Spouses Agner v. BPI Family Savings Bank, Inc.
REITERATIONFacts
The Antecedents: Spouses Deo and Maricon Agner executed a Promissory Note with Chattel Mortgage for Php834,768.00 in favor of Citimotors, Inc., payable in installments with a 6% per month interest for late payments. Citimotors assigned its rights to ABN AMRO Savings Bank, Inc., which in turn assigned it to BPI Family Savings Bank, Inc. (respondent). Petitioners failed to pay four successive installments from May 15, 2002, to August 15, 2002. Respondent sent a demand letter dated August 29, 2002, declaring the entire obligation due and demandable and demanding payment of Php576,664.04 or surrender of the mortgaged vehicle. Procedural History: Respondent filed an action for Replevin and Damages before the Regional Trial Court (RTC), Manila. A writ of replevin was issued but the vehicle was not seized. The RTC ruled in favor of the respondent, ordering petitioners to pay Php576,664.04 plus 72% per annum interest from August 20, 2002. The Court of Appeals (CA) affirmed the RTC decision. The Petition: Petitioners sought review, arguing (1) respondent had no cause of action due to the Deed of Assignment not specifically mentioning their account receivable; (2) they defaulted due to lack of competent proof of receipt of the demand letter; and (3) respondent's pursuit of both replevin and collection of sum of money violated Article 1484 of the Civil Code and the ruling in Elisco Tool Manufacturing Corporation v. Court of Appeals.
Issue(s)
Whether respondent has a valid cause of action despite the Deed of Assignment not specifically mentioning petitioners' account receivable. Whether petitioners defaulted in their payment obligation, considering the alleged lack of competent proof of receipt of the demand letter. Whether respondent's resort to both replevin and an action for sum of money violates Article 1484 of the Civil Code.
Ruling
The petition is DENIED. The Court AFFIRMS WITH MODIFICATION the decision of the Court of Appeals. Petitioners spouses Deo Agner and Maricon Agner are ORDERED 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.
Ratio Decidendi
On the issue of cause of action and the Deed of Assignment: The Court held that the matter surrounding the Deed of Assignment was already considered by the lower courts and is a factual issue not proper for a petition for review under Rule 45. The Supreme Court generally does not weigh anew evidence passed upon by lower courts, as it is not a trier of facts. The petitioners' contention regarding the specific mention of their account receivable in the assignment was deemed untenable as it involved a re-evaluation of evidence already passed upon by the RTC and CA. On the issue of default and waiver of demand: The Court found that petitioners legally waived the necessity of notice or demand in the Promissory Note with Chattel Mortgage they voluntarily signed. The contract expressly stipulated that in case of failure to pay any sum due, the entire outstanding sum shall, without prior notice or demand, immediately become due and payable. This waiver of demand is recognized as legal and valid. Furthermore, the Court noted that the Promissory Note itself provided that the mere act of sending correspondence, including demand letters, to the mortgagor's address shall be valid and effective notice, even if not actually received or returned unclaimed. The presumption of receipt of a duly mailed letter stands absent satisfactory proof to the contrary. The Court also clarified that prior demand is not a condition precedent to an action for a writ of replevin. On the issue of violation of Article 1484 of the Civil Code: The Court distinguished the present case from Elisco Tool Manufacturing Corporation v. Court of Appeals. In Elisco, the petitioner prayed for both the recovery of the sum of money and the seizure of the vehicle, leading the Court to rule that the remedies under Article 1484 are alternative and cannot be cumulative. In the present case, the vehicle subject of the replevin action was never recovered and delivered to the respondent. Since there was no seizure that transpired, petitioners were not deprived of the use and enjoyment of the mortgaged vehicle, and respondent did not pursue actual foreclosure. Therefore, the trial court rightfully granted the alternative prayer for a sum of money, which is equivalent to exacting fulfillment of the obligation, and there was no double recovery or unjust enrichment.
Main Doctrine
The stipulation on a 6% per month interest rate is reduced to 1% per month (12% per annum) as it is excessive, iniquitous, unconscionable, and exorbitant. The remedies under Article 1484 of the Civil Code are alternative; however, where the mortgaged vehicle is not recovered, the mortgagee may still pursue the alternative remedy of collecting the outstanding obligation.