First Fil-Sin Lending Corp. v. Padillo

DLSU Commercial Law Review Digest G02 (2015-2016) 02 FIRST FIL-SIN LENDING CORPORATION,  petitioner,  petitioner, vs. GLORIA D. PADILLO, respondent. G.R. No. 160533 January 12, 2005 To!"# Interpretation of a contract or agreement Pon$n%$# &NARES-SA Pon$n%$# &NARES-SANTIAGO, NTIAGO, J. J. DOCTRINE# When the terms of the agreement are clear and explicit that they do not justify an attempt to read into it any alleged intention of the parties, the terms are to be understood literally just as they appear on the face of the contract. (Note this doctrine was cited in the 1 st case: Gaisano Cagayan, Inc. vs. Insurance Company  of North America America 

 !s between between two parties parties to a written agreement, agreement, the the party who ga"e rise to the mista#e or error error in the pro"isions of the same is estopped from asserting a contrary intention to that contained therein.  '''''''''''''  '''''''''''''''''''' ''''''''''''' ''''''''''''' '''''''''''''' '''''''''''''' ''''''''''''' ''''''''''''' '''''''''''''' ''''''''''''' ''''''''''''' ''''''''  '   '''''''  FACTS# $espondent %loria &. 'adillo obtained a ')),))).)) loan from petitioner *irst *il+in -ending orp. $espond $espondent ent obtained obtained another another ')),)) ')),))).)) ).)) loan from petition petitioner. er. In both both instance instances, s, responde respondent nt executed a promissory note and disclosure statement. *or the first loan, respondent made 1/ monthly interest payments of '00,)).)) each before she settled the ')),))).)) outstanding principal obligation. !s regards the second loan, respondent made made 11 monthl monthly y inter interest est paymen payments ts of '0,) '0,))) )).) .)) ) each each befo before re paying paying the the princi principa pall loan loan of  ')),))).)). In sum, respondent paid a total of '20,)).)) for the first loan and ',))).)) for the second loan. $espondent 'adillo then filed an action for sum of money against herein petitioner before the $3 alleging that she only agreed to pay interest at the rates of 4.5 and 5 per annum, respecti"ely, respecti"ely, for  the two loans, loans, and not 4.5 4.5 and 5 per month. $esponde $espondent nt sought to reco"er reco"er the amounts amounts she allegedly paid in excess of her actual obligations. 3he $3 dismissed respondent6s complaint and ordered her to pay petitioner '/11,10.)) with legal interest. 7n appeal, the ! re"ersed and set aside the decision of the $3 and ruled that, based on the disclosure statements executed by respondent, the interest rates should be imposed on a monthly basis but only for the /+month term of the loan. 3hereafter, the legal interest rate will apply. 8ence, the instant petition. 'etitioner maintains that the interest rates are to be imposed on a monthly and not on a per annum basis and the monthly interest shall be imposed until the outstanding obligations obligations ha"e been fully paid. 7n the other hand, respondent a"ers that the interest on the loans is per annum as expressly stated in the promissory notes and disclosure statements. 3he pro"ision as to annual interest rate is clear and re9uires no room for interpretation. $espondent asserts that any ambiguity in the promissory notes and disclosure statements should not fa"or petitioner since the loan documents were prepared by the latter. ISS(E# Whether the interest on the loans is per annum, and not monthly, as expressly stated in the promissory notes and disclosure statements  ;. 

R(LING# We agree with respondent. 'erusal of the promissory notes and the disclosure statements pertinent to the loan obligations of respondent clearly and unambiguously pro"ide for interest rates of

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 DLSU Commercial Law Review Digest G02 (2015-2016) 4.5 per annum and 5 per annum, respecti"ely. Nowhere was it stated that the interest rates shall be applied on a monthly basis. 3hus, when the terms of the agreement are clear and explicit that they do not justify an attempt to read into it any alleged intention of the parties, the terms are to be understood literally just as they appear  on the face of the contract. It is only in instances when the language of a contract is ambiguous or  obscure that courts ought to apply certain established rules of construction in order to ascertain the supposed intent of the parties. 8owe"er, these rules will not be used to ma#e a new contract for the parties or to rewrite the old one, e"en if the contract is ine9uitable or harsh. 3hey are applied by the court merely to resol"e doubts and ambiguities within the framewor# of the agreement. 3he lower court and the ! mistoo# the -oan 3ransactions ummary for the &isclosure tatement. 3he former was prepared exclusi"ely by petitioner and merely summari