Virgilio C. Crystal v. Bank of the Philippine Islands

Summary

Virgilio and Glynna Crystal borrowed P3 million from Citytrust (later absorbed by BPI) secured by real estate mortgage. After default and extrajudicial foreclosure, BPI sued for deficiency claiming the P5.6 million auction proceeds were insufficient. The trial court reduced the couple's obligation to P5.28 million, finding an excess of P319,111.35 that should be returned with interest. The Court of Appeals affirmed the refund but deleted the interest component. The Supreme Court reversed, applying the principle of unjust enrichment under Civil Code Article 22, ruling that BPI must return the excess with 6% annual interest from the trial court judgment date. The case establishes that genuine surplus from foreclosure sales must be returned to mortgagors with legal interest to prevent unjust enrichment by the foreclosing bank.