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96053 March 3, 1993 amount to be paid to petitioners and the refund to private respondent are
concerned (p. 46, Rollo).chanroblesvirtualawlibrarychanrobles virtual law li
JOSEFINA TAYAG, RICARDO GALICIA, TERESITA GALICIA, EVELYN
GALICIA, JUAN GALICIA, JR. and RODRIGO GALICIA, Petitioners, There is no dispute that the sum of P3,000.00 listed as first installment
vs. COURT OF APPEALS and ALBRIGIDO LEYVA, Respondents. was received by Juan Galicia, Sr. According to petitioners, of the
P10,000.00 to be paid within ten days from execution of the instrument,
only P9,707.00 was tendered to, and received by, them on numerous
Facundo T. Bautista for petitioners.chanrobles virtual law library
occasions from May 29, 1975, up to November 3, 1979. Concerning private
respondent's assumption of the vendors' obligation to the Philippine
Jesus T. Garcia for private respondent. Veterans Bank, the vendee paid only the sum of P6,926.41 while the
difference the indebtedness came from Celerina Labuguin (p. 73, Rollo).
MELO, J.: Moreover, petitioners asserted that not a single centavo of the P27,000.00
representing the remaining balance was paid to them. Because of the
apprehension that the heirs of Juan Galicia, Sr. are disavowing the contract
The deed of conveyance executed on May 28, 1975 by Juan Galicia, Sr., inked by their predecessor, private respondent filed the complaint for
prior to his demise in 1979, and Celerina Labuguin, in favor of Albrigido specific performance.chanroblesvirtualawlibrarychanrobles virtual law libray
Leyva involving the undivided one-half portion of a piece of land situated at
Poblacion, Guimba, Nueva Ecija for the sum of P50,000.00 under the
following terms: In addressing the issue of whether the conditions of the instrument were
performed by herein private respondent as vendee, the Honorable
Godofredo Rilloraza, Presiding Judge of Branch 31 of the Regional Trial
1. The sum of PESOS: THREE THOUSAND (P3,000.00) is HEREBY Court, Third Judicial Region stationed at Guimba, Nueva Ecija, decided to
acknowledged to have been paid upon the execution of this uphold private respondent's theory on the basis of constructive fulfillment
agreement;chanrobles virtual law library under Article 1186 and estoppel through acceptance of piecemeal
payments in line with Article 1235 of the Civil
2. The sum of PESOS: TEN THOUSAND (P10,000.00) shall be paid within Code.chanroblesvirtualawlibrarychanrobles virtual law library
ten (10) days from and after the execution of this agreement;chanrobles
virtual law library Anent the P10,000.00 specified as second installment, the lower court
counted against the vendors the candid statement of Josefina Tayag who
3. The sum of PESOS: TEN THOUSAND (P10,000.00) represents the sat on the witness stand and made the admission that the check issued as
VENDORS' indebtedness with the Philippine Veterans Bank which is hereby payment thereof was nonetheless paid on a staggered basis when the
assumed by the VENDEE; andchanrobles virtual law library check was dishonored (TSN, September 1, 1983, pp. 3-4; p. 3, Decision; p.
