Planters Development Bank vs. Lopez, 708 SCRA 481
Subject: Obligations and Contracts
FACTS
In 1983, the spouses Emesto and
Florentina Lopez applied for and obtained a real estate loan in the amount of
P3M from PDB to finance the construction of a four-story concrete dormitory
building, payable for 14 years and shall bear a monetary interest at 21% p.a.
Furthermore, partial drawdowns on the loan shall be based on project completion
and shall be allowed upon submission of job accomplishment reports by the
project engineer. To secure the payment of the loan, the spouses Lopez mortgaged
a parcel of land covered by Transfer Certificate of Title No. T-16233.
The spouses entered into several
amendments of the original loan agreement with the bank with the most recent
one dated in August 1984 where PDB unilaterally increased the interest rate to 32%
p.a. The spouses Lopez failed to avail the full amount of the loan because PDB refused
to release the remaining amount of ₱700K.
In October 1984, the spouses
Lopez filed against Planters Bank complaint for rescission of the loan
agreements and for damages with the RTC of Makati City. They alleged that they
could not continue the construction of the dormitory building because Planters
Bank had refused to release the remaining loan balance.
In defense, Planters Bank argued
that the spouses Lopez had no cause of action and that the refusal to release
the loan was the result of the spouses Lopez’s violations of the loan
agreement, namely: (1) non-submission of the accomplishment reports; and (2)
construction of a six-story building. As a counterclaim, Planters Bank prayed
for the payment of the overdue released loan in the amount of ₱3.5M, with
interest and damages.
In 1984, Planters Bank foreclosed
the mortgaged properties in favor of third parties after the spouses Lopez
defaulted on their loan.
The spouses Lopez died. Compulsory
heirs Joseph Wilfred, Joseph Gilbert and Marlyn, all surnamed Joven
(respondents) substituted for the deceased Florentina Lopez. CA reversed the
RTC ruling. It held that Planters Bank’s refusal to release the loan was a
substantial breach of the contract. It found that the spouses Lopez submitted
accomplishment reports. It gave weight to Engineer Edgard Fianza’s testimony
that he prepared accomplishment reports prior to the release of the funds.
Moreover, Planters Bank’s appraisal department head, Renato Marayag, testified
that accomplishment reports were a prerequisite for the release of the loan.
ISSUE
Whether or not the spouses Lopez
violated the loan agreement through failure to submit accomplishment reports and
that spouses Lopez deviated from the construction project.
RULING
No.
Under the law, the concurrence of
the following requisites is necessary for the principle of equitable estoppel
to apply: (a) conduct amounting to false representation or concealment of
material facts or at least calculated to convey the impression that the facts
are otherwise than, and inconsistent with, those which the party subsequently
attempts to assert; (b) intent, or at least expectation that this conduct shall
be acted upon, or at least influenced by the other party; and (c) knowledge,
actual or constructive, of the actual facts.
In this case, Planters Bank is estopped from opposing the spouses Lopez's construction of a six-storey building. Inaction or silence may under some circumstances amount to misrepresentation, so as to raise an equitable estoppel. The principle of equitable estoppel prevents PDB from raising the spouses Lopez's violation of the loan agreement. Planters Bank was already aware that the spouses Lopez were building six floors as early as September 30, 1983. Records disclose that Planters Bank also conducted a series of ocular inspections. Despite such knowledge, the bank kept silent on the violation of the loan agreement as Planters Bank continued to release the loan in partial amounts to the spouses Lopez. As the CA correctly pointed out, Planters Bank only raised this argument during trial--a move that highly appears to be an afterthought.
No comments:
Post a Comment