G.R. No.

158262, July 21, 2008

SPS. PEDRO AND FLORENCIA VIOLAGO, PETITIONERS, VS. BA FINANCE
CORPORATION AND AVELINO VIOLAGO, RESPONDENTS.
VELASCO JR., J.

FACTS:
So!"#! #$ 1%8&,
1%8 &, A'!l#$o
A'!l#$o V#ol()o, P*!+#!$" o- V#ol()o o"o* S(l!+ Co*/o*("#o$ VSC,
o--!*! "o +!ll ( (* "o "3! /!"#o$!*+. A'!l#$o
A'!l#$o !4/l(#$! "3(" 3! $!!! "o +!ll ( '!3#l! "o #$*!(+!
"3! +(l!+ uo"( o- VSC, ($ "3(" "3! +/ou+!+ oul 7u+" 3('! "o /(y ( o$ /(y!$" o- P3P
60,500 3#l! "3! (l($! oul ! -#$($! y  y *!+/o$!$" BA F#$($!. T3! +/ou+!+ oul /(y
"3! o$"3ly #$+"(ll!$"+ "o BA F#$($!. 9$!* "3!+! "!*+, "3! +/ou+!+ "3!$ ()*!! "o /u*3(+!
( Toyo"(
Toyo"( C*!++#( o!l 1%8&1%8 & -*o VSC. O$ Au)u+" , 1%8&, "3! +/ou+!+ ($ A'!l#$o
A'!l#$o +#)$!
( /*o#++o*y $o"! u$!* 3#3 "3!y ou$o u$ "3!+!l'!+ "o /(y 7o#$"ly ($ +!'!*(lly "o "3! o*!* o- 
VSC "3! (ou$" o- P3P 20%,601 #$ &6 o$"3ly #$+"(ll!$"+ o- P3P 5,822.25 ( o$"3, "3! -#*+"
#$+"(ll!$" "o ! u! ($ /(y(l!
/( y(l! o$ S!/"!!* 16, 1%8&.
1%8& . VSC "3!$ #++u! ( +(l!+ #$'o#! #$
-('o* o- "3! +/ou+!+ #"3 ( !"(#l! !+*#/"#o$ o- "3! Toyo"( C*!++#( (*. I$ "u*$, "3! +/ou+!+
!4!u"! ( 3(""!l o*")()! o'!* "3! (* #$ -('o* o- VSC (+ +!u*#"y -o* "3! (ou$" o- P3P
20%,601. VSC, "3*ou)3 A'!l#$o,
A'!l#$o, !$o*+! "3! /*o#++o*y $o"! "o BA F#$($! #"3ou"
*!ou*+!. A-"!* *!!#'#$) "3! (ou$" o- P3P P 3P 20%,601, VSC !4!u"! ( D!! o- A++#)$!$" o-
#"+ *#)3"+ ($ #$"!*!+"+ u$!* "3! /*o#++o*y $o"! ($ 3(""!l o*")()! #$ -('o* o- BA F#$($!.
!($3#l!, "3! +/ou+!+ *!#""! "3! (ou$" o- P3P P 3P 60,500 "o VSC "3*ou)3 A'!l#$o.
A'!l#$o.

T3! +(l!+ #$'o#! (+ -#l! #"3 "3! L($ T*($+/o*"("#o$ O--#! LT
LTO;B(l#() B*($3, 3#3
#++u! C!*"#-#("! o- R!)#+"*("#o$ No. 01&<0&2 #$ "3! $(! o- P!*o o$ Au)u+" 8, 1%8&. T3!
+/ou+!+ !*! u$((*! "3(" "3! +(! (* 3( (l*!(y !!$ +ol #$ 1%82 "o E+!*(lo V#ol()o,
V#ol()o,
($o"3!* ou+#$ o- A'!l#$o,
A'!l#$o, ($ *!)#+"!*! #$ E+!*(lo=+ $(! y
 y "3! LTO;S($
LTO;S($ R(-(!l B*($3.
D!+/#"! "3! +/ou+!+= !($ -o* "3! (* ($ A'!l#$o=+ *!/!("! (++u*($!+, "3!*! (+ $o !l#'!*y
o- "3! '!3#l!. S#$! VSC -(#l! "o !l#'!* "3! (*, P!*o # $o" /(y ($y o$"3ly (o*"#>("#o$
"o BA F#$($!. O$ (*3 1, 1%8, BA F#$($! -#l! #"3 "3! RTC ( o/l(#$" -o* R!/l!'#$ #"3
D(()!+ ()(#$+" "3! +/ou+!+. T3! RTC *!$!*! ( !#+#o$ #$ -('o* o- BA F#$($!. P!"#"#o$!*+;
+/ou+!+ ($ A'!l#$o
A'!l#$o (//!(l! "o "3! CA. T3! (//!ll("! ou*" *ul! "3(" "3! /*o#++o*y $o"! (+
( $!)o"#(l! #$+"*u!$" ($ "3(" BA F#$($! (+ ( 3ol!* #$ u! ou*+!, (//ly#$) S!+. 8, 2,
($ 52 o- "3! NIL.

