SECOND DIVISION
G.R. No. 158622, January 27, 2016
SPOUSES ROBERT ALAN L. AND NANCY LEE LIMSO, Petitioners, v. PHILIPPINE NATIONAL BANK AND THE REGISTER OF DEEDS OF DAVAO CITY, Respondents.
G.R. NO. 169441
DAVAO SUNRISE INVESTMENT AND DEVELOPMENT CORPORATION AND SPOUSES ROBERT ALAN AND NANCY LIMSO, Petitioners, v. HON. JESUS V. QUITAIN, IN HIS CAPACITY AS PRESIDING JUDGE OF REGIONAL TRIAL COURT, DAVAO CITY, BRANCH 15 AND PHILIPPINE NATIONAL BANK, Respondents.
G.R. NO. 172958
DAVAO SUNRISE INVESTMENT AND DEVELOPMENT CORPORATION REPRESENTED BY ITS PRESIDENT ROBERT ALAN L. LIMSO, AND SPOUSES ROBERT ALAN AND NANCY LEE LIMSO, Petitioners, v. HON. JESUS V. QUITAIN, IN HIS CAPACITY AS PRESIDING JUDGE OF REGIONAL TRIAL COURT, DAVAO CITY, BRANCH 15 AND PHILIPPINE NATIONAL BANK, Respondents.
G.R. NO. 173194
PHILIPPINE NATIONAL BANK, Petitioner, v. DAVAO SUNRISE INVESTMENT AND DEVELOPMENT CORPORATION AND SPOUSES ROBERT ALAN LIMSO AND NANCY LEE LIMSO, Respondents.
G.R. NO. 196958
PHILIPPINE NATIONAL BANK, Petitioner, v. DAVAO SUNRISE INVESTMENT AND DEVELOPMENT CORPORATION AND SPOUSES ROBERT ALAN L. LIMSO AND NANCY LEE LIMSO, Respondent.
G.R. NO. 197120
DAVAO SUNRISE INVESTMENT AND DEVELOPMENT CORPORATION AND SPOUSES ROBERT ALAN AND NANCY LEE LIMSO, Petitioners, v. PHILIPPINE NATIONAL BANK, Respondent.
G.R. NO. 205463
IN THE MATTER OF THE PETITION EX-PARTE FOR THE ISSUANCE OF THE WRIT OF POSSESSION UNDER LRC RECORD NO. 12973, 18031 AND LRC RECORD NO. 317, PHILIPPINE NATIONAL BANK,
D E C I S I O N
LEONEN, J.:
There is no mutuality of contract when the interest rate in a loan agreement is set at the sole discretion of one party. Nor is there any mutuality when there is no reasonable means by which the other party can determine the applicable interest rate. These types of interest rates stipulated in the loan agreement are null and void. However, the nullity of the stipulated interest rate does not automatically nullify the provision requiring payment of interest. Certainly, it does not nullify the obligation to pay the principal loan obligation.
These consolidated cases arose from three related actions filed before the trial courts of Davao City.
In 1993, Spouses Robert Alan L. Limso and Nancy Lee Limso (Spouses Limso)1 and Davao Sunrise Investment and Development Corporation (Davao Sunrise) took out a loan secured by real estate mortgages from Philippine National Bank.2
The loan was in the total amount of P700 million, divided into two (2) kinds of loan accommodations: a revolving credit line of P300 million, and a seven-year long-term loan of P400 million.3
To secure the loan, real estate mortgages were constituted on four (4) parcels of land registered with the Registry of Deeds of Davao City.4 The parcels of land covered by TCT Nos. T-147820, T-151138, and T-147821 were registered in the name of Davao Sunrise, while the parcel of land covered by TCT No. T-140122 was registered in the name of Spouses Limso.5
In 1995, Spouses Limso sold the parcel of land covered by TCT No. T-140122 to Davao Sunrise.6
Spouses Limso and Davao Sunrise had difficulty in paying their loan. In 1999, they requested that their loan be restructured. After negotiations, Spouses Limso, Davao Sunrise, and Philippine National Bank executed a Conversion, Restructuring and Extension Agreement.7
The principal obligation in the restructured agreement totalled P1.067 billion. This included P217.15 million unpaid interest.8
The restructured loan was divided into two (2) parts. Loan I was for the principal amount of P5 83.18 million, while Loan II was for the principal amount of P483.78 million.9 The restructured loan was secured by the same real estate mortgage over four (4) parcels of land in the original loan agreement. All the properties were registered in the name of Davao Sunrise.10
The terms of the restructured loan agreement state:
SECTION 1. TERMS OF THE CONVERSION,
RESTRUCTURING AND EXTENSION
1.01 The Conversion/Restructuring/Extension. Upon compliance by the Borrowers with the conditions precedent provided herein, the Obligations shall be converted, restructured and/or its term extended effective January 1, 1999 (the "Effectivity Date") in the form of term loans (the "Loans") as follows:
chanRoblesvirtualLawlibrary(a) The Credit Line portion of the Obligations is hereby converted and restructured into a Seven-Year Long Term Loan (the "Loan I") in the principal amount of P583.18 Million;
(b) The original term of the Loan is hereby extended for another four (4) years (from September 1, 2001 to December 31, 2005), and interest portion of the Obligations (including the interest accruing on the Credit Line and Loan up to December 31, 1998 estimated at P49.83 Million) are hereby capitalized. Accordingly, both the Loan and Interest portions of the Obligations are hereby consolidated into a Term Loan (the "Loan II") in the aggregate principal amount of P483.78 Million;SECTION 2. TERMS OF LOAN I
2.01 Amount of Loan I. Loan I shall be in the principal amount not exceeding PESOS: FIVE HUNDRED EIGHTY THREE MILLION ONE HUNDRED EIGHTY THOUSAND (P583,180,000.00).
2.02 Promissory Note. Loan I shall be evidenced by a promissory note (the "Note I") to be issued by the Borrowers in favor of the Bank in form and substance satisfactory to the Bank.
2.03 Principal Repayment. The Borrowers agree to repay Loan I within a period of seven (7) years (inclusive of a one (1) year grace period) in monthly amortizations with the first amortization to commence on January 2000 and a balloon payment on or before the end of the 7th year on December 2005.
2.04 Interest, (a) The Borrowers agree to pay the Bank interest on Loan I from the Effective Date, until the date of full payment thereof at the rate per annum to be set by the Bank. The interest rate shall be reset by the Bank every month.
(b) The interest provided in clause (a) above shall be payable monthly in arrears to commence on January, 1999.SECTION 3. TERMS OF LOAN II
3.01 Amount of Loan II. Loan II shall be in the principal amount not exceeding PESOS: FOUR HUNDRED EIGHTY THREE MILLION SEVEN HUNDRED EIGHTY THOUSAND (P483,780,00.00).
3.02 Promissory Note. Loan II shall be evidenced by a promissory note (the "Note II") to be issued by the Borrowers in favor of the Bank in form and substance satisfactory to the Bank.
3.03 Principal Repayment. The Borrowers agree to repay Loan II within a period of seven (7) years (inclusive of a one (1) year grace period) in monthly amortizations with the first amortization to commence on January 2000 and a balloon payment on or before December 2005.
3.04 Interest, (a) The Borrowers agree to pay the Bank interest on Loan II from the Effective Date, until the date of full payment thereof at the rate per annum to be set by the Bank. The interest rate shall be reset by the Bank every month.
(b) The interest provided in clause (a) above shall be payable monthly in arrears to commence on January 1999.11 (Emphasis provided)
WHEREAS, the Borrowers acknowledge that they have outstanding obligations (the "Obligations") with the Bank broken down as follows:(i) Credit Line - P583.18 Million (as of September 30, 1998);
(ii) Loan - P266.67 Million (as of September 30, 1998); and
(iii) Interest - P217.15 Million (as of December 31, 1998)[.]13ChanRoblesVirtualawlibrary
[the] declaration of nullity of unilateral imposition and increases of interest rates, crediting of illegal interests collected to [Spouses Limso and Davao Sunrise's] account; elimination of all uncollected illegal interests; reimposition of new interest rates at 12% per annum only from date of filing of Complaint, total elimination of penalties; elimination also of attorney's fees or its reduction; declaration of nullity of auction sale and the foreclosure proceedings; reduction of both loan accounts; reformation or annulment of contract, reconveyance, damages and injunction and restraining order.23
PRAYER
WHEREFORE, it is respectfully prayed that judgment issue in favor of plaintiffs and against the defendants:ON THE TEMPORARY
RESTRAINING ORDER
1. That, upon the filing of the above-entitled case, a TEMPORARY RESTRAINING ORDER be maintained enjoining the defendants from executing the provisional Certificate of Sale and final Deed of Absolute Sale; confirmation of such sale; taking immediate possession thereof and from selling to third parties those properties covered by TCT Nos. T-147820, T-147821/T-246386 and T-247012 and its improvements nor to mortgage or pledge the same prior to the final outcome of the above-entitled case, including other additional acts of foreclosure;.
