- Petitioner
- Pilar Pagsibigan
- Respondent
- Court of Appeals
- Citation
- G.R. No. 90169
- Court
- Supreme Court
- Division
- Second Division
- Ponente
- Campos, Jr., J.
- Decided
- April 7, 1993
Summary
Pilar Pagsibigan obtained a P4,500 agricultural loan from Planters Development Bank in 1976, secured by real estate mortgage with acceleration clause. Despite making P11,900 in payments, the bank only applied portions to the loan and placed the remainder in 'accounts payable' claiming the account was past due. The bank then foreclosed the property in 1984 for P29,554.81. The Supreme Court ruled that the bank waived its acceleration clause rights by accepting delayed payments for over four years and applying them to principal and interest. The Court found substantial performance by the borrower under Article 1234 of the Civil Code and bad faith by the bank in manipulating payment applications. The foreclosure was annulled, property reconveyance ordered, and damages awarded totaling P80,000 for the bank's prejudicial conduct.