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    Bustamante Vs Rosel

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    Hector Mayel Macapagal
    Petitioner Natalia Bustamante entered into a loan agreement with respondent Rosel Norma to borrow 100k for 2 years at 1% interest per month. The agreement stipulated that if Bustamante failed to pay, Norma had the option to purchase the collateral, a property portion, for P200,000. When the loan matured, Norma proposed to buy the collateral for P200,000 but Bustamante refused and offered another property instead. Norma refused the extension and substitute property. The court found the stipulation allowing automatic appropriation of the collateral in case of non-payment to be a prohibited pactum commissorium. While contracts between parties have force of law, they cannot

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    Bustamante Vs Rosel

    Uploaded by

    Hector Mayel Macapagal
    132 views2 pages
    Petitioner Natalia Bustamante entered into a loan agreement with respondent Rosel Norma to borrow 100k for 2 years at 1% interest per month. The agreement stipulated that if Bustamante failed to pay, Norma had the option to purchase the collateral, a property portion, for P200,000. When the loan matured, Norma proposed to buy the collateral for P200,000 but Bustamante refused and offered another property instead. Norma refused the extension and substitute property. The court found the stipulation allowing automatic appropriation of the collateral in case of non-payment to be a prohibited pactum commissorium. While contracts between parties have force of law, they cannot

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    Bustamante vs Rosel

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    Petitioner Natalia Bustamante entered into a loan agreement with respondent Rosel Norma to borrow 100k for 2 years at 1% interest per month. The agreement stipulated that if Bustamante failed to pay, Norma had the option to purchase the collateral, a property portion, for P200,000. When the loan matured, Norma proposed to buy the collateral for P200,000 but Bustamante refused and offered another property instead. Norma refused the extension and substitute property. The court found the stipulation allowing automatic appropriation of the collateral in case of non-payment to be a prohibited pactum commissorium. While contracts between parties have force of law, they cannot

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    132 views2 pages

    Bustamante Vs Rosel

    Uploaded by

    Hector Mayel Macapagal
    Petitioner Natalia Bustamante entered into a loan agreement with respondent Rosel Norma to borrow 100k for 2 years at 1% interest per month. The agreement stipulated that if Bustamante failed to pay, Norma had the option to purchase the collateral, a property portion, for P200,000. When the loan matured, Norma proposed to buy the collateral for P200,000 but Bustamante refused and offered another property instead. Norma refused the extension and substitute property. The court found the stipulation allowing automatic appropriation of the collateral in case of non-payment to be a prohibited pactum commissorium. While contracts between parties have force of law, they cannot

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    of 2

    Bustamante vs Rosel Norma Rosel entered into a loan agreement with petitioner Natalia Bustamante.

    Amount: 100k; Period: 2 years; nterest! " #$%""N &1'() P"R*"N% per annum

    #uaranty: *ollateral +","N%- &.0) +/0AR" 1"%"R+ portion2 in3lusive o4 the apartment therein5 $owever2 in the event the 6orrowers 4ail to pay2 the lender has the option to 6uy or pur3hase the 3ollateral 4or a total 3onsideration o4 %78 $0N9R"9 %$80+AN9 &P2002000.00) P"+8+2 in3lusive o4 the 6orrowed amount and interest therein; 7hen the loan was a6out to mature2 respondents proposed to 6uy at the pre!set pri3e o4 P2002000.002 the seventy &.0) s:uare meters par3el o4 land. Petitioner re4used to sell and re:uested 4or e;tension o4 time to pay the loan and o44ered to sell to respondents another residential lot lo3ated at Road 202 Pro<e3t '2 /ue=on *ity. Respondents re4used to e;tend the payment o4 the loan and to a33ept the lot in Road 20 as it was o33upied 6y s:uatters and petitioner and her hus6and were not the owners thereo4 6ut were mere land developers. Petitioner tendered payment o4 the loan to respondents whi3h the latter re4used to a33ept2 insisting on petitioner>s signing a prepared deed o4 a6solute sale o4 the 3ollateral. Respondents 4iled with the R%* a 3omplaint 4or spe3i4i3 per4orman3e with 3onsignation against petitioner and her spouse. Respondents sent a demand letter asking petitioner to sell the 3ollateral pursuant to the option to 6uy em6odied in the loan agreement. Petitioner 4iled in the R%* a petition 4or 3onsignation2 and deposited the amount o4 [email protected]. %*: 1. 9enied plainti44>s prayer 4or the de4endants> e;e3ution o4 the 9eed o4 +ale. Petitioner 4iled with this *ourt a motion 4or re3onsideration o4 the denial alleging that the real intention o4 the parties to the loan was to put up the 3ollateral as guarantee similar to an e:uita6le mortgage a33ording to Arti3le 1A02 o4 the *ivil *ode. Respondents opposed petitioner>s m4r. %hey 3ontend that the agreement 6etween the parties was not a sale with right o4 re!pur3hase2 6ut a loan with interest at 1'( per annum 4or a period o4 two years and i4 petitioner 4ails to pay2 the respondent was given the right to pur3hase the property or apartment 4or P2002000.002 whi3h is not 3ontrary to law2 morals2 good 3ustoms2 pu6li3 order or pu6li3 poli3y.

