Banco Filipino vs Ybanez Full Text and Digests

G.R. No. 148163

December 6, 2004

BANCO FILIPINO SAVINGS AND MORGAG! BAN",  petitioner, vs.

 #$ANIA  #$ANI A B. %BA&!', C(ARL!S B. %BA&!', %BA&!', #OS!P( B. %BA&!' )*+ #!ROM! B. %BA&!', %BA&!',  respondents. FACS On March 7, 1978, respondents obtained a loan secured by a Dee+ o- Re) !/)e Mor)e over Transfer Certicate of Title (TCT fro! petitioner ban". The loan #as used for the construction of a co!!ercial buildin$ in Cebu City. City. On October %&, 1978, respondents obtained an additional loan fro! the petitioner thus increasin$ their obli$ation to one !illion pesos. ' correspondin$ correspondin$ Ame*+me* o- Re) !/)e Mor)e  #as thereafter eecuted. On )ece!ber %*, 198%, the loan #as a$ain re+structured, increasin$ the loan obli$ation to 1,%%&,--- and the eal /state Mort$a$e #as a$ain a!ended. espondents eecuted a Prom//or Noe for the su! of 1,%%&,--payable in fteen years, #ith a stipulated interest of %10 per annu!, and stipulatin$ !onthly pay!ents. espondents total pay!ent fro! 1982 to 1988 a!ounted to 1,*&&,28&.-7, 3o#ever, 4ro! 1989 on#ards, respondents did not pay a sin$le centavo. They aver that 5anco 4ilipino 4ilipino had ceased operations and6or #as not allo#ed to continue business, havin$ been placed under liuidation by the Central 5an". On anuary 1&, 199-, respondents la#yer #rote pecial 'ctin$ :iuidator, enan antos, and reuested that plainti; return the !ort$a$ed property of the respondents since it had su&*8.  The facts of of this case are as follo#sB follo#sB On March 7, 1978, respondents obtained a loan secured by a Dee+ o- Re) !/)e Mor)e over Transfer Certicate of Title (TCT =o. >982> fro! petitioner ban". The loan #as used for the construction of a co!!ercial buildin$ in Cebu City. On October %&, 1978, respondents obtained an additional loan fro! the petitioner thus increasin$ their obli$ation to one !illion pesos. ' correspondin$ Ame*+me* o- Re) !/)e Mor)e  #as thereafter eecuted. On )ece!ber %*, 198%, the loan #as a$ain re+structured, increasin$ the loan obli$ation to 1,%%&,--- and the eal /state Mort$a$e #as a$ain a!ended. espondents eecuted a Prom//or Noe for the su! of 1,%%&,--payable in fteen years, #ith a stipulated interest of %10 per annu!, and stipulatin$ !onthly pay!ents of%%,*%>.  The rst pay!ent pay!ent #as payable on anuary %*, %*, 1982, and and the succeedin$ succeedin$ pay!ents pay!ents #ere due every %* %* thof each 2 !onth thereafter. thereafter.  The note also also stipulated stipulated that in case case of default default in the pay!ent pay!ent of any any of the !onthly !onthly a!ortiLation and interest, respondents shall pay a penalty euivalent to 20 of the a!ount due each !onth. * espondents total pay!ent fro! 1982 to 1988 a!ounted & to 1,*&&,28&.-7, bro"en do#n as follo#sB

