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SECOND DIVISION

[ G.R. No. 198867, October 16, 2019 ]

CHUA PING HIAN ALSO KNOWN AS JIMMY CHING, PETITIONER, V. SILVERIO MANAS (DECEASED), SUBST
HIS HEIRS, NAMELY, CARIDAD MANAS, SURVIVING SPOUSE, AND CHILDREN, NESTOR MANAS, ROLAND
RENE MANAS AND BENILDA MANAS, RESPONDENT.

DECISION

CAGUIOA, J:

Before the Court is a Petition for Review on Certiorari1 (Petition) under Rule 45 of the Rules of Court filed by petitione
Ping Hian, also known as Jimmy Ching (petitioner Ching), against respondent Silverio Manas (respondent Manas), a
Amended Decision2 dated October 13, 2011 (assailed Decision) rendered by the Court of Appeals3 (CA) in CA-G.R.
88099.

The Facts and Antecedent Proceedings

As narrated by the CA, and as culled from the records of the instant case, the essential facts and antecedent proceed
case are as follows:

[Petitioner Ching] and his family own several cinemas in Metro Manila. Sometime in July 1997, [respondent Manas] le
Ching was going to open four theaters in the Sunshine Mall Plaza in Taguig, Metro Manila. He visited [petitioner] Chin
latter's office at Spring Cinema, Libertad, Pasay City and introduced himself as a supplier of movie equipments (sic) t
Ching's ([petitioner] Ching's brother) cinemas at Holiday Plaza, Libertad, Pasay City.
[Petitioner] Ching informed [respondent] Manas that he needed five complete sets of Simplex Model XL movie projec
cinemas at Sunshine Mall. [Respondent] Manas informed [petitioner] Ching that he happened to have Simplex Model
projectors which are US Rebuilt. He then invited [petitioner] Ching to his house in Makati where said projectors were
that the latter could see the same. Since only four Simplex projectors were available then, [respondent] Manas assur
[petitioner] Ching that the fifth set of Simplex Model XL will arrive from the United States anytime.

On 15 August 1997, [respondent] Manas and [petitioner] Ching executed the Contract of Sale, the pertinent portions
reads:

xxxx

1 OBJECT OF SALE - The SELLER hereby agrees to sell and deliver to the BUYER "FIVE (5) SETS OF SIMPLEX M
35MM MOVIE PROJECTOR and SOUND REPRODUCER, U.S. REBUILT, each set complete with accessories of ac
exact fittings, the quatity (sic), full descriptions/specifications of the complete items composing each set are as listed
hereto attached ANNEX "A" and made as integral part hereof;

2 PURCHASE PRICE AND MANNER OF PAYMENT For each complete set, the purchase price shall be SIX HUNDR
THIRTY THOUSAND PESOS (P630,000.00), Philippine currency, or the total sum of THREE MILLION ONE HUNDR
THOUSAND PESOS (P3,150,000.00) for the entire five (5) complete sets, which stipulated purchase price shall be p
BUYER to the SELLER in the following manner:

(a) A downpayment of 30% or P945,000.00 upon the signing of this Contract;

(b) A second payment of 40% or P1,260,000.00 upon full and complete delivery of all
above-mentioned at the site to be designated by the BUYER provided the complete de
effected on or before Jan. 15, 1998; and

(c) The balance of 30% or P945,000.00 after the complete installation, dry run/testing
satisfactory operations of all the units/sets installed.

3 INSTALLATION - The SELLER shall undertake the complete installation of the apparatus/equipment herein purcha
own expense provided all the wires and materials to be used in the installation shall be for the account of the BUYER

4 WARRANTY - The SELLER hereby warrants full and satisfactory usefulness of all the apparatus, equipment, parts
accessories for two (2) years counted from the date of their installation. During said warranty period, any breakdown
malfunction due to the poor quality or manufacturing defects of the main apparatus, its parts and accessories shall be
or repaired by the SELLER at his own expense, except xenon and exuter bulbs, switches and meters.

5 DUTY & TAXES - The SELLER hereby warrants to hold the BUYER free and harmless for any duty or taxes that m
assessed by the government on all the articles herein sold.

6 NON-PERFORMANCE OF OBLIGATION - In the event of failure by the SELLER to deliver and install the
apparatus/equipment herein purchased, the BUYER shall have the option of rescinding this Contract with damages o
legal action for specific performance with damages. On the other hand, in the event (sic) failure by the BUYER to pay
installment of the herein agreed purchase price when such is already due, the BUYER shall be liable to pay an intere
amount due at the rate of fourteen (14%) percent per annum.

