G.R. NO. 153134 - BANCO FILIPINO SAVINGS AND MORTGAGE BANK, VS. ANTONIO G. DIAZ AND ELSIE B. DIAZ. D E C I S I O N - Supreme Court E-Library

Ruling

Accordingly, the respondents' obligation to petitioner bank was declared as fully paid and/or cancelled. On appeal by petitioner bank, the CA, in its Decision dated November 14, 1997 in CA-G.R. CV No. 42899, reversed and set aside the decision of the RTC of Makati City. On the procedural aspect, the CA found that the lower court erred in denying petitioner bank's motion to lift order of default. Regarding the substantive issue, the CA held that the lower court likewise erroneously declared that petitioner bank, during the time that it was ordered closed by the Central Bank, could not charge or collect interests on the respondents' loan obligation. Citing the principle of unjust enrichment, the CA posited that it was with more reason that distressed banks, like petitioner bank, should be allowed to collect interests on the loans that they had extended to their borrowers. According to the CA, the fact that distressed banks were freed from the obligation to pay any interest due on deposits when they were closed and ordered to stop operations did not mean that their borrowers were similarly freed from their contractual obligation to pay interests. It distinguished the contracts between the banks and their depositors from those between the banks and their borrowers. The CA declared that the deposited amount of P1,034,600.00 failed to effect a valid consignation in law because it did not include all interests due. It ratiocinated that for a valid consignation to exist, the tender of the principal must be accompanied with the tender of interests which had accrued; otherwise, the said tender would not be effective. The CA then reversed and set aside the decision of the RTC of Makati City and entered a new one dismissing Civil Case No. 91-3090. The subsequent facts pertain to the case now before the Court: Upon finality of the decision of the CA in CA-G.R. CV No. 42899, declaring that there was no valid consignation and dismissing Civil Case No. 91-3090, the respondents filed with the RTC of Makati City a motion to withdraw deposit. They averred therein that with the finality of the CA decision dismissing their complaint, they are now withdrawing the amount of P1,034,600.00 which they had deposited by way of consignation with the said lower court. In addition, they alleged that their loan obligation was eventually settled with the payment of the amount of P25,000,000.00 through negotiations made with petitioner bank by the brothers James and Francisco Gaisano as attorneys-in-fact of the respondents. Upon such payment, Corazon L. Costan, petitioner bank's 2 nd Assistant Vice-President and Davao Main Branch Manager, issued on February 10, 1999 the Cancellation of the Real Estate Mortgage over the respondents' commercial lots. According to the respondents, there was no longer any obstacle to the immediate release of their deposit. They prayed that they be allowed to withdraw the money which they deposited on consignation with the said court (RTC of Makati Ci