Bayalang vs. Silang Traffic Co G.R. Nos. L-48195 and 48196 May 1, 1942 OZAETA, J.

Petitioner SOFRONIO T. BAYLA, ET AL. entered into an agreement with SILANG TRAFFIC CO., INC
Respondent regarding the purchase of fifteen (15) shares of capital stock by the former from the latter.
On or before July 31, 1937, petitioners failed to pay the installment due that day resulting for the
automatic forfeiture of the payments they already made. On the other hand, on August 1, 1937, the
respondent corporation issued a resolution authorizing the refund of the installments already paid by
the petitioners on auust 1, 1937 the board of directors passed a resolution authorizing for the refund of
the amounts paid and the reversion of the shares of stock to the corporation. Despite the said board
resolution, the amounts paid by petitioners were not returned to them since the board resolution was
revoked and cancelled by a subsequent resolution. Thus, petitioners instituted an action in the Court of
First Instance of Cavite to recover thesums of money paid.
The corporation set up a defense stating that said resolution was no longer applicable to the petitioners
since their shares was already reverted in favor of the respondent corporation due to their failure to pay
on the due date long before the resolution was issued. The trial court issued an order against the
petitioners; and on appeal, the CAaffirmed the decision of the trial court with some modifications as to
thecancellation of the petitioner’s subscription which was reversed by saidappellate court. Hence, an
appeal by both parties for certiorari.

WON the failure of the purchaser to pay any installment would give rise to a forfeiture in favor of the
seller

Rulings: No. The contract did not expressly provide that the failure of the purchaser to pay any
instalment would give rise to forfeiture and cancellation without the necessity of any demand from the
seller; andUnder article 1100 of the Civil Code (now Article 1169) persons obliged to deliver or do
something are not in default until he moment the creditor demands of them judicially or extrajudicially
the fulfilment of their obligation, the judgment of the court of appeals is hereby reversed and another
judgment will be entered against the defendant Silang Traffic Co., Inc., ordering it to pay to the
plaintiffs