7 VENUE OF ACTION - In the event of any legal action that may arise from this Contract; the venue shall be in the a
court in Pasay City, exclusively.
xxxx

In anticipation of the signing of the above contract, or on 19 July 1997, [petitioner] Ching paid [respondent] Manas the
P945,000.00 as downpayment. The four sets of Simplex XL projectors were delivered on 22 August 1997. Several ot
equipments (sic), parts and accessories for the projector sets were delivered within the period of 22 August 1997 unti
1999.

[Petitioner] Ching claims that he asked [respondent] Manas to deliver the fifth Simplex projector set and install the pro
[Respondent] Manas, not having yet the fifth Simplex XL projector set, prevailed on [petitioner] Ching to receive a Ce
projector. After all, it was intended only to be a standby projector. Because the opening date of his cinemas was fast
approaching, [petitioner] Ching agreed. The Century projector, which in the market is a little higher in price than the S
brand, was delivered on 29 November 1998.

Despite the clarity of paragraph 3 of the contract, the parties differed in the interpretation thereof. Said paragraph rea

xxxx

3 INSTALLATION - The SELLER shall undertake the complete installation of the apparatus/equipment herein purcha
own expense provided all the wires and materials to be used in the installation shall be for the account of the BUYER

xxxx

[Respondent] Manas claims to have completed installation of the projectors. On the other hand, [petitioner] Ching ass
[respondent] Manas failed to completely install the apparatus/equipment prompting him to hire Nelson Ruzgal to do th
connections for a fee of P20,000.00.

Ruzgal commenced his work on the wirings to make the apparatus/equipments (sic) work on 26 November 1998. He
assisted by the two projectionists of [petitioner] Ching, Adan Mostera and Lito Pilar. Two days before the scheduled o
the cinemas, on 23 December 1998, Ruzgal and the projectionists could not light the lamphouses. [Respondent] Man
had been observing them, called in his own technician to help. Since the lamphouse would not light, [respondent] Ma
technician took some parts from the rectifier. After re-installing said parts, the lamphouse lit up. Having observed how
[respondent] Manas' technician focused the lamphouses and lit the xenon bulb, Ruzgal and [petitioner] Ching's two p
went to the other theaters to adjust the lamphouses. Since the adjusting mechanism was found inside the lamphouse
bulb inside emitted heat, it took them almost an hour to adjust one lamphouse. It took Ruzgal and the projectionists o
finish adjusting all ten lamphouses.

On 24 December 1998, the trial run of the cinemas was successfully held and the cinemas officially opened on 25 De
1998.

In the first four months after operations, some parts of the projectors started having problems. [Respondent] Manas w
of the defects and asked to replace the same but he failed to do so. The defective equipments (sic) and their defects
follows:

1. Two pieces optical lens malfunctioned, first, in February 1999 and another in March 1999. B
[respondent] Manas did not replace the same, [petitioner] Ching bought the parts at Star Thea
Inc.

2. Ten pieces lamphouses and one reflector. In March to April 1999, the lamphouses misalign
attempt to fix the same, one of [petitioner] Ching's projectionists, opened the lamphouse and e
breaking the reflector inside. Since [respondent] Manas did not repair or replace the same and
 parts were readily available in the market, [petitioner] Ching contracted Rodegelio Anday to fa
lamphouses for him for the contract price of P555,000.00.

3. Ten pieces rectifiers. In April 1999, the rectifiers also malfunctioned due to electrical fluctua

4. One piece projector motor. In late 1999 to early 2000, the projector motor which drives the
run and play the movies, did not work To avoid stoppage in the operations of his cinemas, [pe
Ching utilized available spare parts from the other cinemas he owned.

Sometime in May 1999, [respondent] Manas wrote [petitioner] Ching a notice of full compliance of the terms of the co
sale. He also asked Lito Pilar, one of [petitioner] Ching's projectionists to affix his signature thereon. It reads thus:

Sir:

FULLY COMPLETED AND COMPLIED with the terms of the CONTRACT OF SALE -10 units XL projection film syste
Cinemas 1, 2, 3, 4 - Sunshine Cinema Mall, FTC Complex.

