PHILIPPINE CHARTER INSURANCE CORPORATION v.

CENTRAL COLLEGES OF
THE PHILIPPINES
GR No. 180631
February 22, 2012

MENDOZA, J.

FACTS:
The central Colleges of the Philippines contracted the services of Dynamic Planters and
Construction Corporation to be its general contractor. To have sufficient guarantee of the
fulfillment of the obligation, DPCC posted three bonds, all issued by the Philippine Charter
Insurance Corporation.
However, the second phase of the project encountered one too many delays. The CCP
informed them of the breach of contract which PCIC has committed. Then on Aug 2004, CCP
asked for the final demand for the payment of the amount indicated in the bonds. On Oct 28,
2004, CCP filed a complaint before the Construction Industry Arbitrary Commission against
DPCC and PCIC praying that they be jointly liable. In their answer, DPCC and PCIC denied any
liability stating that CCP unlawfully withheld the materials and other equipments.
The lower court ruled in favor of CCP and the Court of Appeals modified the same.

ISSUE:
Was there delay in the part of PCIC in not being able to fulfill its obligations amidst the
demand from CCP?

RULING:
Art. 1169 of the Civil Code states that those obliged to deliver or to do something incur in
delay from the time the oblige judicially or extrajudicially demands from them the fulfillment of
their obligation.
Delay or default commences from the time the obligor demands, judicially or
extrajudicially, the fulfillment of the obligation from the oblige. Thus, in this case, DPCC and
PCIC incurred elay from the time CCP called its attention that it had breached the contract and
extrajudicially demanded the fulfillment of its commitment against the bonds.