    ssues: 1. 7hether or not petitioner 4ailed to pay the loan at its maturity dateB N8. 2. 7hether or not the stipulation in the loan 3ontra3t was valid and en4or3ea6le. $eld.

    1. 7e rule that petitioner did not 4ail to pay the loan. 8n date o4 maturity2 petitioner tendered payment to settle the loan whi3h respondents re4used to a33ept2 insisting that petitioner sell to them the 3ollateral o4 the loan. 7hen respondents re4used to a33ept payment2 petitioner 3onsigned the amount with the trial 3ourt. 7e note the eagerness o4 respondents to a3:uire the property given as 3ollateral to guarantee the loan. %he sale o4 the 3ollateral is an o6ligation with a suspensive 3ondition. +in3e the event did not o33ur2 respondents do not have the right to demand 4ul4ilment o4 petitioner>s o6ligation. 2. Respondents argue that 3ontra3ts have the 4or3e o4 law 6etween the 3ontra3ting parties and must 6e 3omplied with in good 4aith. %here are2 however2 3ertain e;3eptions to the rule2 spe3i4i3ally Arti3le 1@0A o4 the *ivil *ode2 whi3h provides: CArticle 1306. %he 3ontra3ting parties may esta6lish su3h stipulations2 3lauses2 terms and 3onditions as they may deem 3onvenient2 provided they are not 3ontrary to law2 morals2 good 3ustoms2 pu6li3 order2 or pu6li3 poli3y.D A s3rutiny o4 the stipulation o4 the parties reveals a su6tle intention o4 the 3reditor to a3:uire the property given as se3urity 4or the loan. %his is em6ra3ed in the 3on3ept o4 pactum commissorium2 whi3h is pros3ri6ed 6y law. C%he elements o4 pactum commissorium are as 4ollows: &1) there should 6e a property mortgaged 6y way o4 se3urity 4or the payment o4 the prin3ipal o6ligation2 and &2) there should 6e a stipulation 4or automati3 appropriation 6y the 3reditor o4 the thing mortgaged in 3ase o4 non!payment o4 the prin3ipal o6ligation within the stipulated period.D A signi4i3ant task in 3ontra3t interpretation is the as3ertainment o4 the intention o4 the parties and looking into the words used 6y the parties to pro<e3t that intention. n this 3ase2 the intent to appropriate the property given as 3ollateral in 4avor o4 the 3reditor appears to 6e evident2 4or the de6tor is o6liged to dispose o4 the 3ollateral at the pre!agreed 3onsideration amounting to pra3ti3ally the same amount as the loan. n e44e3t2 the 3reditor a3:uires the 3ollateral in the event o4 non payment o4 the loan. %his is within the 3on3ept o4 pactum commissorium. +u3h stipulation is void. All persons in need o4 money are lia6le to enter into 3ontra3tual relationships whatever the 3ondition i4 only to alleviate their 4inan3ial 6urden al6eit temporarily. $en3e2 3ourts are duty 6ound to e;er3ise 3aution in the interpretation and resolution o4 3ontra3ts lest the lenders devour the 6orrowers like vultures do with their prey.

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