Dear PAO, My father agreed with A to negotiate for the purchase of a lot with X. They have a simple contract wherein it states the amount that A had to pay my father should X agree to buy A’s lot and that it should be paid no later than the exact day the lot is purchased by X. My father successfully negotiated A’s lot, and X has already fully paid for it, as evidenced by the Deed of Absolute Sale that they have executed. But until now, A has not paid my father. He said that there was no exact date or period in their contract, so his obligation to my father is not yet due and demandable. He also said that my FATHER SHOULD GO TO COURT SO THAT THE COURT WILL fiX A period for them. Is he correct? Please advise.

Denver

Dear Denver,

One of the sources of obligation is a contract. (Article 1157, New Civil Code of the Philippines) Anything that has been agreed upon by the contracting parties is deemed to be the law between them and should be complied with in good faith. (Article 1159, id.) Contracts may or may not reflect the period when the obligations become demandable. But when the parties set a certain date, the obligation is demandable when that day comes. A day certain does not necessarily have to be an exact date. It is sufficient that it must necessarily come. As stated under Article 1193 of the New Civil Code:

“Art. 1193. Obligations for whose fulfillment a day certain has been fixed, shall be demandable only when that day comes. x x x

“A day certain is understood to be that which must necessarily come, although it may not be known when. x x x”

It is true that the courts can fix the period of a contract, but it bears emphasis that the authority of the courts to do so is limited by law only in situations where the obligation itself does not fix a period, but from its nature and the circumstances, it can be inferred that a period was intended by the parties to the contract, or if the duration of the period depends upon the will of the debtor. (Article 1197, New Civil Code) If the contract provides a period, the courts will not dip their toes, so to speak, on the matter. Rather, it will direct that the contract be carried out accordingly.

From what you have shared, it is undisputed that your father has successfully negotiated the sale of the property, as a Deed of Absolute Sale has already been executed between A and X, and the latter has already fully paid for the subject lot. Thus, it becomes incumbent upon A to pay your father the amount they agreed. The question left to be resolved is — whether a period was fixed by the parties or if there is a need to go to court for the fixing of the period. We submit that A’s obligation is already due and demandable. Contrary to A’s claim, the contract itself reflects a fixed period since payment has to be made “no later than the exact day the lot is purchased” by X. Such period can actually be reckoned from the Deed of Absolute Sale he executed with X. Our stance is in consonance with the pronouncement of the Third Division of the Supreme Court, through Associate Justice Jhosep Lopez, in the case of IP E-Game Ventures, Inc. vs. George H. Tan (GR 239576, June 30, 2021):

“It is well-established that a contract is the law between the parties. Obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith. x x x From the moment the contract is perfected, the parties are bound not only to the fulfillment of its stipulations, but also the consequences which, according to their nature, may be in keeping with good faith, usage, and law. In respecting the freedom to contract of the parties, courts cannot stipulate for them or amend their agreement. To do so would be to alter the real intention of the contracting parties when the contrary function of the courts is to give force and effect to their intention. xxx

“To reiterate, ‘where the language of a contract is plain and unambiguous, its meaning should be determined without reference to extrinsic facts or aids... Courts cannot make for the parties better or more equitable AGREEMENTS THAT THEY THEMSELVES HAVE BEEN SATISfiED to make, or rewrite contracts because they operate harshly or inequitably as to one of the parties, or ALTER THEM FOR THE BENEfiT OF ONE PARTY AND TO THE detriment of the other, or by construction, relieve one of the parties from the terms which [they] voluntarily consented to, or impose on [them] those which [they] did not.’ x x x

“As correctly found by the CA, it is unequivocal that the performance of petitioner’s obligation of monetary and stock incentive is fixed. At first glance, while there seems to be no definite date indicated in the Agreement, the period is determinable, being due and demandable ‘no later than the date of the execution of the definitive agreements for the sale of the Netopia Stake by ePLDT to petitioner.’ Accordingly, given that the execution of the sale of shares occurred on April 1, 2011, petitioner’s obligation to pay the respondent accrued and is deemed due and demandable on such date. As the Court explained in Deudor v. J.M. Tuason & Co. Inc, ‘WHENEVER A PERIOD IS fiXED PURSUANT THERETO, THE Court does not amend or modify the obligation concerned, but merely enforces or carries out the stipulations in the contract in question.’” x x x (Emphasis supplied).

We hope that we were able to answer your queries. This advice is based solely on the facts you have narrated and our appreciation of the same. Our opinion may vary when other facts are changed or elaborated.