G.R. No. 233846, November 18, 2020
SPOUSES NESTOR CABASAL AND MA. BELEN CABASAL, PETITIONERS, VS. BPI FAMILY SAVINGS BANK, INC. AND ALMA DE LEON, RESPONDENTS.

FACTS

Petitioners Spouses Cabasal were granted a credit line by respondent BPI Family Savings Bank (BPI) for their business. They purchased two properties using this credit line and executed two Mortgage Loan Agreements. After three years, they found a buyer, Eloisa Guevarra Co, who agreed to a “sale with assumption of mortgage.” The buyer would give a down payment and assume the petitioners’ remaining loan balance with BPI. At that time, the petitioners’ accounts were already past due. Petitioner Nestor Cabasal and the prospective buyer went to BPI to obtain an updated statement of account and to effect the transfer. Respondent Alma De Leon, a BPI employee, informed them that BPI would not recognize the transfer because the buyer was not a bank client and such an assumption of mortgage was against bank policy, citing Section 35 of the Mortgage Loan Agreement. The petitioners claimed this caused their sale to fall through, resulting in a lost expected profit. They subsequently defaulted on their loan, leading BPI to extrajudicially foreclose on one of the mortgaged properties. The petitioners filed a case for Damages with Annulment of Extra-Judicial Foreclosure and Injunction against the respondents. BPI filed a separate petition for a writ of possession, which was consolidated with the damage case. The Regional Trial Court (RTC) dismissed the petition to annul the foreclosure and granted the writ of possession, finding the foreclosure valid. However, it held respondents BPI and De Leon jointly and severally liable for damages under Articles 19 and 20 of the Civil Code, finding that De Leon acted in bad faith by branding the petitioners’ transaction as “illegal” and failing to refer them to the proper department. The RTC also held BPI liable under Article 2180 for failing to prove it exercised due diligence in the selection and supervision of its employee. The Court of Appeals (CA) reversed the RTC’s award of damages, absolving the respondents. The CA found no evidence of bad faith or malice on the part of De Leon, as she was merely explaining bank policy based on the loan contract. The CA also ruled that BPI was not liable for damages as the foreclosure was valid and there was no basis for employer liability.

ISSUE

Whether the Court of Appeals erred in reversing the RTC’s decision and absolving respondents BPI Family Savings Bank, Inc. and Alma De Leon from liability for damages.

RULING

The Supreme Court DENIED the petition and AFFIRMED the Decision of the Court of Appeals. The respondents are not liable for damages.
1. On the Validity of the Foreclosure and the “No-Assumption” Clause: The Court upheld the validity of the extrajudicial foreclosure, as petitioners were in default. It also ruled that the “no-assumption” clause in the mortgage contract (Section 35) was valid. Such a stipulation is a standard banking practice and a valid exercise of the bank’s right to choose its debtors. It is not equivalent to a pactum commissorium, which is prohibited. The clause does not absolutely prohibit the sale of the mortgaged property; it only prohibits the transfer of the mortgage obligation without the bank’s consent, allowing the bank to demand full payment if such a sale occurs.
2. On Liability under Articles 19, 20, and 21 of the Civil Code (Abuse of Rights): The Court found no evidence that respondent Alma De Leon acted in bad faith or with intent to injure the petitioners. Her act of informing the petitioners and their buyer about the bank’s policy against assumption of mortgage, even using the word “illegal” in a colloquial sense, was done in the performance of her duty. She was explaining the legal effects of a contract provision. There was no proof that her statement was meant to maliciously sabotage the sale. The mere fact that the sale did not materialize is not sufficient to establish abuse of rights. For liability to attach under Article 19, the act must be done with malice or bad faith, which was not proven.
3. On Employer Liability under Article 2180: Since the employee, Alma De Leon, was found not to have acted negligently or in bad faith, there is no basis to hold her employer, BPI, vicariously liable under Article 2180 of the Civil Code.
4. On the Claim for Lost Profits: The Court ruled that the claimed lost profit from the failed sale was merely speculative and not the direct and necessary consequence of the respondents’ actions. Damages cannot be awarded for expected but unrealized profits that are contingent on many factors and not sufficiently proven.
Consequently, the Supreme Court held that the petitioners failed to substantiate their claim for damages. The respondents’ actions were in accordance with the loan contract and banking policy, and were not tainted with bad faith or abuse of right.