Solid Homes vs.

Tan

21062010
SOLID 465 SCRA 570 (Art. 1169) Facts: On April 7,1980, Solid Homes sold to spouses Uy a subdivision lot and thereafter spouses Uy sold the same lot to spouses Tan. From then on, respondents visited their property a number of times, only to find out the sad state of development thereat. There was no infrastructure & utility system of water. Worse, squatters occupy their lot & its surrounding areas. On Dec. 18,1995, respondents demanded on petitioner to provide the needed utility system & clear the area of squatters by the end of January 1996. Having received no reply from petitioner, Respondent filed with the housing & Land Use Regulatory Board (HLURB) a complaint for specific performance which rendered judgment in favor of respondents. ISSUE: WON Respondents right to bring the instant case against petitioner has already prescribed? NO WON in the event respondents opt to rescind the contract, should petitioner pay them the price they paid for the lot plus interest or the current market value thereof? CURRENT MARKET VALUE. HELD: Petitioner argued that the 10 yrs prescriptive period should be reckoned from April 7, 1980 when they sold the lot to spouses Uy or at the latest on February 1985. The SC disagree because it is from the time an act is performed or an omission incurred which is violative of plaintiffs right, that signals the accrual of a case of action. Thus, the period of prescription of any action is reckoned only from the date the cause of action accrued. And a cause of action arises when that which should have been done is not done, or that which should not have been done is done. In law, a cause of action exists when the following requisites concur, to wit: (1) a right in favor of the plaintiff by whatever means and under whatever law it arises or is created; (2)an obligation on the part on the defendant to respect such right; and (3) an act or omission on the part of such defendant violative of the right of the plaintiff. In this case, it was only on Dec. 18, 1995 when respondent made a written demand upon petitioner to construct which are unquestionably in the nature of an obligation to do. Under Art. 1169, party who is under obligation to do something incurs delay only from the time the obligee demands either judicially or extra judicially for the fulfillment of obligation. HOMES vs. TAN

In this case, respondent made their written demand upon petitioner to perform what is incumbent upon it only on Dec.18, 1995, it was only from that date when 10 yrs prescriptive period commenced to run. Equity and justice dictate that the injured party should be paid the market value, otherwise, respondent would enrich themselves at the expense of the lot owners when they sell the same lot at the present market value. Indeed, there would be unjust enrichment if respondents Solid Homes, Inc. & Purita Soliven are made to pay only the purchase price plus interest. It is definite that the value of the subject property already escalated after almost two decades from the time the petitioner paid for it. Equity and justice dictate that the injured party should be paid the market value of the lot, otherwise, respondents Solid Homes, Inc. & Purita Soliven would enrich themselves at the expense of herein lot owners when they sell the same lot at the present market value. Surely, such a situation should not be countenanced for to do so would be contrary to reason and therefore, unconscionable. Over time, courts have recognized with almost pedantic adherence that what is inconvenient or contrary to reason is not allowed in law.

SSS vs. Moonwalk Development and Housing Corporation FACTS:

Plaintiff SSS approved the application of Defendant Moonwalk for a loan of P30,000,000 for the purpose of developing and constructing a housing project. Out of P30,000,000 approved loan, the sum of P9,595,000 was released to defendant Moonwalk. A third Amendment Deed of Mortgage was executed for the payment of the amount of P9,595,000. Moonwalk made a total payment of P23,657,901.84 to SSS for the loan principal of P12,254,700. After settlement of the account, SSS issued to Moonwalk the release of Mortgage for Moonwalks Mortgaged properties. In letter to Moonwalk, SSS alleged that it committed an honest mistake in releasing defendant. That Moonwalk has still 12% penalty for failure to pay on time the amortization which is in the penal clause of the contract. Moonwalks counsel told SSS that it had completely paid its obligation to SSS and therefore there is no recovery of any penalty.

ISSUE: Is the penalty demandable even after the extinguishment of the principal obligation?

HELD: No. There has been a waiver of the penal clause as it was not demanded before the full obligation was fully paid and extinguished. Default begins from the moment the creditor demands the performance of the obligation. In this case, although there were late amortizations there was no demand made by SSS for the payment of the penalty hence Moonwalk is not in delay in the payment of the penalty. No delay occurred and there was no occasion when the penalty became demandable and enforceable. Since there was no default in the performance of the main obligationpayment of the loan- SSS was never entitled to recover any penalty. If the demand for the payment of the penalty was made prior to the extinguishment of the obligation which are: 1. e principal obligation 2. The interest of 12% on the principal obligation 3. The penalty of 12% for late payment for after demand, Moonwalk would be in delay and therefore liable for the penalty.