THIRD DIVISION

[G.R. No. 182963. June 3, 2013.]

SPOUSES DEO AGNER and MARICON AGNER , petitioners, vs . BPI

FAMILY SAVINGS BANK, INC. , respondent.

DECISION

PERALTA , J : p

This is a petition for review on certiorari assailing the April 30, 2007 Decision 1 and
May 19, 2008 Resolution 2 of the Court of Appeals in CA-G.R. CV No. 86021, which
a rmed the August 11, 2005 Decision 3 of the Regional Trial Court, Branch 33, Manila City.
On February 15, 2001, petitioners spouses Deo Agner and Maricon Agner executed a
Promissory Note with Chattel Mortgage in favor of Citimotors, Inc. The contract provides,
among others, that: for receiving the amount of Php834,768.00, petitioners shall pay
Php17,391.00 every 15th day of each succeeding month until fully paid; the loan is secured
by a 2001 Mitsubishi Adventure Super Sport; and an interest of 6% per month shall be
imposed for failure to pay each installment on or before the stated due date. 4 On the
same day, Citimotors, Inc. assigned all its rights, title and interests in the Promissory Note
with Chattel Mortgage to ABN AMRO Savings Bank, Inc. (ABN AMRO), which, on May 31,
2002, likewise assigned the same to respondent BPI Family Savings Bank, Inc. 5
For failure to pay four successive installments from May 15, 2002 to August 15,
2002, respondent, through counsel, sent to petitioners a demand letter dated August 29,
2002, declaring the entire obligation as due and demandable and requiring to pay
Php576,664.04, or surrender the mortgaged vehicle immediately upon receiving the letter.
6 As the demand was left unheeded, respondent led on October 4, 2002 an action for
Replevin and Damages before the Manila Regional Trial Court (RTC). ESCacI

A writ of replevin was issued. 7 Despite this, the subject vehicle was not seized. 8
Trial on the merits ensued. On August 11, 2005, the Manila RTC Br. 33 ruled for the
respondent and ordered petitioners to jointly and severally pay the amount of
Php576,664.04 plus interest at the rate of 72% per annum from August 20, 2002 until fully
paid, and the costs of suit.
Petitioners appealed the decision to the Court of Appeals (CA), but the CA a rmed
the lower court's decision and, subsequently, denied the motion for reconsideration; hence,
this petition.
Before this Court, petitioners argue that: (1) respondent has no cause of action,
because the Deed of Assignment executed in its favor did not speci cally mention ABN
AMRO's account receivable from petitioners; (2) petitioners cannot be considered to have
defaulted in payment for lack of competent proof that they received the demand letter;
and (3) respondent's remedy of resorting to both actions of replevin and collection of sum
of money is contrary to the provision of Article 1484 9 of the Civil Code and the Elisco Tool
Manufacturing Corporation v. Court of Appeals 1 0 ruling.

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 The contentions are untenable.
With respect to the rst issue, it would be su cient to state that the matter
surrounding the Deed of Assignment had already been considered by the trial court and
the CA. Likewise, it is an issue of fact that is not a proper subject of a petition for review
under Rule 45. An issue is factual when the doubt or difference arises as to the truth or
falsehood of alleged facts, or when the query invites calibration of the whole evidence,
considering mainly the credibility of witnesses, existence and relevancy of speci c
surrounding circumstances, their relation to each other and to the whole, and the
probabilities of the situation. 1 1 Time and again, We stress that this Court is not a trier of
facts and generally does not weigh anew evidence which lower courts have passed upon.
HTacDS

As to the second issue, records bear that both verbal and written demands were in
fact made by respondent prior to the institution of the case against petitioners. 1 2 Even
assuming, for argument's sake, that no demand letter was sent by respondent, there is
really no need for it because petitioners legally waived the necessity of notice or demand
in the Promissory Note with Chattel Mortgage, which they voluntarily and knowingly signed
in favor of respondent's predecessor-in-interest. Said contract expressly stipulates:
In case of my/our failure to pay when due and payable, any sum which
I/We are obliged to pay under this note and/or any other obligation which I/We or
any of us may now or in the future owe to the holder of this note or to any other
party whether as principal or guarantor . . . then the entire sum outstanding under
this note shall, without prior notice or demand , immediately become due and
payable. (Emphasis and underscoring supplied)

