Credit Transactions Case Digest: Bonnevie v. CA (1983)

G.R. No. L-49101 October 24, 1983

Lessons Applicable: Simple Loan

Laws Applicable:

Facts:

• December 6, 1966: Spouses Jose M. Lozano and Josefa P. Lozano secured their loan of P75K from Philippine Bank of Commerce (PBC) by mortgaging their property
• December 8, 1966: Executed Deed of Sale with Mortgage to Honesto Bonnevie where P75K is payable to PBC and P25K is payable to Spouses Lanzano.
• April 28, 1967 to July 12, 1968:   Honesto Bonnevie paid a total of P18,944.22 to PBC
• May 4, 1968:  Honesto Bonnevie assigned all his rights under the Deed of Sale with Assumption of Mortgage to his brother, intervenor Raoul Bonnevie
• June 10, 1968:  PBC applied for the foreclosure of the mortgage, and notice of sale was published 
• January 26, 1971: Honesto Bonnevie filed in the CFI of Rizal against Philippine Bank of Commerce for the annulment of the Deed of Mortgage dated December 6, 1966 as well as the extrajudicial foreclosure made on September 4, 1968.
• CFI: Dismissed the complaint with costs against the Bonnevies
• CA: Affirmed

ISSUE: W/N the forclosure on the mortgage is validly executed.

HELD: YES. CA affirmed

• A contract of loan being a consensual contract is perfected at the same time the contract of mortgage was executed. The promissory note executed on December 12, 1966 is only an evidence of indebtedness and does not indicate lack of consideration of the mortgage at the time of its execution.
• Respondent Bank had every right to rely on the certificate of title. It was not bound to go behind the same to look for flaws in the mortgagor's title, the doctrine of innocent purchaser for value being applicable to an innocent mortgagee for value. 
• Thru certificate of sale in favor of appellee was registered on September 2, 1968 and the one year redemption period expired on September 3, 1969. It was not until September 29, 1969 that Honesto Bonnevie first wrote respondent and offered to redeem the property. 
• loan matured on December 26, 1967 so when respondent Bank applied for foreclosure, the loan was already six months overdue. Payment of interest on July 12, 1968 does not make the earlier act of PBC inequitous nor does it ipso facto result in the renewal of the loan. In order that a renewal of a loan may be effected, not only the payment of the accrued interest is necessary but also the payment of interest for the proposed period of renewal as well. Besides, whether or not a loan may be renewed does not solely depend on the debtor but more so on the discretion of the bank. 

Credit Transactions Case Digest: BPI Investment Corp v. CA (2002)

G.R. No. 133632  February 15, 2002

Lessons Applicable: Simple Loan

Laws Applicable:

Facts:

• Frank Roa obtained a loan with interest rate of 16 1/4%/annum from Ayala Investment and Development Corporation (AIDC), the predecessor of BPI Investment Corp. (BPIIC), for the construction of a house on his lot in New Alabang Village, Muntinlupa.
• He mortgaged the house and lot to AIDC as security for the loan.
• 1980: Roa sold the house and lot to ALS Management & Development Corp. and Antonio Litonjua for P850K who paid P350K in cash and assumed the P500K indebtness of ROA with AIDC.
• AIDC proposed to grant ALS and Litonjua a new loan for P500K with interested rate of 20%/annum and service fee of 1%/annum on the outstanding balance payable within 10 years through equal monthly amortization of P9,996.58 and penalty interest of 21%/annum/day from the date the amortization becomes due and payable.
• March 1981: ALS and Litonjua executed a mortgage deed containing the new stipulation with the provision that the monthly amortization will commence on May 1, 1981
• August 13, 1982: ALS and Litonjua paid BPIIC P190,601.35 reducing the P500K principal loan to P457,204.90.
• September 13, 1982: BPIIC released to ALS and Litonjua P7,146.87, purporting to be what was left of their loan after full payment of Roa’s loan
• June 1984: BPIIC instituted foreclosure proceedings against  ALS and Litonjua on the ground that they failed to pay the mortgage indebtedness which from May 1, 1981 to June 30, 1984 amounting to P475,585.31
• August 13, 1984: Notice of sheriff's sale was published
• February 28, 1985: ALS and Litonjua filed Civil Case No. 52093 against BPIIC alleging that they are not in arrears and instead they made an overpayment as of June 30, 1984 since the P500K loan was only released September 13, 1982 which marked the start of the amortization and since only P464,351.77 was released applying legal compensation the balance of P35,648.23 should be applied to the monthly amortizations
• RTC: in favor of ALS and Litonjua and against BPIIC that the loan granted by BPI to ALS and Litonjua was only in the principal sum of P464,351.77 and awarding moral damages, exemplary damages and attorneys fees for the publication
• CA: Affirmed reasoning that a simple loan is perfected upon delivery of the object of the contract which is on September 13, 1982

ISSUE: W/N the contract of loan was perfected only on September 13, 1982 or the second release of the loan?

HELD: YES. AFFIRMED WITH MODIFICATION as to the award of damages.  The award of moral and exemplary damages in favor of private respondents is DELETED, but the award to them of attorney’s fees in the amount of P50,000 is UPHELD. Additionally, petitioner is ORDERED to pay private respondents P25,000 as nominal damages. Costs against petitioner.

• obligation to pay commenced only on October 13, 1982, a month after the perfection of the contract
• contract of loan involves a reciprocal obligation, wherein the obligation or promise of each party is the consideration for that of the other.  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.  Consequently, petitioner could only demand for the payment of the monthly amortization after September 13, 1982 for it was only then when it complied with its obligation under the loan contract.  
• 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 and the date when it was released.  Such negligence resulted in damage for which an award of nominal damages should be given 
• SSS where we awarded attorney’s fees because private respondents were compelled to litigate, we sustain the award of P50,000 in favor of private respondents as attorney’s fees