The respondents obtained a loan from the petitioner to purchase a motor vehicle (car). The respondents defaulted in payment of installments. A civil case was filed by the petitioner which resulted later into negotiations in lowering the remaining unpaid balance from P184,000.00 to P150,000.00, detaining the car until payment thereof. Respondent delivered a manager’s check but petitioner insisted on the signing of “Joint Motion to Dismiss”, still holding the motor vehicle. Respondent initiated civil action for damages before MTC but the case was dismissed for lack of merit. On appeal to RTC, the decision of MTC was reversed ordering herein petitioners to indemnify the respondents. The Court of Appeals likewise affirmed the decision of the RTC.
Whether or not the respondents are entitled of indemnification for damages.
NO. Petitioner’s act of requiring respondents to sign the Joint Motion to Dismiss can not be said to be a deliberate attempt on the part of petitioner to renege on the compromise agreement of the parties. The law presumes good faith. In fact, the act of petitioner bank in lowering the debt of respondent from P184,000.00 to P150,000.00 is indicative of its good faith and sincere desire to settle the case.
The decision of the Court of Appeals affirming the decision of the RTC was set aside. Respondents were ordered to pay the original obligation amounting to P150,000.00 to the petitioner upon surrender or cancellation of the manager’s check in the latter’s possession, afterwhich, petitioner is to return the subject motor vehicle in good working condition.