A provision on waiver of notice or demand has been recognized as legal and valid in
Bank of the Philippine Islands v. Court of Appeals, 1 3 wherein We held:
The Civil Code in Article 1169 provides that one incurs in delay or is in
default from the time the obligor demands the ful llment of the obligation from
the obligee. However, the law expressly provides that demand is not necessary
under certain circumstances, and one of these circumstances is when the parties
expressly waive demand. Hence, since the co-signors expressly waived demand in
the promissory notes, demand was unnecessary for them to be in default. 1 4

Further, the Court even ruled in Navarro v. Escobido 1 5 that prior demand is not a
condition precedent to an action for a writ of replevin, since there is nothing in Section 2,
Rule 60 of the Rules of Court that requires the applicant to make a demand on the
possessor of the property before an action for a writ of replevin could be filed.
Also, petitioners' representation that they have not received a demand letter is
completely inconsequential as the mere act of sending it would suffice. Again, We look into
the Promissory Note with Chattel Mortgage, which provides: ITDSAE

All correspondence relative to this mortgage, including demand letters,

summonses, subpoenas, or noti cations of any judicial or extrajudicial action
shall be sent to the MORTGAGOR at the address indicated on this promissory
note with chattel mortgage or at the address that may hereafter be given in
writing by the MORTGAGOR to the MORTGAGEE or his/its assignee. The mere
act of sending any correspondence by mail or by personal delivery to
the said address shall be valid and effective notice to the mortgagor for
all legal purposes and the fact that any communication is not actually
received by the MORTGAGOR or that it has been returned unclaimed to the
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 MORTGAGEE or that no person was found at the address given, or that the
address is ctitious or cannot be located shall not excuse or relieve the
MORTGAGOR from the effects of such notice . 1 6 (Emphasis and
underscoring supplied)
The Court cannot yield to petitioners' denial in receiving respondent's demand letter.
To note, their postal address evidently remained unchanged from the time they executed
the Promissory Note with Chattel Mortgage up to time the case was led against them.
Thus, the presumption that "a letter duly directed and mailed was received in the regular
course of the mail" 1 7 stands in the absence of satisfactory proof to the contrary.
Petitioners cannot nd succour from Ting v. Court of Appeals 1 8 simply because it
pertained to violation of Batas Pambansa Blg. 22 or the Bouncing Checks Law. As a higher
quantum of proof — that is, proof beyond reasonable doubt — is required in view of the
criminal nature of the case, We found insu cient the mere presentation of a copy of the
demand letter allegedly sent through registered mail and its corresponding registry receipt
as proof of receiving the notice of dishonor.
Perusing over the records, what is clear is that petitioners did not take advantage of
all the opportunities to present their evidence in the proceedings before the courts below.
They miserably failed to produce the original cash deposit slips proving payment of the
monthly amortizations in question. Not even a photocopy of the alleged proof of payment
was appended to their Answer or shown during the trial. Neither have they demonstrated
any written requests to respondent to furnish them with o cial receipts or a statement of
account. Worse, petitioners were not able to make a formal offer of evidence considering
that they have not marked any documentary evidence during the presentation of Deo
Agner's testimony. 1 9 ScEaAD

Jurisprudence abounds that, in civil cases, one who pleads payment has the burden
of proving it; the burden rests on the defendant to prove payment, rather than on the
plaintiff to prove non-payment. 2 0 When the creditor is in possession of the document of
credit, proof of non-payment is not needed for it is presumed. 2 1 Respondent's possession
of the Promissory Note with Chattel Mortgage strongly buttresses its claim that the
obligation has not been extinguished. As held in Bank of the Philippine Islands v. Spouses
Royeca: 2 2
. . . The creditor's possession of the evidence of debt is proof that the debt has
not been discharged by payment. A promissory note in the hands of the creditor
is a proof of indebtedness rather than proof of payment. In an action for
replevin by a mortgagee, it is prima facie evidence that the promissory note has
not been paid. Likewise, an uncanceled mortgage in the possession of the
mortgagee gives rise to the presumption that the mortgage debt is unpaid. 2 3

