the respondents have presented good cause to undermine the reasons for our ruling, namely: (1) the condonation of UPSUMCO's deficiency obligation was, as found by the trial court in the PHILSUCOR case, part of the bundle of incentives APT offered UPSUMCO for the latter to agree to the "friendly foreclosure" of its mortgaged assets and (2) the Deed of Assignment itself stated that APT condoned "any deficiency amount" of UPSUMCO from the take-off loans after the foreclosure on 27 August 1987. (United Planters Sugar Milling Co., Inc. (UPSUMCO) v. Court of Appeals (Resolution), G.R. No. 126890, 11 July 2007, 527 SCRA 336, 352 [2007]; emphasis supplied, internal citations omitted).
In the early 1980s, UPSUMCO and other sugar millers, hard hit by a slump in the international sugar market, started to default on their loan payments. To bail out these corporations, then President Ferdinand E. Marcos created the Philippine Sugar Corporation (PHILSUCOR), which was authorized to issue and sell "sugar bonds" to various commercial banks holding non-performing loans of ailing sugar millers. Accordingly, PHILSUCOR issued and sold to PNB P3 billion worth of "sugar bonds" on 14 February 1984. PNB partly paid the bonds by assigning to PHILSUCOR 30% of its credit with UPSUMCO, computed as of 14 February 1984. This made PHILSUCOR UPSUMCO's creditor to that extent. To secure PHILSUCOR's interest in UPSUMCO, PHILSUCOR agreed that PNB will continue to hold UPSUMCO's collateral for the take-off loans, for itself and PHILSUCOR, to the extent of their pro-rata interest in the event of a foreclosure.[12] In Civil Case No. 63-B, rendered by the Regional Trial Court of Bais City, Branch 45, the same court which rendered the ruling in this case.
x x x x
To quickly dispose of UPSUMCO's mortgaged assets, APT negotiated with UPSUMCO for the mortgages' uncontested or "friendly" foreclosure and for UPSUMCO's waiver of its right of redemption. UPSUMCO accommodated APT. Hence, APT and PNB ("respondents"), the latter as PHILSUCOR's representative, scheduled the foreclosure sale on 27 August 1987. In the notices of foreclosure, PNB placed UPSUMCO's total "mortgage indebtedness" at P2,137,076,433.15, as of 30 June 1987. At the foreclosure sale, APT purchased the auctioned properties for P450 million.(United Planters Sugar Milling Co., Inc. (UPSUMCO) v. Court of Appeals (Decision), G.R. No. 126890, 28 November 2006, 508 SCRA 310, 315-317; emphasis supplied, internal citations omitted)
[W]e recognize the concept of conventional compensation, defined as occurring "when the parties agree to compensate their mutual obligations["] x x x [T]he only requisites of conventional compensation are (1) that each of the parties can dispose of the credit he seeks to compensate, and (2) that they agree to the mutual extinguishment of their credits. x x x x
[T]he absence of the mutual creditor-debtor relation between the new creditor APT and UPSUMCO cannot negate the conventional compensation. Accordingly, APT, as the assignee of credit of PNB, had the right to set-off the outstanding obligations of UPSUMCO on the basis of conventional compensation before the condonation took effect on 3 September 1987. (United Planters Sugar Milling Co., Inc. (UPSUMCO) v. Court of Appeals (Resolution), G.R. No. 126890, 2 April 2009, pp. 30-31; emphasis supplied)