LOCATORS 1 2 3
Projector Heads Ok Ok
Soundheads/Motors Ok Ok
Xenon Lamphouses Ok Ok
Rectifiers Ok Ok
Lenses, Flat/Mascope Ok Ok
BOOTH ACCESSORIES Ok Ok
Projectionist Adan Mostera Lito Pilar
Kindly inspect the whole projection systems of Cinemas 1, 2, 3, 4 and should you find them to your fullest satisfaction
release the remaining balance (70%) of the Contract of Sale be paid and release to the undersigned.

Thank you.

Very respectfully yours,

(Sgd.) Silverio M Manas

[Petitioner] Ching received a copy of this letter only after he received the summons of the court a quo.

On 24 August 1999, [respondent] Manas' lawyer, Redentor A. Salonga, wrote [petitioner] Ching a demand letter, whic
thus:

Sir:

I have been retained by Mr. Silverio M Manas to take the necessary action to enforce the collection of your account in
the principal amount of P2,205,000.00 which represents the difference between the principal contract price of P3,150
certain movie equipment delivered and installed by Mr. Manas and utilized in your movie houses, and your downpaym
P945,000.00.

I understand from Mr. Manas that you proposed to liquidate your account in monthly installments of P250,000.00, wh
however, not accepted by Mr. Manas.

Through this letter of demand, it is hoped that you will pay, on or before 10 September 1999, the aforesaid principal a
P2,205,000.00 or propose to Mr. Manas in writing, an acceptable and better schedule of payment for his approval.

In default thereof, I shall be left with no other choice but to institute the appropriate legal action not only for the princip
for interests and damages.

xxxx

[Petitioner] Ching, replied through a letter written by his lawyer, Roger L. Em, dated 8 September 1999, the pertinent
which reads:

xxxx

According to Mr. Jimmy Ching, he encountered the following problems in his dealings with Mr. Manas, to wit:

1.) Mr. Ching agreed to pay Mr. Manas a second payment of P1,260,000.00 provided complete delivery of the object
is effected on or before 15 January 1998. Actual delivery of the items was completed only on 8 May 1999. Mr. Ching
damages on account of the long delayed complete delivery.

2.) Mr. Manas made express warranty for full and satisfactory usefulness of all apparatus, equipment, parts and acce
two (2) years from date of installation/ as already advised by Mr. Ching to Mr. Manas, two (2) optical lenses were defe
(10) units of projector lamp house including the reflectors (without xenon lamp) were defective and inefficient; and ten
of Rectifiers were defective and inefficient. These defective and inefficient part/accessories from another supplier for
of P555,000.00.

Considering that both parties appear to have their respective causes of action, we believe it would be to the best inte
respective clients if the matter be settled according to the proposal of Mr. Ching, a copy of which is attached. Litigatin
in court might be very expensive to both parties and could take several years to obtain a final judgment.

We will appreciate it if you could convince Mr. Manas to accept the attached proposal. Upon his acceptance, Mr. Chin
immediately send over the amount of P400,000.00 as installment for August and September 1999.

xxxx

The attached proposal reads:

STATEMENT
1 units Simplex Model XL 3mm movie Projectors with Projector Heads, sound head/motors, Xenon 3
0 lamphouse, rectifiers, lenses, etc. @ 315.00
To be returned and deducted from total cost
2 pcs. Optical lens (defective) 9,800.00
1 units Projector Lamp House including reflector w/o Xenon Lamp (defective and inefficient) @ 18,500.00
0
1 units rectifiers (defective and inefficient) @ 37, 000.00
0
Advertising Commitment

- P

To be deducted (downpayment)

P1
Payment to be made

August 30, 1999 P 200,000.00

September 30, 1999 200,000.00
October 30, 1999 200,000.00
November 30, 1999 200,000.00
December 30, 1999 200,000.00
January 30, 2000 200,000.00
February 30, 2000 200,000.00
March 30, 2000 205,400.00

P1,605,400.00
On 26 September 2000, [respondent] Manas filed a complaint for Sum of Money and Damages against [petitioner] Ch
the Regional Trial Court[, Branch 118 of Pasay City (RTC)]. The case was docketed as Civil Case No. 00-0297 for Su
and Damages]. He alleged that he had faithfully complied with the Contract of Sale and the equipments (sic) he deliv
utilized by [petitioner] Ching in the formal opening of his cinemas on 24 December 1998. Despite repeated demands,
and written, [petitioner Ching] refused to pay him the remaining balance of P2,205.000.00. [Respondent] Manas pray
[petitioner Ching] be ordered to pay him the unpaid sum of P2,205,000.00 as principal, with 12% interest per annum a
the invoices/delivery receipts, counted from date of formal demand on 24 August 1999 until fully paid. He also asked
damages and attorney's fees.

