G.R. No. 178610 ; November 17, 2010
HONGKONG AND SHANGHAI BANKING CORP., LTD. STAFF RETIREMENT PLAN, Retirement Trust Fund, Inc., Petitioner, vs. SPOUSES BIENVENIDO AND EDITHA BROQUEZA, Respondents.

FACTS

Respondent Editha Broqueza, an employee of Hongkong and Shanghai Banking Corporation (HSBC) and a member of the petitioner HSBC Staff Retirement Plan (HSBCL-SRP), obtained a car loan and an appliance loan from the retirement plan, payable through automatic salary deduction. In 1993, a labor dispute led to the termination of Editha and other employees. Due to her dismissal, the salary deductions ceased, and she defaulted on her loan payments. HSBCL-SRP then filed a civil complaint for recovery of sum of money against the spouses Broqueza in the Metropolitan Trial Court (MeTC). The MeTC ruled in favor of HSBCL-SRP, declaring the loans immediately demandable as unsecured obligations following Editha’s termination. The Regional Trial Court (RTC) affirmed this decision.
The Court of Appeals (CA) reversed the RTC, dismissing the complaint. The CA held that the cause of action was premature because the loan obligations had not yet matured. It reasoned that the agreement for payment via salary deduction created a suspensive condition; since the salary source was severed by dismissal, the obligation to pay was not yet demandable. HSBCL-SRP elevated the case to the Supreme Court via a petition for review.

ISSUE

Whether the Court of Appeals erred in ruling that HSBCL-SRP’s complaint for recovery of sum of money was premature, thereby dismissing the case.

RULING

The Supreme Court granted the petition, reversing the CA and reinstating the decisions of the MeTC and RTC. The Court clarified that the payroll deduction authorization was merely a convenient mode of payment mutually agreed upon by the parties, not a suspensive condition that made the employee’s continued employment the sole source of payment. The loan contracts themselves did not stipulate that cessation of employment would extinguish or suspend the obligation to pay. Therefore, Editha’s dismissal did not nullify her contractual duty to settle the loan.
The legal obligation to pay remained a pure civil obligation demandable at once. The default in monthly installments constituted a breach, making the entire unpaid balance immediately due. The Court emphasized that the claim arose from a debtor-creditor relationship founded on contract, separate from any labor dispute over the legality of dismissal. Consequently, the civil action for collection was proper and not premature. The dismissal of the complaint by the CA was erroneous, as a cause of action had clearly accrued upon the borrower’s default.