Teresita Buenaventura v. Metropolitan Bank and Trust Company, GR No.

167082 (August 3, 2016)

FACTS
On [dates] January 20 and April 17, 1997, Teresita Buenaventura executed
Promissory Note (PN) Nos. 232663 and 232711, respectively, each in the
amount of Pl,500,000.00 and payable to Metropolitan Bank and Trust
Company (MBTC). PN No. 232663 was to mature on July 1, 1997, with
interest and credit evaluation and supervision fee (CESF) at the rate of
17.532% per annum, while PN No. 232711 was to mature on April 7, 1998,
with interest and CESF at the rate of 14.239% per annum. Both PNs provide
for penalty of 18% per annum on the unpaid principal from date of default
until full payment
of the obligation.

Despite demands, amounts thereon remained unpaid as of July 15, 1998,

inclusive of interest and penalty. Consequently, MBTC filed an action
against herein petitioner for recovery of said amounts, interest, penalty and
attorney's fees before the RTC. In answer, appellant averred that in 1997,
she received from her nephew, Rene Imperial (Imperial), three (3)
postdated checks drawn against appellee (in total amount
of Php1,897,000) as partial payments for the purchase of her properties;
that she rediscounted the subject checks with MBTC (Timog Branch), for
which she was required to execute the PNs to secure payment thereof; and
that she is a mere guarantor and cannot be compelled to pay unless and
until the bank shall
have exhausted all the properties of Imperial.

RTC finds in favor MBTC and ordered Buenaventura to pay the former the
amount of Php3,553,444.45 plus all interest and penalties due as stipulated
in the PNs beginning July 15, 1998 until the amount is fully paid and 10%
of the total amount due as attorney's fees. The CA promulgated the
assailed decision with some modifications as to the interest rate per annum.
Motion for Reconsideration by Buenaventura
was likewise denied.

ISSUE
For purposes of applying interests, when is the date of delay or default in
this case.

RULING
According to Article 1169 of the Civil Code, there is delay or default from
the time the oblige judicially or extrajudically demands from the obligor
the fulfillment of his or her obligation. The records reveal that the
respondent did not establish when the petitioner defaulted in her
obligation to pay based on the two promissory notes. As such, its claim for
payment computed from July 15, 1998 until full payment of the obligation
had no moorings other than July 15, 1998 being the date reflected in the
statements of past due interest and penalty charges as of July 15, 1998.
Nonetheless, its counsel, through the letter dated July 7, 1998, made a final
demand in writing for the petitioner to settle her total obligation within
five days from receipt. As the registry return receipt indicated, the final
demand letter was received for the petitioner by one Elisa dela Cruz on
July 28, 1998. Hence, the petitioner had five days from such receipt, or until
August 2, 1998, within which to comply. The reckoning date of default is,
therefore, August 3, 1998.
ACE-AGRO DEVELOPMENT CORPORATION, petitioner, vs. COURT
OF APPEALS and COSMOS BOTTLING CORPORATION, respondents.
G.R. No. 119729 January 21, 1997

MENDOZA, J.:

FACTS

Respondent Cosmos Bottling Corporation is engaged in the manufacture of

soft drinks while petitioner Ace-Agro Development Corporation had been
cleaning soft drink bottles and repairing wooden shells for Cosmos,
rendering its services within the company premises in San Fernando,
Pampanga. They entered into service contracts which they renewed every
year. On January 18, 1990, they signed a contract covering the period
January 1, 1990 to December 31, 1990.

On April 25, 1990, fire broke out in private respondent's plant, destroying
the area where petitioner did its work. As a result, petitioner's work was
stopped. Then the petitioner asked private respondent to allow
it to resume its service, but petitioner was advised that on account of the
fire, private respondent was terminating their contract.

On July 17, 1990, petitioner sent another letter to private respondent,

reiterating its request to allow it to resume its service and in response,
private respondent advised petitioner on August 28, 1990 to resume their
work but it has to be done outside the company premises. However, the
petitioner refused the offer, claiming that it will incur additional costs for
transportation.