2. That, plaintiffs' application for the issuance of the [Writ of Preliminary Injunction] be concluded within the 20 days lifetime period of the [Temporary Restraining Order], andAFTER TRIAL ON THE MERITS
3. To declare the injunction as final;
4. Declaring that the unilateral increases of interest rates imposed by the defendant bank over and above the stipulated interest rates provided for in the Promissory Notes, be also considered as null and void and thereafter lowering the same to 12% per annum only, from the date of the filing of the Complaint;
5. Declaring also that all illegally imposed interest rates and penalty charges be considered eliminated and/or deducted from any account balance of plaintiffs;
6. Declaring also either the complete elimination of attorney's fees, or in the alternative, reducing the same to P500,000.00 only;
7. Declaring the reduction of the loan account balance to P827,012,149.50 only;
8. That subsequent thereto, ordering a complete reformation of the loan agreement and Real Estate Mortgage which will now embody the lawful terms and conditions adjudicated by this Honorable Court, or in the alternative, ordering its annulment, as may be warranted under the provision of Article 1359 of the New Civil Code;
9. Ordering the defendant Register of Deeds to refrain from issuing a new title in favor of third parties, and to execute the necessary documents necessary for the reconveyance of the properties now covered by TCT Nos. T-147820, T-147821, T-246386 and T-247012 from the defendant bank in favor of the plaintiffs upon payment of the recomputed loan accounts;
10. Ordering also the defendant bank to pay to the plaintiffs the sum of at least P500,000.00 representing business losses and loss of income by the later [sic] arising from the improvident and premature institution of extrajudicial foreclosure proceedings against the plaintiffs;
11. Ordering again the defendant bank to pay to the plaintiffs the sum of P400,000.00 as attorney's fees and the additional sum of P100,000.00 for expenses incident to litigation; and
12. To pay the costs and for such other reliefs just and proper
under the circumstances.27 (Underscoring in the original)
"WHEREFORE, in view of the foregoing, the Sheriff's Provisional Certificate of Sale dated February 4, 2002 is registrable on TCT Nos. T-147820, T-147386, T-247012 provided all other registration requirements are complied with."44
6. That Petitioners with the continuing crisis and the unstable interest rates imposed by respondent PNB admittedly failed to pay their loan, the demand letters were sent to both debtors-mortgagors separately, one addressed to the Petitioners and another addressed to DSIDC, the last of which was dated April 12, 2000 xxx;
7. That on August 21, 200(0), respondent PNB filed a Petition for Extrajudicial Foreclosure of the mortgaged properties against the petitioners-mortgagors-debtors and DSIDC;
8. That on October 26, 2000, the mortgaged properties were auctioned with the respondent PNB as the highest bidder;
9. That on February 4, 2002, a Sheriff's Provisional Certificate of Sale was issued by respondent Sheriff who certified xxxx
10. That the said Sheriff's Provisional Certificate of Sale did not contain a provision usually contained in a regular Sheriff's Provisional Certificate of Sale as regards the period of redemption and the redemption price to be raised within the ONE (1) YEAR redemption period in accordance with Act 3135, under which same law the extrajudicial petition for sale was conducted as mentioned in the Certificate;
11. That the Sheriff's Provisional Certificate of Sale has not yet been registered with the office of respondent Register of Deeds yet; that petitioners and DSIDC are still in actual possession of the subject properties;
12. That sometime in the middle part of year 2000, Republic Act No. 8791 otherwise known as General Banking Laws of 2000 was approved and finally passed on April 12, 2000 and took effect sometime thereafter;
13. That among the provisions of the said law particularly, Section 47 dealt with Foreclosure of Real Estate Mortgage, quoted verbatim hereunder as follows:
chanRoblesvirtualLawlibrary"Sec. 47. Foreclosure of Real Estate Mortgage. - In the event of foreclosure, whether judicially or extra-judicially, or any mortgage on real estate which is security for any loan or other credit accommodation granted, the mortgagor or debtor whose real property has been sold for the full or partial payment of his obligation shall have the right within one year after the sale of the real estate, to redeem the property by paying the amount due under the mortgage deed, with interest thereon at rate specified in the mortgage, and all the costs and expenses incurred by the bank or institution from the sale and custody of said property less the income derived therefrom. However, the purchaser at the auction sale concerned whether in a judicial or extra-judicial foreclosure shall have the right to enter upon and take possession of such property immediately after the date of the confirmation of the auction sale and administer the same in accordance with law. Any petition in court to enjoin or restrain the conduct of foreclosure proceedings instituted pursuant to this provision shall be given due course only upon the filing by the petitioner of a bond in an amount fixed by the court conditioned that he will pay all the damages which the bank may suffer by the enjoining or the restraint of the foreclosure proceeding.14. That it is clear and evident that the absence of provisions as to redemption period and price in the Sheriff's Provisional Certificate of Sale issued by respondent Sheriff, that respondent PNB and Sheriff intended to apply the provisions of Section 47 of Republic Act No. 8791 which reduced the period of redemption of a juridical person whose property is being sold pursuant to an extrajudicial foreclosure sale until but not after the registration of the Certificate of Sale with the applicable Register of Deeds which in no case shall be more than three (3) months after foreclosure, whichever is earlier;
Notwithstanding Act 3135, juridical persons whose property is being sold pursuant to an extrajudicial foreclosure, shall have the right to redeem the property in accordance with this provision until, but not after, the registration of the certificate of foreclosure sale with the applicable Register of Deeds which in no case shall be more than three (3) months after foreclosure, whichever is earlier. Owners of property that has been sold in a foreclosure sale prior to the effectivity of this Act shall retain their redemption rights until their expiration."
15. That Petitioners in this subject mortgage are Natural Persons who are principal mortgagors-debtors and at the same time registered owners of some properties at the time of the mortgage;
16. That the provisions of Republic Act No. 8791 do not make mention nor exceptions to this situation where the Real Estate Mortgage is executed by both Juridical and Natural Persons; hence, the need to file this instant case of Declaratory Relief under Rule 63 of the Revised Rules of Court of the Philippines;
....PRAYER
WHEREFORE, it is respectfully prayed that judgment in favor of petitioners and against the respondent-PNB;1. That upon the filing of the above-entitled case, a TEMPORARY RESTRAINING INJUNCTION be issued immediately ordering a status quo, enjoining the Register of Deeds and defendant-PNB from registering the subject Provisional Certificate of Sale from consolidating the title of the property covered by Transfer Certificate of Title Nos. T-147820, T-147821, T-246386, T-24712 and Land Improvement, Etc.
2. That petitioners' application of the issuance of the Writ of Preliminary Injunctions be considered and granted within 20 days lifetime period of the TRO.AFTER TRIAL ON THE MERITS
3. To declare the injunction as final;
4. Ordering the Register of Deeds to refrain from registering the Sheriff's Certificate of Sale and further from consolidating the titles of the said properties in its name and offering to sell the same to interested buyers during the pendency of the above entitled case, while setting the date of hearing on the propriety of the issuance of such Writ of Preliminary Injunction.ON THE MAIN CASE
5. To declare the petitioners' right as principal mortgagors/owner jointly with a juridical person to redeem within a period of 1 year the properties foreclosed by respondent PNB still protected and covered by Act 3135.
6. To declare the provisions on Foreclosure of Real Estate Mortgage under Republic Act 8791 or General Banking Laws of 2000 discriminating and therefore unconstitutional.OTHER RELIEFS AND REMEDIES are likewise prayed for.46
This Court finds no merit in the claims advanced by private respondent Bank for the following reasons:
1. That the primary ground why the Court of Appeals dissolved the preliminary injunction granted by Branch 17 of this Court was because the ground upon which the same was issued was based on a pleading which was not verified;
2. That Civil Case No. 28,170-2000 and Civil Case No. 29,036- 2002 while involving substantially the same parties, the same do not involved [sic] the same issues as the former involves nullity of unilateral imposition and increases of interest rates, etc. nullity of foreclosure proceedings, reduction of both loan accounts, reformation or annulment of contract, reconveyance and damages, whereas the issues raised in the instant petition before this Court is the right and duty of the petitioners under the last paragraph of Sec. 47, Republic Act No. 8791 and whether the said section of said law is applicable to the petitioners considering that the mortgage contract was executed when Act No. 3135 was the controlling law and was in fact made part of the contract;
3. That the petition, contrary to the claim of private respondent Bank, clearly states a cause of action; and
4. That since petitioners are parties to the mortgage contract they, therefore, have locus standi to file the instant petition.
