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8 DRTC

BPI Investment Corporation filed a case to foreclose on a mortgage taken out by ALS Management and Development Corporation and Litonjua due to unpaid amortization payments. ALS and Litonjua counter-sued, arguing that the loan contract was not perfected until September 1982 when the full loan amount was released, so they should not be liable for payments before that date. Both the RTC and the Court of Appeals ruled in favor of ALS and Litonjua, finding that the loan contract involved reciprocal obligations and was not perfected until the full amount was delivered in September 1982. Therefore, ALS and Litonjua's payment obligations did not begin until October 1982.

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86 views

8 DRTC

BPI Investment Corporation filed a case to foreclose on a mortgage taken out by ALS Management and Development Corporation and Litonjua due to unpaid amortization payments. ALS and Litonjua counter-sued, arguing that the loan contract was not perfected until September 1982 when the full loan amount was released, so they should not be liable for payments before that date. Both the RTC and the Court of Appeals ruled in favor of ALS and Litonjua, finding that the loan contract involved reciprocal obligations and was not perfected until the full amount was delivered in September 1982. Therefore, ALS and Litonjua's payment obligations did not begin until October 1982.

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kaye choi
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BPI INVESTMENT CORPORATION, petitioner, vs. HON.

COURT OF APPEALS and ALS


MANAGEMENT & DEVELOPMENT CORPORATION, respondents.
G.R. No. 133632 | 2002-02-15
01 May 1981. On
13 August 1982, ALC and Litonjua paid Roa’s arrearages by paying 190,601.35. Outstanding
balance from the old loan was reduced to 457,204.90, and applying the new loan of ALC and
Litonjua, BPIIC returned 7,146.87 pertaining to the excess of the proceeds of their loan against
the balance of Roa’s loan. In June 1984, BPIIC moved for the foreclosure of the mortgage on
the grounds that respondents failed to pay from May 1, 1981 to June 30, 1984, amounted to
P475,585.31. On 28 February 1985, ALS and Litonjua filed a case against BPIIC, alleging that
they were not in arrears, maintaining that they should not have been made to answer for the
amortization (Roa’s arrearages) before the actual release of their loan in August and September
1982. Further they alleged that they only received 464,351.77 out of their 500,000, hence
applying
legal compensation, the balance of 35,648.23 should be applied on the initial monthly
amortization.
RTC ruled in favor of ALS Management and Development Corporation and Litonjua. CA
affirmed the decision of RTC
ISSUE:
Whether a contract of loan is a consensual contract
HELD: No
A loan contract is not a consensual contract but a real contract. It is perfected only upon the
delivery of the object of the contract. In the present case, the loan contract between BPI, on the
one hand, and ALS and Litonjua, on the other, was perfected only on September 13, 1982, the
date of the second release of the loan. Following the intentions of the parties on the
commencement of the monthly amortization, as found by the Court of Appeals, private
respondents’ obligation to pay commenced only on October 13, 1982, a month after the
perfection
of the contract. We also agree with private respondents that a contract of loan involves a
reciprocal
obligation, wherein the obligation or promise of each party is the consideration for that of the
other. As averred by private respondents, the promise of BPIIC to extend and deliver the loan is
upon the consideration that ALS and Litonjua shall pay the monthly amortization commencing
on May 1, 1981, one month after the supposed release of the loan. It is a basic principle in
reciprocal obligations that neither party incurs in delay, if the other does not comply or is not
ready
to comply in a proper manner with what is incumbent upon him. Only when a party has
performed

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