Case Digest (G.R. No. 114829) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Land Bank of the Philippines v. Alfredo Ong, decided on November 24, 2010 under the 1987 Constitution, the respondents Spouses Johnson and Evangeline Sy obtained on March 18, 1996 a PhP 16 million loan from Land Bank’s Legazpi City branch, secured by three residential lots, five cargo trucks, and a warehouse. Their Notice of Loan Approval contained an acceleration clause upon default. When the Sy spouses could no longer pay, they executed on December 9, 1996 a Deed of Sale with Assumption of Mortgage, conveying three mortgaged lots to Angelina Gloria Ong (the mother of petitioner’s husband, Alfredo Ong) for PhP 150,000, expressly “by way of sale unto Angelina Gloria Ong … the above-mentioned debt … and for the proper restructuring of the loan.” Alfredo, as prospective mortgagor, tendered PhP 750,000 and updated accrued interest, submitting all bank‐required documents. The branch head acknowledged receipt, issued a receipt, and assured him of title transfer, yet Alfredo was ne Case Digest (G.R. No. 114829) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Loan Agreement
- On March 18, 1996, Spouses Johnson and Evangeline Sy obtained a PhP 16,000,000 loan from Land Bank’s Legazpi City branch, secured by three residential lots, five cargo trucks, and a warehouse.
- Under the Notice of Loan Approval (Feb. 22, 1996), PhP 6,000,000 was short-term (maturity Feb. 28, 1997) and PhP 10,000,000 payable over seven years, with an acceleration clause upon default.
- Sale with Assumption of Mortgage and Subsequent Events
- On December 9, 1996, the Spouses Sy sold three mortgaged parcels to Angelina Gloria Ong for PhP 150,000 via Deed of Sale with Assumption of Mortgage, authorizing her to represent them for loan restructuring.
- Alfredo Ong (Angelina’s husband) approached Land Bank, met branch head Atty. Hingco, was told to pay PhP 750,000 of principal and update accrued interest to process his assumption of mortgage.
- On January 31, 1997, Alfredo tendered a PhP 750,000 check; Land Bank issued a receipt and he submitted required documents. Atty. Hingco assured him of transfer of title, but no approval or notice was ever sent.
- Land Bank’s Lending Center later denied the assumption due to an adverse credit report on the Ongs. Land Bank foreclosed the mortgage collaterals without informing Alfredo; he learned of foreclosure via RTC auction notice.
- Alfredo’s counsel was verbally assured the PhP 750,000 would be returned, but no refund was made.
- Litigation
- On December 12, 1997, Alfredo filed a recovery of sum action (Civil Case No. T-1941) against Land Bank for PhP 750,000, plus 12% interest from filing, attorney’s fees (PhP 150,000), filing fees (PhP 15,000), and moral damages (PhP 250,000).
- RTC (Branch 17, Tabaco City) ruled in Alfredo’s favor: Land Bank must pay PhP 750,000 with 12% per annum interest from Dec. 12, 1997, plus PhP 50,000 attorney’s fees and litigation expenses.
- CA (Oct. 20, 2009, CA-G.R. CR-CV No. 84445) affirmed. Land Bank’s motion for reconsideration was denied (Jan. 5, 2010).
Issues:
- Whether the CA erred in holding that Article 1236 of the Civil Code does not apply and in finding that there was no novation of the loan agreement.
- Whether the CA misconstrued evidence and law in affirming the order for Land Bank to return PhP 750,000 with 12% per annum interest.
- Whether the CA committed reversible error in affirming the award of PhP 50,000 for attorney’s fees and litigation expenses.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)