Atty. Gregorio B. Austral, CPA
Holiday rush is not a defense against default
One of the disadvantages of the yuletide season is the long queue that you have to endure in malls, supermarkets, taxi lanes, and piers. If you are quite unlucky, you may have your day wasted falling in line just to buy a boat ticket for a supposed pleasure trip. The Christmas rush indeed causes some delays and cancellations of our activities.
In 1993, the Manila Intertional Airport Authority (MIAA) entered into a contract with Ala Industries Corporation (AIC) involving the structural repair and waterproofing of the International Passenger Terminal (IPT) and International Container Terminal (ICT) buildings of the Ninoy Aquino International Airport (NAIA). On June 30, 1994, MIAA unilaterally cancelled the contract on the ground that AIC failed to complete the project within the agreed completion date. AIC objected and filed a case in 1995 for collection of sum of money seeking to recover from MIAA P10,376,017.00 as the latter’s outstanding obligation and P1,642,112.84 due from the first to fifth progress billings. Later, MIAA and AIC entered into a compromise agreement whereby MIAA would pay AIC P5,946,294.31 as full and complete payment of the latter’s claims against MIAA arising from their waterproofing contract within a period of thirty (30) days from receipt of a copy of the Order of the Court approving this Compromise Agreement. They also agreed that failure of MIAA to pay said amount to AIC within the period above stipulated shall entitle the AIC to a writ of execution.
MIAA failed to pay within the period stipulated which prompted AIC to file a motion for execution to enforce its claim in the total amount of P13,118,129.84. MIAA attributed the delays to its being a government agency and the Christmas season.
One of the issues raised in this case is whether or not the Christmas season which allegedly caused the delay in the processing of payment to AIC is a fortuitous event which could excuse MIAA from being subjected to a writ of execution.
The Court rejected MIAA’s defense that the Christmas season is a fortuitous event which would excuse the delay in the fulfilment of its obligation.
The failure to pay on the date stipulated was clearly a violation of the Agreement. Within thirty days from receipt of the judicial Order approving it — on December 20, 1997 — payment should have been made, but was not. Thus, nonfulfillment of the terms of the compromise justified execution. It is the height of absurdity for MIAA to attribute to a fortuitous event its delayed payment. MIAA’s explanation is clearly a gratuitous assertion that borders on callousness. The Christmas season cannot be cited as an act of God that would excuse a delay in the processing of claims by a government entity that is subject to routine accounting and auditing rules.
A fortuitous event is one that cannot be foreseen or, though foreseen, is inevitable. It has the following characteristics:
x x x (a) [T]he cause of the unforeseen and unexpected occurrence, or the failure of the debtor to comply with his obligations, must be independent of human will; (b) it must be impossible to foresee the event which constitutes the caso fortuito, or if it can be foreseen, it must be impossible to avoid; (c) the occurrence must be such as to render it impossible for the debtor to fulfill his obligation in a normal manner; and (d) the obligor must be free from any participation in the aggravation of the injury resulting to the creditor.
None of these elements appears in this case.
First, processing claims against the government and subjecting these to the usual accounting and auditing procedures are certainly not only foreseeable and expectable, but also dependent upon the human will. Liquidation and payment resulting therefrom can be deliberately delayed or speeded up.
Second, the Christmas season is not a caso fortuito, but a regularly occurring event. It is in fact foreseeable, and its occurrence has absolutely nothing to do with the processing of claims.
Third, the occurrence of the Christmas season did not at all render impossible the normal fulfillment of the obligation of petitioner; otherwise, few claims would ever be paid during this period. It ought to have taken appropriate measures to ensure that a delay would be avoided. When it entered into the Agreement, it knew fully well that the 30-day period for it to pay its obligation would end during the Christmas season. Thus, it cannot now be allowed to renege on its commitment.
Fourth, petitioner cannot argue that it is free from any participation in the delay. It should have laid out on the compromise table the problems that would be caused by a deadline falling during the Christmas season. Furthermore, it should have explained to respondent that government accounts would be examined carefully and thoroughly to the last detail, in strict compliance with accounting and auditing rules issued by and pursuant to the constitutional mandate of the Commission on Audit.The sheer neglect shown by petitioner in failing to consider these matters aggravated the resulting injury suffered by respondent. The former cannot be allowed to hide now behind its government cloak (Manila International Airport Authority v. Ala Industries Corporation, G.R. No. 147349. February 13, 2004).