G.R. NO. 159748 - SPOUSES VIRGILIO AND DIGNA ANASTACIO-CALINA, VS. DEVELOPMENT BANK OF THE PHILIPPINES.D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE, premises above considered, this case is hereby DISMISSED. [15] On July 29, 1998, DBP filed a petition for review [16] with the Court of Appeals, assigning the following errors to the decision of the trial court: The court a quo gravely erred in concluding that "DBP novated the contract when it agreed to condone the interest and penalties but was revoked by the failure of Calina to pay the amount of P600,000.00"; The court a quo gravely erred in concluding "that the subsequent agreement of both parties to sell the subject engine for P550,000.00 is considered by the [c]ourt as substantial compliance of the novated contract for the DBP to condone the interests and penalties"; The court a quo gravely erred in concluding that the receipt of DBP of the amount of P550,000.00 realized from the sale of the marine diesel engine "is more than sufficient to offset the loan of P451,589.80 after condonation of interest and penalties." Hence, "the loan obligation x x x is considered as settled and/or fully paid"; and The court a quo gravely erred is ( sic ) not ordering the defendants-appellees Spouses Virgilio G. Calina and Digna Anastacio to pay DBP the remaining balance of their loan obligation, plus interest until fully paid, and the pre-agreed attorney's fees. It was also averred that even if "the DBP through its Board of Governors expressly approved and agreed not only to condone the penalty charges and interest, but also the dismissal of the complaint upon payment of P600,000.00," [17] this issue of novation is already moot as it had been revoked by the petitioners' failure to pay the said amount. On August 27, 2003, the appellate court rendered its Decision, [18] reversing the trial court, viz : WHEREFORE, in view of the foregoing, the October 14, 1996 Decision of Branch 61, Regional Trial Court, Makati City in Civil Case No. 1622 is REVERSED and SET ASIDE and a new one entered ordering defendants-appellees, Spouses Virgilio Calina and Digna Anastacio, to pay plaintiff-appellant, Development Bank of the Philippines, the amount of P666,195.55 plus 12% interest from August 18, 1878 (sic) until fully paid to be computed based on diminishing balance method less the P550,000.00 proceeds from the sale of the aforesaid Cummins Engine and 10% attorney's fees. [19] In their Petition for Review on Certiorari, [20] petitioners assigned the following errors to the appellate court's decision: The Court of Appeals gravely erred when it required petitioners to pay interest on the advance of P451,589.80 made by DBP, in violation of the Agreement between the parties and without any valid document in support thereof. The Court of Appeals gravely erred when it ruled that there was partial condonation of the interest due, but the said condonation was revoked when petitioners still did not pay the loan despite the reduction in interest. The Court of Appeals seriously erred when it failed to consider and appreciate that what transpired between the parties, after t