SSS vs Moonwalk Development
Under the Civil Code, delay begins from the time the obligee judicially or
CASE:
Petition for review on certiorari of the decision of the then Intermediate Appellate
Court affirming in toto the decision of the former Court of First Instance of Rizal,
Seventh Judicial District, Branch XXIX, Pasay City.
FACTS:
On February 20, 1980, the petitioner Social Security System filed a complaint in the
Court of First Instance of Rizal against the respondent Moonwalk Development and
Housing Corporation.
The petitioner alleged that it had committed an error in failing to compute the 12%
interest due on delayed payments on the loan of the respondent and also in not
reflecting in its statement of account an unpaid balance on the said penalties for
delayed payments.
The respondent answered denying the claims and asserting that the petitioner had
the opportunity to ascertain the truth but it failed to do so.
Decision of the Court of First Instance:
The Court of First Instance dismissed the complaint on the ground that the obligation
was already extinguished by the payment by the respondent of its indebtedness to
the petitioner and by the latters cancellation of the real estate mortgages executed
in its favor by the defendant.
The Motion for Reconsideration filed by the petitioner was dismissed by the trial
court.
Decision of the Intermediate Appellate Court:
The respondent court held that the respondents obligation was extinguished and
affirmed the decision of the trial court.
ISSUE:
Whether or not respondent Moonwalk Development and Housing Corporation
incurred delay in the performance of its obligation.
RULING:
extrajudicially demands from the obligor the performance of the obligation. (Article
1169 of the Civil Code)
Article 1169 of the Civil Code provides for three (3) instances when demand in not
necessary to render the obligation in default:
(1) When the obligation or the law expressly so declares;
(2) When from the nature and the circumstances of the obligation it appears that the
designation of the time when the thing is to be delivered or the service to be
rendered was a controlling motive for the establishment of the contract;
(3) When demand would be useless, as when the obligor has rendered it beyond his
power to perform.
The case at bar does not fall within any of the established exceptions. Hence,
petitioner is not excused from making a demand.
It is true that respondent has long been delinquent in meeting its monthly arrears
and in paying the full amount of the loan itself as the obligation matured sometime
in January, 1977.
But mere delinquency in payment does not necessarily mean delay in the legal
concept. Default generally begins from the moment the creditor demands the
performance of the obligation.
In the present case, the petitioner never demanded from the respondents the
payment of its monthly amortizations. It was clear that respondent was never in
default because petitioner never compelled performance.
The petition was DISMISSED and the decision of the Intermediate Appellate Court
was AFFIRMED.