1982

%*7,>21.&*

198*

81,797.%*

198&

172,87&.77

198>

%8*,2>*.8%

1987

28-,---.--

1988

%87,71&.7->

4ro! 1989 on#ards, respondents did not pay a sin$le centavo. They aver that 5anco 4ilipino had ceased operations and6or #as not allo#ed to continue business, havin$ been placed under liuidation by the Central 5an". On anuary 1&, 199-, respondents la#yer #rote pecial 'ctin$ :iuidator, enan antos, and reuested that plainti; return the !ort$a$ed property of the respondents since it had su, 1997, the lo#er court rendered a Dec/o*, disposin$ as follo#sB F3//4O/, ?ud$!ent is hereby rendered directin$ defendant 5anco 4ilipino avin$s and Mort$a$e 5an" to render a correct accountin$ of the obli$ations of plainti;s #ith it after eli!inatin$ interest fro! anuary 1, 198& to uly 1, 199* #hen it #as closed, and reducin$ interest fro! %10 to 170 per annu!, at the ti!e it #as in operation, and totally eli!inatin$ @theA surchar$e of 10 per !onth, #ithin a period of fteen (1& days fro! the ti!e the ?ud$!ent shall have beco!e nal and eecutory. lainti;s are directed to pay the ban" #ithin a period of thirty (2- days fro! the ti!e they #ill receive defendant ban"s true and correct accountin$, other#ise the order of in?unction #ill be lifted6dissolved. )efendants are en?oined fro! foreclosin$ the real estate !ort$a$e on the property of plainti;s, unless the latter fail to pay in accordance #ith the @precedin$A para$raph. Fithout special pronounce!ent as to costs. O O)//).1=ot satised #ith the decision, both parties appealed the case to the Court of 'ppeals. etitioner led its Noce oA99e) on 'u$ust 19, 1997, #hile respondents led theirs on 'u$ust %%, 1997. On 'pril 17, %--1, the Court of 'ppeals rendered a Dec/o* a :a#s in force at the ti!e the contract #as !ade $enerally $overn its interpretation and application. The loan a$ree!ent bet#een petitioner and respondents species the obli$ation of the debtor to pay interest. Dn principle said stipulation is bindin$ bet#een the parties. 17 Fe note that at the ti!e the parties entered into the said loan a$ree!ent, the pertinent la#, 'ct =o. %>&&, already provided that the rate of interest for the forbearance of !oney #hen secured by a !ort$a$e upon real estate should not be !ore than 1%0 per annu! or the maximum rate prescribed by the Monetary Board and in force at the time the loan was granted. On )ece!ber 1, 1979, the Monetary 5oard of the Central 5an" of the hilippines 18had issued C5 Circular =o. 7-&+79. 19 On loan transactions #ith !aturities of !ore than 72- days, it ed the e;ective rate of interest at %10 per annu! for both secured and unsecured loans. ince the loan in uestion has ed 1& years for its !aturity, it fell #ithin the covera$e of said C5 Circular. Thus, #e a$ree that the %10 interest is not violative of the sury :a# as it stood at the ti!e of the loan transaction. 's to the !onthly surchar$e, petitioner relies on C5 Circular =o. 9-&+8%. %- The ceilin$ on interest rates prescribed by the sury :a#, accordin$ to petitioner, #ere epressly re!oved. etitioner ar$ues that the said circular had retroactive e;ect since it is !erely procedural in nature. 3ence accordin$ to petitioner, the i!position of 20 !onthly surchar$e by the ban" a$ainst the borro#er is le$al. On this !atter, #e disa$ree #ith petitioner. C5 Circular =o. 9-&+8%, #hich #as e;ective anuary 1, 1982, did not repeal nor in any #ay a!end the sury :a#. The Circular si!ply suspended the e;ectivity of the sury :a#. ' Central 5an" Circular cannot repeal a la#. Only a la# can repeal another la#. Thus, the retroactive application of a C5 Circular cannot, and should not, be presu!ed. %1 The loan #as entered into on )ece!ber %*, 198%, but C5 Circular =o. 9-&+8% #as $iven force and e;ect only on anuary 1, 1982. Thus, C5 Circular =o. 9-&+8% could not be !ade applicable to the loan a$ree!ent in this case, and petitioner could not rely on this Circular for its i!position of 20 !onthly surchar$e. etitioner also ar$ues that the 20 !onthly surchar$e parta"es of the nature of a penalty clause. %% ' penal clause is an accessory underta"in$ to assu!e $reater liability in case of breach and is attached to an obli$ation in order to secure its perfor!ance. %2 The penalty shall substitute the inde!nity for da!a$es and the pay!ent of interests in case of non+co!pliance.%* 5ut if such stipulation is found contrary to la# for bein$ usurious, it can be nullied by the courts #ithout a;ectin$ the principal obli$ation. %& Dn the loan a$ree!ent bet#een the parties in this case, the total interest and other charges eceed the prescribed %10 ceilin$. 3ence, the i!position of the 20 !onthly surchar$e, as the penal clause to the obli$ation, violated the li!it i!posed by the sury :a#. aid surchar$e of 20 !onthly !ust be declared null and void.

