Case Digest (G.R. No. 190755)
Facts:
- On March 18, 1996, spouses Johnson and Evangeline Sy obtained a PhP16 million loan from Land Bank of the Philippines, Legazpi City.
- The loan was secured by three residential lots, five cargo trucks, and a warehouse.
- The loan agreement included an acceleration clause.
- Unable to pay, the Spouses Sy sold the mortgaged properties to Angelina Gloria Ong, Evangeline's mother, via a Deed of Sale with Assumption of Mortgage on December 9, 1996.
- Alfredo Ong, Angelina's husband, informed Land Bank about the sale and assumption of mortgage.
- Atty. Edna Hingco, the Legazpi City Branch Head, laid out the requirements for the assumption of mortgage, including a payment of PhP750,000.
- Alfredo complied with the requirements, but his application was later denied due to a negative credit investigation.
- Land Bank foreclosed the mortgage without informing Alfredo of his application's denial.
- Alfredo filed a case for recovery of the sum of money with damages against Land Bank, claiming he was misled to believe that the payment would ensure the approval of his assumption of the loan.
- The Regional Trial Court ruled in favor of Alfredo, ordering Land Bank to return the PhP750,000 with interest and attorney's fees.
- The Court of Appeals affirmed the RTC’s decision.
Issues
- Did the Court of Appeals err in holding that Article 1236 of the Civil Code does not apply and in finding that there is no novation?
- Did the Court of Appeals misconstrue the evidence and the law in affirming the trial court’s decision to order Land Bank to pay Alfredo the amount of PhP750,000 with interest?
- Did the Court of Appeals commit a reversible error in affirming the award of PhP50,000 to Alfredo as attorney's fees and expenses of litigation?
Ruling:
- The Supreme Court affirmed the CA's decision with modification.
- The PhP750,000 will earn interest at 6% per annum from December 12, 1997.
- The total aggregate monetary awards...(Unlock)
Ratio:
- The Court found that Land Bank was not obligated to accept Alfredo’s payment under Article 1236 of the Civil Code since Alfredo did not have an interest in the fulfillment of the Spouses Sy’s obligation.
- Alfredo made a conditional payment for the assumption of mortgage, required by Land Bank before approval.
- Due to the adverse credit investigation, the contract was not perfected, and Alfredo was not informed of the disap...continue reading
Case Digest (G.R. No. 190755)
Facts:
On March 18, 1996, spouses Johnson and Evangeline Sy secured a loan of PhP16 million from Land Bank of the Philippines, Legazpi City, secured by three residential lots, five cargo trucks, and a warehouse. The loan agreement included an acceleration clause. Unable to pay their loan, the Spouses Sy sold three mortgaged parcels of land to Angelina Gloria Ong, Evangeline's mother, under a Deed of Sale with Assumption of Mortgage on December 9, 1996. Alfredo Ong, Angelina's husband, informed Land Bank about the sale and assumption of mortgage. Atty. Edna Hingco, the Legazpi City Branch Head, provided requirements for the assumption of mortgage, including a payment of PhP750,000. Alfredo complied, but his application was later denied due to a negative credit investigation. Land Bank foreclosed the mortgage without informing Alfredo of the denial. Alfredo filed a case for recovery of the sum of money with damages against Land Bank, arguing that he was misled into believing his payment would lead to the approval of his assumption of the loan. The Regional Trial Court (RTC) ruled in favor of Alfredo, ordering Land Bank to return the PhP750,000 with interest and attorney's fees. The Court of Appeals (CA) affirmed the RTC's decision.