Facts:
Frank Roa obtained a loan at an interest rate of 16 1/4% per annum from
Ayala Investment and Development Corporation (AIDC), the predecessor of
petitioner BPIIC, for the construction of a house on his lot in New Alabang
Village, Muntinlupa. Said house and lot were mortgaged to AIDC to secure the
loan. In 1980, Roa sold the house and lot to private respondents ALS and
Antonio Litonjua for P850,000. They paid P350,000 in cash and assumed the
P500,000 balance of Roas indebtedness with AIDC. The latter, however, was not
willing to extend the old interest rate to private respondents and proposed to
grant them a new loan of P500,000 to be applied to Roas debt and secured by the
same property, at an interest rate of 20% per annum and service fee of 1% per
annum on the outstanding principal balance payable within ten years in equal
monthly amortization of P9,996.58 and penalty interest at the rate of 21% per
annum per day from the date the amortization became due and payable.
March 1981,
private respondents executed a mortgage deed containing the above stipulations
with the provision that payment of the monthly amortization shall commence on
May 1, 1981.
On August 13,
1982, ALS and Litonjua updated Roas arrearages by paying BPIIC the sum of
P190,601.35. This reduced Roas principal balance to P457,204.90 which, in turn,
was liquidated when BPIIC applied thereto the proceeds of private respondents
loan of P500,000.
On September
13, 1982, BPIIC released to private respondents P7,146.87, purporting to be
what was left of their loan after full payment of Roas loan.
In June 1984,
BPIIC instituted foreclosure proceedings against private respondents on the
ground that they failed to pay the mortgage indebtedness which from May 1, 1981
to June 30, 1984, amounted to P475,585.31. A notice of sheriffs sale was
published on August 13, 1984.
On February
28, 1985, ALS and Litonjua filed Civil Case No. 52093 against BPIIC. They
alleged, among others, that they were not in arrears in their payment, but in
fact made an overpayment as of June 30, 1984. They maintained that they should
not be made to pay amortization before the actual release of the P500,000 loan
in August and September 1982. Further, out of the P500,000 loan, only the total
amount of P464,351.77 was released to private respondents. Hence, applying the
effects of legal compensation, the balance of P35,648.23 should be applied to
the initial monthly amortization for the loan.
The trial
court rendered a decision in favor of ALS Management and Development Corp and
Litonjua and against BPI Investment Corp.
Both parties
appealed to the CA, however, private respondents’ appeal was dismissed for
non-payment of docket fees.
Issues:
I. Whether or
not a contract of loan is a consensual contract in the light of the rule laid
down in Bonnevie v. CA
II. Whether or
not BPI should be held liable for moral and exemplary damages and attorney’s
fees in the face of irregular payments made by ALS and opposed to the rule laid
down in SSS v. CA
Held:
A loan
contract is not a consensual contract but a real contract. It is perfected only
upon the delivery of the object of the contract.
A perfected
consensual contract, as shown above, can give rise to an action for damages.
However, said contract does not constitute the real contract of loan which
requires the delivery of the object of the contract for its perfection and
which gives rise to obligations only on the part of the borrower.
The loan
contract between BPI, on the one hand, and ALS and Litonjua, on the other, was
perfected only on September 13, 1982, the date of the second release of the
loan. Following the intentions of the parties on the commencement of the
monthly amortization, as found by the Court of Appeals, private respondents
obligation to pay commenced only on October 13, 1982, a month after the
perfection of the contract.
A contract of
loan involves a reciprocal obligation, wherein the obligation or promise of each
party is the consideration for that of the other. The promise of BPIIC to
extend and deliver the loan is upon the consideration that ALS and Litonjua
shall pay the monthly amortization commencing on May 1, 1981, one month after
the supposed release of the loan. It is a basic principle in reciprocal
obligations that neither party incurs in delay, if the other does not comply or
is not ready to comply in a proper manner with what is incumbent upon him.
In SSS v. CA:
Nor can the SSS be held liable for moral and temperate damages. As
concluded by the Court of Appeals the negligence of the appellant is not so
gross as to warrant moral and temperate damages, except that, said Court
reduced those damages by only P5,000.00 instead of eliminating them. Neither can
we agree with the findings of both the Trial Court and respondent Court that
the SSS had acted maliciously or in bad faith. The SSS was of the belief that
it was acting in the legitimate exercise of its right under the mortgage
contract in the face of irregular payments made by private respondents and
placed reliance on the automatic acceleration clause in the contract. The
filing alone of the foreclosure application should not be a ground for an award
of moral damages in the same way that a clearly unfounded civil action is not
among the grounds for moral damages.
BPIIC was
negligent in relying merely on the entries found in the deed of mortgage,
without checking and correspondingly adjusting its records on the amount
actually released to private respondents and the date when it was released.
Such negligence resulted in damage to private respondents, for which an award
of nominal damages should be given in recognition of their rights which were
violated by BPIIC
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