Case Digest (G.R. No. 153134)
Facts:
The case involves Banco Filipino Savings and Mortgage Bank as the petitioner and spouses Antonio G. Diaz and Elsie B. Diaz as the respondents. The events leading to this case began on March 8, 1979, when the respondents secured a loan from the petitioner bank amounting to P400,000.00 at an interest rate of 16% per annum. In November 1982, this loan was restructured to P3,163,000.00, payable over 20 years at an increased interest rate of 21% per annum, with monthly amortizations of P56,227.00, secured by a real estate mortgage on two commercial lots in Davao City. The respondents defaulted on their payments starting October 1986. Before the bank could initiate foreclosure proceedings, the respondents filed a complaint in the Regional Trial Court (RTC) of Davao City, seeking to declare the interest rates and penalty charges as unconscionable, among other claims. The RTC denied their application for a preliminary injunction, affirming the bank's right to foreclose due to the...
Case Digest (G.R. No. 153134)
Facts:
Loan Agreement and Restructuring
- On March 8, 1979, spouses Antonio and Elsie Diaz secured a loan of P400,000.00 from Banco Filipino Savings and Mortgage Bank (petitioner bank) at an interest rate of 16% per annum.
- In November 1982, the loan was restructured to P3,163,000.00, payable over 20 years at 21% interest per annum, secured by a real estate mortgage over two commercial lots in Davao City. The respondents also assigned the rentals of the mortgaged properties to the bank.
Default and Legal Proceedings
- The respondents defaulted on their payments starting October 1986. Before the bank could foreclose, the respondents filed a complaint in the RTC of Davao City to challenge the interest rates and penalty charges as unconscionable. The RTC denied their application for a preliminary injunction, and the CA affirmed this decision.
Consignation and Further Legal Battles
- The respondents filed another complaint in the RTC of Makati City for consignation, seeking to deposit P1,034,600.00 as full payment of their loan. The bank was declared in default for failing to file an answer. The RTC ruled in favor of the respondents, declaring the consignation valid and their obligation fully paid.
- On appeal, the CA reversed the RTC’s decision, holding that the consignation was invalid because it did not include accrued interest. The CA dismissed the respondents' complaint.
Motion to Withdraw Deposit
- After the CA’s decision became final, the respondents filed a motion to withdraw the P1,034,600.00 deposit, claiming their loan had been settled through a compromise agreement with the bank. The RTC denied their motion, and the respondents filed a petition for certiorari with the CA.
- The CA granted the petition, allowing the respondents to withdraw the deposit, and reversed the RTC’s orders.
Issue:
- Whether the respondents properly resorted to a petition for certiorari to challenge the RTC’s denial of their motion to withdraw the deposit.
- Whether the CA erred in allowing the respondents to withdraw the P1,034,600.00 deposit on consignation.
Ruling:
- The Supreme Court denied the petition, affirming the CA’s decision. The Court held that:
- The respondents properly filed a petition for certiorari because the RTC’s orders were interlocutory and not appealable.
- The respondents had the right to withdraw the deposit under Article 1260 of the Civil Code, as the bank had not accepted the consignation, and there was no judicial declaration that the consignation was properly made.
- The payment of P25,100,000.00 by the respondents’ attorneys-in-fact constituted substantial compliance with their obligation, and the surcharges imposed by the bank were excessive and should be equitably reduced.
Ratio:
- Propriety of Certiorari: A petition for certiorari is appropriate when there is no appeal or plain, speedy, and adequate remedy available. Since the RTC’s orders were interlocutory, the respondents correctly filed a petition for certiorari.
- Right to Withdraw Deposit: Under Article 1260 of the Civil Code, a debtor may withdraw a deposit made on consignation before the creditor accepts it or before a judicial declaration that the consignation is proper. Since the bank did not accept the deposit and the CA declared the consignation invalid, the respondents retained ownership of the deposit and could withdraw it.
- Substantial Compliance with Obligation: The payment of P25,100,000.00 by the respondents’ attorneys-in-fact was deemed substantial compliance with their obligation, especially considering the excessive surcharges imposed by the bank. The Court found the surcharges unconscionable and reduced them equitably.