Indeed, when the existence of a debt is fully established by the evidence contained in
the record, the burden of proving that it has been extinguished by payment devolves upon
the debtor who offers such defense to the claim of the creditor. 2 4 The debtor has the
burden of showing with legal certainty that the obligation has been discharged by
payment. 2 5
Lastly, there is no violation of Article 1484 of the Civil Code and the Court's decision
in Elisco Tool Manufacturing Corporation v. Court of Appeals. 2 6
In Elisco, petitioner's complaint contained the following prayer:

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 WHEREFORE, plaintiffs [pray] that judgment be rendered as follows:
ON THE FIRST CAUSE OF ACTION
Ordering defendant Rolando Lantan to pay the plaintiff the sum of
P39,054.86 plus legal interest from the date of demand until the whole obligation
is fully paid;
ON THE SECOND CAUSE OF ACTION
To forthwith issue a Writ of Replevin ordering the seizure of the motor
vehicle more particularly described in paragraph 3 of the Complaint, from
defendant Rolando Lantan and/or defendants Rina Lantan, John Doe, Susan Doe
and other person or persons in whose possession the said motor vehicle may be
found, complete with accessories and equipment, and direct deliver thereof to
plaintiff in accordance with law, and after due hearing to confirm said seizure and
plaintiff's possession over the same; TaDSHC

ON THE ALTERNATIVE CAUSE OF ACTION

In the event that manual delivery of the subject motor vehicle cannot be
effected for any reason, to render judgment in favor of plaintiff and against
defendant Rolando Lantan ordering the latter to pay the sum of SIXTY
THOUSAND PESOS (P60,000.00) which is the estimated actual value of the
above-described motor vehicle, plus the accrued monthly rentals thereof with
interests at the rate of fourteen percent (14%) per annum until fully paid;

PRAYER COMMON TO ALL CAUSES OF ACTION

1. Ordering the defendant Rolando Lantan to pay the plaintiff an
amount equivalent to twenty- ve percent (25%) of his outstanding obligation, for
and as attorney's fees;
2. Ordering defendants to pay the cost or expenses of collection,
repossession, bonding fees and other incidental expenses to be proved during the
trial; and

3. Ordering defendants to pay the costs of suit.

Plaintiff also prays for such further reliefs as this Honorable Court may
deem just and equitable under the premises. 2 7

The Court therein ruled: HTDCAS

The remedies provided for in Art. 1484 are alternative, not cumulative. The
exercise of one bars the exercise of the others. This limitation applies to contracts
purporting to be leases of personal property with option to buy by virtue of Art.
1485. The condition that the lessor has deprived the lessee of possession or
enjoyment of the thing for the purpose of applying Art. 1485 was ful lled in this
case by the ling by petitioner of the complaint for replevin to recover possession
of movable property. By virtue of the writ of seizure issued by the trial court, the
deputy sheriff seized the vehicle on August 6, 1986 and thereby deprived private
respondents of its use. The car was not returned to private respondent until April
16, 1989, after two (2) years and eight (8) months, upon issuance by the Court of
Appeals of a writ of execution.
Petitioner prayed that private respondents be made to pay the sum of
P39,054.86, the amount that they were supposed to pay as of May 1986, plus
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 interest at the legal rate. At the same time, it prayed for the issuance of a writ of
replevin or the delivery to it of the motor vehicle "complete with accessories and
equipment." In the event the car could not be delivered to petitioner, it was prayed
that private respondent Rolando Lantan be made to pay petitioner the amount of
P60,000.00, the "estimated actual value" of the car, "plus accrued monthly rentals
thereof with interests at the rate of fourteen percent (14%) per annum until fully
paid." This prayer of course cannot be granted, even assuming that private
respondents have defaulted in the payment of their obligation. This led the trial
court to say that petitioner wanted to eat its cake and have it too. 2 8

