Case Summary (G.R. No. 190445)
Background and Loan Agreement
On September 29, 1995, the Locsins secured a loan of PHP 700,000 from BDO, with a promissory note that included an acceleration clause. Subsequently, on November 6, 1996, they obtained a PHP 2.5 million credit line facility, secured by a third-party mortgage. Despite the initial good payment record, the Locsins defaulted on their obligations in October 1997. BDO sent a demand letter on January 7, 1998, invoking the cross-default provision, which meant that the first loan also became due due to the default on the credit line facility.
Legal Proceedings
The Locsins filed a complaint for Specific Performance against BDO in August 1998, seeking to compel BDO to restructure their loans and halt foreclosure actions. The Regional Trial Court (RTC) denied their request for injunctive relief, leading BDO to proceed with extrajudicial foreclosure on September 23, 1998. BDO won the auction for the properties, with a bid exceeding the total outstanding balance on the loans by over PHP 400,000.
Deficiency Claim and Motion to Dismiss
On February 5, 1999, BDO demanded payment for a claimed deficiency of PHP 1,259,166.21. Subsequently, on November 29, 1999, BDO filed a collection action for this deficiency. The Locsins filed a Motion to Dismiss, asserting that BDO's claim should have been a compulsory counterclaim in the earlier case. The RTC denied this motion, which led the Locsins to appeal to the Court of Appeals (CA).
Court of Appeals Decision
The CA initially ruled in favor of the Locsins, only to see the Supreme Court reverse this decision, remanding the case for further proceedings. During the RTC proceedings, BDO presented its evidence ex parte after the Locsins failed to respond. The RTC ruled in favor of BDO, awarding the total amount claimed. The Locsins then appealed to the CA, which ruled that BDO failed to prove its claims by a preponderance of evidence and dismissed the complaint.
Supreme Court Review and Findings
BDO's petition to the Supreme Court challenged the sufficiency of appellate court evidence as well as alleged procedural errors in the CA's decision. The Supreme Court affirmed the CA's ruling, noting that the deficiencies claimed by BDO were not sufficiently proven through adequate and competent evidence, emphasiz
...continue readingCase Syllabus (G.R. No. 190445)
Case Overview
- The case involves a petition for review on certiorari filed by Banco De Oro Universal Bank (BDO) against spouses Enrique Gabriel Locsin and Ma. Geraldine R. Locsin.
- The petition challenges the Decision dated June 30, 2009, and Resolution dated October 28, 2009, of the Court of Appeals (CA) in CA-G.R. CV No. 89622.
Factual Background
- On September 29, 1995, the Locsins secured a loan of P700,000.00 from BDO, backed by a real estate mortgage (1st Loan) on their property (TCT No. N-138739).
- The 1st Loan included an acceleration clause, making the full amount due upon default.
- On November 6, 1996, the Locsins obtained a credit line facility of P2.5 Million from BDO, secured by a third-party mortgage on properties from business partners (Juanito and Anita Evidente).
- The credit line facility contained a cross-default provision, linking it to the 1st Loan.
- The Locsins defaulted on the credit line in October 1997, prompting BDO to demand payment for both loans due to the cross-default provision.
- Efforts to restructure the loans failed, leading the Locsins to file a complaint for Specific Performance against BDO on August 24, 1998.
- BDO extrajudicially foreclosed on the mortgages on September 23, 1998, and became the highest bidder at the auction sale.
- BDO later claimed a deficiency amount of P1,259,166.21, which was contested by the Locsins.
Procedural History
- On November 29, 1999, BDO filed a complaint for Collection of a Sum of Money against the Locsins for the alleged deficiency.
- The Locsins filed a Motion to Dismiss, asserting that BDO's claim should have been a comp