G.R. No. 104726 February 11, 1999.
VICTOR YAM & YEK SUN LENT, doing business under the name and style of Philippine Printing Works, petitioners, vs. THE COURT OF APPEALS and MANPHIL INVESTMENT CORPORATION, respondents.

FACTS

Petitioners Victor Yam and Yek Sun Lent obtained two loans from private respondent Manphil Investment Corporation. The first loan was for P500,000.00 under a Loan Agreement with Assumption of Solidary Liability dated May 10, 1979, secured by a chattel mortgage and providing for 12% annual interest, 2% monthly penalty, 1 1/2% monthly service charge, and 10% attorney’s fees. This loan was fully paid by April 2, 1985. A second loan of P300,000.00 was obtained, evidenced by promissory notes and a new loan agreement with identical terms except for a 14% annual interest and a 1% per annum service charge, secured by an amended chattel mortgage. On November 4, 1985, private respondent was placed under receivership by the Central Bank. On May 17, 1986, petitioners made a partial payment of P50,000.00 on the second loan. As of July 31, 1986, petitioners’ total liability was P727,001.35, broken down into principal (P295,469.47), interest (P165,385.00), penalties (P254,820.55), and service charges (P11,326.33). On that date, petitioners paid P410,854.47 by check, which was the sum of the principal and interest less the partial payment. The voucher for the check bore the notation “full payment of IGLF LOAN.” Private respondent subsequently sent demand letters for the balance of P266,146.88 (representing penalties and service charges) and, upon petitioners’ failure to pay, filed a collection case. Petitioners claimed full payment, alleging that during a meeting with the corporation’s president, Carlos Sobrepeña, after the corporation was under receivership, he agreed to waive the penalties and service charges if they paid the principal and interest. The trial court and the Court of Appeals ruled in favor of private respondent, ordering petitioners to pay the balance.

ISSUE

Whether petitioners are liable for the payment of the penalties and service charges on their loan amounting to P266,146.88, despite their claim of an oral condonation agreement.

RULING

Yes, petitioners are liable. The Supreme Court affirmed the decision of the Court of Appeals. The alleged oral agreement to condone the penalties and service charges is void. Under Article 1270, paragraph 2 of the Civil Code, express condonation must comply with the forms of donation. Since the condoned amount exceeded P5,000.00, Article 748, paragraph 3 requires the donation to be in writing; otherwise, it is void. The obligation (credit) is considered movable property under Article 417. The notation “full payment of IGLF loan” on the voucher was merely petitioners’ unilateral declaration and did not bind private respondent; it was not a receipt issued by the respondent admitting full payment. Furthermore, at the time of the alleged oral agreement, the private respondent was under receivership. The appointment of a receiver suspends the authority of the corporation’s officers over its property; thus, President Sobrepeña had no authority to condone the debt. The Central Bank examiner, Cristina Destajo, who signed the voucher, had no authority to condone indebtedness, and her act merely acknowledged receipt of the payment. The Supreme Court also upheld the lower courts’ factual finding that petitioners received the demand letters. Therefore, petitioners remained liable for the unpaid penalties and service charges.