In contrast, respondent in this case prayed:

(a) Before trial, and upon ling and approval of the bond, to [forthwith]
issue a Writ of Replevin ordering the seizure of the motor vehicle above-described,
complete with all its accessories and equipments, together with the Registration
Certi cate thereof, and direct the delivery thereof to plaintiff in accordance with
law and after due hearing, to confirm the said seizure;
(b) Or, in the event that manual delivery of the said motor vehicle
cannot be effected to render judgment in favor of plaintiff and against
defendant(s) ordering them to pay to plaintiff, jointly and severally, the sum of
P576,664.04 plus interest and/or late payment charges thereon at the rate of 72%
per annum from August 20, 2002 until fully paid;
(c) In either case, to order defendant(s) to pay jointly and severally:

(1) the sum of P297,857.54 as attorney's fees, liquidated damages,

bonding fees and other expenses incurred in the seizure of the said motor
vehicle; and
(2) the costs of suit.

Plaintiff further prays for such other relief as this Honorable Court may
deem just and equitable in the premises. 2 9

Compared with Elisco, the vehicle subject matter of this case was never recovered
and delivered to respondent despite the issuance of a writ of replevin. As there was no
seizure that transpired, it cannot be said that petitioners were deprived of the use and
enjoyment of the mortgaged vehicle or that respondent pursued, commenced or
concluded its actual foreclosure. The trial court, therefore, rightfully granted the alternative
prayer for sum of money, which is equivalent to the remedy of "[e]xact[ing] ful llment of
the obligation." Certainly, there is no double recovery or unjust enrichment 3 0 to speak of.
TEHIaA

All the foregoing notwithstanding, We are of the opinion that the interest of 6% per
month should be equitably reduced to one percent (1%) per month or twelve percent (12%)
per annum, to be reckoned from May 16, 2002 until full payment and with the remaining
outstanding balance of their car loan as of May 15, 2002 as the base amount.
Settled is the principle which this Court has a rmed in a number of cases that
stipulated interest rates of three percent (3%) per month and higher are excessive,
iniquitous, unconscionable, and exorbitant. 3 1 While Central Bank Circular No. 905-82,
which took effect on January 1, 1983, effectively removed the ceiling on interest rates for
both secured and unsecured loans, regardless of maturity, nothing in the said circular
could possibly be read as granting carte blanche authority to lenders to raise interest rates
to levels which would either enslave their borrowers or lead to a hemorrhaging of their
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 assets. 3 2 Since the stipulation on the interest rate is void for being contrary to morals, if
not against the law, it is as if there was no express contract on said interest rate; thus, the
interest rate may be reduced as reason and equity demand. 3 3
WHEREFORE, the petition is D E N I E D and the Court AFFIRMS WITH
MODIFICATION the April 30, 2007 Decision and May 19, 2008 Resolution of the Court of
Appeals in CA-G.R. CV No. 86021. Petitioners spouses Deo Agner and Maricon Agner are
O RDE RE D to pay, jointly and severally, respondent BPI Family Savings Bank, Inc. (1) the
remaining outstanding balance of their auto loan obligation as of May 15, 2002 with
interest at one percent (1%) per month from May 16, 2002 until fully paid; and (2) costs of
suit.
SO ORDERED.
Velasco, Jr., Abad, Mendoza and Leonen, JJ., concur.

Footnotes
1.Penned by Associate Justice Vicente Q. Roxas, with Associate Justices Jose na Guevara-
Salonga and Ramon R. Garcia concurring; rollo, pp. 49-54.
2.Id. at 56.
3.Records, pp. 149-151.
4.Id. at 28.
5.Id. at 29, 33-35.

