33 ROWENA R. SALONTE vs. COMMISSION ON AUDIT G.R. No. 207348 August 19 2014 !ACTS" The City of Mandaue and F.F. .F. Cruz and Co., Inc. (F.F (F.F.. Cruz) entered into a Contract of Reclamation in which F.F. Cruz, in consideration of a dened land sharing formula thus stiulated, agreed to underta!e, at its own e"ense, the reclamation reclamation of #$% hectares, more or less, of foreshore and su&merged lands from the Ca&ahug Causeway in that city. The timeta&les, i.e., commen commencem cement ent of the contra contract ct and ro'e ro'ect ct comle comletio tion, n, are are roi roided ded in aragrahs and #* of the Contract which state+ #*. C-TRCT /0RTI-. The ro'ect is estimated to &e comleted in si" (1) years. 2oweer, if all the infrastructures within the 3-4R56 share share of the ro'ect ro'ect are alread already y comle comleted ted within within the si" (1) year year eriod agreed uon, any e"tension of time for wor!s to &e done within the the sh shar are e of the the /474 /4748 894R 94R5, 5, sh shal alll &e at the the disc discrretio etion n of the the /474894R5, as a growing city, changes in re:uirements of the lot &uyers are ineita&le. 5u&se: 5u&se:uen uently tly,, the artie arties s in!ed in!ed in relat relation ion to the a&oe a&oe ro'e ro'ect ct a M M where&y the City of Mandaue allowed F.F. Cruz to ut u structures on a ortion of a arcel of land owned &y the city for the use of and to house F.F. Cruz ersonnel assigned at the ro'ect site. 2oweer, the structures and facilities &uilt &y F.F. Cruz su&'ect of the M stoo stood d in the the dir direct ect ath ath of the the road oad wide wideni ning ng ro' ro'ec ect. t. Thus Thus,, the the /932 /932 ente ntered into nto an gre greemen ementt to /emo /emollish, ish, Remoe moe and and Recons constr truc uctt Imr Imro oem emen entt with with F.F. Cruz Cruz wher where& e&y y the the latt latter er woul would d demo demoli lish sh the the imroements imroements outside of the &oundary of the road widening ro'ect. Thereafter, Thereafter, /932 addressed a letter;comlaint letter;comlaint to the
ISSUE" 3ho &etween the City of Mandaue and F.F. Cruz owned during the eriod material the roerties roerties that were demolished.
RULING"
A#t$%&' 1193 o( t)' C$v$& Co*' thereof roides+ >&ligations for whose fulllment a day certain has &een "ed, shall &e demanda&le only when that day comes.? &ligations with a resolutory eriod ta!e e=ect at once, &ut terminate uon arrial of the day certain. day certain is understood to &e that which must necessarily come, although it may not &e !nown when. If the uncertainty consists in whether the day will come or not, the o&ligation is conditional, and it shall &e regulated &y the rules of the receding 5ection. lain reading of the Contract of Reclamation reeals that the si" (1);year eriod roided for ro'ect comletion, or, with li!e e=ect, termination of the contract was a mere estimate and cannot &e considered a eriod or a @day certain@ in the conte"t of the afore:uoted rt. ##AB. To &e clear, ar. #* of the Contract of Reclamation states+ @TDhe ro'ect is estimated to &e comleted in si" (1) years.@ s such, the lase of si" (1) years from the erfection of the contract did not, &y itself, ma!e the o&ligation to nish the reclamation ro'ect demanda&le, such as to ut the o&ligor in a state of actiona&le delay for its ina&ility to nish. Thus, F.F. Cruz cannot &e deemed to &e in delay. 9ut a &it di=erently, the lase of si" (1) years from the erfection of the su&'ect reclamation contract, without more, could not hae automatically ested Mandaue City, under the M, with ownershi of the structures. Moreoer, een if we consider the allotted si" (1) years within which F.F. Cruz was suosed to comlete the reclamation ro'ect, the lase thereof does not automatically mean that F.F. Cruz was in delay. s may &e noted, the City of Mandaue neer made a demand for the fulllment of its o&ligation under the Contract of Reclamation. rticle ##1A of the Ciil Code on the interaction of demand and delay and the e"cetions to the re:uirement of demand releantly states+
rticle ##1A. Those o&liged to delier or to do something incur in delay from the time the o&ligee 'udicially or e"tra'udicially demands from them the fulllment of their o&ligation. 2oweer, the demand &y the creditor shall not &e necessary in order that delay may e"ist+ (#) 3hen the o&ligation or the law e"ressly so declaresE or () 3hen from the nature and the circumstances of the o&ligation it aears that the designation of the time when the thing is to &e deliered or the serice is to &e rendered was a controlling motie for the esta&lishment of the contractE or
(B) 3hen demand would &e useless, as when the o&ligor has rendered it &eyond his ower to erform. In recirocal o&ligations, neither arty incurs in delay if the other does not comly or is not ready to comly in a roer manner with what is incum&ent uon him. From the moment one of the arties fullls his o&ligation, delay &y the other &egins. Thus, in 9lus sia /eeloment Cororation, the Court has held+
Cororation
.
0tility
ssurance
In this 'urisdiction, the following re:uisites must &e resent in order that the de&tor may &e in default+ (#) that the o&ligation &e demanda&le and already li:uidatedE() that the de&tor delays erformanceE and (B) that the creditor re:uires the erformance 'udicially or e"tra'udicially. In the instant case, the records are &ereft of any document whence to deduce that the City of Mandaue e"acted from F.F. Cruz the fulllment of its o&ligation under the reclamation contract. nd to &e sure, not one of the e"cetions to the re:uisite demand under rt. ##1A is esta&lished, let alone asserted. n the contrary, the then city mayor of Mandaue, no less, a&soled F.F. Cruz from incurring under the remises in delay. To &e clear, the M does not state that the structures shall inure in ownershi to the City of Mandaue after the lase of si" ( 1) years from the e"ecution of the Contract of Reclamation. 3hat the M does roide is that ownershi of the structures shall est uon, or iso facto &elong to, the City of Mandaue when the Contract of Reclamation shall hae &een comleted. 8ogically, &efore such time, or until the agreed reclamation ro'ect is actually nished, F.F. Cruz owns the structures. The ayment of comensation for the demolition thereof is 'ustied. The disallowance of the ayment is without factual and legal &asis. C then graely a&used its discretion when it decreed the disallowance.
