Almocera v. Ong
REITERATIONFacts
The Antecedents: Plaintiff Johnny Ong entered into a Contract to Sell with defendants Andre T. Almocera and First Builder Multi-Purpose Cooperative (FBMC) for a townhouse unit (Unit No. 4 of Atrium Townhomes) for P3,400,000.00. Ong paid P1,060,000.00. Ong alleged that defendants fraudulently concealed the fact that the property was already mortgaged to the Land Bank of the Philippines (LBP) and that construction was delayed and unfinished. The property was subsequently advertised for public auction due to foreclosure of the mortgage. Defendants asserted that the loan from LBP was used for project documentation and that payments were made by Tommy Ong, plaintiff's brother, for various units, including Unit No. 4. They claimed Ong changed his mind from Unit 5 to Unit 4 only when they were about to sell Unit 4 to another party. Procedural History: Ong filed a complaint for Damages against Almocera and FBMC before the RTC of Cebu City, alleging fraudulent concealment and breach of contract due to the undisclosed mortgage and subsequent foreclosure. The RTC ruled in favor of Ong, ordering defendants to solidarily pay Ong P1,060,000.00 with legal interest, P100,000.00 as moral damages, P50,000.00 as attorney's fees, and P15,619.80 as expenses of litigation. The RTC found defendants acted in bad faith and failed to comply with their contractual obligations, including the six-month completion period. The Court of Appeals affirmed the RTC decision in toto, holding defendants incurred delay and that Ong was justified in suspending payments. The Court of Appeals also ruled that the issue of Almocera's solidary liability was belatedly raised. The Petition: Petitioner Almocera filed a Petition for Review on Certiorari before the Supreme Court, assailing the Court of Appeals' decision, raising issues of delay, respondent's refusal to pay the balance, and Almocera's solidary liability.
Issue(s)
Whether the defendants incurred delay in the performance of their obligation. Whether the respondent was justified in refusing to pay the balance of the purchase price. Whether petitioner Andre T. Almocera is solidarily liable with the defendant cooperative for damages to the plaintiff.
Ruling
The Supreme Court denied the petition and affirmed the decision of the Court of Appeals. The Court held that the defendants incurred delay, the respondent was justified in refusing to pay the balance, and the issue of petitioner's solidary liability was correctly deemed belatedly raised on appeal.
Ratio Decidendi
On the issue of delay: The Court held that the defendants incurred delay because they failed to complete and deliver the townhouse unit within the six-month period stipulated in the Contract to Sell. Article 1169 of the Civil Code provides that delay exists when the obligee judicially or extrajudicially demands fulfillment, or when from the nature and circumstances of the obligation, the time of performance was a controlling motive, or when demand would be useless. In reciprocal obligations, delay by one party begins when the other fulfills their obligation. Here, the defendants' obligation to complete and deliver the unit was determinative of the respondent's obligation to pay the balance. Their failure to do so meant they incurred delay, making them liable for damages. The Court found that demand was not necessary as it would have been useless due to the defendants' fault in allowing the mortgage to be foreclosed, rendering performance impossible. On the issue of respondent's refusal to pay the balance: The Court found the petitioner's argument specious. The respondent's obligation to pay the balance of the contract price was conditioned upon the petitioner and FBMC's performance of their obligation to complete and deliver the townhouse unit within the agreed period. Since the defendants failed to fulfill their obligation, the respondent could not have incurred delay by refusing to pay the balance. The respondent was justified in suspending payments because he was never in possession of the unit and could no longer become its owner due to the foreclosure and sale to a third party. To require payment under these circumstances would result in the unjust enrichment of the petitioner and FBMC, a principle that the Court aims to prevent. On the issue of petitioner's solidary liability: The Court affirmed the Court of Appeals' ruling that the issue of piercing the veil of corporate fiction and holding petitioner Almocera solidarily liable was belatedly raised. This issue was not presented before the trial court, and raising it for the first time on appeal before the Court of Appeals was deemed too late. The Court emphasized that points of law, theories, issues, and arguments not brought to the attention of the trial court cannot be raised for the first time on appeal, as it would be unfair to the adverse party who would not have had the opportunity to present further evidence. Therefore, the petitioner could not escape liability by claiming he acted solely as a corporate officer when this defense was not properly ventilated at the trial level.
Main Doctrine
In reciprocal obligations, delay by one party commences from the moment the other party fulfills their obligation. Failure to complete and deliver a property within the stipulated period, especially when coupled with fraudulent concealment of a mortgage, constitutes a breach of contract, justifying the buyer's suspension of payments and entitlement to the return of down payments.