Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&amp;view=article&amp;id=45894:153004&amp;catid=1459&amp;Itemid=566
Timestamp: 2019-04-21 12:07:58+00:00

Document:
G.R. No. 153004 - SANTOS VENTURA HOCORMA FOUNDATION, INC. v. ERNESTO V. SANTOS, ET AL.
SANTOS VENTURA HOCORMA FOUNDATION, INC., Petitioner, v. ERNESTO V. SANTOS and RIVERLAND, INC., Respondents.
Subject of the present Petition for Review on Certiorari is the Decision,1 dated January 30, 2002, as well as the April 12, 2002, Resolution2 of the Court of Appeals in CA-G.R. CV No. 55122. The appellate court reversed the Decision,3 dated October 4, 1996, of the Regional Trial Court of Makati City, Branch 148, in Civil Case No. 95-811, and likewise denied petitioner's Motion for Reconsideration.
In compliance with the Compromise Agreement, respondent Santos moved for the dismissal of the aforesaid civil cases. He also caused the lifting of the notices of lis pendens on the real properties involved. For its part, petitioner SVHFI, paid P1.5 million to respondent Santos, leaving a balance of P13 million.
Subsequently, petitioner SVHFI sold to Development Exchange Livelihood Corporation two real properties, which were previously subjects of lis pendens. Discovering the disposition made by the petitioner, respondent Santos sent a letter to the petitioner demanding the payment of the remaining P13 million, which was ignored by the latter. Meanwhile, on September 30, 1991, the Regional Trial Court of Makati City, Branch 62, issued a Decision6 approving the compromise agreement.
On October 28, 1992, respondent Santos sent another letter to petitioner inquiring when it would pay the balance of P13 million. There was no response from petitioner. Consequently, respondent Santos applied with the Regional Trial Court of Makati City, Branch 62, for the issuance of a writ of execution of its compromise judgment dated September 30, 1991. The RTC granted the writ. Thus, on March 10, 1993, the Sheriff levied on the real properties of petitioner, which were formerly subjects of the lis pendens. Petitioner, however, filed numerous motions to block the enforcement of the said writ. The challenge of the execution of the aforesaid compromise judgment even reached the Supreme Court. All these efforts, however, were futile.
On November 22, 1994, petitioner's real properties located in Mabalacat, Pampanga were auctioned. In the said auction, Riverland, Inc. was the highest bidder for P12 million and it was issued a Certificate of Sale covering the real properties subject of the auction sale. Subsequently, another auction sale was held on February 8, 1995, for the sale of real properties of petitioner in Bacolod City. Again, Riverland, Inc. was the highest bidder. The Certificates of Sale issued for both properties provided for the right of redemption within one year from the date of registration of the said properties.
On June 2, 1995, Santos and Riverland Inc. filed a Complaint for Declaratory Relief and Damages7 alleging that there was delay on the part of petitioner in paying the balance of P13 million. They further alleged that under the Compromise Agreement, the obligation became due on October 26, 1992, but payment of the remaining P12 million was effected only on November 22, 1994. Thus, respondents prayed that petitioner be ordered to pay legal interest on the obligation, penalty, attorney's fees and costs of litigation. Furthermore, they prayed that the aforesaid sales be declared final and not subject to legal redemption.
In its Answer,8 petitioner countered that respondents have no cause of action against it since it had fully paid its obligation to the latter. It further claimed that the alleged delay in the payment of the balance was due to its valid exercise of its rights to protect its interests as provided under the Rules. Petitioner counterclaimed for attorney's fees and exemplary damages.
WHEREFORE, finding merit in the appeal, the appealed Decision is hereby REVERSED and judgment is hereby rendered ordering appellee SVHFI to pay appellants Santos and Riverland, Inc.: (1) legal interest on the principal amount of P13 million at the rate of 12% per annum from the date of demand on October 28, 1992 up to the date of actual payment of the whole obligation; and (2) P20,000 as attorney's fees and costs of suit.
The only issue to be resolved is whether the respondents are entitled to legal interest.
Lastly, petitioner alleges that since the compromise agreement did not provide for a period within which the obligation will become due and demandable, it is incumbent upon respondent Santos to ask for judicial intervention for purposes of fixing the period. It is only when a fixed period exists that the legal interests can be computed.
In accordance with the compromise agreement, the respondents asked for the dismissal of the pending civil cases. The petitioner, on the other hand, paid the initial P1.5 million upon the execution of the agreement. This act of the petitioner showed that it acknowledges that the agreement was immediately executory and enforceable upon its execution.
The two-year period must be counted from October 26, 1990, the date of execution of the compromise agreement, and not on the judicial approval of the compromise agreement on September 30, 1991. When respondents wrote a demand letter to petitioner on October 28, 1992, the obligation was already due and demandable. When the petitioner failed to pay its due obligation after the demand was made, it incurred delay.
In the case at bar, the obligation was already due and demandable after the lapse of the two-year period from the execution of the contract. The two-year period ended on October 26, 1992. When the respondents gave a demand letter on October 28, 1992, to the petitioner, the obligation was already due and demandable. Furthermore, the obligation is liquidated because the debtor knows precisely how much he is to pay and when he is to pay it.
The second requisite is also present. Petitioner delayed in the performance. It was able to fully settle its outstanding balance only on February 8, 1995, which is more than two years after the extra-judicial demand. Moreover, it filed several motions and elevated adverse resolutions to the appellate court to hinder the execution of a final and executory judgment, and further delay the fulfillment of its obligation.
Third, the demand letter sent to the petitioner on October 28, 1992, was in accordance with an extra-judicial demand contemplated by law.
Verily, the petitioner is liable for damages for the delay in the performance of its obligation. This is provided for in Article 117025 of the New Civil Code.
WHEREFORE, the petition is DENIED for lack of merit. The Decision dated January 30, 2002 of the Court of Appeals and its April 12, 2002 Resolution in CA-G.R. CV No. 55122 are AFFIRMED. Costs against petitioner.
Davide, Jr. C.J. (Chairman), Ynares-Santiago and Carpio, JJ., concur.
1 Rollo, pp. 39-45. Penned by Associate Justice Hilarion L. Aquino, with Associate Justices Edgardo P. Cruz, and Amelita G. Tolentino concurring.
15 New Civil Code, Art. 2028.
16 Cebu International Finance Corp. v. Court of Appeals, G.R. No. 123031, 12 October 1999, 316 SCRA 488, 498-499 citing David v. Court of Appeals, G.R. No. 97240, 16 October 1992, 214 SCRA 644, 650.
17 Del Rosario v. Madayag, G.R. No. 118531, 28 August 1995, 247 SCRA 767, 771.
18 Mayuga v. Court of Appeals, No. L-46953, 28 September 1987, 154 SCRA 309, 320.
21 Landoil Resources Corporation v. Tensuan, No. L-77733, 20 December 1988, 168 SCRA 569, 578.
23 IV Arturo M. Tolentino, Civil Code of the Philippines, 101 (1987 ed.).
25 Art. 1170. Those who in the performance of their obligations are guilty of fraud, negligence, or delay and those who in any manner contravene the tenor thereof, are liable for damages.
26 II J. Cesar S. Sangco, Philippine Law on Torts and Damages 1085 (1993 ed.).
28 Quiros v. Tan-Guinlay, No. 1904, 3 March 1906, 5 Phil 675, 680.
29 Central Bank Circular No. 416, July 29, 1974.
30 Eastern Assurance and Surety Corporation v. Court of Appeals, G.R. No. 127135, 18 January 2000, 322 SCRA 73, 78.

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