66, Rollo). Regarding the third condition, the trial court noted that plaintiff
below paid more than P6,000.00 to the Philippine Veterans Bank
4. The balance of PESOS: TWENTY SEVEN THOUSAND (P27,000.00.) shall but Celerina Labuguin, the sister and co-vendor of Juan Galicia, Sr. paid
be paid within one (1) year from and after the execution of this instrument. P3,778.77 which circumstance was construed to be a ploy under Article
(p. 53, Rollo) 1186 of the Civil Code that "prematurely prevented plaintiff from paying
the installment fully" and "for the purpose of withdrawing the title to the
is the subject matter of the present litigation between the heirs of Juan lot". The acceptance by petitioners of the various payments even beyond
Galicia, Sr. who assert breach of the conditions as against private the periods agreed upon, was perceived by the lower court as tantamount
respondent's claim anchored on full payment and compliance with the to faithful performance of the obligation pursuant to Article 1235 of the
stipulations thereof.chanroblesvirtualawlibrarychanrobles virtual law library Civil Code. Furthermore, the trial court noted that private respondent
consigned P18,520.00, an amount sufficient to offset the remaining
balance, leaving the sum of P1,315.00 to be credited to private
The court of origin which tried the suit for specific performance filed by
respondent.chanroblesvirtualawlibrarychanrobles virtual law library
private respondent on account of the herein petitioners' reluctance to abide
by the covenant, ruled in favor of the vendee (p. 64, Rollo) while
respondent court practically agreed with the trial court except as to the On September 12, 1984, judgment was rendered:
1. Ordering the defendants - heirs of Juan Galicia, to execute the Deed of 1975 up to November 3, 1979, a total amount of P13,908.25 has been
Sale of their undivided ONE HALF (1/2) portion of Lot No. 1130, Guimba paid, thereby leaving a balance of P13,091.75. Said unpaid balance plus
Cadastre, covered by TCT No. NT-120563, in favor of plaintiff Albrigido the amount reimbursable to appellant in the amount of P3,778.77 will
Leyva, with an equal frontage facing the national road upon finality of leave an unpaid total of P16,870.52. Since appellee consigned in court the
judgment; that, in their default, the Clerk of Court II, is hereby ordered to sum of P18,500.00, he is entitled to get the excess of P1,629.48. Thus,
execute the deed of conveyance in line with the provisions of Section 10, when the heirs of Juan Galicia, Sr. (obligees) accepted the performance,
Rule 39 of the Rules of Court;chanrobles virtual law library knowing its incompleteness or irregularity and without expressing any
protest or objection, the obligation is deemed fully complied with (Article
1235, Civil Code). (p. 50, Rollo)
2. Ordering the defendants, heirs of Juan Galicia, jointly and severally to
pay attorney's fees of P6,000.00 and the further sum of P3,000.00 for
actual and compensatory damages;chanrobles virtual law library Petitioners are of the impression that the decision appealed from, which
agreed with the conclusions of the trial court, is vulnerable to attack via the
recourse before Us on the principal supposition that the full consideration
3. Ordering Celerina Labuguin and the other defendants herein to
of the agreement to sell was not paid by private respondent and, therefore,
surrender to the Court the owner's duplicate of TCT No. NT-120563,
the contract must be rescinded.chanroblesvirtualawlibrarychanrobles
province of Nueva Ecija, for the use of plaintiff in registering the portion,
virtual law library
subject matter of the instant suit;chanrobles virtual law library
With respect to the fourth condition stipulated in the contract, the period In a perfected contract of sale of land under an agreed schedule of
indicated therein is deemed modified by the parties when the heirs of Juan payments, while the parties may mutually oblige each other to compel the
Galicia, Sr. accepted payments without objection up to November 3, 1979. specific performance of the monthly amortization plan, and upon failure of
On the basis of receipts presented by appellee commencing from August 8, the buyer to make the payment, the seller has the right to ask for a
rescission of the contract under Art. 1191 of the Civil Code, this shall be contract of purchase, (Ang vs. Court of Appeals, 170 SCRA 286 [1989];
deemed waived by acceptance of posterior payments. 4 Paras, supra, at p. 201), both parties are mutually obligors and also
obligees (4 Padilla, supra, at p. 197), and any of the contracting parties
may, upon non-fulfillment by the other privy of his part of the prestation,
Both the trial and appellate courts were, therefore, correct in sustaining the
rescind the contract or seek fulfillment (Article 1191, Civil Code). In short,
claim of private respondent anchored on estoppel or waiver by acceptance
it is puerile for petitioners to say that they are the only obligees under the
of delayed payments under Article 1235 of the Civil Code in that:
contract since they are also bound as obligors to respect the stipulation in
permitting private respondent to assume the loan with the Philippine
When the obligee accepts the performance, knowing its incompleteness or Veterans Bank which petitioners impeded when they paid the balance of
irregularity, and without expressing any protest or objection, the obligation said loan. As vendors, they are supposed to execute the final deed of sale
is deemed fully complied with. upon full payment of the balance as determined
hereafter.chanroblesvirtualawlibrarychanrobles virtual law library
considering that the heirs of Juan Galicia, Sr. accommodated private
respondent by accepting the latter's delayed payments not only beyond the Lastly, petitioners argue that there was no valid tender of payment nor
grace periods but also during the pendency of the case for specific consignation of the sum of P18,520.00 which they acknowledge to have
performance (p. 27, Memorandum for petitioners; p. 166, Rollo). Indeed, been deposited in court on January 22, 1981 five years after the amount of
the right to rescind is not absolute and will not be granted where there has P27,000.00 had to be paid (p. 23, Memorandum for Petitioners; p.
