CASE:
Social Security System, petitioner vs. Moonwalk
Development and Housing Corporation, et al,
respondents.
G.R. No. 73345. April 7, 1993
221 SCRA 119
Obligations; Requisites in order that debtor may be in default;
Necessity of demand. –
To be in default “x x x is different from mere delay in
grammatical sense, because it involves the beginning of a special
condition or status which has its own peculiar effects or results.”
In order that the debtor may be in default it is necessary
that the following requisites be present:
(1) That the obligation be demandable and already
liquidated;
(2) That the debtor delays performance; and
(3) That the creditor requires the performance judicially
or extrajudicially.
Default generally begins from the moment the creditor
demands the performance of the obligation.
Petition for review on certiorari of the decision of the then
Intermediate Appellate Court affirming in toto the decision of the former Court
of First Instance of Rizal, Seventh Judicial District, Branch XXIX, Pasay City.
FACTS:
On February 20, 1980, the petitioner Social Security System filed a
complaint in the Court of First Instance of Rizal against the respondent
Moonwalk Development and Housing Corporation.
The petitioner alleged that it had committed an error in failing to
compute the 12% interest due on delayed payments on the loan of the
respondent and also in not reflecting in its statement of account an unpaid
balance on the said penalties for delayed payments.
The respondent answered denying the claims and asserting that the
petitioner had the opportunity to ascertain the truth but it failed to do so.
Decision of the Court of First Instance:
The Court of First Instance dismissed the complaint on the ground that
the obligation was already extinguished by the payment by the respondent of
its indebtedness to the petitioner and by the latter’s cancellation of the real
estate mortgages executed in its favor by the defendant.
The Motion for Reconsideration filed by the petitioner was dismissed
by the trial court.
Decision of the Intermediate Appellate Court:
The respondent court held that the respondent’s obligation was
extinguished and affirmed the decision of the trial court.
ISSUE:
Whether or not respondent Moonwalk Development and Housing
Corporation incurred delay in the performance of its obligation.
RULING:

Under the Civil Code, delay begins from the time the obligee judicially
or extrajudicially demands from the obligor the performance of the obligation.
(Article 1169 of the Civil Code)

Article 1169 of the Civil Code provides for three (3) instances when
demand in not necessary to render the obligation in default:

(1) When the obligation or the law expressly so declares;

(2) When from the nature and the circumstances of the
obligation it appears that the designation of the time
when the thing is to be delivered or the service to be
rendered was a controlling motive for the establishment
of the contract;
(3) When demand would be useless, as when the obligor has
rendered it beyond his power to perform.

The case at bar does not fall within any of the established exceptions.
Hence, petitioner is not excused from making a demand.

It is true that respondent has long been delinquent in meeting its

monthly arrears and in paying the full amount of the loan itself as the
obligation matured sometime in January, 1977.

But mere delinquency in payment does not necessarily mean delay in

the legal concept. Default generally begins from the moment the creditor
demands the performance of the obligation.

In the present case, the petitioner never demanded from the

respondents the payment of its monthly amortizations. It was clear that
respondent was never in default because petitioner never compelled
performance.

The petition was DISMISSED and the decision of the

Intermediate Appellate Court was AFFIRMED.