CABANTING v. BPI FAMILY SAVINGS BANK, INC.

G.R. No. 201927

February 17, 2016

PERALTA, J.

Facts:
The petitioners, Cabanting bought a car on installment basis from Diamond Motors
Corporation and they effected a promissory note with chattel mortgage. One of the
conditions was that any failure to pay on schedule will make the entire outstanding sum
become due and should be paid without prior notice and demand. Upon the execution
of such document, Diamond Motors, with notification to the petitioners, executed a
Deed of Assignment handing over to BPI Family Savings Bank, Inc. (BPI Family) all its rights,
title and interest to the promissory note with chattel mortgage.

The petitioners were not able to pay three consecutive installments along with not
complying with the successive written request to pay or surrender the possession of
the vehicle, BPI Family charged the petitioners for Replevin and damages. The RTC ordered
petitioners to pay the car’s unpaid value with damages. As a result, the petitioners appealed
to the CA which affirmed the RTC’s ruling with amendment. Then petitioners filed a motion
for reconsideration of the CA decision but such was denied.

Issue:
Can the respondent bank be entitled to the possession of the motor vehicle or the payment
of its value and damages without proof of prior demand?

Ruling:
Yes, respondent bank can be entitled to the possession of the motor vehicle or the payment
of its value and damages without proof of prior demand.
The Supreme Court held ruled that Article 1169 of the New Civil Code applies in this case as it
provides that when one incurs delay or is in default from the time the obligor demands the
fulfillment of the obligation from the obligee. Conversely, the law expressly provides that
demand is not essential under certain conditions, and one of these conditions is when the
parties expressly waive demand. Therefore, as the co-signors expressly waived demand in
the promissory notes, demand was unnecessary for them to be in default.