G.R. No. 104726 - Yam vs. Court of Appeals

Victor Yam & Yek Sun Lent, doing business under the name and style of Philippine Printing Works, Petitioners contracted with Manphil Investment Corporation, Respondent for loans under the Industrial Guarantee and Loan Fund (IGLF).
On May 10, 1979, parties executed a Loan Agreement with Assumption of Solidary Liability under which petitioners received P500,000.00, bearing 12% annual interest, 2% monthly penalty, 1 1/2% monthly service charge, and 10% attorney's fees, secured by a chattel mortgage on printing machinery.
Petitioners availed of a second IGLF loan totaling P300,000.00 evidenced by promissory notes dated July 3, 1981 and September 30, 1981; parties executed a new loan agreement with identical provisions except annual interest increased to 14% and service charge reduced to 1% per annum; the chattel mortgage was amended accordingly.

Petitioners fully paid the first loan of P500,000.00 by April 2, 1985.
On November 4, 1985, Manphil Investment Corporation was placed under receivership by the Central Bank, and Ricardo Lirio and Cristina Destajo were appointed receiver and in-house examiner, respectively.
Petitioners made a partial payment of P50,000.00 on the second loan on May 17, 1986, and sent a settlement proposal dated June 18, 1986.
On July 2, 1986, respondent, through counsel, counter-offered to reduce penalty charges up to P140,000.00 if petitioners paid by July 30, 1986.

As of July 31, 1986, petitioners' total liability to respondent was P727,001.35, broken down as principal P295,469.47, interest P165,385.00, penalties P254,820.55, and service charges P11,326.33.
On July 31, 1986, petitioners paid P410,854.47 by Pilipinas Bank check; the corresponding voucher bore the notation "full payment of IGLF LOAN" and Destajo acknowledged receipt.
The P410,854.47 corresponded to principal P295,469.47 plus interest P165,385.00 less the earlier partial payment of P50,000.00.

Respondent sent demand letters dated September 4, 1986 and September 25, 1986 seeking payment of the balance P266,146.88; petitioners did not respond.
Respondent filed suit in the Regional Trial Court, Metropolitan Manila, Branch 149, for collection of P266,146.88 plus interests, penalties, service charges and attorney's fees, or alternatively for foreclosure of the mortgaged machinery.
Petitioners pleaded full payment and alleged that Carlos Sobrepenas, president of respondent corporati...(Subscriber-Only)

Whether petitioners remain liable for the payment of penalties and service charges amounting to P266,146.88 as of July 31, 1986.

Whether the voucher bearing the notation "full payment of IGLF loan" and signed or countersigned by Cristina L. Destajo constitutes sufficient documentary proof of an oral condonation or full payment by respondent.
Whether Carlos Sobrepenas, as president of respondent corporation, had authority to waive or condone petitioners' indebtedness after respondent had been placed un...(Subscriber-Only)