Case Digest (G.R. No. 129552)
Facts:
In P.C. Javier & Sons, Inc. vs. PAIC Savings & Mortgage Bank, Inc. (G.R. No. 129552, June 29, 2005), petitioners P.C. Javier & Sons, Inc. and spouses Pablo C. Javier, Sr. and Rosalina F. Javier applied in February 1981 for a P1.5 million Industrial Guarantee Loan Fund (IGLF) loan from First Summa Savings and Mortgage Bank, later renamed PAIC Savings & Mortgage Bank, Inc. The Central Bank released two tranches of P750,000 on May 18 and November 20, 1981, deducting P250,000 for a time deposit as additional collateral. Petitioners alleged delayed releases and inability to withdraw the deposit; the bank explained that collateral value was deficient and that petitioners had agreed to the deposit and a February 15, 1983 chattel mortgage over machinery. After petitioners defaulted, the bank sent demand letters in November 1983 and May 1984 and scheduled an extrajudicial foreclosure on TCT No. 473216. To forestall the foreclosure, petitioners filed on May 7 and May 10, 1984 a complaintCase Digest (G.R. No. 129552)
Facts:
- Parties and Proceedings
- Petitioners: P.C. Javier & Sons, Inc.; spouses Pablo C. Javier, Sr. and Rosalina F. Javier.
- Respondents: PAIC Savings & Mortgage Bank, Inc. (formerly First Summa Savings and Mortgage Bank); Acting and Deputy Sheriffs Grace Belvis, Sofronio Villarin, Pio Martinez, Nicanor Blanco; Hon. Court of Appeals.
- RTC Makati, Branch 62, Civil Case No. 7184 – Complaint for Annulment of Mortgage and Foreclosure with Preliminary Injunction, Prohibition, and Damages filed May 7, 1984; Supplemental Complaint filed May 10, 1984.
- Loan Transaction and Foreclosure Events
- February 1981: Petitioners applied for a ₱1.5 million IGLF loan from First Summa Savings and Mortgage Bank.
- Loan Releases:
- First tranche of ₱750,000 disbursed May 18, 1981.
- Second tranche of ₱750,000 disbursed November 21, 1981, with ₱250,000 placed in time deposit as additional collateral.
- Collateral Security: On February 15, 1983, petitioners executed a chattel mortgage over certain machinery and maintained the ₱250,000 time deposit to cure collateral deficiency.
- Default and Foreclosure Notices: Demand letters dated November 22, 1983 and May 2, 1984; extrajudicial foreclosure scheduled for May 9, 1984.
- Preliminary Injunctions: RTC issued status quo orders (May 9 & 19; October 22) and a December 10, 1990 order enjoining further foreclosure.
- RTC and CA Decisions
- RTC Findings and Disposition (July 6, 1993):
- First Summa and PAIC are the same entity; petitioners’ obligations were due and demandable; foreclosure justified.
- Dismissal of petitioners’ complaint; awarded to bank: unpaid principal (₱700,453.45 and ₱749,879.38), accrued interest, liquidated damages, actual damages (₱40,000), exemplary damages (₱30,000), attorney’s fees (₱50,000), costs.
- CA Decision (January 31, 1997) and Resolution (June 20, 1997): Affirmed RTC in toto and denied motion for reconsideration.
Issues:
- Whether a formal notice to debtors is required when a bank changes its corporate name.
- Whether petitioners’ loan obligations were due and demandable at the time foreclosure proceedings commenced.
- Whether the ₱250,000 time deposit constituted unlawful withholding giving rise to unjust enrichment.
- Whether actual, exemplary damages and attorney’s fees were properly awarded despite petitioners’ alleged absence of malice.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)