Case Digest (G.R. No. 133632)
Facts:
BPI Investment Corporation (Petitioner) foreclosed a mortgage on a New Alabang property after ALS Management and Development Corporation and Antonio K. Litonjua (Respondents) assumed a P500,000 loan originally granted to Frank Roa; the mortgage deed was executed March 31, 1981 but portions of the loan were released only in August–September 1982. The Regional Trial Court of Pasig dismissed the foreclosure as premature, reformed the amortization schedule, and awarded P300,000 moral, P50,000 exemplary, and P50,000 attorneys fees; the Court of Appeals affirmed, and BPIIC sought review in the Supreme Court.Issues:
- Whether a contract of loan is a consensual contract or a real contract perfected only upon delivery of the loan.
- Whether BPI Investment Corporation should be held liable for moral and exemplary damages and attorneys fees despite alleged irregular payments by respondents.
Ruling:
The Court held that a contract of loan is a *real contract* and is perfected only upon de Case Digest (G.R. No. 133632)
Facts:
- Parties and capacities
- BPI Investment Corporation (petitioner) as mortgagee and successor of Ayala Investment and Development Corporation (AIDC).
- ALS Management and Development Corporation and Antonio K. Litonjua (private respondents) as mortgagors and purchasers of the property from Frank Roa.
- Original loan, sale and mortgage formation
- Frank Roa obtained a loan from AIDC at 16 1/4% per annum secured by a mortgage on his house and lot in New Alabang Village.
- In 1980 Roa sold the house and lot to private respondents for P850,000, paying P350,000 cash and assuming Roa's P500,000 indebtedness.
- AIDC proposed a new loan to private respondents of P500,000 at 20% per annum plus 1% service fee, payable in ten years in equal monthly amortizations of P9,996.58, with penalty interest at 21% per annum from default; private respondents executed a mortgage deed in March 1981 providing that monthly amortization would commence May 1, 1981.
- Release, adjustments and alleged shortfall
- On August 13, 1982 ALS and Litonjua paid P190,601.35 to update Roa's arrearages; this reduced Roa's balance and permitted application of the P500,000 loan to liquidate Roa's debt.
- On September 13, 1982 BPIIC released to private respondents P7,146.87, representing the purported balance of the P500,000 after applying proceeds to Roa's indebtedness.
- Private respondents alleged that only P464,351.77 was actually released from the P500,000 loan and that the unpaid balance of P35,648.23 should be applied to the initial amortizations.
- Foreclosure and preliminary judicial actions
- In June 1984 BPIIC instituted extrajudicial foreclosure proceedings alleging arrears from May 1, 1981 to June 30, 1984 amounting to P475,585.31; a sheriff's sale notice was published August 13, 1984.
- On February 28, 1985 private respondents filed Civil Case No. 52093 alleging they were not in arrears, asserting overpayment as of June 30, 1984 and contending amortization should not run before actual release of the loan.
- Trial court disposition in consolidated cases
- The Regional Trial Court of Pasig City, Branch 151 consolidated Civil Case No. 11831 (foreclosure) and Civil Case No. 52093 (damages) and rendered judgment on August 31, 1988.
- The trial court held that the loan amounted to P464,351.77 with monthly amortizations of P9,283.83 for 120 months and reformed the amortization schedule accordingly.
- The trial court found private respondents not in default, dismissed the foreclosure suit as premature, and awarded private respondents P300,000 moral damages, P50,000 exemplary damages, and P50,000 attorneys' fees; costs against BPIIC.
- Court of Appeals proceedings and judgment
- Private respondents' appeal to the Court of Appeals was dismissed for non-payment of docket fees; BPIIC appealed.
- On February 28, 1997 the Court of Appeals affirmed the trial court in toto, ruling the loan was perfecte...(Subscriber-Only)
Issues:
- Perfection of the loan and commencement of amortization
- Whether the contract of loan between BPI Investment Corporation and ALS Management and Development Corporation and Antonio K. Litonjua was a consensual contract perfected on March 31, 1981 (date of mortgage deed) or a real contract perfected upon delivery of the loan (date of actual release).
- Liability for moral, exemplary damages and attorneys' fees
- Whether BPI Investment Corporation should be held liable for moral and exempla...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)