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    Spouses Reyes Vs BPI GR 149840

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    Maridel Pozas
    The spouses Reyes mortgaged their property to BPI Family Savings Bank as collateral for a loan to Transbuilders. Transbuilders defaulted on the loan after a year, so BPI restructured the loan through a new promissory note with Transbuilders. The spouses Reyes claimed this constituted novation and released them from the mortgage. However, the court ruled that the mortgage did not limit the obligation to the original loan agreement, and was intended to secure future indebtedness as well. There was no clear intent by the parties to completely replace the old agreement with the new one. Novation is not presumed under the law. Therefore, there was no novation and the spouses Reyes' property remained

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    Spouses Reyes Vs BPI GR 149840

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    Maridel Pozas
    395 views2 pages
    The spouses Reyes mortgaged their property to BPI Family Savings Bank as collateral for a loan to Transbuilders. Transbuilders defaulted on the loan after a year, so BPI restructured the loan through a new promissory note with Transbuilders. The spouses Reyes claimed this constituted novation and released them from the mortgage. However, the court ruled that the mortgage did not limit the obligation to the original loan agreement, and was intended to secure future indebtedness as well. There was no clear intent by the parties to completely replace the old agreement with the new one. Novation is not presumed under the law. Therefore, there was no novation and the spouses Reyes' property remained

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    Spouses Reyes vs BPI GR 149840

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    The spouses Reyes mortgaged their property to BPI Family Savings Bank as collateral for a loan to Transbuilders. Transbuilders defaulted on the loan after a year, so BPI restructured the loan through a new promissory note with Transbuilders. The spouses Reyes claimed this constituted novation and released them from the mortgage. However, the court ruled that the mortgage did not limit the obligation to the original loan agreement, and was intended to secure future indebtedness as well. There was no clear intent by the parties to completely replace the old agreement with the new one. Novation is not presumed under the law. Therefore, there was no novation and the spouses Reyes' property remained

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    395 views2 pages

    Spouses Reyes Vs BPI GR 149840

    Uploaded by

    Maridel Pozas
    The spouses Reyes mortgaged their property to BPI Family Savings Bank as collateral for a loan to Transbuilders. Transbuilders defaulted on the loan after a year, so BPI restructured the loan through a new promissory note with Transbuilders. The spouses Reyes claimed this constituted novation and released them from the mortgage. However, the court ruled that the mortgage did not limit the obligation to the original loan agreement, and was intended to secure future indebtedness as well. There was no clear intent by the parties to completely replace the old agreement with the new one. Novation is not presumed under the law. Therefore, there was no novation and the spouses Reyes' property remained

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 2

    G.R. Nos.

    149840-41 March 31, 2006


    SPS. FRANCISCO AND RUBY REYES vs. BPI FAMILY SAVINGS BANK, INC.,
    and MAGDALENA L. LOMETILLO, in her capacity as ex-officio Provincial Sheriff
    for Iloilo
    FACTS:
    1. On 1995, spouses Reyes executed a real estate mortgage on their property at
    La Union to BPI Family Savings Bank, Incm such would be used to secure a
    P15,000,000 loan of Transbuilders
    2. The mortgage contract between petitioners and BPI-FSB provided, among
    others:
    That for and in consideration of the above-mentioned sum received by
    way of a loan, and other credit accommodations of whatever nature obtained
    by the Borrower/Mortgagor, the Borrower/Mortgagor by this Agreement,
    hereby constitutes a first mortgage, special and voluntary over the property/ies
    specifically described in Annex "A", together with all existing improvements as
    well as those that may hereafter be made to exist or constructed thereon,
    inclusive of all fruits and rents, in favor of the Bank, its successors and assigns.
    3. Transbuilders failed to pay their laon on the stipulated period of one year the
    bank restructured the loan through a promissory note executed by
    Transbuilders in its favor.
    4. The pertinent provisions of the promissory note stated that:
    1. The proceeds of the Note shall be applied to loan account no. 21108336 ; and
    2. The new obligation of Transbuilders to respondent Bank for fifteen million
    (P15,000,000.00) shall be paid in twenty (20) quarterly installments
    commencing on September 28, 1996 and at an interest rate of eighteen (18%)
    per annum.
    5. Petitioners aver that they were not informed about the restructuring of
    Transbuilders’ loan.
    6. In fact, when they learned of the new loan agreement sometime in December
    1996, they wrote BPI-FSB requesting the cancellation of their mortgage and
    the return of their certificate of title to the mortgaged property. They claimed
    that the new loan novated the loan agreement of March 24, 1995. Because the
    novation was without their knowledge and consent, they were allegedly
    released from their obligation under the mortgage.
    ISSUE:
    Whether or not there is novation as to extinguish their obligation?
    RULING:
    The mortgage contract between the petitioners and the respondent BPI does
    not limit the obligation or loan for which it may stand to the loan agreement between
    Transbuilders and BPI, dated March 24, 1995, considering that under the terms of
    that contract, the intent of all the parties, including the petitioners, to secure future
    indebtedness is apparent…. On the whole, the contract of loan/mortgage dated March
    24, 1995, appears to include even the new loan agreement between Transbuilders
    and BPI, entered into on June 28, 1996.
    xxx xxx xxx
    There is likewise no merit to the petitioners’ submission that there was a
    novation of the March 24, 1995 contract. There is no clear intent of the parties to
    make the new contract completely supersede and abolish the old loan/mortgage
    contract. The established rule is that novation is never presumed. Novation will not
    be allowed unless it is clearly shown by express agreement, or by acts of equal import.
    Thus, to effect an objective novation it is imperative that the new obligation expressly
    declares that the old obligation is thereby extinguished or that the new obligation be
    on every point incompatible with the new one. (Ajax Marketing & Development
    Corporation v. Court of Appeals, 248 SCRA 222 [1995]) Without such clear intent to
    abolish the old contract, there is no merit to affirm the existence of a novation.
    There is no basis therefore, to the charge that respondent BPI had gravely
    erred in not surrendering the petitioners’ certificate of title, as the mortgage
    undertaking of the petitioners has not been cancelled. For the same reason, the
    respondent BPI acted within its prerogative when it initiated extra-judicial
    foreclosure proceedings over the petitioners’ property.

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