G.R. No. 97255 , August 12, 1994
SOLID HOMES, INC., petitioner, vs. HON. COURT OF APPEALS, INVESTCO, INC., ANGELA PEREZ STALEY, and ANTONIO PEREZ, respondents.

FACTS

Private respondents Investco, Inc., Angela Perez Staley, and Antonio Perez Jr. filed a collection case against petitioner Solid Homes, Inc. before the Regional Trial Court of Pasig. The action stemmed from a 1976 “Contract to Sell and to Buy” involving six parcels of land. The contract stipulated a total purchase price of P10,211,075.00, payable via a down payment and ten semi-annual installments. A critical provision stated that if the seller (Investco) obtained the titles to the properties after July 22, 1977, the due dates for all payments would be adjusted accordingly. The titles were in fact obtained from March 21 to 28, 1979. The contract also contained an acceleration clause: failure to pay any installment would make the entire unpaid balance immediately due and demandable after a 30-day grace period. Private respondents alleged Solid Homes defaulted, leaving an unpaid balance of P4,800,282.91.
The trial court ruled in favor of private respondents, ordering Solid Homes to pay the balance with interest. The Court of Appeals affirmed but modified the interest computation. Solid Homes elevated the case to the Supreme Court, arguing the appellate court erred in declaring the entire balance due and in awarding attorney’s fees. During the pendency of the petition, it was revealed that Investco had subsequently sold the same properties to a third party, giving rise to separate litigation. However, the Supreme Court found this did not render the instant collection case moot.

ISSUE

The primary issue is whether the Court of Appeals correctly applied the contract’s acceleration clause, thereby making the entire unpaid balance immediately due and demandable from Solid Homes.

RULING

The Supreme Court affirmed the Court of Appeals’ ruling, upholding the enforcement of the acceleration clause. The legal logic rests on the proper application of the contract’s adjustment provision and the consequent determination of default. The contract explicitly provided for an adjustment of all payment due dates if titles were obtained after July 22, 1977. Since the titles were secured in March 1979, the Court correctly recalculated the schedule. Based on this adjusted schedule, the payment for the fifth installment was due on March 28, 1982. The payments made by Solid Homes were properly credited to this adjusted date.
The record showed that after making payments credited up to the fifth installment (due March 28, 1982), Solid Homes failed to pay the succeeding sixth to tenth installments. This failure to pay the installments when they fell due under the adjusted schedule constituted a clear default. Under the express terms of the contract, such default triggered the acceleration clause, making the entire remaining balance immediately payable. Therefore, the Court of Appeals correctly ordered Solid Homes to pay the full unpaid balance of P4,800,282.91 with stipulated interest. However, the Supreme Court deleted the award of attorney’s fees due to the absence of a special finding of fact to justify it.