11 Feb 2020

1. Pineda v. De Vega –
 Vega borrowed 500k payable 1 year with 8% interest per month
 Also secured loan subject to real estate mortgage over a land together with
buildings and improvements
 Loan maturity, Vega did not pay despite demand (232K)
 Vega said cannot claim because lack of barangay conciliation proceedings and
fail to join her husband as party
 No need for husband to join
 Instead of 8% Pineda only charged 4%
 Pineda admit Vega only claimed 200K instead of 500K 3%
 Vega written admission 500K is for a different agreement(undated real estate
mortgage) for thr 200K
 Went to mediation but unsuccessful
 RTC in favor of Pineda
o Loan and mortgage established – judicial foreclosure
o 12% legal interet
o Barangay not needed; husband not needed
o ORDER to pay 200k with interest and nominal at atty
o ORDER to foreclose and sell – proceed to Pineda
 CA REVERSE
o Pineda fail to prove demand was sent
o Registry return card was not formally offerd in evidence
o Only a photocopy
o Not competent proof
o No postman cert
o FAIL TO PROVE DEMAN 1169 – VEGA CANNPT BE IN DEFAULT
 SC SIDE WITH
o No evidence to prove demand
o Cannot use photocopy of registry return card
o Pineda could have just presented the OG copy but did not and gave no
explanation
o VEGA COULD NOT BE IN DEFAFULT BEC NO EXTRAJUDCIAL DEMAND
o BUT
o Pineda seek to enforce is a contract of loan secured by mortgage – arise
from a contract – governed by 1169
o DELAY WAS TRIGGERED WHEN PINEDA DEMANDED PAYMENT IN COURT
o CANNOT foreclose and demand collection (mutally exclusive) – 2
remedies na
o Only one remedy because it would amount to the multiplicity of suit
o Single and indivisible cause of action
o Vega to pay Pineda loaned 200k and 30k atty
 o Pay interest 12% and 6%
 a
2. Lara (handicraft) v. Midtown (construction) –
 Midtown allege lara bought construction materials worth 1m on 60-day credit
term
 With condition 24% interest per annum for overdue
 Lara paid purchase price- postdated Chinabank checks
 Checks BOUNCED
 Lara replaces with new ones
 Dishonored again for insufficient
 Lara admits to buying but that they were of poor quality – did not pass the US
buyers standards
 RTC ordered Lara to pay Midtown – failed to prove poor quality
 CA AFFIRMED RTC
 Lara is ordered to pay Midtown:
o 1M plus the stipulated 24% interest per annum from the date of
extrajudicial demand.
o Legal interest on the 24% due on the principal as of judicial demand (at the
rate of 12% per annum and the rate of 6% until full payment)
 Default in the Contractual Obligation
o Whoever alleges fraud or mistake affecting a transaction must
substantiate his allegation and has the burden of proof.
o Lara failed to substantiate the claim that the materials delivered did not
comply with the required specifications.

