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BSA Loan Delay Case: Ong vs. BPI

BSA approved a loan to petitioners for ₱20 million, but only released ₱10.4 million of the ₱15 million term loan and ₱3 million of the ₱5 million credit line. BSA agreed to release the remaining ₱2 million of the credit line if petitioners paid the initial ₱3 million, which they did. However, BSA still did not release the additional funds and petitioners stopped paying their loan obligations. The court ruled that BSA incurred delay in performance by failing to release the full agreed upon credit line amount after petitioners complied with their obligation, so petitioners' default was justified.

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53 views2 pages

BSA Loan Delay Case: Ong vs. BPI

BSA approved a loan to petitioners for ₱20 million, but only released ₱10.4 million of the ₱15 million term loan and ₱3 million of the ₱5 million credit line. BSA agreed to release the remaining ₱2 million of the credit line if petitioners paid the initial ₱3 million, which they did. However, BSA still did not release the additional funds and petitioners stopped paying their loan obligations. The court ruled that BSA incurred delay in performance by failing to release the full agreed upon credit line amount after petitioners complied with their obligation, so petitioners' default was justified.

Uploaded by

Michael Vincent Bautista
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd

SPOUSES FRANCISCO ONG and BETTY LIM ONG, and SPOUSES JOSEPH

ONG CHUAN and ESPERANZA ONG CHUAN, vs. BPI FAMILY SAVINGS


BANK, INC.,

G.R. No. 208638 January 24, 2018 REYES, JR., J.

DOCTRINE:

In a reciprocal obligation where parties are mutual creditors and debtors


of each other, delay occurs when one party had complied with his obligation
and the other party failed to act on his obligation

FACTS:

Petitioners applied for the credit facilities of Bank of Southeast Asia's


(BSA). They executed a REM over their property situated in Paco, Manila in
favor of BSA as security for a ₱15,000,000.00 term loan and ₱5,000,000.00
credit line or a total of ₱20,000,000.00. Only ₱10,444,271.49 was released by
BSA on the term loan whereas only ₱3,000,000.00 was released on the credit
line. BSA promised to release the remaining ₱2,000,000.00 conditioned upon
the payment of the ₱3,000,000.00 initially released to petitioners.

Petitioners acceded to the condition and paid the ₱3,000,000.00 in full.


However, BSA still refused to release the ₱2,000,000.00. Petitioners then
refused to pay the amortizations due on their term loan. BPI Family Savings
Bank (BPI) merged with BSA, thus, acquired all the latter's rights and assumed
its obligations. BPI filed a petition for extrajudicial foreclosure of the REM for
petitioners' default in the payment of their term loan.

Petitioners instituted an action for damages with Temporary Restraining


Order and Preliminary Injunction against BPI to enjoin the foreclosure.

The RTC ruled in favor of the petitioners. The CA reversed the RTC’s
decision.

ISSUE:

Whether or not BSA incurred delay in the performance of its obligations

RULING:

Yes, BSA incurred delay in the performance of its obligation. BSA did not
only incur delay in releasing the pre-agreed credit line of ₱5,000,000.00 but
likewise violated the terms of its agreement with petitioners when
it deliberately failed to release the amount of ₱2,000,000.00 after petitioners
complied with their terms and paid the first ₱3,000,000.00 in full. The default
attributed to petitioners when they stopped paying their amortizations on the
term loan cannot be sustained by this Court because long before they sent a
Letter to BSA informing the latter of their refusal to continue paying
amortizations, BSA had already reneged on its obligation to release the amount
previously agreed upon, i.e., the ₱5,000,000.00 covered by the credit line.

Loan is a reciprocal obligation, as it arises from the same cause where


one party is the creditor and the other the debtor.  The obligation of one party
in a reciprocal obligation is dependent upon the obligation of the other, and the
performance should ideally be simultaneous. This means that in a loan, the
creditor should release the full loan amount and the debtor repays it when it
becomes due and demandable.  BSA approved and released the ₱3,000,000.00
out of the original ₱5,000,000.00 credit facility, the contract was perfected.

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