Komatsu Industries (Phil.), Inc. v. Pilipinas Bank
REITERATIONFacts
The Antecedents: Petitioner Komatsu Industries (Phil.), Inc. obtained credit facilities from Pilipinas Bank, initially amounting to P3,000,000.00, secured by a Chattel Mortgage. The loan was restructured multiple times, with the final Promissory Note (No. TL-693) dated 24 December 1981 having a face value of P6,869,266.08 with 23% annual interest, payable in semi-annual installments. The loan was secured by two Chattel Mortgages. Petitioner failed to pay any installment despite repeated demands and did not deliver the mortgaged properties. Procedural History: Pilipinas Bank filed a complaint for replevin and damages, with an alternative prayer for money judgment. The trial court issued a seizure order for the mortgaged properties. Subsequently, the bank moved to recall the writ and cancel the bond, which was granted. The trial court rendered judgment ordering petitioner to pay the principal obligation, interest, penalty, collection charges, attorney's fees, and other costs. The Court of Appeals affirmed the decision with modification regarding the reckoning date for interest and charges, stating they should commence from the date of judicial demand (September 28, 1984) instead of December 24, 1983. The motion for reconsideration was denied. The Petition: Petitioner Komatsu Industries imputed error to the appellate court for failing to consider the doctrine of no default for unliquidated sums, not considering alleged assignments of receivables and a P250,000.00 credit, ruling against promissory estoppel, and upholding the validity of both Chattel Mortgages.
Issue(s)
Whether the doctrine of no default for unliquidated and unascertained sum due is applicable. Whether the alleged assignment of receivables and a P250,000.00 credit should have been considered. Whether promissory estoppel applies in this case. Whether both Chattel Mortgages were valid and subsisting.
Ruling
The petition is denied. The decision of the Court of Appeals is affirmed.
Ratio Decidendi
On the doctrine of no default for unliquidated and unascertained sum due: The Court found this argument to be without merit. The petitioner did not deny its indebtedness. The offered receivables, which were approximately P5,000,000.00, did not materialize as payment. The P250,000.00 special time deposit, though matured, was credited to the account of Quezon Transport, Inc./Jose Zubiri per petitioner's authorization, and petitioner did not question this application until the hearing of the case. The Court noted that the petitioner's Finance Manager testified that the offer of receivables did not materialize. Therefore, the petitioner was in default. On the alleged assignment of receivables and P250,000.00 credit: The Court found that the offered receivables did not materialize as payment. The P250,000.00 matured time deposit was credited to another account based on petitioner's authorization, and petitioner failed to question this credit memo received in September 1983 until the case was heard. This inaction indicated acquiescence to the application of the funds. On promissory estoppel: The Court held that promissory estoppel does not apply. There was no assurance from Pilipinas Bank that it agreed to the payment by way of dacion en pago. The bank's act of causing the appraisal of the offered properties was merely an investigation of the proposal, not a commitment to accept them. The Court stated that at most, it indicated a study of the proposal, which ultimately found the properties unacceptable. Therefore, there was no reliance on a promise that would lead to injustice. On the validity of the Chattel Mortgages: The Court found it futile to resolve the issue of the validity of both Chattel Mortgages because the trial court granted the alternative prayer for a money judgment. The Court noted that the Chattel Mortgage of 16 October 1978 was admitted to have been novated by the Promissory Note of 29 February 1980, leaving only the Chattel Mortgage of 9 April 1980 potentially valid. However, since a money judgment was rendered, the seizure of the mortgaged properties became secondary.
Main Doctrine
The Court affirmed the appellate court's decision, holding that the petitioner failed to establish its defenses and that the trial court's factual findings were supported by evidence. The Court reiterated that the principle of promissory estoppel does not apply where there is no assurance of acceptance of a proposal for dacion en pago, and that the mere appraisal of properties does not constitute a commitment.