xxxx

On 4 September 2006, the RTC rendered a Decision4 in favor of [respondent] Manas, finding: (a) that there was com
timely delivery of the equipments (sic); (b) that [respondent Manas] installed the movie equipments (sic); (c) that [resp
Manas] is not liable on the express two (2) year warranty embodied in the contract of sale; and (d) that [respondent M
the consent of [petitioner Ching], validly substituted with another brand the movie projector specified in the contract o
court ruled as follows:

WHEREFORE, all the foregoing considered, judgment is hereby rendered in favor of plaintiff Silverio Manas and aga
defendant Chua Ping Hian, a.k.a. Jimmy Ching, ordering the latter to pay the former the total amount of P2,205,000.0
stipulated interest of 12% per annum from date of default until fully paid. Defendant is also ordered to pay plaintiff P2
attorney's fees. The claim for moral and exemplary damages is hereby denied for lack of merit.

Defendant's counterclaims are denied for lack of merit.

Costs against the defendant.

SO ORDERED.

Aggrieved, [petitioner] Ching filed [an] appeal [before the CA].5

The Ruling of the CA

In its Decision6 dated March 11, 2009, the CA found petitioner Ching's appeal partly impressed with merit.

Even as the CA found that the substitution of the fifth set of Simplex brand with the Century brand by respondent Man
acquiesced to by petitioner Ching,7 so that petitioner Ching is obligated to pay respondent Manas an outstanding bal
P2,205,000.00, the CA nevertheless found that respondent Manas failed to comply with his contractual duty to compl
the projectors which then prompted petitioner Ching to hire other persons to completely install the equipment. The CA
held that some of the equipment delivered by respondent Manas, i.e., lamphouses, optical lenses, and projector moto
defective, forcing petitioner Ching to secure replacements, and that petitioner Ching did not waive his right to compla
defects.

Considering the foregoing, the CA held that the expenses incurred by petitioner Ching arising from the incomplete ins
and some defective equipment should be deducted from the outstanding balance owed by petitioner Ching to respon
The CA summarized the total expenses incurred by petitioner Ching as follows:

Expenses Incurred Amount

A. Cost of Installation performed by Nelson Ruzgal P20,000.00

1. Cash Voucher for Downpayment

26 November 1998
P10,000.00
2. Cash Voucher for Complete Payment for labor contract
6 January 1999
P10,000.00

B. Replacement of Defective Equipments (sic)

1. Optical Lenses P17,160.00

a. Star Theater Supply, Inc.

Invoice No. 7420, 11 February 1999
P8,360.00
b. Star Theater Supply, Inc.
Invoice No. 5028, 23 March 1999
P8,800.00

2 Lamphouses P185,000.00
As fabricated by Rodegelio Anday per contract
Contract Price P555,000.00
Less: Cost of 10 rectifiers 370,000.00

185,000.00
3 Project Motor P4,600.00
 Star Theater Supply, Inc.
Invoice No. 7818, 15 August 2000
4. Reflector P8,500.00
Expenses Incurred Amount
G&O Enterprises, Inc.
Invoice No. 8273, 26 December 1999
TOTAL EXPENSES INCURRED P235,260.008
Hence, the CA deducted from the balance of P2,205,000.00 "the amount of [P]235,260.00 representing the expenses
[petitioner] Ching as indicated above. Thus, [petitioner] Ching's outstanding account payable to Manas is now [P]1,96

The dispositive portion of the CA's Decision reads as follows:

WHEREFORE, in view of the foregoing, the appealed RTC Decision is hereby MODIFIED. Its dispositive portion shal
as follows:

WHEREFORE, all the foregoing considered, judgment is hereby rendered in favor of plaintiff Silverio Manas and aga
defendant Chua Ping Hian, a.k.a. Jimmy Ching, ordering the latter to pay the former the total amount of P1,969,740.0
interest rate of 12% per annum counted from the finality of this judgment until it is fully paid. The claim for moral and e
damages is hereby denied for lack of merit.

Defendant's counterclaims are denied for lack of merit.

Costs against the defendant.

