Title: Santos Ventura Hocorma Foundation Inc.

v Santos Name of Digester: Cel G

G.R. No. 153004 Date: 5 November 2004 Ponente: Quisimbing, J.

Subject / Syllabus Topic: Obligations and Contracts/Nature and Effects of Civil Obligations
Petitioner: Santos Ventura Hocorma Foundation, Inc. Respondent: Ernesto V. Santos
Doctrines:
 Article 1169, Civil Code. Those obliged to deliver to do something incur in delay from the time the oblige judicially or
extrajudicially demands from them the fulfillment of their obligation.
 Requisites for a debtor to be in default:
1. The obligation is to be demandable and already liquidated;
2. The debtor delays in performance
3. The creditor requires the performance judicially and extrajudicially
 The Compromise Agreement as a consensual contract became binding between the parties upon its execution and not
upon its court approval
Facts:
● Ernesto Santos (Santos) and Santos Ventura Hocorma Foundation, Inc. (SVHFI) executed a Compromise Agreement which
amicably ended their pending litigations, which include the following: (1) Defendant Foundation shall pay Plaintiff Santos P14.5
Million on (a) P1.5 Million immediately upon the execution of this agreement and (b) The balance of P13 Million shall be paid,
whether in one lump sum or in installments, at the discretion of the Foundation, within a period of not more than two years from
the execution of this agreement; (2) Immediately upon the execution of this agreement (and [the] receipt of the P1.5 Million),
plaintiff Santos shall cause the dismissal with prejudice of Civil Cases; (3) Failure of compliance of any of the foregoing terms and
conditions by either or both parties to this agreement shall ipso facto and ipso jure automatically entitle the aggrieved party to a
writ of execution for the enforcement of this agreement.
●
● In line with the Compromise Agreement, Santos moved for the dismissal of the civil cases concerned. He also caused the lifting of
the notice of lis pendens on the real properties involved. For its part, SVHFI paid 1.5 million to respondent Santos to represent him,
leaving a balance of 13 million. Subsequently, SVHFI sold to Development Exchange Livelihood Corporation two real properties,
which were previously subjects of lis pendens.

Santos sent a letter to the petitioner demanding the payment of the remaining P13 million which was ignored by SVHFI. Santos
sent another letter inquiring when it would pay the balance of P13 million, to no avail. This led Santos to apply with the RTC of
Makati for the issuance of a writ of execution.
Issue/s: Ruling:
Whether or not SVHI delayed in the fulfillment of their Yes.
obligation

Holding:
A compromise has upon the parties the effect and authority or res judicata, with respect to the matter definitely stated therein, or by
which implication from its terms should be deemed to have included therein. This holds true even if the agreement has not been
judicially approved. In this case, the Compromise Agreement was entered into by the parties on October 26, 1990 and was judicially
approved on September 31, 1990. The compromise agreement as a consensual contract became binding between the parties upon
its execution and not upon its court approval.

Article 1169 of the Civil Code states: Those obliged to deliver to do something incur in delay from the time the oblige judicially or
extrajudicially demands from them the fulfillment of their obligation.

In order for the debtor to be in default, the following requisites must be present:
1. The obligation is to be demandable and already liquidated;
2. The debtor delays in performance
3. The creditor requires the performance judicially and extrajudicially

In this case, all three requisites were present:

1. the obligation was already due and demandable after the lapse of the two-year period from the execution of the contract.
When the respondents gave a demand letter to the petitioner, the obligation was already due and demandable. The
obligation was also liquidated since the debtor already knows precisely how much he needs to pay and when he must pay
it.
 2. Petitioner delayed in the performance. It was able to fully settle its outstanding balance two years after the extrajudicial
demand. Furthermore, 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 the obligation.
3. The demand letter sent to the petitioner was in accordance with an extrajudicial demand contemplated by law
Notes:
● Res judicata - a matter that has been adjudicated by a competent court and may not be pursued further by the same parties