 To recapitulateB the respondents principal obli$ation to pay the !onthly a!ortiLation of %%,*%>, validly subsists. Only the 20 !onthly surchar$e is void. The !onthly a!ortiLation of %%,*%>, for 1& years, #ould a!ount to*,-2>,>8-. To date, respondents already paid the a!ount of 1,*&&,28&.-7. Thus, only the outstandin$ balance of %,&81,%9*.92 re!ains due. espondents #ere $iven by the TC 2- days fro! receipt of decision, #ithin #hich to pay their outstandin$ obli$ation. Fe no# reiterate that period of 2- days, fro! receipt of this )ecision, for respondents to pay the a!ount of %,&81,%9*.92 to the ban" as full pay!ent of the outstandin$ balance on their loan obli$ation. Other#ise, the order of in?unction restrainin$ petitioner fro! foreclosin$ the property shall be lifted.

7(!R!FOR! , the )ecision of the e$ional Trial Court, #hich #as sustained by the Court of 'ppeals, is hereby MO)D4D/) as follo#sB (1 the interest rate at %10 per annu! is hereby declared G':D)K (% the 20 !onthly surchar$e is =::D4D/) for bein$ violative of the sury :a# at the ti!eK and (2 respondents are O)//) to pay petitioner the a!ount of %,&81,%9*.92 #ithin 2- days fro! receipt of this )ecision. =o pronounce!ent as to costs.

SO ORD!R!D.

:ia! :a# v. Oly!pic a#!ill Co., 1%9 C' *29 (198* Case )i$est Obli$ations and ContractsB surious Transactions N 'rticle 117& 4actsB On or about epte!ber 7, 19&7, the petitioner loaned 1-,---.--, #ithout interest, to the respondent. The loan beca!e ulti!ately due on anuary 21, 19>- but #as not paid. The petitioner as"ed for a 2+!onth etension, or up to 'pril 2-, 19>-. On March 17, 19>-, the parties eecuted another loan docu!ent for the pay!ent of 1-, ---.-etended up to 'pril 2-, 19>- but the obli$ation #as increased by >,---.-- to ans#er for the attorneys fees, le$al interest, and other cost incident thereto. The petitioner a$ain failed to pay their obli$ation by 'pril 2-, 19>-. On epte!ber %2, 19&7, the respondent instituted a collection case. The petitioner ad!itted the 1-, ---.-- principal obli$ation but clai!ed that the additional >, ---.-- constituted usurious interest.

DssueB Fhether or not the additional >, ---.-- constituted usurious interest.

3eldB =o. sury has been le$ally non+eistent. Dnterest can no# be char$ed as lender and borro#er !ay a$ree upon. Dn the present case, the petitioner had not proven that the >, ---.-- additional obli$ation #as ille$al.