been substantial compliance by partial payments (4 Caguioa, Comments 162, Rollo). Again this suggestion ignores the fact that consignation alone
and Cases on Civil Law, First Ed. [1968] p. 132). By and large, petitioners' produced the effect of payment in the case at bar because it was
actuation is susceptible of but one construction - that they are now established below that two or more heirs of Juan Galicia, Sr. claimed the
estopped from reneging from their commitment on account of acceptance same right to collect (Article 1256, (4), Civil Code; pp. 4-5, Decision in Civil
of benefits arising from overdue accounts of private Case No. 681-G; pp. 67-68, Rollo). Moreover, petitioners did not bother to
respondent.chanroblesvirtualawlibrarychanrobles virtual law library refute the evidence on hand that, aside from the P18,520.00 (not
P18,500.00 as computed by respondent court) which was consigned,
Now, as to the issue of whether payments had in fact been made, there is private respondent also paid the sum of P13,908.25 (Exhibits "F" to "CC";
no doubt that the second installment was actually paid to the heirs of Juan p. 50, Rollo). These two figures representing private respondent's payment
Galicia, Sr. due to Josefina Tayag's admission in judicio that the sum of of the fourth condition amount to P32,428.25, less the P3,778.77 paid by
P10,000.00 was fully liquidated. It is thus erroneous for petitioners to petitioners to the bank, will lead us to the sum of P28,649.48 or a refund
suppose that "the evidence in the records do not support this conclusion" of P1,649.48 to private respondent as overpayment of the P27,000.00
(p. 18, Memorandum for Petitioners; p. 157, Rollo). A contrario, when the balance.chanroblesvirtualawlibrarychanrobles virtual law library
court of origin, as well as the appellate court, emphasized the frank
representation along this line of Josefina Tayag before the trial court (TSN, WHEREFORE, the petition is hereby DISMISSED and the decision appealed
September l, 1983, pp. 3-4; p. 5, Decision in CA-G.R. CV No. 13339, p. from is hereby AFFIRMED with the slight modification of Paragraph 4 of the
50, Rollo; p. 3, Decision in Civil Case No. 681-G, p. 66, Rollo), petitioners dispositive thereof which is thus amended to read:
chose to remain completely mute even at this stage despite the
opportunity accorded to them, for clarification. Consequently, the
4. ordering the withdrawal of the sum of P18,520.00 consigned with the
prejudicial aftermath of Josefina Tayag's spontaneous reaction may no
Regional Trial Court, and that the amount of P16,870.52 be delivered by
longer be obliterated on the basis of estoppel (Article 1431, Civil
private respondent with legal rate of interest until fully paid to the heirs of
Code; Section 4, Rule 129; Section 2(a), Rule 131, Revised Rules on
Juan Galicia, Sr. as balance of the sale including reimbursement of the sum
Evidence).chanroblesvirtualawlibrarychanrobles virtual law library
paid to the Philippine Veterans Bank, minus the attorney's fees and
damages awarded in favor of private respondent. The excess of P1,649.48
Insofar as the third item of the contract is concerned, it may be recalled shall be returned to private respondent also with legal interest until fully
that respondent court applied Article 1186 of the Civil Code on constructive paid by petitioners. With costs against petitioners.