If Section 7 of Republic Act 8791 were made to apply to the petitioners, the latter would have a shorter period of three (3) months to exercise the right of redemption after the registration of the Certificate of Sale, hence, the registration of the Sheriff's Provisional Certificate of Sale would cause great and irreparable injury to them as their rights to the properties sold at public auction would be lost forever if the registration of the same is not enjoined.53ChanRoblesVirtualawlibrary
WHEREFORE, premises considered, the writ prayed for in the herein petition is GRANTED and the assailed Orders of respondent judge dated May 3 and June 24, 2002 granting the writ of preliminary injunction are SET ASIDE. Civil Case No. 29,036-2002 is hereby ordered DISMISSED and respondent Register of Deeds of Davao City is hereby ordered to register petitioner PNB's Sheriff's Provisional Certificate of Sale and cause its annotation on TCTNos. T-147820, T-147821, T-246386 andT-247012.77
WHEREFORE, finding the evidence of plaintiffs corporation through counsel, more than sufficient, to constitute a preponderance to prove the various unilateral impositions of increased interest rates by defendant bank, such usurious, unreasonable, arbitrary, unilateral imposition of interest rates, are declared, null and void.
Accordingly, decision is issued in favor of the defendant bank, in a reduced amount based on the following:
- The amount of One Hundred Twenty Seven Million, One Hundred Fifty Thousand (P127,150,000.00) Pesos, representing illegal interest rate, the amount of One Hundred Seventy Six Million, Ninety Eight Thousand, Forty Five and 95/100 (P176,098,045.95) Pesos, representing illegal penalty charges and the amount of One Hundred Thirty Six Million, Nine Hundred Thousand, Nine Hundred Twenty Eight and 85/100 (P136,900,928.85) Pesos, as unreasonable 10% Attorney's fees or in the total amount of Four Hundred Forty Million, One Hundred Forty Eight Thousand, Nine Hundred Seventy Four and 79/100 (P440,148,974.79) Pesos, are declared null and void, rescending [sic] and/or altering the loan agreement of parties, on the ground of fraud, collusion, mutual mistake, breach of trust, misconduct, resulting to gross inadequacy of consideration, in favor of plaintiffs corporation, whose total reduced and remaining principal loan obligation with defendant bank, shall only be the amount of Eight Hundred Eighty Two Million, Twelve Thousand, One Hundred Forty Nine and 50/100 (P882,012,149.50) Pesos, as outstanding remaining loan obligation of plaintiffs corporation, with defendant bank, to be deducted from the total payments so far paid by plaintiffs corporation with defendant bank as already stated in this decision.
- That thereafter, the above-amount as ordered reduced, shall earn an interest of 12% per annum, the lawful rate of interest that should legitimately be imposed by defendant bank to the outstanding remaining reduced principal loan obligation of plaintiffs corporation.
- Notwithstanding, defendant bank, is entitled to a reduced Attorney's fees of Five Hundred Thousand (P500,000.00) Pesos, as a reasonable Attorney's fees, subject to subsequent pronouncement as to the real status of defendant bank, on whether or not, said institution is now a private agency or still a government instrumentality in its capacity to be entitled or not of the said Attorney's fees.
- The prayer of defendant bank for award of moral damages and exemplary damages, are denied, for lack of factual and legal basis.
SO ORDERED.85 (Emphasis in the original)
WHEREFORE, finding the motion for reconsideration of defendant bank through counsel, to the decision of the court, grossly bereft of merit, merely a reiteration and rehash of the arguments already set forth during the hearing, including therein matters not proved during the trial on the merits, and considered admitted, is denied.
To provide a clarification of the decision of this court, relative to plaintiffs motion for partial clarification with comment of defendant bank through counsel, the correct remaining balance of plaintiffs account with defendant bank, pursuant to the decision of this court, in pages 17 and 18, dated June 19, 2002, is Two Hundred Five Million Eighty Four Thousand Six Hundred Eighty Two Pesos & 61/100 (P205,084,682.61), as above-clarified.
SO ORDERED.88ChanRoblesVirtualawlibrary
(1) The Motion to Intervene filed by Spouses Robert Alan Limso and Nancy Limso;
(2) The Motion to Expunge and/or Dismiss Petition for the Issuance of Writ of Possession filed by Davao Sunrise Investment and Development Corporation; and
(3) The Motion for Voluntary Inhibition filed by Davao Sunrise Investment and Development Corporation.96ChanRoblesVirtualawlibrary
[O]n 11 August 2004, at around 11:45 a.m., petitioners' counsel was furnished a copy of public respondent's Order allegedly dated 06 August 2004 which declared as submitted for resolution the following incidents, to wit: (a) petitioner DSIDC's Motion to Transfer the Case to Branch 17; (b) Petitioner DSIDC's Motion to Postpone Hearing; (c) Motion for Intervention filed by a certain Karlan Lou Ong; (d) petitioners' (DSIDC and Spouses Limso) Extremely Urgent Manifestation and Motion; and (e) Petitioner DSIDC's Manifestation.
. . . And then, at around 2:10 p.m. of the same day, 11 August 2004, when petitioners' counsel was already in court for the said hearing, he was furnished by a staff of public respondent Judge Quitain a copy of an Order dated 11 August 2004 and consisting of two (2) pages, the dispositive portion of which reads as follows:"WHEREFOREM(sic), the Court hereby resolves the following motions: 1) DSIDC's motion to transfer case to Branch 17 or dismiss the same is denied for lack of merit. 2) DSIDC's (sic) motion to postpone the hearing is denied for lack of merit. 3) The motion of Karla Ong to intervene is denied for lack of merit. 4) The August 5 manifestation of DSIDC is noted."128 (Emphasis in the original)
The registration of these documents became complete when respondent affixed her signature below these annotations. Whatever information belatedly gathered thereafter relative to the circumstances as to the registrability of these documents, respondent cannot unilaterally take judicial notice thereof and proceed to lift at her whims and caprices what has already been officially in force and effective, by erasing thereon her signature. With her years of experience in the Registry, not to mention her being a lawyer, respondent should have taken the appropriate steps in filing a query to this Authority regarding the matter or should have consulted Section 117 of PD 1529 in relation to Section 12 of Rule 43. The deplorable act of Respondent was fraught with partiality to favor the DSIDC and Sps. Limso.150
It is a settled rule that the procedure for claiming damages on account of an injunction wrongfully issued shall be the same as that prescribed in Section 20 of Rule 57 of the Revised Rules of Court. Section 20 provides:
chanRoblesvirtualLawlibrarySec. 20. Claim for damages on account of improper, irregular or excessive attachment. - An application for damages on account of improper, irregular or excessive attachment must be filed before the trial or before appeal is perfected or before the judgment becomes executory, with due notice to the attaching obligee or his surety or sureties, setting forth the facts showing his right to damages and the amount thereof. Such damages may be awarded only after proper hearing and shall be included in the judgment on the main case.Records show that when this Court annulled the RTC's order of injunction, Davao Sunrise thereafter elevated the matter to the Supreme Court. On July 24, 2002, the Supreme Court denied its petition for having been filed out of time and an Entry of Judgment was issued on Sept. 11, 2002.
If the judgment of the appellate court be favorable to the party against whom the attachment was issued, he must claim damages sustained during the pendency of the appeal by filing an application in the appellate court with notice to the party in whose favor the attachment was issued or his surety or sureties, before the judgment of the appellate court becomes executory. The appellate court may allow the application to be heard and decided by the trial court.
Nothing herein contained shall prevent the party against whom the attachment was issued from recovering in the same action the damages awarded to him from any property of the attaching obligee not exempt from execution should the bond or deposit given by the latter be insufficient or fail to fully satisfy the award.
PNB's instant application however was filed only on February 17, 2005 and/or in the course of its appeal on the main case - about two (2) years and five (5) months after the judgment annulling the injunction order attained finality.
