Case Digest (G.R. No. 214752)
Facts:
This case revolves around a loan dispute between Equitable Savings Bank (now known as BDO Unibank, Inc.) as the petitioner and Rosalinda C. Palces as the respondent. On August 15, 2005, Palces acquired a Hyundai Starex GRX Jumbo vehicle through a loan arrangement with the bank for a total amount of P1,196,100.00. In conjunction with this loan, Palces signed a Promissory Note with Chattel Mortgage, which stipulated that she would repay the loan in 36 monthly installments of P33,225.00 starting September 18, 2005. The agreement also specified that any default on her part would lead to the entire balance becoming due and payable, and would entitle the bank to foreclose the mortgage or initiate collection proceedings.Palces made regular payments from September 2005 to December 2006 but defaulted on her payments for January and February of 2007. In response to her default, the bank issued a demand letter on February 22, 2007, for the remaining loan balance of P664,500.00. When Palc
Case Digest (G.R. No. 214752)
Facts:
- Transaction and Loan Details
- On August 15, 2005, respondent Rosalinda C. Palces obtained financing from petitioner Equitable Savings Bank (now BDO Unibank, Inc.) for the purchase of a Hyundai Starex GRX Jumbo.
- The financing was documented by a Promissory Note with Chattel Mortgage executed on August 18, 2005, evidencing an indebtedness of P1,196,100.00.
- The Promissory Note stipulated:
- Payment of the loan in 36 monthly installments of P33,225.00, starting September 18, 2005, with subsequent payments on the 18th of each month.
- That default in payment would render the remaining balance immediately due and payable.
- That failure to pay installments would allow the petitioner to either foreclose the chattel mortgage or pursue a civil action for collection.
- Payment Performance and Default
- Respondent made timely payments from September 18, 2005 to December 21, 2006 by paying her monthly installments.
- In January and February 2007, she failed to pay her monthly installments, triggering the acceleration clause in the Promissory Note.
- Petitioner then sent a demand letter dated February 22, 2007, demanding payment of the remaining balance of P664,500.00.
- Initiation of Legal Proceedings
- On March 7, 2007, petitioner filed a Complaint for Recovery of Possession with Replevin with an alternative prayer for the sum of money and damages before the RTC, seeking either:
- The issuance of a writ of replevin for seizure and delivery of the subject vehicle; or
- An order compelling respondent to pay the remaining balance including penalties and charges if the vehicle could not be recovered.
- A writ of replevin was issued and served to respondent on April 26, 2007, with a subsequent Sheriff’s Return filed on May 8, 2007, evidencing the implementation of the writ.
- Respondent’s Defense and Partial Payments
- While admitting to the default in January and February 2007, respondent asserted that:
- She had communicated with petitioner through a bank officer, Rodrigo Dumagpi, who gave her consent regarding the delay in payment.
- To update her payment schedule, she made partial payments totalling P103,000.00 (P70,000.00 on March 8, 2007 and P33,000.00 on March 20, 2007).
- Despite these payments, respondent was taken by surprise when petitioner proceeded to file the complaint that ultimately led to the seizure of the vehicle.
- Decisions of Lower Courts
- The Regional Trial Court (RTC) Decision (May 20, 2010):
- Ruled largely in petitioner’s favor by confirming his right to possess the vehicle.
- Determined that respondent’s default in January and February 2007 had rendered the entire loan balance of P664,500.00 due.
- Awarded petitioner P15,000.00 as attorney’s fees and costs of suit but denied the alternative prayer for collection of the remaining balance.
- The Court of Appeals (CA) Decision (February 13, 2014):
- Partially affirmed the RTC ruling but modified the relief by ordering:
- The refund of P103,000.00 to respondent representing her late partial payments.
- The deletion of the award of attorney’s fees for lack of sufficient legal basis.
- The CA based its ruling on the contention that petitioner’s acceptance of the late payments constituted a waiver of its right to recover any unpaid installments pursuant to Article 1484 of the Civil Code.
- Petitioner filed a petition for review on certiorari contesting the CA ruling regarding the refund order and the treatment of attorney’s fees.
Issues:
- Whether or not the CA correctly ordered petitioner to return to respondent the total of P103,000.00 representing her late partial installment payments.
- Whether or not the CA properly deleted the award of attorney’s fees in favor of petitioner due to insufficient basis.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)