HSBC v.

Spouses Broqueza

FACTS:

 Petitioners Gerong and [Editha] Broqueza (defendants below) are employees

of Hongkong and Shanghai Banking Corporation (HSBC) and members of the
HSBC Staff Retirement Plan. The HSBC-SRP is a retirement plan established
by HSBC through its Board of Trustees for the benefit of their employees.
 On October 1, 1990, petitioner [Editha] Broqueza obtained a car loan in the
amount of Php175,000.00 and applied for another loan (appliance loan) again
on Dec. 12, 1991 with the amount of P24,000. On the other hand, Gerong
applied and was granted of an emergency loan of P35,780 on June 2, 1993.
These loans were paid through automatic salary deduction.
 In 1993, a labor dispute arose between HSBC and its employees which
resulted to the termination of majority of its employees, including spouses
Gerong and Editha Broqueza. The employees then filed an illegal dismissal
case before the NLRC against HSBC, the legality or illegality of which is still
pending before the Apellate Court.
 The spouses Broqueza were not able to pay the monthly amortizations of
their loans and their accounts were considered by HSBC-SRP as delinquents.
Demands to pay were made by the HSBC but the Spouses Broqueza failed to
pay.
 Metropolitan Trial Court: HSBC filed civil suits for recovery and collection of
sums of money.
a. Held that nature of HSBCL-SRP's demands for payment is civil and
has no connection to the ongoing labor dispute. Moreover, Gerong
and Editha’s termination from employment resulted in the loss of
their continued benefits under their retirement plan hence, the loans
secured by their future retirement benefits are reduced to
unsecured and pure civil obligations. Simply put, the loans are
immediately demandable.
b. Ruled in favor of HSBC and ordered the Broquezas to pay the
amount of P116,740 at 6% per annum from the filing of the cases
until amount is fully paid. P20,000 attorney’s fees and cost of suit.
 RTC: Spoused Broqueza elevated the case in RTC. Affirmed the ruling of
MeTC.
a. Ruled that Gerong and Editha Broqueza's termination from
employment disqualified them from availing of benefits under their
retirement plans which means that there is no longer security for the
loans.
b. HSBC-SRP has the legal right to demand immediate settlement of
the unpaid balance because of the spouses’ default in payment and
failure to provide new security for their loans.
 c. Additionally, the absence of a period within which to pay the loan
allows HSBC-SRP to demand immediate payment as the loans are
considered pure obligations, its fulfillment are demandable at
once.

Court of Appeals: Reversed the ruling of the RTC

a. Held that the recovery of sum of money against Gerong and the
spouses Broqueza are premature as the loan obligations have
not yet matured hence, no cause of action accrued in favor of
HSBC-SRP.
***HSBC withdrew the petition against Gerong because the latter has settled his
obligations. The Court granted the motion, and considered the case against
Gerong closed and terminated.

ISSUE:

I. The Court of Appeals has decided a question of substance in a way not in accord
with law and applicable decisions of this Honorable Court; and

II. The Court of Appeals has departed from the accepted and usual course of judicial
proceedings in reversing the decision of the Regional Trial Court and the
Metropolitan Trial Court.

RATIO: SC affirmed and agree with the rulings of the MeTC and RTC

SC’s Contention:

 Applied the 1st par. of Art. 1179 of the Civil Code, “Every obligation whose
performance does not depend upon a future or uncertain event, or upon a past event
unknown to the parties, is demandable at once.” SC affirmed the findings of the MeTC
and RTC that there is no date of payment indicated in the promissory notes. The RTC is
correct in ruling that since the Promissory Notes do not contain a period, HSBCL-SRP
has the right to demand immediate payment. Article 1179 of the Civil Code applies.
 Spouses Broqueza’s obligation to pay HSBC-SRP is a pure obligation which means
that once they defaulter in their monthly payment; the HSBC-SRP can make a demand to
enforce a pure obligation.
 Contention of the Spouses Broqueza: Editha religiously paid her loan amortizations
which were collected by HSBC through payroll check-off, a definite amount is paid to
HSBC on a specific date as she authorized HSBC to make deductions from her payroll
until her loans are fully paid. Due to her dismissal, Editha defaulted in her monthly
payment and despite the spouses’ protestations the payroll deduction is merely a
convenient mode of payment and not the sole source of payment for the loans. ***
 HSBCL-SRP never agree that the loans will be paid only through salary deductions.
Neither did HSBCL-SRP agree that if Editha Broqueza ceases to be an employee of
HSBC, her obligation to pay the loans will be suspended.
 HSBC can immediately demand payment based on the following grounds:
a. Obligation to pay has no period
b. The spouses Broqueza already incurred default in paying the monthly
installments.
 SC averred that the enforcement of a loan agreement involves "debtor-creditor relations
founded on contract and does not in any way concern employee relations. As such it
should be enforced through a separate civil action in the regular courts and not before the
Labor Arbiter."