Clearly, despite that it already obtained a favorable judgment on the injunction matter, PNB failed to file (before the court a quo) an application for damages against the bond before judgment was rendered in the main case by the court a quo. Thus, even for this reason alone, Davao Sunrise and its bondsman are relieved of further liability thereunder.159 (Citations omitted)
WHEREFORE, above premises considered, the Philippine National Bank's Application to Hold Davao Sunrise Investment and Development Corporation, the Spouses Robert Alan L. Limso and Nancy Lee Limso and Wellington Insurance Company, Inc. Jointly and Severally Liable for Damages on the Injunction Bond and its Application for the Appointment of PNB as Receiver are hereby both DENIED. And, for the reasons above set forth, the Plaintiff-Appellees' Motion to Dismiss is likewise DENIED.
With the filing of the Appellants' and the Appellees' respective Brief(s), this case is considered SUBMITTED for Decision and ORDERED re-raffled to another justice for study and report.
SO ORDERED.167ChanRoblesVirtualawlibrary
(1) For purposes of the issuance of the writ of possession, Petitioner should complete the entire process in extrajudicial foreclosure ...
(2) The records disclose the [sic] contrary to petitioner's claim, the Certificate of Sale covering the subject properties has not been registered with the Registry of Deeds of Davao City as the Court finds no annotation thereof. As such, the sale is not considered perfected to entitled petitioner to the writ of possession as a matter of rights [sic].174ChanRoblesVirtualawlibrary
But it even gets worse. After appellant bank had unilaterally determined the imposable interest on plaintiffs-appellees loans and after the latter had been notified thereof, appellant bank unilaterally increased the interest rates. Further aggravating the matter, appellant bank did not increase the interest rate only once but on numerous occasions. Appellant bank unilaterally and arbitrarily increased the already arbitrarily imposed interest rate within intervals of only seven (7) days and/or one (1) month.
. . . .
The interests imposed under the Conversion, Restructuring and Extension Agreement, is not a valid imposition. DSIDC and Spouses Limso have no choice except to assent to the conditions therein as they are heavily indebted to PNB. In fact, the possibility of the foreclosure of their mortgage securities is right in their doorsteps. Thus it cannot be considered "contracts'" between the parties, as the borrower's participation thereat has been reduced to an unreasonable alternative that is to "take it or leave it." It has been used by PNB to raise interest rates to levels which have enslaved appellees or have led to a hemorrhaging of the latter's assets. Hence, for being an exploitation of the weaker party, the borrower, the alleged letter-contracts should also be struck down for being violative of the principle of mutuality of contracts under Article 1308.188 (Emphasis in the original)
We reiterate that since the unilateral imposition of rates of interest by appellant bank is not only violative of the principle of mutuality of contracts, but also were found to be unconscionable, iniquitous and unreasonable, it is as if there was no express contract thereon. Thus, the interest provisions on the (a) revolving credit line in the amount of three hundred (300) million pesos, (b) seven-year long term loan in the amount of four hundred (400) million pesos; and (c) Conversions, Restructuring and Extension Agreement, Real Estate Mortgage, promissory notes, and all other loan documents executed contemporaneous with or subsequent to the execution of the said agreements are hereby declared null and void.As to the trial court's reduction of the penalty charges and attorney's fees, the Court of Appeals affirmed the trial court's ruling and stated that Article 1229190 of the Civil Code allows for the reduction of penalty charges that are unconscionable.191 The Court of Appeals discussed that:
Such being the case, We apply the ruling of the Supreme Court in the case of United Coconut Planters Bank vs. Spouses Samuel and Odette Beluso which stated:"We see, however, sufficient basis to impose a 12% legal interest in favor of petitioner in the case at bar, as what we have voided is merely the stipulated rate of interest and not the stipulation that the loan shall earn interest."189 (Citation omitted)
The penalties imposed by PNB are clearly unconscionable. Any doubt as to this fact can be removed by simply glancing at the penalties charged by defendant-appellant which . . . already amounted to an incredibly huge amount of P176,098,045.94 despite payments that already exceeded the amount of the loan as of 1998.
With respect to attorney's fees, the Supreme Court had consistently and invariably ruled that even with the presence of an agreement between the parties, the court may nevertheless reduce attorney's fees though fixed in the contract when the amount thereof appears to be unconscionable or unreasonable. Again, the fact that the attorney's fees imposed by PNB are unconscionable and unreasonable can clearly be seen. The attorney's fees imposed similarly points to an incredibly huge sum of P136,900,928.85 as of October 30, 2000. Therefore, its reduction in the assailed decision is well-grounded.192 (Citation omitted)
WHEREFORE, the assailed Decision dated June 19, 2002 and Order dated August 13, 2002 of the Regional Trial Court of Davao City, Branch 17 in Civil Case No. 28,170-2000 declaring the unilateral imposition of interest rates by defendant-appellant PNB as null and void appealed from are AFFIRMED with the MODIFICATION that the obligation of plaintiffs-appellees arising from the Loan and Revolving Credit Line and subsequent Conversion, Restructuring and Extension Agreement as Loan I and Loan II shall earn interest at the legal rate of twelve percent (12%) per annum computed from September 1, 1993, until fully paid and satisfied.
SO ORDERED.193 (Emphasis in the original)
Since the appellees did not appeal from the decision of the lower court, they are not entitled to any award of affirmative relief. It is well settled that an appellee who has not himself appealed cannot obtain from the appellate court any affirmative relief other than those granted in the decision of the court below. The appellee can only advance any argument that he may deem necessary to defeat the appellant's claim or to uphold the decision that is being disputed. . . . Thus, the lower court's finding that the appellees have an unpaid obligation with PNB, and not the other way around, should stand. It bears stressing that appellees even acknowledged their outstanding indebtedness with the PNB when they filed their "Urgent Motion for Execution Pending Appeal" of the August 13, 2002 Order of the lower court decreeing that appellees' remaining obligation with PNB is P205,084,682.61. They cannot now claim that PNB is the one indebted to them in the amount of P15,915,588.89.202
Docket Number | Original Case | Assailed Order/Decision |
G.R. No. 158622 | Petition for Declaratory Relief with Prayer for the Issuance of Preliminary Injunction and Application for Temporary Restraining Order221 | Court of Appeals Decision dated December 11, 2002 dismissing the Petition for Certiorari filed by Philippine National Bank. The Petition for Certiorari questioned the issuance of a writ of preliminary injunction in favor of Spouses Limso and Davao Sunrise.222 |
G.R. No.169441 | Ex-Parte Petition223 for Issuance of Writ of Possession under Act No. 3135 filed by Philippine National Bank, praying that it be granted possession over four (4) parcels of land owned by Davao Sunrise | Court of Appeals Decision dated September 1, 2004 and Resolution dated August 11, 2005.224 Spouses Limso and Davao Sunrise filed a Motion to Inhibit Judge Quitain, which was denied by Judge Quitain. Thus, Spouses Limso and Davao Sunrise questioned the denial of their Motion before the Court of Appeals.225 |
G.R. No. 172958 | Ex-Parte Petition226 for" Issuance of the Writ of Possession under Act No. 3135 filed by Philippine National Bank, praying that it be granted possession over four (4) parcels of land owned by Davao Sunrise | Court of Appeals Decision227 dated September 1, 2005 and Resolution228 dated May 26, 2006. The Petition for Certiorari and Prohibition filed by Spouses Limso and Davao Sunrise assailed two Orders of Judge Quitain, which denied their Motion to Expunge and/or Dismiss Petition for Issuance of Writ of Possession.229 |
G.R. No. 173194 | Petition for Reformation or Annulment of Contract with Damages filed by Spouses Limso and Davao Sunrise230 | Court of Appeals Resolution231 dated March 2, 2006, which denied Philippine National Bank's (1) Application to Hold [Spouses Limso and Davao Sunrise] and the Surety Bond Company Jointly and Severally Liable for Damages on the Injunction Bond, and (2) Application for the Appointment of [Philippine National Bank] as Receiver. Also assailed was the Court of Appeals Resolution232 dated May 26, 2006, which denied the Motion for Reconsideration filed by Philippine National Bank. |
G.R. No. 196958 | Petition for Reformation or Annulment of Contract with Damages filed by Davao Sunrise and Spouses Limso233 | Court of Appeals Decision234 dated August 13, 2009 and Court of Appeals Resolution235 dated May 18, 2011 docketed as CA-G.R. CV No. 79732-Min. The decision dated August 13, 2009 affirmed with modification the decision of the trial court in Civil Case No. 28,170-2000.236 The Resolution dated May 18,2011 in CA-G.R. CV No. 79732-Min denied the Motion for Reconsideration filed by Philippine National Bank and also denied the Motion for Partial Reconsideration filed by Spouses Limso and Davao Sunrise.237 The Rule 41 appeal was filed by Philippine National Bank.238 |
G.R. No. 197120 | Petition239 for Reformation or Annulment of Contract with Damages filed by Spouses Limso and Davao Sunrise | Court of Appeals Decision240 dated August 13, 2009 and Court of Appeals Resolution241dated May 18, 2011. Spouses Limso and Davao Sunrise assailed the portion of the Court of Appeals Decision stating that their outstanding obligation was P803,185,411.11.242 |
G.R. No. 205463 | Ex-Parte Petition for Issuance of the Writ of Possession under Act No. 3135 filed by Philippine National Bank, praying that it be granted possession over four parcels of land owned by Davao Sunrise243 | Court of Appeals Decision244 dated January 21, 2013 dismissing the appeal under Rule 41 filed by Philippine National Bank for being the wrong remedy |
It is clear, however, that the ruling of the Regional Trial Court of Davao City in Civil Case No. 28,170-2000 and the Court of Appeals in CA G.R. No. 79732 already rendered Civil Case No. 29,036-2002 moot and academic. Under the premises, there is no need for this Honorable Court to rule on the propriety of the dismissal of the said action for Declaratory Relief as the loan agreements — from which the entire case stemmed — had already been declared NULL AND VOID.257 (Emphasis in the original)
SECTION 1. Subject of Appeal. — An appeal may be taken from a judgment or final order that completely disposes of the case, or of a particular matter therein when declared by these Rules to be appealable.
