Agcaoili vs GSIS [Case Digest]

GR NO L-30056
August 30, 1988

Facts:
Agcaoili was awarded a house by GSIS on the condition that they occupy the house within 3 days.
Agcaoili wasted no time occupying the said house.
o However, it was inhabitable the house was nothing more than a shell and civilized
occupation was not possible
He asked a homeless friend, Villanueva, to stay on the premises as a watchman, pending the
construction or completion of the house.
Agcaoili complained to GSIS but to no avail.
Subsequently, GSIS asked Agcaoli to pay for the monthly amortizations fees and other fees (P 31.56
/ mo)
o Agcaoili paid the first monthly installment, but refused to pay the rest until the house was
completed
o GSIS cancelled the award and required Agcaoili to vacate the premises
Agcaoili then filed a suit in the CFI for damages
o Pending the suit, a protest was also lodged by the other awardees regarding the failure of
the GSIS to complete construction of their houses
o Judgement was rendered in favor of Agcaoili
rendered the cancellation of award illegal and void
ordered the completion of the said house and to collect monthly amortizations only
thereof
GSIS appealed said judgement
o Said unit had been sold in the condition and state of completion then existing and he is
deemed to have accepted the same condition he found it when he accepted the award
o Contract of sale was perfected upon the immediate occupancy. Since Agcaoili failed to
comply with the condition, no contract of sale was perfected.
o Agcaoilis act of placing his homeless friend as watchman without prior knowledge of GSIS
was a repudiation on the part of Agcaoili and deprivation of GSIS of reasonable rental value
property

Issue:
(1) WON the cancellation by GSIS of the award in favor of Agcaoili just and proper

Held:
(1) NO. It was the duty of GSIS to deliver the thing sold in a condition suitable for its enjoyment by the buyer
for the purpose contemplated deliver the house in a reasonably livable state.
To say that it was not stipulated in the contract that the obligation was to deliver a habitable house
would result in an absurd and unfair situation.
Since GSIS did not fulfill that obligation, then it cannot cancel the award or the contract just because
Agcaoili refused to pay for the amortization fee.
In reciprocal obligations, neither party incurs delay if the other does not comply in a proper manner
with what is incumbent upon him

GSIS may not succeed in justifying its cancellation of the award to Agcaoili by saying that he didnt occupy
the house.
Agcaoili did try to fulfill the condition
 However, when he found the house inhabitable, he did leave a friend, who being homeless,
accepted the shelter as it is and agreed to look after it.

However, given that the case is on going for 20 years now, the Court cannot require specific performance of
the contract in question as this would result into equity.
The court adjusted the rights of the parties with the circumstances of time at the rendition of
judgement, when these are significantly different when the rights existed.
The completion of the house no longer appears feasible given the time that has elapsed
It is more equitable to just require the payment of the land on which the house stands and for the
house itself, in its unfinished state, at the time of the contract.
SSS vs Moonwalk [Case Digest]
GR NO 73345
April 7, 1993

Facts:
SSS approved the application of Moonwalk for a loan of P 30 M for the purpose of developing and
constructing a housing project.
Out of P 30 M, the sum of P 9.595 M was released to Moonwalk
A third amendment Deed of Mortgage was executed for the payment of the amount of P 9.595 M
Moonwalk made a total payment of P 23 M to SSS for the loan principal of P 12.2 M (last payment
was around P 15 M)
o After the settlement of the account, SSS issued to Moonwalk the release of Mortgage for
Moonwalks Mortgaged Properties
However, in a letter sent to Moonwalk, SSS said they committed an honest mistake in releasing
Moonwalk
o Moonwalk still has the 12% penalty for failure to pay on time the amortization which is in the
penal clause of the contract
Moonwalk said that it had completely paid its obligation to SSS and therefore no recovery of any
penalty

Issue:
(1) WON the penalty is demandable even after the extinguishment of the principal obligation

Held:
(1) NO. There has been a waiver of the penal clause since it was not demanded before the full obligation
was fully paid and extinguished.
Penal clause an accessory to the obligation which the parties attach to the principal obligation for
the purpose of insuring the performance thereof
o Dependent upon the existence of the principal obligation
o Demandable only in case of nonperformance or late performance of the main obligation
Under Art 1169 of CC, Those obliged to deliver or to do something incur in delay from the time the
obligee judicially or extrajudicially demands from them the fulfillment of their obligation.
o Moonwalk has long been delinquent in meeting its monthly amortization payments and in
paying the full amount of the loan itself but mere delinquency does not mean delay
o Default begins when the creditor demands the performance of the obligation
Nowhere in this case did appear that SSS demanded from Moonwalk its monthly
amortizations
SSS tried to foreclose its mortgages but did not push through upon Moonwalks
promise to pay in full
The next demand was when SSS issued a statement of account to Moonwalk and
then Moonwalk paid in full
Moonwalk was never in default because SSS never compelled performance
Demand was complied on time so there is no delay since no delay occurred, the
penalty cannot become demandable or enforceable

