Solar Harvest Inc. v. Davao Corrugated Carton Corp. & Andre T. Almocera v. Johnny Ong

Solar Harvest Inc., petitioner, vs. Davao Corrugated Carton Corporation, respondent G.R. no. 176868 July 26,2010 Facts: Petitioners entered into an agreement with the respondent for the purchase of corrugated carton boxes specifically designed for petitioner's business of exporting fresh bananas. The agreement was not reduced into writing. Petitioner deposited in respondent's US Dollar Savings Account as full payment for the ordered boxes. Despite such payment, petitioner did not receive any boxes from respondent. Petitioner wrote a demand letter for reimbursement of the amount paid. Respondent replied that the boxes had been completed as early as April 3, 1998 and that petitioner failed to pick them up from the former's warehouse 30 days from completion, as agreed upon. Petitioner filed a Complaint for sum of money and damages against respondent. The Complaint averred that the parties agreed that the boxes will be delivered within 30 days from payment but respondent failed to manufacture and deliver the boxes within such time. Issue: Whether or not the petitioner would have a cause of action for rescission against the respondent. Held: No, the petitioner would not have a cause of action for rescission against the respondent. The Supreme Court ruled that in reciprocal obligations, as in a contract of sale, the general rule is that the fulfillment of the parties' respective obligations should be simultaneous. Hence, no demand is generally necessary because, once a party fulfills his obligation and the other party does not fulfill his, the latter automatically incurs in delay. But when different dates for performance of the obligations are fixed, the default for each obligation must be determined by the rules given in the first paragraph of the present article, that is, the other party would incur in delay only from the moment the other party demands fulfillment of the former's obligation. Thus, even in reciprocal obligations, if the period for the fulfillment of the obligation is fixed, demand upon the obligee is still necessary before the obligor can be considered in default and before a cause of action for rescission will accrue. The Complaint only alleged that petitioner made a "follow-up" upon respondent, which, however, would not qualify as a demand for the fulfillment of the obligation. Without a previous demand for the fulfillment of the obligation, petitioner would not have a cause of action for rescission against respondent as the latter would not yet be considered in breach of its contractual obligation.

Andre T. Almocera, petitioner, vs. Johnny Ong, respondent. G.R. no. 170479 February 18, 2008 Facts: Plaintiff Johnny Ong tried to acquire from the defendants a "townhome". The selling price of the unit was P3,400,000.00 pesos. Out of the purchase price, plaintiff was able to pay the amount of P1,060,000.00. Prior to the full payment of this amount, plaintiff claims that defendants Andre Almocera and First Builders fraudulently concealed the fact that before and at the time of the perfection of the aforesaid contract to sell, the property was already mortgaged to and encumbered with the Land Bank of the Philippines (LBP). In trying to recover the amount he paid as down payment for the townhouse unit, respondent Johnny Ong filed a complaint for Damages before the RTC against defendants Andre T. Almocera and FBMC alleging that defendants were guilty of fraudulent concealment and breach of contract when they sold to him a townhouse unit without divulging that the same, at the time of the perfection of their contract, was already mortgaged with the Land Bank of the Philippines (LBP), with the latter causing the foreclosure of the mortgage and the eventual sale of the townhouse unit to a third person. defendants denied liability claiming that the foreclosure of the mortgage on the townhouse unit was caused by the failure of complainant Johnny Ong to pay the balance of the price of said townhouse unit. Issue: Whether or not there is a cause of action for the rescission of the contract. Held: Yes, there is a cause of action for the rescission of the contract. The Supreme Court ruled that it is clear that petitioner and FBMC had the obligation to complete the townhouse unit within six months from the signing of the contract. Upon compliance therewith, the obligation of respondent to pay the balance of P2,400,000.00 arises. Upon payment thereof, the townhouse shall be delivered and conveyed to respondent upon the execution of the Absolute Deed of Sale and other relevant documents. In the case at bar, the obligation of petitioner and FBMC which is to complete and deliver the townhouse unit within the prescribed period, is determinative of the respondent's obligation to pay the balance of the contract price. With their failure to fulfill their obligation as stipulated in the contract, they incurred delay and are liable for damages. They cannot insist that respondent comply with his obligation. Where one of the parties to a contract did not perform the undertaking to which he was bound by the terms of the agreement to perform, he is not entitled to insist upon the performance of the other party.