SO ORDERED.10

Unsatisfied, petitioner Ching filed a Most Respectful Motion for Partial Reconsideration11 dated March 31, 2009. Res
Manas likewise filed a Motion for Reconsideration.

Petitioner Ching argued that: (1) the CA failed to consider that the fifth movie projector unit provided by respondent M
Century brand projector, costs much less at P220,000.00 compared to the agreed upon model, i.e., Simplex Model X
projector, which costs P630,000.00 and (2) petitioner Ching had good reason in refusing to pay the balance of the pu
price, considering that the CA itself held that "[petitioner] Ching had a valid reason for refusing payment until the issue
recoupment for breach of warranty was resolved."12

On the other hand, in his Motion for Reconsideration, respondent Manas argued that: (1) the wiring installation was fo
account of the buyer, petitioner Ching; (2) the stipulated interest of 12% per annum should be counted from the date
extrajudicial demand on August 24, 1999 until full payment; and (3) there is no valid reason for denying the award for
fees.

In the Amended Decision, the CA partially granted petitioner Ching and respondent Manas' respective Motions for
Reconsideration:

Accordingly, this Court resolves the two motions as follows:

1. Defendant-appellant's Motion for Partial Reconsideration is PARTLY GRANTED in that the amoun
P410,000.00 (sic) should be deducted from the his (sic) outstanding balance amounting to P1,969,74
 2. Plaintiff-appellee's Motion for Reconsideration is PARTLY GRANTED in that the stipulated interest
per annum shall be counted from the date of extrajudicial demand on August 24, 1999 until full payme

With the above disposition, the dispositive portion of the Decision in this case is hereby AMENDED as follows:

WHEREFORE, all the foregoing considered, judgment is hereby rendered in favor of plaintiff Silverio Manas and aga
defendant Chua Ping Hian, a.k.a. Jimmy Ching, ordering the latter to pay the former the total amount of P1,559,740.0
interest rate of 12% per annum counted from the date of extrajudicial demand on August 24, 1999 until full payment.
for moral and exemplary damages is hereby denied for lack of merit.

Defendant's counterclaims are denied for lack of merit. Costs against the defendant.

SO ORDERED.13

Hence, the instant appeal by petitioner Ching before the Court.

Respondent Manas filed his Comment14 to the instant Petition on February 13, 2012, while petitioner Ching filed his
respondent Manas' Comment on May 21, 2012.

On April 18, 2017, the counsel of respondent Manas filed a Manifestation of Death and Motion to Substitute Heirs,16
the Court that respondent Manas passed away on February 7, 2017, as well as praying that the surviving heirs of res
Manas be deemed to have substituted the deceased.

The Issue

Petitioner Ching raises a singular issue — whether respondent Manas is entitled to an award of stipulated interest for
supposed delay on the part of petitioner Ching in the payment of the remaining balance of the contract price.

Conjunctively, petitioner Ching prays for a singular relief — that the Court modify the CA's Amended Decision by dele
portion of the said Decision which awards stipulated interest at the rate of 12% per annum in favor of respondent Man

The Court's Ruling

The instant Petition is impressed with merit. Respondent Manas is not entitled to an award of stipulated interest.

To recall, the RTC, in its Decision dated September 4, 2006, ruled that stipulated interest of 12% should be awarded
respondent Manas, counted from the date of default. The CA modified the same and held that the interest of 12% pe
annum stipulated by the parties in the Contract of Sale should be applied from the finality of judgment until full payme
Amended Decision, the CA further modified the RTC's Decision and held that the 12% stipulated interest should be c
the date of extrajudicial demand on August 24, 1999 until full payment.

Based on the established facts of the instant case, however, both the RTC and CA committed error in awarding contr
stipulated interest in favor of respondent Manas.

The contractual stipulated interest is provided in paragraph 6 of the Contract of Sale, which states that in the event of
petitioner Ching to pay any installment of the herein agreed purchase price when such is already due, the latter shall
pay an interest on the amount due at the rate of 14% percent per annum (and not 12% per annum as incorrectly held
and CA):
6. NON-PERFORMANCE OF OBLIGATION - In the event of failure by the SELLER to deliver and install the
apparatus/equipment herein purchased, the BUYER shall have the option of rescinding this Contract with damages o
legal action for specific performance with damages. On the other hand, in the event (sic) failure by the BUYER to pay
installment of the herein agreed purchase price when such is already due, the BUYER shall be liable to pay an intere
amount due at the rate of fourteen (14%) percent per annum.

