CREDIT TRANSACTIONS

ROA

G.R. No. 133632

2015
SECOND DIVISION
[G.R. No. 133632. February 15, 2002]
BPI INVESTMENT CORPORATION, petitioner, vs. HON. COURT OF APPEALS and ALS MANAGEMENT &
DEVELOPMENT CORPORATION, respondents.

Facts:
Frank Roa obtained a loan with interest rate of 16 1/4%/annum from Ayala Investment and Development
Corporation (AIDC), the predecessor of BPI Investment Corp. (BPIIC), for the construction of a house on his lot in
New Alabang Village, Muntinlupa.
He mortgaged the house and lot to AIDC as security for the loan.
1980: Roa sold the house and lot to ALS Management & Development Corp. and Antonio Litonjua for P850K who
paid P350K in cash and assumed the P500K indebtness of ROA with AIDC.
AIDC proposed to grant ALS and Litonjua a new loan for P500K with interested rate of 20%/annum and service
fee of 1%/annum on the outstanding balance payable within 10 years through equal monthly amortization of
P9,996.58 and penalty interest of 21%/annum/day from the date the amortization becomes due and payable.
March 1981: ALS and Litonjua executed a mortgage deed containing the new stipulation with the provision that the
monthly amortization will commence on May 1, 1981
August 13, 1982: ALS and Litonjua paid BPIIC P190,601.35 reducing the P500K principal loan to P457,204.90.
September 13, 1982: BPIIC released to ALS and Litonjua P7,146.87, purporting to be what was left of their loan
after full payment of Roas loan
June 1984: BPIIC instituted foreclosure proceedings against ALS and Litonjua on the ground that they failed to pay
the mortgage indebtedness which from May 1, 1981 to June 30, 1984 amounting to P475,585.31
August 13, 1984: Notice of sheriff's sale was published
February 28, 1985: ALS and Litonjua filed Civil Case No. 52093 against BPIIC alleging that they are not in arrears
and instead they made an overpayment as of June 30, 1984 since the P500K loan was only released September 13,
1982 which marked the start of the amortization and since only P464,351.77 was released applying legal
compensation the balance of P35,648.23 should be applied to the monthly amortizations
RTC: in favor of ALS and Litonjua and against BPIIC that the loan granted by BPI to ALS and Litonjua was only in
the principal sum of P464,351.77 and awarding moral damages, exemplary damages and attorneys fees for the
publication
CA: Affirmed reasoning that a simple loan is perfected upon delivery of the object of the contract which is on
September 13, 1982
ISSUE: W/N the contract of loan was perfected only on September 13, 1982 or the second release of the loan?
HELD: YES. AFFIRMED WITH MODIFICATION as to the award of damages. The award of moral and exemplary
damages in favor of private respondents is DELETED, but the award to them of attorneys fees in the amount of
P50,000 is UPHELD. Additionally, petitioner is ORDERED to pay private respondents P25,000 as nominal damages.
Costs against petitioner.
obligation to pay commenced only on October 13, 1982, a month after the perfection of the contract
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 in a proper manner with what is incumbent upon him. Consequently, petitioner
could only demand for the payment of the monthly amortization after September 13, 1982 for it was only then when it
complied with its obligation under the loan contract.
BPIIC was negligent in relying merely on the entries found in the deed of mortgage, without checking and
correspondingly adjusting its records on the amount actually released and the date when it was released. Such
negligence resulted in damage for which an award of nominal damages should be given
SSS where we awarded attorneys fees because private respondents were compelled to litigate, we sustain the
award of P50,000 in favor of private respondents as attorneys fees