Cabanting v. Bank of the Philippine Islands Family Savings Bank, Inc.
REITERATIONFacts
The Antecedents: Petitioners Vicente D. Cabanting and Lalaine V. Cabanting purchased a vehicle on installment from Diamond Motors Corporation, executing a Promissory Note with Chattel Mortgage for P836,032.00. Diamond Motors assigned its rights to BPI Family Savings Bank, Inc. (BPI Family). Petitioners failed to pay three consecutive installments. Procedural History: BPI Family filed a Complaint for Replevin and damages against petitioners. Petitioners alleged they sold the vehicle to Victor S. Abalos, who assumed the obligation and made payments via checks, some of which were dishonored. Petitioners argued BPI Family should have sued Abalos. The Regional Trial Court (RTC) granted BPI Family's motion to deem petitioners' right to present evidence waived due to repeated failures to appear and present their witness. The RTC ruled in favor of BPI Family. The Court of Appeals (CA) affirmed the RTC decision with modification, reducing the awarded amount and deleting attorney's fees, holding that petitioners waived their right to present evidence and thus failed to prove Abalos's assumption of obligation. The CA found preponderance of evidence in favor of BPI Family. The Petition: Petitioners filed a Petition for Review on Certiorari, raising issues on the necessity of prior demand for replevin and deprivation of due process.
Issue(s)
Whether respondent bank may be held entitled to the possession of the motor vehicle subject of the instant case for replevin, or the payment of its value and damages, without proof of prior demand. Whether petitioners were deprived of their right to due process when they were deemed to have waived their right to present evidence in their behalf.
Ruling
The petition is denied. The Decision of the Court of Appeals is affirmed with modification regarding the interest rate.
Ratio Decidendi
On the necessity of prior demand for replevin: The Court held that no prior demand was necessary because the Promissory Note with Chattel Mortgage explicitly stipulated that the entire outstanding sum shall immediately become due and payable without the necessity of notice or demand, which the petitioners expressly waived. The Court clarified that a contract of adhesion is not strictly against the law and is as binding as ordinary contracts, provided the adhering party was free to reject it and was not disadvantaged. In this case, there was no proof that petitioners were disadvantaged, uneducated, or inexperienced in financial dealings, thus they are bound by the waiver. The Court cited Agner v. BPI Family Savings Bank, Inc. and Bank of the Philippine Islands v. Court of Appeals to support the validity of such waiver. Furthermore, the Court noted that prior demand is not a condition precedent to an action for a writ of replevin under Section 2, Rule 60 of the Rules of Court. On the alleged deprivation of due process: The Court found no merit in petitioners' claim of deprivation of due process. The records showed that petitioners were given several opportunities to present evidence, but they failed to avail themselves of these opportunities. The Court emphasized that due process requires an opportunity to be heard, which can be through hearings or pleadings, and petitioners were afforded such opportunities. Their failure to present evidence and their subsequent failure to move for reconsideration of the order deeming their right to present evidence waived demonstrated their propensity to waste granted opportunities. The Court cited Resurreccion v. People to support the principle that an opportunity to be heard, including seeking reconsideration, satisfies due process.
Main Doctrine
A stipulation in a promissory note with chattel mortgage waiving the necessity of notice or demand for the obligation to become due and payable is valid and binding, absent proof of disadvantage or inexperience of the party adhering to the contract. Furthermore, a party is deemed to have waived their right to present evidence if they are given multiple opportunities to do so and fail to avail themselves of these opportunities.