fulfillment which petitioners claim should not have been appreciated
because they are the obligees while the proviso in point speaks of the
SO ORDERED.
obligor. But, petitioners must concede that in a reciprocal obligation like a
G.R. No. 171925 : July 23, 2010 Of the 60 million available to PERMANENT HOMES, it availed of a total of
41.5 million pesos, covered by three (3) promissory notes, which contain
the following provisions, thus:
SOLIDBANK CORPORATION, (now Metropolitan Bank and Trust
Company), Petitioner, v. ERMANENT HOMES,
INCORPORATED, Respondent. "xxx
The Facts For the first loan availment of PERMANENT HOMES on March 20, 1997, in
the amount of 19.6 MILLION, from the initial interest rate of 14.25% per
annum (p.a.), the same was increased 15% p.a. effective May 19, 1997; it
The appellate court narrated the facts as follows:
was again increased to 26% p.a. effective July 18, 1997. It was thereafter
reduced to 20% p.a. effective August 18, 1997, and then increased
The records disclose that PERMANENT HOMES is a real estate development to 24% p.a. effective September 17, 1997. The rate was increased further
company, and to finance its housing project known as the "Buena Vida to 30% p.a. effective October 17, 1997, then decreased to 27% p.a. on
Townhomes" located within Merville Subdivision, Parañaque City, it applied November 17, 1997, and again increased to 34% p.a. effective December
and was subsequently granted by SOLIDBANK with an "Omnibus Line" 17, 1997. The rate then decreased to 30% p.a. on January 16, 1998.
credit facility in the total amount of SIXTY MILLION PESOS. Of the entire
loan, FIFTY NINE MILLION as [sic] time loan for a term of up to three
For the second loan availment in the amount of 18 million, the rate was
hundred sixty (360) days, with interest thereon at prevailing market rates,
initially pegged at 15.75% p.a. on June 24, 1997. A month later, the rate
and subject to monthly repricing. The remaining ONE MILLION was
increased to 23.5% p.a. It thereafter decreased to 20% p.a. effective
available for domestic bills purchase.
August 24, 1997, but again increased to 22.5% p.a. effective September
24, 1997. For the next month, the rate surged to 30% p.a., and
To secure the aforesaid loan, PERMANENT HOMES initially mortgaged three decreased to 27% p.a. for the month of November. The rate again surged
(3) townhouse units within the Buena Vida project in Parañaque. At the to 34% p.a. for the month of December, and was decreased to 30%
time, however, the instant complaint was filed against SOLIDBANK, a total p.a. from January 22, 1998 to February 20, 1998.
of thirty six (36) townhouse units were mortgaged with said bank.
For the third loan availment on July 15, 1997, in the amount of 3.9 million, loans, they had to ensure that they will not be at the losing end of the deal,
the interest rate was initially pegged at 35% p.a., but this was decreased so to speak, by the repricing of the interest rates every month. SOLIDBANK
to 21% p.a. from August 14 until September 11, 1997. The rate increased insists that PERMANENT HOMES should not be allowed to renege on its
slightly to 23% p.a. on September 12, 1997, and surged to 27% p.a. on contractual obligations, as it freely and voluntarily bound itself to the
October 13, 1997. The rate went down slightly to 27% p.a. for the month provisions of the Omnibus Credit Line and the promissory notes.
of November, and to 26% p.a. for the month of December. The rate,
however, again surged to 30% p.a. on January 12, 1998 before settling
PERMANENT HOMES presented as witnesses Jacqueline S. Lim, its Vice
at 29% p.a. for the month of February.