6.Id. at 36.
7.Id. at 40.
8.TSN, November 23, 2004, p. 15.
9.ART. 1484. In a contract of sale of personal property, the price of which is payable in
installments, the vendor may exercise any of the following remedies:
  (1) Exact fulfillment of the obligation, should the vendee fail to pay;
  (2) Cancel the sale, should the vendee's failure to pay cover two or more installments;

  (3) Foreclose the chattel mortgage on the thing sold, if one has been constituted,
should the vendee's failure to pay cover two or more installments. In this case, he shall
have no further action against the purchaser to recover any unpaid balance of the price.
Any agreement to the contrary shall be void.
10.G.R. No. 109966, May 31, 1999, 307 SCRA 731.
11.Royal Cargo Corporation v. DFS Sports Unlimited, Inc. , G.R. No. 158621, December 10, 2008,
573 SCRA 414, 421.
12.TSN, November 23, 2004, p. 11.
13.523 Phil. 548 (2006).

14.Id. at 560.

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 15.G.R. No. 153788, November 27, 2009, 606 SCRA 1, 20-21.

16.Records, p. 31.
17.RULES OF COURT, Rule 131, Sec. 3 (v).
18.398 Phil. 481 (2000).
19.Records, p. 145.
20.Royal Cargo Corporation v. DFS Sports Unlimited, Inc., supra note 11, at 422; Bank of the
Philippine Islands v. Spouses Royeca, G.R. No. 176664, July 21, 2008, 559 SCRA 207,
216; Benguet Corporation v. Department of Environment and Natural Resources-Mines
Adjudication Board, G.R. No. 163101, February 13, 2008, 545 SCRA 196, 213; Citibank,
N.A. v. Sabeniano, 535 Phil. 384, 419 (2006); Keppel Bank Philippines, Inc. v. Adao, 510
Phil. 158, 166-167 (2005); and Far East Bank and Trust Company v. Querimit, 424 Phil.
721, 730-731 (2002).
21.Tai Tong Chuache & Co. v. Insurance Commission, 242 Phil. 104, 112 (1988).
22.Supra note 20.
23.Bank of the Philippine Islands v. Spouses Royeca, id. at 219.

24.Id. at 216; Citibank, N.A. v. Sabeniano, supra note 20; and Coronel v. Capati, 498 Phil. 248,
255 (2005).

25.Royal Cargo Corporation v. DFS Sports Unlimited, Inc., supra note 11, at 422; Bank of the
Philippine Islands v. Spouses Royeca, supra note 20; Benguet Corporation v. Department
of Environment and Natural Resources-Mines Adjudication Board, supra note 20;
Citibank, N.A. v. Sabeniano, supra note 20; Coronel v. Capati, supra note 24, at 256; and
Far East Bank and Trust Company v. Querimit, supra note 20.
26.Supra note 10.
27.Elisco Tool Manufacturing Corporation v. Court of Appeals, id. at 735-736.
28.Id. at 743-744.
29.Records, pp. 24-25.

30.I n Cabrera v. Ameco Contractors Rental, Inc. (G.R. No. 201560, June 20, 2012 Second
Division Minute Resolution), We held:
  The principle of unjust enrichment is provided under Article 22 of the Civil Code which
provides:
  Article
22. Every person who through an act of performance by another, or any other
means, acquires or comes into possession of something at the expense of the latter
without just or legal ground, shall return the same to him.
  There is unjust enrichment "when a person unjustly retains a bene t to the loss of another,
or when a person retains money or property of another against the fundamental
principles of justice, equity and good conscience." The principle of unjust enrichment
requires two conditions: (1) that a person is bene ted without a valid basis or
justification, and (2) that such benefit is derived at the expense of another.
31.Arthur F. Menchavez v. Marlyn M. Bermudez, G.R. No. 185368, October 11, 2012.
32.Macalinao v. Bank of the Philippine Islands, G.R. No. 175490, September 17, 2009, 600
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 SCRA 67, 77, citing Chua v. Timan, G.R. No. 170452, August 13, 2008, 562 SCRA 146,
149-150.
33.Arthur F. Menchavez v. Marlyn M. Bermudez, G.R. No. 185368, October 11, 2012, citing
Macalinao v. Bank of the Philippine Islands, supra, at 77, and Chua v. Timan, supra, at
150.

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