FACTS:
ISSUE:
HELD:
No. There has been a waiver of the penal clause as it was not demanded before
the full obligation was fully paid and extinguished.
Default begins from the moment the creditor demands the performance of the
obligation. In this case, although there were late amortizations there was no
demand made by SSS for the payment of the penalty.
If the demand for the payment of the penalty was made prior to the
extinguishment of the obligation which are: 1. The principal obligation 2. The
interest of 12% on the principal obligation 3.The penalty of 12% for late payment
for after demand, Moonwalk would be in delay and therefore liable for the
penalty.
To support its claim, SSS cited the case of United Christian Missionary Society v.
Social Security Commission.
It was found out that it is not applicable to the present case as it dealt not with
the right of the SSS to collect penalties which were provided for in contracts
which it entered into but with its right to collect premiums and its duty to collect
the penalty for delayed payment or non-payment of premiums.
The case at bar does not refer to any penalty provided for by law nor does it
refer to the non remittance of premium. The case at bar refers to a contract of
loan entered into between plaintiff and defendant Moonwalk Development and
Housing Corporation. Note, therefore, that no provision of law is involved in this
case, nor is there any penalty imposed by law nor a case about non-remittance
of premium required by law. The present case refers to a contract of loan payable
in instalments not provided for by law but by agreement of the parties.
Therefore, the ratio decidendi of the case of United Christian Missionary Society
vs. Social Security Commission which plaintiff-appellant relies is not applicable in
this case; clearly, the Social Security Commission, which is a creature of the
Social Security Act cannot condone a mandatory provision of law providing for
the payment of premiums and for penalties for non remittance. The life of the
Social Security Act is in the premiums because these are the funds from which
the Social Security Act gets the money for its purposes and the non-remittance of
the premiums is penalized not by the Social Security Commission but by law.
The petition is DISMISSED and the decision of the respondent court is AFFIRMED.