Sps Ong V BPI

SPOUSES FRANCISCO ONG ET AL V. BPI FAMILY SAVINGS BANK, INC., G.R. No.
208638, January 24, 2018 REYES, JR., J:

FACTS:
Petitioners are engaged in the business of printing under the name and style "Melbros Printing
Center”. Sometime in December 1996, Bank
of Southeast Asia's (BSA) managers visited petitioners' office and discussed the various loan and credit facilities offered by their bank. In view
of petitioners' business expansion plans and the assurances made by BSA's managers, they applied for the credit facilities offered by the latter.
Sometime 1997, they executed a real estate mortgage over their property in favor of BSA as security for a P15M term loan and P5M credit line or
a total of P20M. Thus, with regard to the term loan, only P10,444,271.49 was released by BSA, while with regard to the P5M credit line, only
P3M was released. BSA promised to release the remaining P2M conditioned upon the payment of the P3M initially released to petitioners.
Petitioners acceded to the condition and paid the P3M in full. However, BSA still refused to release the P2M. Petitioners then refused to pay the
amortizations due on their term loan. Later on, BPI Family Savings Bank (BPI) merged with BSA, thus, acquired all the latter's rights and
assumed its obligations. BPI filed a petition for extrajudicial foreclosure of the REM for petitioners' default in the payment of their term loan. In
order to enjoin the foreclosure, petitioners instituted an action for damages with Temporary Restraining Order and Preliminary Injunction against
BPI praying for P23,570,881.32 as actual damages; P1,000,000.00 as moral damages; P500,000.00 as attorney's fees, litigation expenses and
costs of suit. The RTC ruled in favor of the petitioners, however BPI appeal before the CA. The CA reversed the decision of the lower court and
ruled in favor of BPI
ISSUES:
1.
Whether there was already an existing and binding contract between Petitioners and BSA with regard to the Omnibus Credit Line; 2.
Whether BSA incurred delay in the performance of its obligations; 3.
Whether the Petitioners are entitled to damages; and 4.
Whether the BPI can foreclose the mortgage on the land of herein petitioners
HELD: 1.
YES
As a rule, a contract is perfected upon the meeting of the minds of the two parties. It is perfected by mere consent, that is, from the moment that
there is a meeting of the offer and acceptance upon the thing and the cause that constitute the contract. In the case of
Spouses Palada v. Solidbank Corporation, et al.
, this Court held that under Article 1934 of the Civil Code, a loan contract is perfected only upon the delivery of the object of the contract. In that
case, although therein petitioners applied for a P3,000,000.00 loan, only the amount of P1,000,000.00 was approved by therein respondent bank
because petitioners became collaterally deficient. Nonetheless, the loan contract was deemed perfected on March 17, 1997, the date when
petitioners received the P1,000,000.00 loan, which was the object of the contract and the date when the REM was constituted over the property.
Applying this to the case at bench, there is no iota of doubt that when BSA approved and released the P3,000,000.00 out of the original
P5,000,000.00 credit facility, the contract was perfected.
2.
NO
In this case, BSA did not only incur delay in releasing the pre-agreed credit line of P5,000,000.00 but likewise violated the terms of its agreement
with petitioners when it
deliberately
failed to release the amount of P2,000,000.00 after petitioners complied with their terms and paid the first P3,000,000.00 in full. The default
attributed to petitioners when they stopped paying their amortizations on the term loan cannot be sustained because long before they sent a Letter
to BSA informing the latter of their refusal to continue paying amortizations, BSA had already reneged on its obligation to release the amount
previously agreed upon, i.e., the P5,000,000.00 covered by the credit line.
3.
YES
The law allows the grant of exemplary damages to set an example for the public good. The banking system has become an indispensable
institution in the modern world and plays a vital role in the economic life of every civilized society. Whether as mere passive entities for the safe-
keeping and saving of money or as active instruments of business and commerce, banks have attained an ubiquitous presence among the people,
who have come to regard them with respect and even gratitude and most of all, confidence. For this reason, banks should guard against injury
attributable to negligence or bad faith on its part. Thus, the Court finds it proper to likewise award exemplary damages to the petitioners.
4.
NO.
The Articles of Merger dated November 21, 2001 provides that all liabilities and obligations of BSA shall be transferred to and become the
liabilities and obligations of BPI in the same manner as if it had itself incurred such liabilities or obligations. Pursuant to such merger and
consolidation, BPI's right to foreclose the mortgage on petitioner's property depends on the status of the contract and the corresponding
obligations of the parties originally involved, that is, the agreement between its predecessor BSA and petitioner. Since BSA incurred delay in the
performance of its obligations and subsequently cancelled the omnibus line without petitioners' consent, its successor BPI cannot be permitted to
foreclose the loan for the reason that its successor BSA violated the terms of the contract even prior to petitioners' justified refusal to continue
paying the amortizations

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SPOUSES FRANCISCO ONG ET AL V. BPI FAMILY SAVINGS BANK, INC., G.R. No.

208638, January 24, 2018 REYES, JR., J:

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