Title
Bank of the Philippine Islands vs. Leobrera
Case
G.R. No. 137147
Decision Date
Jan 29, 2002
BPI refused remittance, foreclosed properties, and rejected a Letter of Credit, causing financial harm to Leobrera. Courts ruled BPI negligent, awarding reduced damages and attorney’s fees.
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Case Digest (G.R. No. L-63271-74)

Facts:

Background of the Parties:

  • Carlos B. Leobrera, the respondent, was engaged in shell manufacturing, retail, and shell craft export. He had been a valued client of the Bank of the Philippine Islands (BPI), the petitioner, for several years.

Loan Agreement and Mortgage:

  • On November 15, 1985, Leobrera obtained a loan of P500,000 from BPI, secured by a real estate mortgage on certain properties. The loan was to be paid within three years, with quarterly amortizations of P41,666.66.

Remittance Issue:

  • On November 12, 1986, Darlene Shells sent a remittance of $8,350.94 to Leobrera through BPI. BPI refused to accept the remittance, citing a discrepancy in the beneficiary's name (Car Sales Shell Export instead of Carfel Shell Export). Despite Leobrera's prior advice to BPI about the incoming remittance, BPI returned the funds to the U.S. bank, causing financial harm to Leobrera's business.

Loan Default and Foreclosure:

  • On January 16, 1987, Leobrera authorized BPI to debit his account for the amortization due on February 9, 1987. However, BPI did not credit the remittance, and Leobrera deposited P26,300 on February 11, 1987, to cover the amortization. BPI deemed the payment late and accelerated the loan, demanding full payment by February 27, 1987.
  • BPI foreclosed on the mortgaged properties (Quezon City and Paranaque) after Leobrera failed to meet the accelerated payment deadline.

Letter of Credit Issue:

  • BPI also refused to negotiate a Letter of Credit (LC No. 5600053 C) in favor of Leobrera, despite collecting a handling fee of P360.

Trial Court Decision:

  • The trial court ruled in favor of Leobrera, awarding P1,000,000 in actual damages, P4,000,000 in moral damages, P500,000 in attorney’s fees, and ordering the reconveyance of the foreclosed properties.

Court of Appeals Decision:

  • The Court of Appeals affirmed the trial court's decision but reduced the moral damages to P1,000,000 and attorney’s fees to P100,000.

Issue:

  1. Whether the Court of Appeals erred in copying the memorandum filed by Leobrera.
  2. Whether the Court of Appeals erred in ruling that Leobrera was not in legal delay.
  3. Whether the Court of Appeals erred in awarding excessive actual and moral damages and attorney’s fees.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Fallo

The Supreme Court denied the petition, affirming the Court of Appeals' decision with modifications: actual damages were reduced to P200,000, and attorney’s fees to P50,000. No costs were awarded.


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