1.Mallari was obliged to construct a chapel for the Navarro for P160,000. Of this amount, P120,000 has already been paid and only P40,000 remains to be paid. The contract carried a penal clause to the effect that in case of non-compliance with the obligation, the defendant would have to pay a penalty of P40,000. It was proved at the trial that the defendant did not construct it according to the specifications of the contract. hence,

Navarro, brought this action to recover P40,000 from Mallari, as penalty. On his part, Navarro refused to pay the balance of P40,000 which he still owed from Mallari. In other words, Navarro wanted:

a.To get P40,000 from Mallari as penalty; and

b.Not to pay anymore his (Navarros) unpaid balance of P40,000.

Is Navarro lawfully entitled not to pay his remaining debt and at the same time ask for the penalty?