Ba Finance Corporation v. Hon. Court of Appeals

Summary

B.A. Finance Corporation sued the Cuady spouses for unpaid balance on promissory note secured by chattel mortgage on motor vehicle. After the vehicle was damaged in accident, Cuadys requested enforcement of total loss provision in insurance policy but B.A. Finance insisted on repair. When repair rendered vehicle unusable, Cuadys stopped payments and requested total loss claim, which B.A. Finance refused. The Supreme Court affirmed lower courts' dismissal of collection suit, ruling that B.A. Finance Corporation's failure to enforce valid insurance claim as attorney-in-fact under the chattel mortgage constituted breach of agency duties under Article 1884 of Civil Code, causing pecuniary loss to the Cuadys and making collection of remaining debt unjust and inequitable.