Hence, as agreed upon by the parties in the Contract of Sale, the stipulated interest to be paid by petitioner Ching sh
accrue when the installment payment is already due and petitioner Ching failed to make such installment payment. S
stated, petitioner Ching shall pay the stipulated interest only when he is in delay.

Based on the established facts of the instant case, petitioner Ching was not in delay when he failed to pay the balanc
purchase price. ℒαwρhi ৷

To recall, based on paragraph 2 of the Contract of Sale, petitioner Ching obligated himself to make three installment
as regards the objects of the sale: (a) the down payment of 30% or P945,000.00 upon the signing of the Contract of S
petitioner Ching did; (b) a second payment of 40% or P1,260,000.00 upon full and complete delivery of all the items i
the Contract of Sale, provided the complete delivery is effected on or before January 15, 1998; and (c) the balance of
P945,000.00 after the complete installation, dry run/testing and satisfactory operations of all the units/sets installed.

Stated simply, the Contract of Sale between petitioner Ching, as buyer, and respondent Manas, as seller, gave rise to
a reciprocal obligation, wherein petitioner Ching was obliged to pay the balance of the purchase price while responde
was obliged to make complete delivery of the objects of the sale on or before January 15, 1998 and ensure complete
dry run-testing, and satisfactory operations of all the equipment installed.

In a reciprocal obligation, the performance of one is conditioned on the simultaneous fulfillment of the other obligation
party incurs in delay if the other does not comply or is not ready to comply in a manner with what is incumbent upon h
explained by recognized Civil Law Commentator, former CA Justice Eduardo P. Caguioa, a reciprocal obligation has
defined as that "where each of the parties is a promissee of a prestation and promises another in return as a counterp
equivalent of the other. x x x The most salient feature of this obligation is reciprocity." 19

In the instant case, it is not of serious dispute that respondent Manas reneged on his obligations as seller, justifying p
Ching's refusal to pay the balance of the purchase price.

First, in its Amended Decision, the CA already found as established fact that there was no complete delivery of the ob
sale in accordance with the Contract of Sale.

It was the obligation of respondent Manas to deliver five sets of Simplex Model XL 35mm movie projectors. Respond
was only able to deliver four sets, and the fifth set delivered was a Century brand projector. As held by the CA in its A
Decision, the delivery of the Century brand projector cannot be considered a substantial compliance of the obligation
Simplex Model XL movie projector because the Century brand projector is significantly less valuable compared to a S
Model XL movie projector. As found by the CA, the Century brand projector is worth only P220,000.00, while a Simpl
projector costs P630,000.00, or almost three times the value of the Century brand projector.20

The CA likewise noted that petitioner Ching "did not acquiesce [to] the delivery of the Century brand as a substitute o
Simplex model. [Petitioner Ching] had to accept the Century brand delivered on November 29, 1998 considering that
already announce (sic) to the public that the theater will start its operation on December 25, 1998 x x x. Hence, he wa
accept the Century brand in time for the opening of the movie house."21

The CA pointed out that the evidence on record reveals that when petitioner Ching reminded respondent Manas that
pay respondent Manas the complete balance of the contract price only after the complete delivery of the five sets of t
Model XL movie projectors, respondent Manas responded positively as the fifth set of the Simplex Model XL movie p
would supposedly be forthcoming.22 The records also show that the fifth Simplex Model XL movie projector was nev
to petitioner Ching.

Second, as factually found by the CA, "the delivery was made after 15 January 1998"23 in contravention of responde
obligation to deliver the objects of the sale on or before January 15, 1998.

Third, there was no complete installation of the movie projector units as contemplated under the Contract of Sale.

The CA factually found that "[respondent] Manas is liable to [petitioner] Ching for failing to comply with his obligation t
completely install the equipments (sic) which resulted to [petitioner] Ching's expenses in hiring a third party to comple
the projectors."24 It must be recalled that petitioner Ching was obligated to pay the balance of 30% or P945,000.00 o
complete installation, dry run/testing and satisfactory operations of all the units/sets installed. As stressed by the CA,
stipulation in the contract of sale is clear and unambiguous. The complete installation is to be made by the seller."25