3. Pantaleon v AMEX – case about delay of credit card company in its oblig to
cardholders
 diamond;
 delay in credit card;
 AMEX not liable
4. J Plus v. Utility Assurance (UTASCO) –
 Jplus (Joo Han Lee) entered into Construction agreement with Mabunay (Steven
Shades)
 Condotel Building in Boracay (72 room condo) for 42M completed in 365 days
from signing
 8.4M DP was fully paid and balance will be based on the actual work finished
within 15 days recipt of MONTHLY Progress billings – work sched
 Completion dat December
 MABUNAY also submit PERFORMANCE BOND by UTASCO (insurance ata) 4.8M or
20% DP
 Lee paid upto 7th moth (15M) but Mabunay only completed 27%
 As of Nov only 31% was completed so uncompleted 68% with cost 28M
 Lee wants to terminate and sent demand letters to Mabunay and UTASCO asking
for payment of sums 8M damages and 2M overpayment
 Mabunay said start proj after they retrofitted the old structure pa kaya delay
 Arbitration with CONSTRUCTION INDUSTRY ARBI COM
 W/N MABUNAY INCURRED DELAY IN PERFORMANCE
 YES
 a general rule that one who contracts to complete certain work within a certain
time is liable for the damage for not completing it within such time, unless the
delay is excused or waived.
o (1) that the obligation be demandable and already liquidated;
o (2) that the debtor delays performance; and
o (3) that the creditor requires the performance judicially or extrajudicially.
 CA said failure of the contractor to catch up with schedule of work activities did
not constitute delay. FALSEEE
 SC said various stipulations of a contract shall be interpreted together,
o the work schedule approved by petitioner was intended, not only to
serve as its basis for the payment of monthly progress billings,
o but also for evaluation of the progress of work by the contractor.
o delayed without justiciable cause the completion of the project "by more
than thirty (30)
o From the start of proj (April) Mabunay already late in the work sched
o Lee also constantly advised him of the delays throught their engineer
o Time is of the essence in this Agreement. Should the CONTRACTOR fail to
complete the PROJECT within the period stipulated herein or within the
period of extension granted by the OWNER, plus One (1) Week grace
period
o OWNER shall be entitled to confiscate the performance bond of the
CONTRACTOR to compensate for all kinds of damages the OWNER may
suffer.
o
 The plain and unambiguous terms of the Construction Agreement authorize
petitioner to conCscate the Performance Bond to answer for all kinds of
damages it may suffer as a result of the contractor's failure to complete the
building
 Respondent Utassco to pay to petitioner J Plus Asia Development Corporation
the full amount of the Performance Bond, P8,400,000.00, pursuant to Art. 13 of
the Construction Agreement dated December 24, 2007, with interest at the rate
of 6% pe
 Respondent Mabunay to indemnify respondent Utassco of the amounts
respondent Utassco will have paid to claimant under this decision, plus interest
thereon at the rate of 12% per annum computed from the date he is notiCed of
 such payment made by respondent Utassco to claimant until fully paid, and to
pay Utassco P100,000.00 as attorney's fees.

5. Barzaga v. CA and Alviar – non-importance of demand in obligations where time is of

the essence
 Christmas;
 hardware;
 tools; late delivery for niche; urgent; before Christmas dapat; flat tire not excuse

6. Lorenzo Shipping v. BJ Marthel – no demand or notice necessary

 cylinder liners;
 not late delivery; not specified; no urgency
 Lorenzo offered to pay 150K for both out of 477K/each

7. Almocera v. Ong – delay when demand is useless

 townhouse in Cebu;
 contract to sell
 13.4M
 Almocera and first builders did not tell Johnny that it ws mortgaged to LBP
 Construction was not finished
 Lot was foreclosed then sold to another person
 Ong asked for money
 DEMAND NOT NECESSARY because it is impossible
 Buyer not in default because it is a reciprocal obligation
 No demand made by buyse but seller was not in default because
 IT WAS USELESS BECAUSE OF NON-DISCLOSURE OF THE MORTGAGE
o IF ONLY SELLER PAID THEIR LOAN
 WHY USELESS?
o
 BREACH DUE TO FRAUD

8. Megaworld Globus v. Tanseco – delay without need of demand because demand is

useless (debtor cannot accomplish oblig of condo with or without demand)
 Unit in Salcedo;
 Grace period of 6 months
 After 3 years before turnover
 Tanesco filed for recission and refund and damages
 Demand would have been useless because no unit yet

DISCUSSION

 Problem with seller

 Failure to deliver also within grace period
  Buyer never made a demand
 SC said demand is useless
 USELESS means
 Let say today is the due date
 22 floors
 Due date not yet topoff building only 21 floors
 There is no way seller could build and deliver the unit on the same day
 If the demand were made by the creditor – debtor would be in no position to the
performance on the due date
 Demand is usless
 Debtor in no position to fulfill the obligation if creditor made the demand on the
due date

DISCUSSION

 Why do we need to know if debtor is in default

 A

LARA’S (buyer) v. MIDTOWN (supplier)

 Handicrafts business
 60 day credit terms
 On or before 60th day price should be paid
 If no payment within due date there would be interest of 24% per annum
 Was LARA IN DEFAULT? YES
 CONSEQUENCE OF DEFAULT – pay INTEREST
o Buyer defaulted
o Default happened after the due date
 Interest would now be due. Why?
o
 1 thing to determine
st

o Did parties agree to a rate

o
 If u have a contract
 2 kinds of obligation with respect to default
o LOANS OR FORBEARANCE OF MONEY
o OR NOT LOANS OR FORBEARANCE OF MONEY
 Forbearance

9. Solar Harvest v. Davao Corrugated Carto – recission despite lack of demand

 bought boxes from Davao; Solar did not pickup;


10. Cortes v. CA – delay of both parties or compensation morae