President and Chief Financial Officer, Engr. Rey A. Romasanta, its Executive
Vice President and Chief Operating Officer, and Martha Julia Flores, its
It is [Permanent's] stand that SOLIDBANK unilaterally and arbitrarily Treasury Officer.
accelerated the interest rates without any declared basis of such increases,
of which PERMANENT HOMES had not agreed to, or at the very least, been
On March 24, 1998, the trial court issued a temporary restraining order
informed of. This is contrary to their earlier agreement that any interest
(TRO), after a summary hearing, which enjoined SOLIDBANK from
rate changes will be subject to mutual agreement of the parties.
implementing and collecting the increases in interest rates and from
PERMANENT HOMES further admits that it was not able to protest such
initiating any action, including the foreclosure of the mortgaged properties.
arbitrary increases at the time they were imposed by SOLIDBANK, for fear
that SOLIDBANK might cut off the credit facility it extended to PERMANENT
HOMES. Permanent was then in the midst of the construction of its project Ms. Lim's testimony centered on PERMANENT HOMES' allegations that the
in Merville, Parañaque City, and SOLIDBANK knew that it was relying repricing of the interest rates was done by SOLIDBANK without any written
substantially on the credit facility the latter extended to it. agreement entered into between the parties. In fact, Ms. Lim accounted
that SOLIDBANK will merely advise them of the interest rate for the period,
after said period had already commenced, and at times very late in the
[Permanent] thus filed a case before the trial court seeking the following:
period, by fax messages. When PERMANENT HOMES called SOLIDBANK's
(1) the annulment of the increases in interest rates on the loans it obtained
attention to the seemingly surging rates it imposed on its loan, SOLIDBANK
from SOLIDBANK, on the ground that it was violative of the principle of
will merely answer that it was the bank's policy, without offering any basis
mutuality of agreement of the parties, as enunciated in Article 1409 of the
for such increase. Furthermore, Ms. Lim also mentioned SOLIDBANK's
New Civil Code, (2) the fixing of the interest rates at the applicable interest
alleged practice of imposing interest on unpaid interest, at the highest rate
rate, and (3) for the trial court to order SOLIDBANK to make an accounting
of 30% p.a.. Ms. Lim also presented a tabulation, which presents the
of the payments it made, so as to determine the amount of refund
number of days their billing statements were sent late, from the time the
PERMANENT is entitled to, as well as to order SOLIDBANK to release the
interest period started. It is PERMANENT HOMES' stand that since the
remaining available balance of the loan it extended to PERMANENT. In
purpose of the billing statements was to inform them beforehand of the
addition, [Permanent] prays for the payment of compensatory, moral and
applicable interest rate for the period, the late billings will clearly show
exemplary damages.
SOLIDBANK's arbitrary imposition of the repriced interest rates, as well as
its indifference to PERMANENT HOMES' plight.
SOLIDBANK, on the other hand, avers that PERMANENT HOMES has no
cause of action against it, in view of the pertinent provisions of the
To illustrate, for the first loan availment in the amount of P19.6 million, the
Omnibus Credit Line and the promissory notes agreed to and signed by
billing statements which should have notified PERMANENT HOMES of the
PERMANENT HOMES. Thus, in accordance with said provisions, SOLIDBANK
repriced interest rates were faxed to PERMANENT HOMES between
was authorized to, upon due notice, periodically adjust the interest rates on
eighteen (18) to thirty-three (33) days late. For the second loan availment
PERMANENT HOMES' loan availments during the monthly interest repricing
in the amount of P18 million, the faxed billings were late between six (6) to
dates, depending on the changes in prevailing interest rates in the local
twenty-one (21) days, and one instance where PERMANENT HOMES
and international capital markets. In fact, SOLIDBANK avers that four (4)
received no billing at all. For the third loan availment in the amount of P3.9
days before July 15, 1997, the Bangko Sentral ng Pilipinas (BSP) declared
million, the faxed billings were late between seven (7) to twenty-nine (29)
that it could no longer support the Philippine currency from external
days, and also an instance where PERMANENT HOMES received no billing at
speculative forces, hence, the local currency was allowed to seek its own
all.