No appeal may be taken from:
....
(b) An interlocutory order;
....
In any of the foregoing circumstances, the aggrieved party may file an appropriate special civil action as provided in Rule 65.
SECTION 1. Filing of Petition with Supreme Court. — A party desiring to appeal by certiorari from a judgment, final order or resolution of the Court of Appeals, the Sandiganbayan, the Court of Tax Appeals, the Regional Trial Court or other courts, whenever authorized by law, may file with the Supreme Court a verified petition for review on certiorari[.] (Emphasis supplied)
The word interlocutory refers to something intervening between the commencement and the end of the suit which decides some point or matter but is not a final decision of the whole controversy. This Court had the occasion to distinguish a final order or resolution from an interlocutory one in the case of Investments, Inc. v. Court of Appeals, thus:
chanRoblesvirtualLawlibraryx x x A "final" judgment or order is one that finally disposes of a case, leaving nothing more to be done by the Court in respect thereto, e.g., an adjudication on the merits which, on the basis of the evidence presented on the trial, declares categorically what the rights and obligations of the parties are and which party is in the right; or a judgment or order that dismisses an action on the ground, for instance, of res judicata or prescription. Once rendered, the task of the Court is ended, as far as deciding the controversy or determining the rights and liabilities of the litigants is concerned. Nothing more remains to be done by the Court except to await the parties' next move (which among others, may consist of the filing of a motion for new trial or reconsideration, or the taking of an appeal) and ultimately, of course, to cause the execution of the judgment once it becomes "final" or, to use the established and more distinctive term, "final and executory."xxx xxx xxx
Conversely, an order that does not finally dispose of the case, and does not end the Court's task of adjudicating the parties' contentions and determining their rights and liabilities as regards each other, but obviously indicates that other things remain to be done by the Court, is "interlocutory" e.g., an order denying motion to dismiss under Rule 16 of the Rules, or granting of motion on extension of time to file a pleading, or authorizing amendment thereof, or granting or denying applications for postponement, or production or inspection of documents or things, etc. Unlike a "final" judgment or order, which is appealable, as above pointed out, an "interlocutory" order may not be questioned on appeal except only as part of an appeal that may eventually be taken from the final judgment rendered in the case.272 (Citations omitted)
Records show that when this Court annulled the RTC's order of injunction, Davao Sunrise thereafter elevated the matter to the Supreme Court. On July 24, 2002, the Supreme Court denied its petition for having been filed out of time and an Entry of Judgment was issued on Sept[ember] 11,2002.
PNB's instant application however was filed only on February 17, 2005 and/or in the course of its appeal on the main case - about two (2) years and five (5) months after the judgment annulling the injunction order attained finality.
Clearly, despite that it already obtained a favorable judgment on the injunction matter, PNB failed to file (before the court a quo) an application for damages against the bond before judgment was rendered in the main case by the court a quo. Thus, even for this reason alone, Davao Sunrise and its bondsman are relieved of further liability thereunder.296 (Citations omitted)
In the case at bar, respondents' claim to a right to preliminary injunction based on PNB's purported unilateral imposition of interest rates and subsequent increases thereof, is not a right warranting the issuance of an injunction to halt the foreclosure proceedings. On the contrary, it is petitioner bank which has proven its right to foreclose respondents' mortgaged properties, especially since respondents have admitted their indebtedness to PNB and merely questioning the interest rates imposed by the bank. . . .
. . . .
Above all, the core and ultimate issue raised in the main case below is the interest stipulation in the loan agreements between the petitioner and private respondents, the validity of which is still to be determined by the lower court. Injunctive relief cannot be made to rest on the assumption that said interest stipulation is void as it would preempt the merits of the main case.
WHEREFORE, premises considered, the assailed Orders of respondent judge dated December 4 and 21, 2000 are hereby ANNULLED and SET ASIDE, and the Order dated November 20, 2000 denying private respondents prayer for the issuance of a writ of preliminary injunction is REINSTATED.
SO ORDERED.301ChanRoblesVirtualawlibrary
SECTION 20. Claim for Damages on Account of Improper, Irregular or Excessive Attachment. — An application for damages on account of improper, irregular or excessive attachment must be filed before the trial or before appeal is perfected or before the judgment becomes executory, with due notice to the attaching party and his surety or sureties, setting forth the facts showing his right to damages and the amount thereof. Such damages may be awarded only after proper hearing and shall be included in the judgment on the main case.
If the judgment of the appellate court be favorable to the party against whom the attachment was issued, he must claim damages sustained during the pendency of the appeal by filing an application in the appellate court, with notice to the party in whose favor the attachment was issued or his surety or sureties, before the judgment of the appellate court becomes executory. The appellate court may allow the application to be heard and decided by the trial court.
Nothing herein contained shall prevent the party against whom the attachment was issued from recovering in the same action the damages awarded to him from any property of the attaching party not exempt from execution should the bond or deposit given by the latter be insufficient or fail to fully satisfy the award.
Section 20 essentially allows the application to be filed at any time before the judgment becomes executory. It should be filed in the same case that is the main action, and cannot be instituted separately. It should be filed with the court having jurisdiction over the case at the time of the application. The remedy provided by law is exclusive and by failing to file a motion for the determination of the damages on time and while the judgment is still under the control of the court, the claimant loses his right to damages.305 (Citations omitted)
SECTION 1. Appointment of Receiver. — Upon a verified application, one or more receivers of the property subject of the action or proceeding may be appointed by the court where the action is pending, or by the Court of Appeals or by the Supreme Court, or a member thereof, in the following cases:
(a) When it appears from the verified application, and such other proof as the court may require, that the party applying for the appointment of a receiver has an interest in the property or fund which is the subject of the action or proceeding, and that such property or fund is in danger of being lost, removed, or materially injured unless a receiver be appointed to administer and preserve it; (b) When it appears in an action by the mortgagee for the foreclosure of a mortgage that the property is in danger of being wasted or dissipated or materially injured, and that its value is probably insufficient to discharge the mortgage debt, or that the parties have so stipulated in the contract of mortgage; (c) After judgment, to preserve the property during the pendency of an appeal, or to dispose of it according to the judgment, or to aid execution when the execution has been returned unsatisfied or the judgment obligor refuses to apply his property in satisfaction of the judgment, or otherwise to carry the judgment into effect; (d) Whenever in other cases it appears that the appointment of a receiver is the most convenient and feasible means of preserving, administering, or disposing of the property in litigation.
During the pendency of an appeal, the appellate court may allow an application for the appointment of a receiver to be filed in and decided by the court of origin and the receiver appointed to be subject to the control of said court.
The general rule is that neither party to a litigation should be appointed as receiver without the consent of the other because a receiver should be a person indifferent to the parties and should be impartial and disinterested. The receiver is not the representative of any of the parties but of all of them to the end that their interests may be equally protected with the least possible inconvenience and expense.310 (Citations omitted)
(a) identity of parties, or at least such parties as represent the same interests in both actions;
(b) identity of rights asserted and relief prayed for, the relief being founded on the same facts; and
(c) the identity of the two preceding particulars, such that any judgment rendered in the other action will, regardless of which party is successful, amount to res judicata in the action under consideration.313 (Citation omitted)
Article 2227. Liquidated damages, whether intended as an indemnity or a penalty, shall be equitably reduced if they are iniquitous or unconscionable.