In subsequent meetings with the private respondent, petitioner asked for

an extension of the term of the contract in view of the suspension of work.
But still it was refused by the respondent.
On November 7, 1990, private respondent granted the request of the
petitioner and advised that they could then resume its work inside the
plant in accordance with its original contract. However, this time the
petitioner rejected it, citing the fact that there was a pending labor case.

Now the petitioner complained that the termination of its service contract
was illegal and arbitrary and that, as a result, it stood to lose profits and to
be held liable to its employees for back wages, damages and/or separation
pay. The Private respondent appealed to the Court of Appeals, which
reversed the trial court's decision and dismissed petitioner's complaint. The
appellate court found that it was petitioner which had refused to resume
work, after failing to secure an extension of its contract.

ISSUE
Whether or not the unilateral termination of the service contract by the
Cosmos on account of a force majeure extinguished the obligation.

RULING
There was no cause for terminating the contract but at most a “temporary
suspension of work.” The court thus rejects private respondent’s claim that,
as a result of the fire, the obligation of contract must be deemed to have
been extinguished.

The stipulation that in the event of a fortuitous event or force majeure the
contract shall be deemed suspended during the said period does not mean
that the happening of any of those events stops the running of the period
the contract has been agreed upon to run. It only relieves the parties from
the fulfillment of their respective obligations during that time.
Teresita Buenaventura v. Metropolitan Bank and Trust Company, GR No.
167082 (August 3, 2016)

FACTS
Teresita Buenaventura executed 2 promissory notes dated January 20 and
April 17, 1997 each in the amount of 1.5M and payable to Metropolitan
Bank and Trust Company (MBTC). Both PNs provide for penalty of 18%
per annum on the unpaid principal from date of default until full payment
of the obligation.

Despite demands, amounts thereon remained unpaid as of July 15, 1998,

inclusive of interest and penalty. Consequently, MBTC filed an action
against herein petitioner for recovery of said amounts, interest, penalty and
attorney's fees before the RTC. In answer, appellant averred that in 1997,
she received from her nephew, Rene Imperial (Imperial), three (3)
postdated checks drawn against appellee (in total amount
of Php1,897,000) as partial payments for the purchase of her properties;
that she rediscounted the subject checks with MBTC
(Timog Branch), for which she was required to execute the PNs to secure
payment thereof; and that she is a mere guarantor and cannot be compelled
to pay unless and until the bank shall
have exhausted all the properties of Imperial.

RTC finds in favor MBTC and ordered Buenaventura to pay the former the
amount of Php3,553,444.45 plus all interest and penalties due as stipulated
in the PNs beginning July 15, 1998 until the amount is fully paid and 10%
of the total amount due as attorney's fees. The CA promulgated the
assailed decision with some modifications as to the interest rate per annum.
Motion for Reconsideration by Buenaventura
was likewise denied.

ISSUE
For purposes of applying interests, when is the date of delay or default in
this case.

RULING
According to Article 1169 of the Civil Code, there is delay or default from
the time the oblige judicially or extrajudically demands from the obligor
the fulfillment of his or her obligation. The records reveal that the
respondent did not establish when the petitioner defaulted in her
obligation to pay based on the two promissory notes. As such, its claim for
payment computed from July 15, 1998 until full payment of the obligation
had no moorings other than July 15, 1998 being the date reflected in the
statements of past due interest and penalty charges as of July 15, 1998.
Nonetheless, its counsel, through the letter dated July 7, 1998, made a final
demand in writing for the petitioner to settle her total obligation within
five days from receipt. As the registry return receipt indicated, the final
demand letter was received for the petitioner by one Elisa dela Cruz on
July 28, 1998. Hence, the petitioner had five days from such receipt, or until
August 2, 1998, within which to comply. The reckoning date of default is,
therefore, August 3, 1998.