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Sebastian 1

The Supreme Court of the Philippines ruled that the Realty Installment Buyer Protection Act does not cover a loan extended by an employer to an employee to finance the purchase of a house and lot. The law only protects buyers who acquire property through installment payments, not borrowers whose rights are governed by the terms of the loan from the employer. In this case, spouses who used the proceeds of a housing loan from their employer, BPI Family Bank, to purchase a property did not qualify for protection under the Act. The spouses had signed documents agreeing to have their monthly loan amortizations automatically deducted from their salaries until the loan was fully paid.

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77 views2 pages

Sebastian 1

The Supreme Court of the Philippines ruled that the Realty Installment Buyer Protection Act does not cover a loan extended by an employer to an employee to finance the purchase of a house and lot. The law only protects buyers who acquire property through installment payments, not borrowers whose rights are governed by the terms of the loan from the employer. In this case, spouses who used the proceeds of a housing loan from their employer, BPI Family Bank, to purchase a property did not qualify for protection under the Act. The spouses had signed documents agreeing to have their monthly loan amortizations automatically deducted from their salaries until the loan was fully paid.

Uploaded by

jeanvaljean999
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Republic of the Philippines

SUPREME COURT
Manila

FIRST DIVISION

G.R. No. 160107               October 22, 2014

SPOUSES JAIME SEBASTIAN AND EVANGELINE SEBASTIAN, Petitioners,


vs.
BPI FAMILY BANK, INC., CARMELITA ITAPO AND BENJAMIN HAO, Respondents.

DECISION

BERSAMIN, J.:

The protection of Republic Act No. 6552 (Realty Installment Buyer Protection Act) does not cover a
loan extended by the employer to enable its employee to finance the purchase of a house and lot.
The law protects only a buyer acquiring the property by installment, not a borrower whose rights are
governed by the terms of the loan from the employer.

The Case

Under appeal is the decision promulgated on November 21, 2002,  whereby the Court of Appeals
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(CA) affirmed the dismissal of the action for injunction filed by the petitioners against the
respondents to prevent the foreclosure of the mortgage constituted on the house and lot acquired
out of the proceeds of the loan from respondent BPI Family Bank (BPI Family), their employer.

Antecedents

The petitioners are spouses who used to work for BPI Family. At the time material to this case,
Jaime was the Branch Manager of BPI Family’s San Francisco del Monte Branch in Quezon City
and Evangeline was a bank teller at the Blumentritt Branch in Manila. On October 30, 1987, they
availed themselves of a housing loan from BPI Family as one of the benefits extended to its
employees. Their loan amounted to ₱273,000.00, and was covered by a Loan Agreement,  whereby
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they agreed that the loan would be payable in 108 equal monthly amortizations of ₱3,277.57 starting
on January 10, 1988 until December 10, 1996;  and that the monthly amortizations would be
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deducted from his monthly salary.  To secure the payment of the loan, they executed a real estate
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mortgage in favor of BPI Family  over the property situated in Bo. Ibayo, Marilao, Bulacan and
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covered by TCT No. T-30.827 (M) of the Register of Deeds of Bulacan. 6

Apart from the loan agreement and the real estate mortgage, Jaime signed an undated letter-
memorandum addressed to BPI Family,  stating as follows:
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In connection with the loan extended to me by BPI Family Bank, I hereby authorize you to
automatically deduct an amount from my salary or any money due to me to be applied to my loan,
more particularly described as follows:

xxxx
This authority is irrevocable and shall continue to exist until my loan is fully paid. I hereby declare
that I have signed this authority fully aware of the circumstances leading to the loan extended to me
by BPI Family Bank and with full knowledge of the rights, obligations, and liabilities of a borrower
under the law.

I am an employee of BPI Family Bank and I acknowledge that BPI Family Bank has granted to me
the above-mentioned loan in consideration of this relationship. In the event I leave, resign or am
discharged from the service of BPI Family Bank or my employment with BPI Family Bank is
otherwise terminated, I also authorize you to apply any amount due me from BPI Family Bank to the
payment of the outstanding principal amount of the aforesaid loan and the interest accrued thereon
which shall thereupon become entirely due and demandable on the effective date of such discharge,
resignation or termination without need of notice of demand, and to do such other acts as may be
necessary under the circumstances. (Bold emphasis added)

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