[T]he rate of interest shall be set at the start of every Interest Period. For this purpose, I/We agree that the rate of interest herein stipulated may be increased or decreased for the subsequent Interest Periods, with PRIOR NOTICE TO THE BORROWER in the event of changes in the interest rate prescribed by law or the Monetary Board of Central Bank of the Philippines or in the Bank's overall cost of funds. I/We hereby agree that IN THE EVENT I/WE ARE NOT AGREEABLE TO THE INTEREST RATE FIXED FOR ANY INTEREST PERIOD, I/WE HAVE THE OPTION TO PREPAY THE LOAN OR CREDIT FACILITY WITHOUT PENALTY within ten (10) calendar days from the Interest Setting Date.331 (Emphasis in the original)
Article 1308. The contract must bind both contracting parties; its validity or compliance cannot be left to the will of one of them.
The binding effect of any agreement between parties to a contract is premised on two settled principles: (1) that any obligation arising from contract has the force of law between the parties; and (2) that there must be mutuality between the parties based on their essential equality. Any contract which appears to be heavily weighed in favor of one of the parties so as to lead to an unconscionable result is void. Any stipulation regarding the validity or compliance of the contract which is left solely to the will of one of the parties, is likewise, invalid.336 (Citation omitted)
We cannot subscribe to appellant bank's allegation that plaintiffs-appellees agreed to these interest rates by receiving various letters from PNB. Those letters cannot be construed as agreements as a simple reading of those letters would show that they are mere notices informing plaintiffs-appellees that the bank, through its top management, had already imposed interest rates on their loan. The uniform wordings of the said letters go this way:
chanRoblesvirtualLawlibraryThis refers to your existing credit facility in the principal amount of P850.0 MM granted by the Philippine National Bank by and under the terms and conditions of that Credit Agreement dated 12.2.97 (Renewal of Credit Facility).
We wish to advise you that the top management has approved an interest rate of 20.756% which will be used in computing the interest due on your existing peso and redenominated availments against the credit facility for the period July 20 to August 19, 1998.
If you are amenable to this arrangement, please signify your conformity on the space provided below and return to us the original copy of the document. If we receive no written objection by the end of 10 days from date of receipt of this letter, we will take it to mean that you agree to the new interest rate we quote. On the other hand, if you disagree with the quoted rate, you will have to pay the loan in full within the same ten-day period otherwise, the entire loan will be considered due and demandable.339 (Citation omitted)
Article 1318. There is no contract unless the following requisites concur:
chanRoblesvirtualLawlibrary(1) Consent of the contracting parties;
(2) Object certain which is the subject matter of the contract;
(3) Cause of the obligation which is established.
[Promissory Note] NO. 0015138516350115 . ..
. . . I/We, jointly and severally, promise to pay to the order of the Philippine National Bank (the 'Bank') at its office in cm recto avenue davao city [sic], Philippines, the sum of PHILIPPINE PESOS: 583.183.333.34 (P583383.333.34) together with interest thereon for the current Interest Period at a rate of to be set by mzt. [management]. Interest Period shall mean the period commencing on the date hereof and having a duration not exceeding monthly (____ ) days and each similar period thereafter commencing upon the expiry of the immediately preceding Interest Period. The rate of interest shall be set at the start of every Interest Period. For this purpose, I/We agree that the rate of interest herein stipulated may be increased or decreased for the subsequent Interest Periods, with prior notice to the Borrower in the event of changes in interest rate prescribed by law or the Monetary Board of the Central Bank of the Philippines, or in the Bank's overall cost of funds. I/We hereby agree that in the event I/We are not agreeable to the interest rate fixed for any Interest Period, I/we shall have the option to prepay the loan or credit facility without penalty within ten (10) calendar days from the Interest Setting Date.342ChanRoblesVirtualawlibrary
In determining whether the rate of interest is unconscionable, the mechanical application of pre-established floors would be wanting. The lowest rates that have previously been considered unconscionable need not be an impenetrable minimum. What is more crucial is a consideration of the parties' contexts. Moreover, interest rates must be appreciated in light of the fundamental nature of interest as compensation to the creditor for money lent to another, which he or she could otherwise have used for his or her own purposes at the time it was lent. It is not the default vehicle for predatory gain. As such, interest need only be reasonable. It ought not be a supine mechanism for the creditor's unjust enrichment at the expense of another.346
CREDIT AGREEMENT ....
1.04 Interest on Availments. (a) The Borrowers agree to pay interest on each availment from date of each availment up to, but not including the date of full payment thereof at a rate per annum that is determined by the Bank to be equivalent to the Bank's prime rate less 1.0% in effect as of the date of the relevant Availment, subject to quarterly review and to maintenance of deposits with ADB of at least 5% of the amount availed in its savings and current account. Non compliance of ADB requirement shall subject the credit line to regular interest rate which is the prime rate plus applicable spread.347LOAN AGREEMENT
1.03 Interest, (a) The Borrowers hereby agree to pay interest on the loan from the date of Drawdown up to Repayment Date at the rate that is determined by the Bank to be the Bank's prime rate in effect at the Date of Drawdown less 1.0% and which shall be reset every 90 days to coincide with interest payments.
(b) The determination by the Bank of the amount of interest due and payable hereunder shall be conclusive and binding on the borrower in the absence of manifest error in the computation.348 (Emphasis supplied, underscoring in the original)
SECTION 2. TERMS OF LOAN I
....
2.04 Interest, (a) The Borrowers agree to pay the Bank interest on Loan I from the Effective Date, until the date of full payment thereof at the rate per annum to be set by the Bank. The interest rate shall be reset by the Bank every month.
....SECTION 3. TERMS OF LOAN II
....
3.04 Interest, (a) The Borrowers agree to pay the Bank interest on Loan II from the Effective Date, until the date of full payment thereof at the rate per annum to be set by the Bank. The interest rate shall be reset by the Bank every month.349 (Emphasis supplied, underscoring in the original)
"(k) INCREASE OF INTEREST RATE:
"The rate of interest charged on the obligation secured by this mortgage as well as the interest on the amount which may have been advanced by the mortgagee, in accordance with the provisions hereof shall be subject during the life of this contract to A such an increase within the rate allowed by law, as the Board of Directors of the MORTGAGEE may prescribe for its debtors."351
For this purpose, I/We agree that the rate of interest herein stipulated may be increased or decreased for the subsequent Interest Periods, with prior notice to the Borrower in the event of changes in interest rate prescribed by law or the Monetary Board or the Central Bank of the Philippines, or in the Bank's overall cost of funds.353
[A]n escalation clause "which grants the creditor an unbridled right to adjust the interest independently and upwardly, completely depriving the debtor of the right to assent to an important modification in the agreement" is void. A stipulation of such nature violates the principle of mutuality of contracts. Thus, this Court has previously nullified the unilateral determination and imposition by creditor banks of increases in the rate of interest provided in loan contracts.
. . . [W]e hold that the escalation clause is ... void because it grants respondent the power to impose an increased rate of interest without a written notice to petitioners and their written consent. Respondent's monthly telephone calls to petitioners advising them of the prevailing interest rates would not suffice. A detailed billing statement based on the new imposed interest with corresponding computation of the total debt should have been provided by the respondent to enable petitioners to make an informed decision. An appropriate form must also be signed by the petitioners to indicate their conformity to the new rates. Compliance with these requisites is essential to preserve the mutuality of contracts. For indeed, one-sided impositions do not have the force of law between the parties, because such impositions are not based on the parties' essential equality.357 (Citations omitted)
"The Credit Agreement provided inter alia, that —'(a) The BANK reserves the right to increase the interest rate within the limits allowed by law at any time depending on whatever policy it may adopt in the future: Provided, that the interest rate on this accommodation shall be correspondingly decreased in the event that the applicable maximum interest is reduced by law or by the Monetary Board. In either case, the adjustment in the interest rate agreed upon shall take effect on the effectivity date of the increase or decrease in the maximum interest rate.'
"The Promissory Note, in turn, authorized the PNB to raise the rate of interest, at any time without notice, beyond the stipulated rate of 12% but only 'within the limits allowed by law.'