M!L!NCIO:(!RR!RA,  J.:  This is an appeal by defendants fro! a )ecision rendered by the then Court of 4irst Dnstance of 5ulacan. The appeal #as ori$inally ta"en to the then Court of 'ppeals, #hich endorsed it to this instance statin$ that the issue involved #as one of la#. Dt appears that on or about epte!ber 7, 19&7, plainti; loaned 1-,---.--, #ithout interest, to defendant partnership and defendant /lino :ee Chi, as the !ana$in$ partner. The loan beca!e ulti!ately due on anuary 21, 19>-, but #as not paid on that date, #ith the debtors as"in$ for an etension of three !onths, or up to 'pril 2-, 19>-. On March 17, 19>-, the parties eecuted another loan docu!ent. ay!ent of the 1-,---.-- #as etended to 'pril 2-, 19>-, but the obli$ation #as increased by >,---.-- as follo#sB  That the su! of D T3O'=) /O (>,---.--, hilippine currency shall for! part of the principal obli$ation to ans#er for attorneys fees, le$al interest, and other cost incident thereto to be paid unto the creditor and his successors in interest upon the ter!ination of this a$ree!ent. )efendants a$ain failed to pay their obli$ation by 'pril 2-, 19>- and, on epte!ber %2, 19>-, plainti; instituted this collection case. )efendants ad!itted the 1-,---.-- principal obli$ation, but clai!ed that the additional >,---.-- constituted usurious interest. pon application of plainti;, the Trial Court issued, on the sa!e date of epte!ber %2, 19>-, a #rit of 'ttach!ent on real and personal properties of defendants located at Iaran$lan, =ueva /ci?a. 'fter the Frit of 'ttach!ent #as i!ple!ented, proceedin$s before the Trial Court versed principally in re$ards to the attach!ent. On anuary 18, 19>1, an Order #as issued by the Trial Court statin$ that P after considering the manifestation of both counsel in Chambers, the Court hereby allo#s both parties to si!ultaneously sub!it a Motion for u!!ary  ud$!ent. 1 The plainti; led his Motion for u!!ary ud$!ent on anuary 21, 19>1, #hile defendants led theirs on 4ebruary %, 19>l. 2 On une %>, 19>1, the Trial Court rendered decision orderin$ defendants to pay plainti; Pthe a!ount of 1-,---.-plus the further su! of >,---.-- by #ay of liuidated da!a$es . . . #ith le$al rate of interest on both a!ounts fro! 'pril 2-, 19>-.P Dt is fro! this ?ud$!ent that defendants have appealed. Fe have decided to a,---.-- constituted usurious interest. They insist the clai! of usury should have been dee!ed ad!itted by plainti; as it #as Pnot denied specically and under oathP. 3 ection 9 of the sury :a# ('ct %>&& providedB /C. 9. he person or corporation sued  shall le its ans#er in #ritin$ under oath to any co!plaint brou$ht or led a$ainst said person or corporation before a co!petent court to recover the !oney or other personal or real property, seeds or a$ricultural products, char$ed or received in violation of the provisions of this 'ct. The lac" of ta"in$ an oath to an ans#er to a co!plaint #ill !ean the ad!ission of the facts contained in the latter.  The fore$oin$ provision envisa$es a co!plaint led a$ainst an entity #hich has co!!itted usury, for the recovery of the usurious interest paid. Dn that case, if the entity sued shall not le its ans#er under oath denyin$ the alle$ation of usury, the defendant shall be dee!ed to have ad!itted the usury. The provision does not apply to a case, as in the present, #here it is the defendant, not the plainti;, #ho is alle$in$ usury. Moreover, for so!eti!e no#, usury has been le$ally non+eistent. Dnterest can no# be char$ed as lender and borro#er !ay a$ree upon. 4 The ules of Court in re$ards to alle$ations of usury, procedural in nature, should be considered repealed #ith retroactive e;ect. tatutes re$ulatin$ the procedure of the courts #ill be construed as applicable to actions pendin$ and undeter!ined at the ti!e of their passa$e. rocedural la#s are retrospective in that sense and to that etent. ; ... ection %*(d, epublic 'ct =o. 87>, "no#n as the 'rbitration :a#, #hich too" e;ect on 19 )ece!ber 19&2, and !ay be retroactively applied to the case at bar because it is procedural in nature. ... 6 F3//4O/, the appealed ?ud$!ent is hereby a