SPOUSES BONROSTRO v. SPOUSES LUNAG.R. No. 172346July 24, 2013Delay/Default

FACTS:Respondent Luna entered into a Contract to Sell with Bliss Development Corporation involving a House and Lot. A year after, respondent Luna entered into another Contract to Sell with petitioner Bonrostro concerning the same property. After the execution of the contract, Bonrostro immediately took possession of the property. However, except for the initial downpayment of P200,000, Bonrostro failed to pay any of the stipulated subsequent amortization payments. So, Petitioner Luna filed a complaint of rescission of contract with the Bonrostros. In their answer, the Bonrsotros allege that Luna failed to show up during their agreed date of payment and that they received no reply in their letter expressing their desire to settle such obligation. Hence they assert that they should not be assessed any interest subsequent to the date of such tender. Neither should they be ordered to pay interest which covers the amortizations paid by Spouses Luna to Bliss, because it was Spouses Luna themselves who prevented such fulfillment by instructing Bliss not to accept amortization payments from anyone.

ISSUE:Whether or not Respondent Bonrostro incurred delay in the performance of its obligation, and is therefore liable to pay damages. – YES.

HELD:**Since the contract entered into is a Contract to Sell, rescission is not the solution. It is governed by RA 6552 or the Maceda Law, which states that

In case where less than two years of installment were paid, the seller shall give the buyer a grace period of not less than sixty days from the date the installment became due. If the buyer fails to pay the installments due at the expiration of the grace period, the seller may cancel the contract after thirty days from the receipt of the buyer of the notice of cancellation or demand for rescission.

So, while the Spouses Luna sent the letters rescinding the contract for non-payment, those are not considered valid and effective since they were made within the 60-day grace period. The cancellation is invalid, it remains valid and subsisting.

**The letter manifesting intent to pay is not a tender of payment. Tender of payment is the manifestation by the debtor of a desire to pay an obligation. If such tender is refused without just cause, the tender of payment will discharge a debtor from obligation to pay only after a valid consignation of the amount with the proper court. Consignation is the deposit of the amount with a judicial authority according to the rules prescribed by law, after the tender of payment has been refused.

In the case, the letter considered as the tender of payment, not accompanied by the means of payment, and the debtor not taking any immediate step to make a consignation, it produces

Prepared By: Mariel Angeli R. Quines

no effect, and consequently, the interest is not suspended from the time of such tender. Spouses Bonrostro are still liable for such interest.

**Regarding the payment of interest on the amount which spouses Luna paid to Bliss as amortizations, spouses Bonrostro assert that they were prevented by Luna from fulfilling such obligation, invoking the article on the Civil Code on constructive fulfillment – the condition shall be deemed fulfilled when the obligor voluntarily prevents its fulfillment. However, the Court finds that this provision is inapplicable to the instant case because Luna is the obligee, not the obligor. There was no showing that any attempt at payment of Bonrostro was refused by Bliss, nor was there any showing that Bliss actually heeded Luna’s instruction.

Clearly, Bonrostro was remiss in paying such amortization, so Luna was constrained to pay such to avoid the cancellation of the earlier Contract to Sell between Luna and Bliss. The reimbursement of the payment to Luna is proper, considering that because of such payment by Luna, Bonrostro is spared from interests and penalties which Bliss would’ve imposed if such amortizations remained unpaid.

Delay in the performance of an obligation is looked upon with disfavor because when a party to a contract incurs delay, the other party who performs his part of the contract suffers damages thereby. Spouses Luna suffered damages brought about by the failure of spouses Bonrostro to comply with their obligation on time. Under the Civil Code, if the obligation consists in the payment of a sum of money, and the debtor incurs delay, the indemnity for damages shall be the payment of interest agreed upon.

Prepared By: Mariel Angeli R. Quines