The Real Estate Mortgage contract likewise provided that —'(k) INCREASE OF INTEREST RATE: The rate of interest charged on the obligation secured by this mortgage as well as the interest on the amount which may have been advanced by the MORTGAGEE, in accordance with the provision hereof, shall be subject during the life of this contract to such an increase within the rate allowed by law, as the Board of Directors of the MORTGAGEE may prescribe for its debtors.'362
Similarly, contract changes must be made with the consent of the contracting parties. The minds of all the parties must meet as to the proposed modification, especially when it affects an important aspect of the agreement. In the case of loan contracts, it cannot be gainsaid that the rate of interest is always a vital component, for it can make or break a capital venture. Thus, any change must be mutually agreed upon, otherwise, it is bereft of any binding effect.363
In this case no attempt was made by PNB to secure the conformity of private respondents to the successive increases in the interest rate. Private respondents' assent to the increases cannot be implied from their lack of response to the letters sent by PNB, informing them of the increases. For as stated in one case, no one receiving a proposal to change a contract is obliged to answer the proposal.365 (Citation omitted)
This is so because interest in this respect is used as a surrogate for the parties' intent, as expressed as of the time of the execution of their contract. In this sense, the legal rate of interest is an affirmation of the contracting parties' intent; that is, by their contract's silence on a specific rate, the then prevailing legal rate of interest shall be the cost of borrowing money. This rate, which by their contract the parties have settled on, is deemed to persist regardless of shifts in the legal rate of interest. Stated otherwise, the legal rate of interest, when applied as conventional interest, shall always be the legal rate at the time the agreement was executed and shall not be susceptible to shifts in rate.370
[T]he interest due on conventional interest shall be at the rate of 12% per annum from [date of judicial demand] to June 30, 2013. Thereafter, or starting July 1, 2013, this shall be at the rate of 6% per annum.374
Article 1292. In order that an obligation may be extinguished by another which substitutes the same, it is imperative that it be so declared in unequivocal terms, or that the old and the new obligations be on every point incompatible with each other.
Novation may either be express, when the new obligation declares in unequivocal terms that the old obligation is extinguished, or implied, when the new obligation is on every point incompatible with the old one. The test of incompatibility lies on whether the two obligations can stand together, each one with its own independent existence.
For novation, as a mode of extinguishing or modifying an obligation, to apply, the following requisites must concur:
1) There must be a previous valid obligation.
2) The parties concerned must agree to a new contract.
3) The old contract must be extinguished.
4) There must be a valid new contract.378 (Citations omitted)
WITNESSETH: That -
....
WHEREAS, the Borrowers [referring to DSIDC and spouses Limso] acknowledge that they have outstanding obligations (the "Obligations") with the Bank broken down as follows:
(i ) Credit Line - P583.18 Million (as of September 30, 1998);
(i i) Loan - P266.67 Million (as of September 30, 1998); and
(i i i) Interest -P217.15 Million (as of December 31, 1998);
WHEREAS, at the request of the Borrowers, the Bank has approved (a) the conversion and restructuring of the Credit Line portion of the Obligations into a term loan, (b) the extension of the term of the Loan for another four (4) years, (c) the capitalization on accrued interest (up to December 31,1998) on the Obligations, (d) the waiver of the penalties charges (if any) accruing on the Obligations, and (e) the partial release of chattel mortgage on stock inventories, subject to the terms and conditions hereinafter set forth;
....SECTION 2. TERMS OF LOAN I
2.01 Amount of Loan I. Loan I shall be in the principal amount not exceeding PESOS: FIVE HUNDRED EIGHTY THREE MILLION ONE HUNDRED EIGHTY THOUSAND (P583,180,000.00)
....SECTION 3. TERMS OF LOAN II
3.01 Amount of Loan II. Loan II shall be in the principal amount not exceeding PESOS: FOUR HUNDRED EIGHTY THREE MILLION SEVEN HUNDRED EIGHTY THOUSAND (P483,780,000.00).383
(a) The conversion of the Revolving Credit Line into a Term Loan in the principal amount of 583.18 Million and denominated as "Loan I".
(b) The Extension for another four (4) years of the original long term loan (from 01 September 2001 to 31 December 2005);
(c) The capitalization of the accrued interest on both the Revolving Credit Line and the Long Term Loan up to 31 December 1998;
(d) The consolidation of the accrued interest and the outstanding obligation of the original Long Term Loan to form "Loan 2" with the total principal amount of P483.82 Million;
(e) Waiver of penalty charges;
(f) Partial release of chattel mortgage on the stock inventories;
(g) Both "Loan I" and "Loan II" were made payable within seven (7) years in monthly amortization and a balloon payment on or before December 2005.385
Computing the interest at 12% per annum on the principal amount of 700 Million Pesos, the interest should be 84 Million Pesos per annum. Multiplying 84 Million Pesos by 15 years from September 1, 1993 to September 1, 2008, the interest for the 15-year period would be One Billion Two Hundred Sixty Million Pesos (P1,260,000,000.00). Then, by adding the interest of P1,260,000,000.00 to the principal amount of 700 Million Pesos, the total obligation of plaintiffs-appellees would be One Billion Nine Hundred Sixty Million Pesos (P1,960,000,000.00) by September 1, 2008. And since plaintiffs-appellees has paid a total amount of One Billion One Hundred Fifty Six Million Eight Hundred Fourteen Thousand Five Hundred Eighty Eight Pesos and 89/100 (P1,156,814,588.89) to appellant PNB as of December 5, 1998, as per PNB's official computation of payments per official receipts, then, plaintiffs-appellees would still have an outstanding balance of about Eight Hundred Three Million One Hundred Eighty Five Thousand Four Hundred Eleven and 11/100 Pesos (P 803,185,411.11) as of September 1, 2008. The amount of P 803,185,411.11 will earn interest at the legal rate of 12% per annum from September 1, 2008 until fully paid.
....chanrobleslaw
WHEREFORE, the assailed Decision dated June 19, 2002 and Order dated August 13, 2002 of the Regional Trial Court of Davao City, Branch 17 in Civil Case No. 28,170-2000 declaring the unilateral imposition of interest rates by defendant-appellant PNB as null and void appealed from are AFFIRMED with the MODIFICATION that the obligation of plaintiffs-appellees arising from the Loan and Revolving Credit Line and subsequent Conversion, Restructuring and Extension Agreement as Loan I and Loan II shall earn interest at the legal rate of twelve percent (12%) per annum computed from September 1, 1993, until fully paid and satisfied.
SO ORDERED.386
Where there is a conflict between the dispositive part and the opinion of the court contained in the text or body of the decision, the former must prevail over the latter on the theory that the dispositive portion is the final order, while the opinion is merely a statement ordering nothing.387 (Citation omitted)
[Philippine National Bank] simply takes issue against the conclusions made by the court a quo which pertains to the matter of whether mere entry in the Primary Entry Book, sans the signature of the registrar, already completes registration. It does not question the weight and probative value of the fact that the signature of Atty. Patriarcha [sic] was previously entered in the records then revoked by her. What PNB seeks, therefore, is a review of the decision of the court a quo dismissing its petition, without delving into the weight of the evidence, but on the correctness of the court a quo's conclusions based on the evidence presented before it. This is clearly a question of law.
....
To the mind of this Court, PNB seeks to harp repeatedly on the issue of the court a quo's failure to consider that the certificate of sale has been duly registered on February 4, 2002 upon mere entry in the Primary Entry Book, even without the signature of the then register of deeds. Though couched in different creative presentations, all the errors assigned by PNB point to one vital question: What completes registration? To answer it, this Court is not asked to calibrate the evidence presented, or gauge the truth or falsity, but to apply the appropriate law to the situation. This is clearly a question of law.392 (Emphasis in the original)
As a general rule, the Court's jurisdiction in a Rule 45 petition is limited to the review of pure questions of law. A question of law arises when the doubt or difference exists as to what the law is on a certain state of facts. Negatively put, Rule 45 does not allow the review of questions of fact. A question of fact exists when the doubt or difference arises as to the truth or falsity of the alleged facts.
The test in determining whether a question is one of law or of fact is "whether the appellate court can determine the issue raised without reviewing or evaluating the evidence, in which case, it is a question of law[.]" Any question that invites calibration of the whole evidence, as well as their relation to each other and to the whole, is a question of fact and thus proscribed in a Rule 45 petition.394 (Citations omitted)
Once the Certificate of Sale is entered in the Primary Book of Entry of the Registry of Deeds with the registrant having paid all the required fees and accomplished all that is required of him under the law to cause registration, the registration is complete.396
3. The Sheriffs Provisional Certificate of Sale was annotated at the back of the aforementioned titles but it does not bear the signature of the former Registrar of Deeds. Noted however is that the portion below the annotation of the Provisional Sheriffs [sic] Certificate of Sale there appears to be erasures ("snowpake"), and [Atty. Cruzabra] is not in a position to conclude as to the circumstances [relative to said erasures], for lack of personal knowledge as to what transpired at that time.401 (Citation omitted)
Respondent herein likewise admits that she finally signed the PNB transaction annotated on the subject titles when she was informed that the motion for reconsideration was denied by this Authority, but she subsequently erased her signature when she subsequently found out that an appeal was filed by the Limso spouses.
