Cosmic Lumber Company, Inc. vs. Manaois

When parties to an obligation intend to fix a period for its performance but fail to stipulate one, the court may fix the period pursuant to Article 1197 of the Civil Code. The Court may exercise this power where the nature and circumstances of the obligation indicate that a period was intended, notwithstanding the absence of an express stipulation.

The plaintiff-appellee, Cosmic Lumber Company, Inc., was engaged in the sale of hardware goods, lumber, and construction materials. The defendant-appellant, Gapita Manaois, was a buyer who purchased goods from the company on credit. The invoices issued for the sales contained the words "credit sales" and included a printed provision stating that bills not paid within a certain number of days would bear interest at ten percent per annum, indicating that the parties contemplated a period for payment but left the number of days blank.

The plaintiff-appellee, Cosmic Lumber Company, Inc., sold hardware goods, lumber, and construction materials to the defendant-appellant, Gapita Manaois, on different dates from November 10, 1952 to June 30, 1953. The defendant took delivery and received the goods, which were valued at the total sum of P12,127.57, as evidenced by invoices marked Exhibits A to Z and AA to OO. From November 4, 1952 to March 10, 1954, the defendant made payments totaling P6,979.83, which the plaintiff credited to her account. On December 23, 1954, after the original complaint had been filed on March 24, 1954, the defendant paid an additional P1,000, which was likewise credited to her account, reducing her total indebtedness to P4,147.74.

The invoices for the wares and materials sold and delivered to the defendant bore the words "credit sales" and contained a printed provision stating that all civil actions on the contract shall be instituted in the courts of Dagupan City, that purchases are payable in said city, and that if the bill is not paid within a certain number of days from date, the buyer would pay interest at the rate of ten percentum per annum on all overdue accounts. The provision also covered attorney's fees and court costs should the seller institute legal action, and stated that goods travel at the buyer's risk and that no claim would be considered after 24 hours from delivery. The number of days within which payment was due was left blank in the printed form.

The defendant did not deny that she received the wares and materials listed in the invoices nor that she remained indebted to the plaintiff in the sum of P4,147.74. At the hearing on June 4, 1956, her counsel withdrew the objection to the items listed in some of the invoices. The defendant argued, however, that since no time for payment was stipulated or fixed, and from the nature and circumstances of the obligation it could be inferred that a period was intended, the Court should fix the period for payment pursuant to Article 1197 of the new Civil Code.

• Fixing of Period under Article 1197: The defendant-appellant argued that since no time for payment was stipulated or fixed, and from the nature and circumstances of the obligation it could be inferred that a period was intended, the Court should fix the period for payment pursuant to Article 1197 of the new Civil Code.

• Right to Payment: The plaintiff-appellee sought payment of the outstanding balance of P4,147.74, with lawful interest thereon from March 24, 1954, when the original complaint was filed.

• Fixing of Payment Period: Whether the Court should fix a period for payment of the defendant's obligation under Article 1197 of the Civil Code where the parties intended to fix a period but failed to stipulate one.

• Fixing of Payment Period: Yes. The parties intended to fix a period for payment but failed to do so, and under Article 1197 of the new Civil Code, the Court may fix it. The defendant was ordered to pay the amount she still owes within fifteen (15) days from the date the judgment shall have become final.

• Fixing of Payment Period: The parties entered into a contract of sale on credit. The invoices of the wares and materials sold and delivered to the appellant contained the words "credit sales" and stated that if the bill is not paid within a certain number of days from date, the buyer would pay interest at the rate of ten percentum per annum on all overdue accounts. The Court found that the parties intended to fix a period for payment of the appellant's obligation but failed to do so, leaving the number of days blank. Under Article 1197 of the new Civil Code, the Court may fix the period in such circumstances. Taking into consideration that from November 10, 1952, the first sale, and June 30, 1953, the last sale, to the present, more than six and nearly seven years already had elapsed, the appellant, who did not deny her obligation, was ordered to pay the appellee the amount she still owed within fifteen days from the date the judgment became final.

• Fixing of Period by the Court (Article 1197, Civil Code) — When the parties to an obligation intend to fix a period for its performance but fail to stipulate one, the court may fix the period. The Court applied this doctrine where the invoices contained a provision for interest on overdue accounts but left the number of days blank, indicating the parties' intent to fix a period without having done so.

• "The parties intended to fix a period for payment of the appellant's obligation but failed to do so. Under article 1197 of the new Civil Code, the Court may fix it." — This passage states the ratio decidendi, applying Article 1197 to a situation where the parties intended a payment period but left it unspecified.
• "Taking into consideration that from 10 November 1952, the first sale, and 30 June 1953, the last sale, to the present, more than six and nearly seven years already have elapsed, the appellant who does not deny her obligation must be ordered to pay the appellee the amount she still owes it within fifteen (15) days from the date the judgment shall have become final." — This passage explains the Court's exercise of its power under Article 1197, fixing a fifteen-day period for payment given the substantial time that had already elapsed.

• Article 1197, Civil Code of the Philippines — The Court applied this provision to fix a period for payment where the parties intended to fix a period but failed to do so, ordering the defendant to pay within fifteen days from finality of judgment.

Paras, Bengzon, C.J., Montemayor, Bautista Angelo, Labrador, Concepcion, Reyes, J.B.L., Endencia, Barrera, and Gutierrez David, JJ., concurred.