Case Summary (G.R. No. 153134)

Background of the Case

• The case involves a Petition for Review on Certiorari filed by Banco Filipino Savings and Mortgage Bank against respondents Antonio and Elsie Diaz.
• The Court of Appeals (CA) allowed the respondents to withdraw a deposit of P1,034,600.00 held by the Regional Trial Court (RTC) of Makati City.
• The CA's decision reversed the RTC's orders that denied the respondents' motion to withdraw the deposit.
• The case is rooted in earlier decisions from the CA regarding the respondents' loan obligations and the validity of their consignation.

Loan Agreement and Default

• The respondents secured a loan of P400,000.00 from the petitioner bank in 1979, which was later restructured to P3,163,000.00 in 1982.
• The loan was secured by a real estate mortgage over two commercial lots and the assignment of rental income.
• The respondents defaulted on their payments starting October 1986, prompting the bank to consider foreclosure.

Legal Proceedings Initiated by Respondents

• In response to the impending foreclosure, the respondents filed a complaint in the RTC of Davao City challenging the interest rates and seeking various forms of relief.
• The RTC denied their request for a preliminary injunction, affirming the bank's right to foreclose due to the respondents' default.
• The CA upheld the RTC's decision on appeal.

Subsequent Consignation and Court Findings

• The respondents filed a new complaint in the RTC of Makati City for consignation and cancellation of their obligation.
• The RTC found that the respondents had made substantial payments and declared their obligation to be P1,034,600.00.
• The bank refused to accept this amount, leading the respondents to deposit it with the RTC as a form of consignation.

Court of Appeals Decision on Consignation

• The RTC ruled in favor of the respondents, declaring their debt fully paid, but the CA later reversed this decision, stating that the consignation was invalid as it did not include accrued interest.
• The CA emphasized that for a valid consignation, the tender must include all interests due.

Motion to Withdraw Deposit

• Following the CA's decision, the respondents filed a motion to withdraw their deposit, asserting that their loan obligation had been settled through a separate payment of P25,000,000.00.
• The petitioner bank opposed this motion, claiming the respondents still owed a larger amount and that the deposit should be applied to their outstanding obligation.

RTC's Denial of Withdrawal

• The RTC denied the respondents' motion to withdraw the deposit, stating that the dismissal of their earlier complaint did not absolve their obligation to the bank.
• The RTC maintained that the deposit could still be applied to the respondents' outstanding obligation.

Court of Appeals Reversal

• The CA reversed the RTC's orders, asserting that the respondents had the right to withdraw their deposit since the bank had not accepted it.
• The CA cited Article 1260 of the Civil Code, which allows a debtor to withdraw a deposit before acceptance by the creditor or a judicial declaration of proper consignation.

Petitioner Bank's Arguments

• The petitioner bank contended that the CA erred in its decision, arguing that the deposit was not valid as it did not cover the full obligation.
• The bank claimed it had accepted the deposit a...continue reading

Case Syllabus (G.R. No. 153134)

Case Overview

• The case involves a Petition for Review on Certiorari filed by Banco Filipino Savings and Mortgage Bank against spouses Antonio and Elsie Diaz.
• The petition challenges the Decision dated November 12, 2001, of the Court of Appeals which permitted the respondents to withdraw their deposit of P1,034,600.00 held by the Regional Trial Court (RTC) of Makati City.
• The appellate court's decision reversed prior orders of the RTC that denied the respondents' motion to withdraw the deposit.

Factual Background

• On March 8, 1979, the respondents secured a loan of P400,000.00 from the petitioner bank at an interest rate of 16% per annum.
• In November 1982, the loan was restructured to P3,163,000.00 at 21% interest, payable over 20 years, with monthly amortizations of P56,227.00 secured by real estate mortgages on two commercial lots.
• The respondents defaulted on payments starting October 1986, leading them to file a complaint against the petitioner for various claims including the reduction of interest rates and damages, which the RTC of Davao City denied.

Procedural History

• The RTC of Makati City subsequently ruled on a separate complaint filed by the respondents for consignation and declaration of cancellation of their obligation.
• The RTC found that the respondents had made substantial payments, ultimately determining their outstanding obligation to be P1,034,600.00.
• The petitioner bank contested this, asserting that the respondents owed significantly more.
• A manager's check for P1,034,600.00 wa...continue reading