exchange rate level. As a result of the volatile exchange rate ratio, banks
were then hesitant to extend loans, and in some instances that it granted
This practice, according to Ms. Lim, clearly affected its operations, as the would rather put the blame on [Solidbank], taking advantage of every
completion of its construction project was unnecessarily delayed, to its conceivable gray area of its contract with [Solidbank] to avoid its own
prejudice and its buyers. This was the import of the testimony of liabilities. In fact, this complaint was made the very basis for [Permanent]
PERMANENT HOMES' second witness, Engr. Rey A. Romasanta. According to altogether stop the payment of its loan from [Solidbank] including the
to Engr. Rey, the target date of completion was August 1997, but in view interest payment (TSN, May 07, 1998, p. 60).
of the shortage of funds by reason of SOLIDBANK's refusal for PERMANENT
HOMES to make further availments on its omnibus credit line, the project
xxx
was completed only on February 1998.
The stipulations on interest rate repricing are valid because (1) the parties
(B) Whether the Honorable Court of Appeals was correct in ordering the mutually agreed on said stipulations; (2) repricing takes effect only upon
parties to enter into an express agreement regarding the applicable Solidbank's written notice to Permanent of the new interest rate; and (3)
interest rates on Permanent's loan availments subsequent to the initial Permanent has the option to prepay its loan if Permanent and Solidbank do
thirty-day (30) period. not agree on the new interest rate. The phrases "irrevocably authorize," "at
any time" and "adjustment of the interest rate shall be effective from the
(C) Whether the Honorable Court of Appeals was correct in ruling that date indicated in the written notice sent to us by the bank, or if no date is
[Permanent] is entitled to attorney's fees notwithstanding the absence of indicated, from the time the notice was sent," emphasize that Permanent
bad faith or malice on the part of [Solidbank].cra8 should receive a written notice from Solidbank as a condition for the
adjustment of the interest rates.
The Court's Ruling
In order that obligations arising from contracts may have the force of law
between the parties, there must be a mutuality between the parties based
The petition has merit. on their essential equality.cra10cralaw A contract containing a condition
which makes its fulfillment dependent exclusively upon the uncontrolled
The Usury Law had been rendered legally ineffective by Resolution No. 224 will of one of the contracting parties is void.cra11cralaw There was no
dated 3 December 1982 of the Monetary Board of the Central Bank, and showing that either Solidbank or Permanent coerced each other to enter
later by Central Bank Circular No. 905 which took effect on 1 January into the loan agreements. The terms of the Omnibus Line Agreement and
1983. These circulars removed the ceiling on interest rates for secured and the promissory notes were mutually and freely agreed upon by the parties.
unsecured loans regardless of maturity. The effect of these circulars is to
allow the parties to agree on any interest that may be charged on a loan.
Moreover, Solidbank's range of lending rates were consistent with
"prevailing rates in the local or international capital markets." Permanent
presented a tabulation12cralaw of the range of Solidbank's lending rates, as
reported to Bangko Sentral ng Pilipinas and compared the lending rates
with the interest rates charged by Solidbank on Permanent's loans, thus:
We also recognize that Solidbank admitted that it did not promptly send
Permanent written repriced rates, but rather verbally advised Permanent's
officers over the phone at the start of the period. Solidbank did not present
any written memorandum to support its allegation that it promptly advised
Permanent of the change in interest rates.cra13cralaw Solidbank advised
Permanent on the repriced interest rate applicable for the 30-day interest
period only after the period had begun. Permanent presented a tabulation
which showed that Solidbank either did not send a billing statement, or
sent a billing statement 6 to 33 days late.cra14cralaw We reproduce the
tabulation below:
SO ORDERED.