There is no delay or mora unless there is a demand

o In this case, during the period when the principal obligation was still subsisting, although
there were late payments of the amortization, there was no demand made by the creditor.
Hence the debtor was not in delay or mora.
o At the time the demand was made, the principal obligation was already extinguished, thereby
extinguishing the penal clause (merely an accessory) thereof
Bricktown Devt Corp vs Amor Tierra [Case Digest]
GR NO
DATE

Facts:
Bricktown Devt executed two contracts to sell in favor of Amor Tierra a total of 96 residential lots in
Paranaque
The total price to be paid by AT is P 21 M to be paid in different amounts corresponding their maturity
dates and several other payments for mortgage liability and interest in updating the bank loan
AT was only able to pay P 1.3 M. Meanwhile, the parties continued to negotiate for a possible
modification of their agreement but nothing conclusive happened
Several months later, AT demanded the refund of various payments to Bricktown amounting to P 2.4
M with interest within 15 days or in lieu of cash, assign an equivalent number of lots at the same
price fixed by contracts
When the demand was not heeded, AT filed an action in court that rendered a decision in its favor
o CA also affirmed the decision

Issue:
(1) WON the contract was properly rescinded

(2) WON the amounts remitted by AT were rightly forfeited by Bricktown

Held:
(1) YES. The cancellation of contracts to sell by Bricktown is in accord with the contractual covenants of the
parties, and such must be respected
In a contract to sell, the non-payment of the purchase price can prevent the obligation to convey title
from acquiring any obligatory force
In the case at bar, the terms of payment were not met by AT.
A notice of cancellation was ultimately made months after the lapse of the contracted grace period
o Art 1169 would not apply bec the grace period is not an obligation that would render the
debtor in default
o It became operative when the payments were not made, so Art 1169 has no relavance

(2) NO. Given that AT did not actually possessed the property under the contract, Bricktown is ordered to
return the amount remitted to it.
However, it wouldnt be equitable to adjudge any interest payment by Bricktown to the amount
refunded since AT should not be allowed to totally free itself from its own breach.
Taguba vs De Leon [Case Digest]
GR NO L-59980
October 23, 1984

Facts:
Berlin Taguba is the owner of a residential lot in Isabela
He sold a portion of the said lot to De Leon and to Asuncion spouses
Alleging that De Leon had already paid the complete stipulated price of P 18 K to Taguba within the
grace period, but Taguba refused to accept payment
Since the intervention of Gov Dy didnt lead to a proper negotiation of settlement, DL filed a case for
Specific Performance against Taguba
In their Answer, Taguba claimed that DL failed to comply with their obligation under the Deed of
Conditional Sale despite the extensions granted to her
TC: Taguba was ordered to excute the deed of sale in favor of DL to the actual area occupied by her
and was ordered to refund the excess cost of the area
o CA modified its decision

Issue:
(1) WON the deed of sale between Taguba and DL can be rescinded

(2) WON xxx

Held:
(1) NO. The contract of sale between Taguba and DL was absolute in nature.
Nowhere in the said contract was a stipulation that the title of the property is reserved to the vendor
until full price was paid
o A reading of the contract only says that Taguba has the right to collect interest if DL fails to
pay the full price on time and to increase the price per square meter if she still fails to pay
after the 6-mos grace period
The applicable provision is Art 1592 of CC which states that the vendee may pay even after the
expiration period as long as no demand for rescission has been made upon him
In this case, petitioner Taguba never notified DL that he was rescinding the contract
o However, since time is not of the essence of the agreement, a slight delay is not a sufficient
ground for the rescission of the agreement
o Considering that DL was able to pay her obligation on time, equity and justice mandates that
she be given additional period to complete the payment of the purchase price

As with the sale to the Asuncion spouses, on the part of property previously sold to DL, the court finds that
the sale cannot prevail over the sale to DL
Asuncion spouses cannot be considered buyers in GF because they were aware of the previous
sale over to DL