FACTS:

Respondent Rosalinda Palces purchased a Hyundai Starex GRX Jumbo through a loan granted by petitioner Equitable Savings Bank (now BDO Unibank, Inc.). Respondent executed a promissory note with chattel mortgage stating that she will pay the loan in 36 monthly installments of P33,225.00 per month. Respondent defaulted on her installments for January and February 2007, prompting petitioner to send a demand letter and subsequently file a complaint for recovery of possession with replevin with alternative prayer for sum of money and damages. In defense, respondent claimed that she made two payments totaling P103,000.00 to update her installment payments. The Regional Trial Court (RTC) ruled in favor of petitioner, confirming its right and possession over the subject vehicle. The RTC found that although respondent made actual payments, such were late and irregular and not enough to fully pay her outstanding obligation. The Court of Appeals (CA) affirmed the RTC ruling but ordered petitioner to return the amount of P103,000.00 to respondent, holding that petitioner waived its right to recover any unpaid installments by choosing to recover the subject vehicle via replevin. Petitioner's motion for partial reconsideration was denied. Hence, this petition.

ISSUES:

1. Whether the Court of Appeals correctly ordered petitioner to return to respondent the amount of P103,000.00 representing the latter's late installment payments.

2. Whether the Court of Appeals correctly deleted the award of attorney's fees in favor of petitioner.

RULING:

1. Yes, the Court of Appeals correctly ordered petitioner to return to respondent the amount of P103,000.00 representing the latter's late installment payments. The Court of Appeals held that petitioner should not have accepted respondent's late partial payments as it already waived its right to recover any unpaid installments by choosing to recover the subject vehicle via a writ of replevin. Pursuant to Article 1484 of the Civil Code, the Court of Appeals concluded that respondent is entitled to the recovery of the late installment payments.

2. Yes, the Court of Appeals correctly deleted the award of attorney's fees in favor of petitioner. The Court of Appeals found that there was lack of sufficient basis for the award of attorney's fees in favor of petitioner.

PRINCIPLES:

• A creditor who chooses to recover a property through a writ of replevin waives its right to recover any unpaid installments pursuant to Article 1484 of the Civil Code.

• The award of attorney's fees must be based on, among others, the degree of success of the party claiming attorney's fees and the nature of the case.