Yam v. Court of Appeals
REITERATIONFacts
The Antecedents: Petitioners Victor Yam and Yek Sun Lent obtained two loans from private respondent Manphil Investment Corporation. The first loan was for P500,000.00, secured by a chattel mortgage. The second loan, evidenced by two promissory notes, was for P300,000.00, with amended provisions regarding interest and service charge, and a correspondingly amended chattel mortgage. Petitioners paid the first loan in full. On November 4, 1985, private respondent was placed under receivership by the Central Bank. Petitioners made a partial payment on the second loan and later proposed a settlement. Private respondent made a counter-offer to reduce penalty charges if the obligation was paid by July 30, 1986. As of July 31, 1986, the total liability on the second loan was P727,001.35. Petitioners paid P410,854.47 via check, with a notation on the voucher stating "full payment of IGLF loan." This amount represented the principal and interest less the partial payment. Private respondent sent demand letters for the balance of P266,146.88. Procedural History: Private respondent filed a collection case for the balance or, alternatively, for foreclosure of the chattel mortgage. Petitioners claimed full payment, alleging an oral agreement with the president of private respondent to waive penalties and service charges. The Regional Trial Court (RTC) ordered petitioners to pay the balance plus interest, penalties, service charges, and attorney's fees, or face foreclosure. The Court of Appeals (CA) affirmed the RTC decision in toto. The Petition: Petitioners filed a petition for review, arguing that the lower courts erred in not giving credence to their evidence of full payment and in disregarding the respondent's exhibits. The core issue is whether petitioners are liable for the penalties and service charges on their loan.
Issue(s)
Whether the petitioners are liable for the payment of penalties and service charges on their loan. Whether the notation "full payment of IGLF loan" on the voucher constitutes proof of full payment or condonation of the debt. Whether the alleged oral agreement to condone the debt is valid and binding. Whether the president of the respondent corporation had the authority to condone the debt after the corporation was placed under receivership. Whether the petitioners received the demand letters from the private respondent.
Ruling
The Supreme Court affirmed the decision of the Court of Appeals, holding that petitioners are liable for the outstanding balance, including penalties and service charges. The Court ruled that the alleged oral agreement to condone the debt was not valid as it was not in writing, and that the notation on the voucher merely reflected the petitioners' intention, not an admission by the private respondent. Furthermore, the president of the corporation lacked the authority to condone the debt after the corporation was placed under receivership.
Ratio Decidendi
On the liability for penalties and service charges: The Court held that petitioners are liable for the penalties and service charges. Article 1270, paragraph 2 of the Civil Code requires express condonation to comply with the forms of donation. Article 748, paragraph 3 further mandates that the donation and acceptance of a movable property exceeding P5,000.00 must be in writing, otherwise it is void. Obligations, referring to credits, are considered movable property. Since the alleged agreement to condone P266,196.88 was not reduced to writing, it is void. On the notation "full payment of IGLF loan": The Court found the contention that the voucher notation constitutes documentary evidence of full payment to be without merit. The notation merely stated the petitioners' intention in making the payment and did not bind the private respondent. It would have been different if the notation appeared in a receipt issued by the respondent corporation through its receiver, which would then be an admission against interest. Moreover, if the respondent had truly condoned the amount, petitioners should have obtained a certificate of full payment, similar to what they did for their first loan. On the validity of the oral agreement to condone: The Court reiterated that express condonation must be in writing. The alleged oral agreement to condone the debt was not reduced to writing, thus rendering it void. The fact that the Central Bank examiner, Cristina Destajo, signed the voucher did not signify assent to the full payment. Destajo testified that she failed to notice the "full payment" statement and merely acknowledged receipt of the payment. She had no authority to condone any indebtedness, her role being limited to issuing receipts and preparing documentation. On the authority of the president to condone the debt: The Court emphasized that the alleged agreement to condone occurred after the private respondent was placed under receivership on November 4, 1985. As held in Villanueva v. Court of Appeals, the appointment of a receiver suspends the authority of the corporation and its officers over its property, with such authority being reposed in the receiver. Therefore, the president, Sobrepeñas, had no authority to condone the debt during the receivership period. This was further supported by Mrs. Yam's own testimony that they were told only the Central Bank, as receiver, could authorize the release of the chattel mortgage. On the receipt of demand letters: The Court found no reason to disturb the factual finding of both the lower court and the Court of Appeals that the petitioners did receive the demand letters dated September 4 and September 25, 1986. It is a settled rule that findings of fact of trial courts, adopted and confirmed by the Court of Appeals, are final and conclusive and generally will not be reviewed on appeal.
Main Doctrine
An alleged oral agreement to condone a debt, especially when the amount involved exceeds P5,000.00, must be in writing to be valid, in compliance with the forms of donation. Furthermore, after a corporation has been placed under receivership, its officers lose their authority over its property and effects, which authority is reposed in the receiver. Therefore, any purported condonation of debt by an officer after receivership is void.