Case Digest (G.R. No. 73345)
Facts:
Social Security System v. Moonwalk Development & Housing Corporation, G.R. No. 73345. April 07, 1993, Supreme Court Second Division, Campos, Jr., J., writing for the Court.The petitioner is the Social Security System (SSS); respondents include Moonwalk Development & Housing Corporation (Moonwalk), Rosita U. Alberto (and another Rosita U. Alberto), JMA House, Inc., and the Registers of Deeds for Cavite and Makati in their official capacities, among others. SSS sued Moonwalk on February 20, 1980 in the Court of First Instance (CFI) of Rizal, alleging errors in its accounting of a loan advanced to Moonwalk — specifically, SSS claimed it failed to apply a 12% interest properly and that there remained unpaid principal and contractual penalties (a 12% penal clause) amounting to large sums as of October 10, 1979.
The parties submitted a stipulation of facts on September 19, 1980 showing that SSS had approved a P30,000,000 loan (released in part), that Moonwalk received specified disbursements, that a Third Amended Deed of First Mortgage and a restructuring annex existed, and that Moonwalk ultimately made payments totalling P23,657,901.84 against a released principal of P12,254,700.00. A Statement of Account (Annex F) dated October 1, 1979 showed a P15,004,905.74 obligation, and SSS issued Releases of Mortgage on October 9 and 11, 1979. Afterward SSS sent letters (November 28 and December 17, 1979) asserting it had made an honest mistake and demanding payment of penalties; Moonwalk’s counsel replied on December 21, 1979 that Moonwalk had completely paid its obligations. The genuineness and execution of the key documents were admitted in the stipulation.
Relying on the stipulation, the CFI dismissed SSS’s complaint (order of October 6, 1980) on the ground that Moonwalk had extinguished its obligation by paying the amounts shown in the Statement of Account and because SSS had released the mortgages; the CFI also denied SSS’s motion for reconsideration. SSS appealed to the then Intermediate Appellate Court (IAC). The IAC reduced the controversy to whether the defendants remained liable for unpaid penalties or whether that obligation was extinguished; it affirmed the CFI, holding that the penal clause was accessory and could not survive extinction of the principal obligation once Moonwalk paid the account and the mortgages were released. SSS then filed this petition for review on certiorari to the Supreme Court (Rule 45), challengin...(Pro-only)
Issues:
- Was the contractual penal clause (the 12% penalty) demandable and enforceable after Moonwalk paid the principal and SSS released the mortgages?
- Did Moonwalk fall into legal default (mora) prior to the extinguishment of the principal so that the penalty became demandable before payment?
- Could SSS, as a government-created entity holding trust funds, be said to have condoned or waived the penalty; and does United Christian Missionary Society v. Social ...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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