BPI Investment Corporation v CA

15 February 2002
Quisumbing, J.
FACTS
Frank Roa obtained a loan from Ayala Investment and Development Corporation
(AIDC), for the construction of his house. Said house and lot were mortgaged to
AIDC to secure the loan. Roa sold the properties to ALS and Litonjua (respondents),
the latter paid in cash and assumed the balance of Roas indebtedness with AIDC.
AIDC was not willing to extend the old interest to private respondents and proposed
to grant of new loan of P500,000 with higher interest to be applied to Roas debt,
secured by the same property. Private respondents executed a mortgage deed on
March 31, 1981 with the provision that payment shall commence on May 1, 1981.
However, the full loan was released only on September 13, 1982.
BPIIC, AIDCs predecessor, filed for foreclosure proceedings on the ground that
private respondents failed to pay the mortgage indebtedness from May 1, 1981 to
June 30, 1984. Private respondents maintained that they should not be made to pay
amortization before the actual release of the P500,000 loan. The suit was dismissed
and affirmed by the CA.
ISSUE
WON a contract of loan is a consensual contract
HELD
No. A loan contract is not a consensual contract but a real contract. It is
perfected only upon delivery of the object of the contract. A contract of loan
involves a reciprocal obligation, wherein the obligation or promise of each party is
the consideration for that of the other; it is a basic principle in reciprocal obligations
that neither party incurs in delay, if the other does not comply or is not ready to
comply is a proper manner with what is incumbent upon him.
In this case, even though the loan contract was signed on March 31, 1981, it was perfected
only on September 13, 1982, the date of the second release of the loan. Thus, obligation to
pay commenced only a month after the perfection of the contract despite the express
agreement that payment shall commence on May 1, 1981.