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D.2.2. G.R. No. 169407 March 25, 2015 Bank of The Philippine Islands, Petitioner, v. AMADOR DOMINGO, Respondent. Facts

The spouses Domingo executed a promissory note and chattel mortgage on a vehicle in favor of Makati Auto Center, which were later assigned to FEBTC. FEBTC then merged with BPI. The spouses defaulted on payments, so BPI demanded payment. However, Mercy had previously sold the vehicle to Carmelita and assumed the loan without BPI's express consent. While BPI was aware of the transaction and accepted payments from Carmelita, the Court found this did not constitute express consent to substitute debtors as required, as BPI's records still reflected the spouses as debtors.

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789 views

D.2.2. G.R. No. 169407 March 25, 2015 Bank of The Philippine Islands, Petitioner, v. AMADOR DOMINGO, Respondent. Facts

The spouses Domingo executed a promissory note and chattel mortgage on a vehicle in favor of Makati Auto Center, which were later assigned to FEBTC. FEBTC then merged with BPI. The spouses defaulted on payments, so BPI demanded payment. However, Mercy had previously sold the vehicle to Carmelita and assumed the loan without BPI's express consent. While BPI was aware of the transaction and accepted payments from Carmelita, the Court found this did not constitute express consent to substitute debtors as required, as BPI's records still reflected the spouses as debtors.

Uploaded by

Emmanuel Princess Zia Salomon
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
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D.2.2. G.R. No.

169407 March 25, 2015


BANK OF THE PHILIPPINE ISLANDS, Petitioner,
v. AMADOR DOMINGO, Respondent.

FACTS:
Respondent Amador and his wife, the late Mercy, (spouses Domingo)
executed a Promissory Note in favor of Makati Auto Center, Inc., payable in 48
monthly installments. They simultaneously executed a Deed of Chattel
Mortgage over a subject vehicle to secure the payment of their PN. Makati Auto
Center, Inc. then assigned, ceded, and transferred all its rights and interests over
the said PN and chattel mortgage to Far East Bank and Trust Company (FEBTC).
The Securities and Exchange Commission approved and issued the Certificate of
Filing of the Articles of Merger and Plan of Merger executed by and between BPI,
the survivng corporation, and FEBTC, the absorbed corporation. By virtue of said
merger, all the assets and liabilities of FEBTC were transferred to and absorbed by
BPI.
The spouses Domingo defaulted when they failed to pay 21 monthly
installments. BPI, being the surviving corporation after the merger, demanded that
the spouses Domingo pay the balance of the PN including accrued late payment
charges/interests or to return the possession of the subject vehicle for the purpose
of foreclosure in accordance with the undertaking stated in the chattel mortgage.

ISSUE:
Whether or not there was an express consent of the BPI to the substitution of
debtors.

RATIO DECIDENDI:
No. There is no express consent of BPI to the substitution of debtors. The
Court of Appeals and the RTC inferred the consent of BPI from the following
facts: (1) BPI had a copy of the Deed of Sale and Assumption of Mortgage
executed between Mercy and Carmelita in its file, indicating its knowledge of said
agreement, and still it did not interpose any objection to the same; (2) BPI (through
FEBTC) returned the spouses Domingo's checks and accepted Carmelita's
payments; and (3) BPI did not demand any payment from the spouses Domingo
not until 30 months after Carmelita assumed the payment of balance on the
Promissory Note.
The Court notes that the documents of BPI concerning the car loan and
chattel mortgage are still in the name of the spouses Domingo. No new promissory
note or chattel mortgage had been executed between BPI (or FEBTC) and
Carmelita. Even the account itself is still in the names of the spouses Domingo.
The absence of objection on the part of BPI (or FEBTC) cannot be presumed
as consent. Jurisprudence requires presentation of proof of consent, not mere
absence of objection. The consent of BPI to the substitution of debtors cannot be
deduced from its acceptance of payments from Carmelita.

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