ISS9E:
?3!"3!* o* $o" "3! 3ol!* o- ($ #$'(l# $!)o"#(l! /*o#++o*y $o"! (y ! o$+#!*! ( 3ol!*
#$ u! ou*+!

@ELD:
T3! /*o#++o*y $o"! #+ l!(*ly $!)o"#(l!. T3! /*o#++o*y $o"! l!(*ly +("#+-#!+ "3! *!u#*!!$"+
o- ( $!)o"#(l! #$+"*u!$" u$!* "3! NIL. I" #+ #$ *#"#$) +#)$! y "3! V#ol()o +/ou+!+ 3(+ ($
u$o$#"#o$(l /*o#+! "o /(y ( !*"(#$ (ou$",
( ou$", #.!., P3P 20%,601, o$ +/!#-# ("!+ #$ "3! -u"u*!
3#3 oul ! !"!*#$! -*o "3! "!*+ o- "3! $o"! (! /(y(l! "o "3! o*!* o- VSC ($
$(!+ "3! *(!!+ #"3 !*"(#$"y. T3!
T3! #$o*+!!$" y VSC "o BA F#$($! (//!(*+ l#!#+! "o
 ! '(l# ($ *!)ul(*. T3!
T3! l( /*!+u!+ "3(" ( 3ol!* o- ( $!)o"#(l! #$+"*u!$" #+ ( 3ol!*
"3!*!o- #$ u! ou*+!. I$ "3#+ (+!, "3! CA #+ o**!" #$ -#$#$) "3(" BA F#$($! !!"+ (ll "3!
 -o*!)o#$) *!u#+#"!+: ( "3! P*o#++o*y No"! #+ o/l!"! ($ *!)ul(*  "3! P*o#++o*y No"!
(+ !$o*+! y "3! VSC #$ -('o* o- "3! BA FINANCE BA FINANCE, 3!$ #" (!/"!
"3! No"!, ("! #$ )oo -(#"3 ($ -o* '(lu!  BA FINANCE (+ $!'!* #$-o*!, !-o*! ($ ("
"3! "#! "3! P*o#++o*y No"! (+ !$o*+! "o "3! BA FINANCE, "3(" "3! '!3#l! +ol "o "3!
 /!"#"#o$!* +/ou+!+ (+ $o" !l#'!*! "o "3! l(""!* ($ "3(" VSC 3( (l*!(y /*!'#ou+ly +ol "3!
'!3#l! "o E+!*(lo V#ol()o. Al"3ou)3 Jo+! Ol'#o o*")()! "3! '!3#l! "o G!$!*o+o Lo/!>,
3o (++#)$! 3#+ *#)3"+ "o "3! BA F#$($!, "3! +(! ou**! o$ly o$ (y 8, 1%8<, u3 l("!*
"3($ Au)u+" , 1%8&, 3!$ VSC (++#)$! #"+ *#)3"+ o'!* "3! C3(""!l o*")()! y "3!
D!-!$($"+;A//!ll($"+ "o "3! BA FINANCE. @!$!, BA FINANCE (+ ( 3ol!* #$ u! ou*+!.
S#$! BA F#$($! #+ ( 3ol!* #$ u! ou*+!, /!"#"#o$!*+ ($$o" *(#+! "3! !-!$+! o- $o$;!l#'!*y
o- "3! o7!" ($ $ull#"y o- "3! +(l! ()(#$+" "3! o*/o*("#o$. T3! NIL o$+#!*+ !'!*y $!)o"#(l!
#$+"*u!$" /*#( -(#! "o 3('! !!$ #++u! -o* ( '(lu(l! o$+#!*("#o$.

?@EREFORE, "3! CA=+ Au)u+" 20, 2002 D!#+#o$ ($ (y 15, 200& R!+olu"#o$ #$ CA;G.R.
CV No. 88% (*! SET ASIDE #$+o-(* (+ "3!y #+#++! #"3ou" /*!7u#! "3! "3#* /(*"y
o/l(#$" o- /!"#"#o$!*+;+/ou+!+ P!*o ($ Flo*!$#( V#ol()o ()(#$+" *!+/o$!$" A'!l#$o
V#ol()o. T3! (*3 5, 1%% D!#+#o$ o- "3! RTC #+ REINSTATED ($ AFFIRED. Co+"+
()(#$+" A'!l#$o V#ol()o.