This case has been cited 1 times or more.
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2009-09-11 |
CHICO-NAZARIO, J. |
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| On the application of the advance payment of P289,480.00 to the obligation, the Court affirms the ruling of the Court of Appeals that Article 1252[37] of the Civil Code controls. Therefore, the spouses Dy may properly apply said advance payment against their outstanding obligation following the new schedule of payments. Additionally, in contracts involving installment payments with interest chargeable against the remaining balance of the obligation, the creditor is duty-bound to inform the debtor of the amount of interest that falls due, and that he is applying the installment payments to cover said interest. Without notifying the debtor, the creditor cannot apply the payments to the interest and then later on hold the debtor in default for nonpayment of installments on the principal.[38] In this case, as found by the appellate court, Orix Metro clearly failed to provide the spouses Dy a detailed accounting of the remaining principal obligation, interest, and payments already made.[39] The spouses Dy had all the right to apply the advance payment to the amount due in the new schedule of payments. | |||||