Case Digest (A.M. No. 2009-23-SC)
Facts:
In Bank of the Philippine Islands v. Domingo (G.R. No. 169407, March 25, 2015), petitioner Bank of the Philippine Islands (BPI) succeeded by merger with Far East Bank and Trust Company (FEBTC) sought payment from respondent Amador Domingo and his wife Mercy Maryden Domingo, on a Promissory Note of ₱629,856 executed on September 27, 1993 in favor of Makati Auto Center, Inc., secured by a chattel mortgage on a 1993 Mazda 323. Makati Auto Center assigned its rights to FEBTC, which assets and liabilities were later absorbed by BPI upon SEC approval of a merger on April 7, 2000. The spouses defaulted on twenty-one monthly installments from January 1996 to September 1997. After demand letters failed to compel payment or surrender of the vehicle, BPI filed on November 14, 2000 a Complaint for Replevin and Damages before the Metropolitan Trial Court (MeTC) of Manila, naming a John Doe to represent the unknown possessor. The spouses pleaded lack of cause of action, absence of jurisdictioCase Digest (A.M. No. 2009-23-SC)
Facts:
- Execution and assignment of loan documents
- On September 27, 1993, Amador and Mercy Domingo executed a Promissory Note for ₱629,856.00 and a Chattel Mortgage over a 1993 Mazda 323 in favor of Makati Auto Center, Inc.
- Makati Auto Center assigned its rights to Far East Bank and Trust Company (FEBTC), which was merged into BPI on April 7, 2000.
- Default and trial court proceedings
- The spouses Domingo defaulted on 21 consecutive monthly installments (January 15, 1996–September 15, 1997). BPI demanded payment or vehicle return and filed a Complaint for Replevin and Damages on November 14, 2000 before the MeTC Manila.
- At trial, BPI’s witness testified to the note, mortgage, default, demand, and an outstanding balance of ₱275,562.00. The spouses Domingo claimed they sold the vehicle to Carmelita Gonzales with FEBTC’s conformity and that postdated checks were returned.
- MeTC Decision (June 10, 2004): Held no novation, spouses remained debtors; awarded ₱275,562.00 + 36% interest p.a. + 25% attorney’s fees (later reduced to 10%).
- RTC Decision (February 10, 2005): Found implied novation by BPI’s inaction and acceptance of payments from Carmelita; dismissed BPI’s complaint; awarded moral, exemplary damages, attorney’s fees, litigation expenses.
- CA Decision (July 11, 2005): Affirmed RTC on novation; deleted damages awards for lack of factual and legal basis; denied reconsideration (August 19, 2005).
- Petition for certiorari
- BPI filed a Rule 45 Petition for Review on Certiorari contesting the finding of novation.
Issues:
- Whether the loan obligation was novated by substitution of debtors
- Did BPI (or FEBTC) give clear and unmistakable consent to release the spouses Domingo in favor of Carmelita Gonzales?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)