The "complete installation" contemplated under the Contract of Sale refers to the installation of five complete sets of S
Model XL movie projectors. However, as already discussed, the fifth Simplex Model XL movie projector was not deliv
installed, despite respondent Manas promising petitioner Ching that the said unit "was coming anytime soon."26 Hen
petitioner Ching engaged the services of a third party to complete the installation of the projectors delivered, there wa
complete installation envisioned under the contract because the fifth Simplex Model XL unit was never delivered and

Furthermore, the Court notes that in the May 1999 letter issued by respondent Manas addressed to petitioner Ching,
apparent that respondent Manas sought the payment of the remaining balance of 70% of the contract price only after
Ching would have inspected the entire projection system and found them to be satisfactory:

Kindly inspect the whole projection systems of Cinemas 1, 2, 3, 4 and should you find them to your fullest satisfaction
release the remaining balance (70%) of the Contract of Sale be paid and release (sic) to the undersigned.27

Simply stated, respondent Manas covenanted that the payment of the remaining balance by petitioner Ching was ma
contingent on the latter's satisfactory assessment that respondent Manas completely delivered and installed all of the
projector units. Obviously, petitioner Ching did not find the delivery, installation, and operation of the movie projector
satisfactory on account of respondent Manas' failure to deliver the fifth Simplex XL movie projector, the failure of resp
Manas to ensure the complete installation of the movie projector systems, and respondent Manas' delivery of defectiv
components.

In fact, very telling is the unequivocal pronouncement of the CA that "[petitioner] Ching had a valid reason for refusing
payment until the issue of recoupement (sic) for breach of warranty was resolved."28

Therefore, with petitioner Ching being justified in withholding the payment of the balance of the purchase price on acc
several breaches of contract committed by respondent Manas,29 it cannot be said that petitioner Ching was in delay.
Necessarily, respondent Manas is not entitled to the stipulated interest as provided in the Contract of Sale. And consi
petitioner Ching cannot be deemed in delay in accordance with the Contract of Sale, the legal interest shall accrue on
finality of this Decision until full payment.

WHEREFORE, the instant Petition is GRANTED. The Court of Appeals' Amended Decision dated October 13, 2011 i
CV No. 88099 is AFFIRMED WITH MODIFICATIONS. The dispositive portion of the Amended Decision is modified t
follows:

WHEREFORE, all the foregoing considered, judgment is hereby rendered in favor of plaintiff Silverio Manas and aga
defendant Chua Ping Hian, a.k.a. Jimmy Ching, ordering the latter to pay the former the total amount of P1,559,740.0
interest at a rate of 6% per annum from finality of judgment until full satisfaction.

The claim for moral and exemplary damages is hereby denied for lack of merit.

Defendant's counterclaims are denied for lack of merit.

Costs against the defendant.

SO ORDERED.

SO ORDERED.

Carpio (Chairperson), J. Reyes, Jr., Lazaro-Javier, and Zalameda, JJ., concur.

Footnotes

1 Rollo, pp. 8-33.

2 Id. at 35-43. Penned by Associate Justice Rosmari D. Carandang (now a Member of the Court), with
Justices Japar B. Dimaampao and Apolinario D. Bruselas, Jr. concurring.

3 Special Former 16th Division.

4 Rollo, pp. 87-99. Penned by Presiding Judge Pedro B. Corales.

5 Id. at 46-57.

6 Id. at 45-77. Penned by Associate Justice Teresita Dy-Liacco Flores, with Associate Justices Rosm
Carandang (now a Member of the Court) and Apolinario D. Bruselas, Jr., concurring.

7 Id.

8 Id. at 75-76.

9 Id. at 76.

10 Id.

11 Id. at 78-85.

12 Id. at 76.

13 Id. at 41-42.
 14 Id. at 206-211.

15 Id. at 213-222.

16 Id. at 227-230.

17 Vermen Realty Development Corp. v. Court of Appeals, 296 Phil. 420, 426 (1993).

18 CIVIL CODE, Art. 1169.

19 Eduardo P. Caguioa, COMMENTS AND CASES ON CIVIL LAW, CIVIL CODE OF THE PHILIPPIN
Revised 2nd ed., 1966, p. 147.

20 Rollo, pp. 36-38.

21 Id. at 37.

22 Id. at 38.

23 Id. at 58.

24 Id. at 67.

25 Id. at 61. Emphasis in the original.

26 Id. at 38.

27 Id. at 51.

28 Id. at 76. Emphasis and underscoring supplied.

29 Unfortunately, petitioner Ching did not present sufficient proof of the quantification of whatever dam
he might have suffered thereby.

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