....
The registration of these documents became complete when respondent affixed her signature below these annotations. Whatever information belatedly gathered thereafter relative to the circumstances as to the registrability of these documents, respondent can not unilaterally take judicial notice thereof and proceed to lift at her whims and caprices what has already been officially in force and effective, by erasing thereon her signature.402
WHEREFORE, in view of the foregoing, the Sheriff's Provisional Certificate of Sale dated February 04, 2002 is registerable on TCT Nos. T-147820, T-147386, and T-247012, provided all other registration requirements are complied with.408 (Emphasis supplied)
WHEREFORE, in view of the foregoing[J the Sheriff's Provisional Certificate of Sale dated February 4, 2002 is registrable on TCT Nos. T-147820, T-147821, T-147386 and T-247012, provided all other registration requirements are complied with.410 (Emphasis supplied)
ATTY. [BENILDA A.] TEJADA:
Yes, we can show the documents which we are going to file your Honors.
We would like to state also your Honors the fact of why no registration was ever made in this case. Counsel forgot to mention that the fact of no registration is simply because the Register of Deeds refused to register our Certificate of Sale. We have a pending case against them Sir before the LRA and before the Ombudsman fore [sic] refusal to register our Certificate of Sale. Now, we have filed this case because inspite [sic] of the fact the Register of Deeds addressed a consulta to the Land Registration Authority on the registerity of the Certificate of Sale your Honors [,] [i]t was at their instance that there was a consulta.
And then, the Land Registration Authority has already rendered its opinion that the document is registrable. Despite that your Honors, the document has never been registered. So that was the subject of our case against them. We do not understand the intransigencies we do not understand the refusal.427
SECTION 56. Primary Entry Book; Fees; Certified Copies. — Each Register of Deeds shall keep a primary entry book in which, upon payment of the entry fee, he shall enter, in the order of their reception, all instruments including copies of writs and processes filed with him relating to registered land. He shall, as a preliminary process in registration, note in such book the date, hour and minute of reception of all instruments, in the order in which they were received. They shall be regarded as registered from the time so noted, and the memorandum of each instrument, when made on the certificate of title to which it refers, shall bear the same date: Provided, that the national government as well as the provincial and city governments shall be exempt from the payment of such fees in advance in order to be entitled to entry and registration. (Emphasis supplied)
[F]or the registration of an involuntary instrument, the law does not require the presentation of the owner's duplicate certificate of title and considers the annotation of such instrument upon the entry book, as sufficient to affect the real estate to which it relates.
...
....
It is a ministerial duty on the part of the Register of Deeds to annotate the instrument on the certificate of sale after a valid entry in the primary entry book. P.D. No. 1524 provides:
chanRoblesvirtualLawlibrarySEC. 63. Foreclosure of Mortgage. — x x x
(b) If the mortgage was foreclosed extrajudicially, a certificate of sale executed by the officer who conducted the sale shall be filed with the Register of Deeds who shall make a brief memorandum thereof on the certificate of title.
In fine, petitioner's prayer for the issuance of a writ of injunction, to prevent the register of deeds from registering the subject certificate of sale, had been rendered moot and academic by the valid entry of the instrument in the primary entry book. Such entry is equivalent to registration.430 (Emphasis supplied, citation omitted)
Portion of Sec. 47 of RANo. 8791 is quoted:
chanRoblesvirtualLawlibraryxxx the purchaser at the auction sale concerned whether in a judicial or extra-judicial foreclosure shall have the right to enter upon and take possession of such property immediately after the date of the confirmation of the auction sale and administer the same in accordance with law xxx.From the quoted provision, one can readily conclude that before the sale is confirmed, it is not considered final or perfected to entitle the purchaser at the auction sale to the writ of possession as a matter of right....
In extra-judicial foreclosure, there is technically no confirmation of the auction sale in the manner provided for by Sec. 7 of Rule 68. The process though involves an application, preparation of the notice of extra-judicial sale, the extra-judicial foreclosure sale, issuance of the certificate of sale, approval of the Executive Judge or in the latter's absence, the Vice-Executive Judge and the registration of the certificate of sale with the Register of Deeds.
While it may be true that as found by the CA in the case earlier cited that DSIDC had only until January 24, 2001 to redeem its properties and that the registration of the certificate of foreclosure sale is no longer relevant in the reckoning of the redemption period, for purposes of the issuance of the writ of possession, petitioner to this Court's belief should complete the entire process in extra-judicial foreclosure. Otherwise the sale may not be considered perfected and the application for writ of possession may be denied.
The records disclose that contrary to petitioner's claim, the Certificate of Sale covering the subject properties has not been registered with the Registry of Deeds of Davao City as the Court finds no annotation thereof. As such, the sale is not considered perfected to entitle petitioner to the writ of possession as a matter of right.
Accordingly, for reason stated, the petition is DISMISSED. With the dismissal of the petition, PNB's Motion for Reception and Admission of PNB's Ex-parte Testimonial and Documentary Evidence is DENIED.
SO ORDERED.432
SECTION 47. Foreclosure of Real Estate Mortgage. — In the event of foreclosure, whether judicially or extrajudicially, of any mortgage on real estate which is security for any loan or other credit accommodation granted, the mortgagor or debtor whose real property has been sold for the full or partial payment of his obligation shall have the right within one year after the sale of the real estate, to redeem the property by paying the amount due under the mortgage deed, with interest thereon at the rate specified in the mortgage, and all the costs and expenses incurred by the bank or institution from the sale and custody of said property less the income derived therefrom. However, the purchaser at the auction sale concerned whether in a judicial or extrajudicial foreclosure shall have the right to enter upon and take possession of such property immediately after the date of the confirmation of the auction sale and administer the same in accordance with law. Any petition in court to enjoin or restrain the conduct of foreclosure proceedings instituted pursuant to this provision shall be given due course only upon the filing by the petitioner of a bond in an amount fixed by the court conditioned that he will pay all the damages which the bank may suffer by the enjoining or the restraint of the foreclosure proceeding.
Notwithstanding Act 3135, juridical persons whose property is being sold pursuant to an extrajudicial foreclosure, shall have the right to redeem the property in accordance with this provision until, but not after, the registration of the certificate of foreclosure sale with the applicable Register of Deeds which in no case shall be more than three (3) months after foreclosure, whichever is earlier. Owners of property that has been sold in a foreclosure sale prior to the effectivity of this Act shall retain their redemption rights until their expiration. (Emphasis supplied)
SECTION 7. In any sale made under the provisions of this Act, the purchaser may petition the Court of First Instance of the province or place where the property or any part thereof is situated, to give him possession thereof during the redemption period, furnishing bond in an amount equivalent to the use of the property for a period of twelve months, to indemnify the debtor in case it be shown that the sale was made without violating the mortgage or without complying with the requirements of this Act. Such petition shall be made under oath and filed in form of an ex parte motion in the registration or cadastral proceedings if the property is registered, or in special proceedings in the case of property registered under the Mortgage Law or under section one hundred and ninety-four of the Administrative Code, or of any other real property encumbered with a mortgage duly registered in the office of any register of deeds in accordance with any existing law, and in each case the clerk of the court shall, upon the filing of such petition, collect the fees specified in paragraph eleven of section one hundred and fourteen of Act Numbered Four hundred and ninety-six, as amended by Act Numbered Twenty-eight hundred and sixty-six, and the court shall, upon approval of the bond, order that a writ of possession issue, addressed to the sheriff of the province in which the property is situated, who shall execute said order immediately.
During the one-year redemption period, as contemplated by Section 7 of the above-mentioned law, a purchaser may apply for a writ of possession by filing an ex parte motion under oath in the registration or cadastral proceedings if the property is registered, or in special proceedings in case the property is registered under the Mortgage Law. In this case, a bond is required before the court may issue a writ of possession.436
The difference in the treatment of juridical persons and natural persons was based on the nature of the properties foreclosed — whether these are used as residence, for which the more liberal one-year redemption period is retained, or used for industrial or commercial purposes, in which case a shorter term is deemed necessary to reduce the period of uncertainty in the ownership of property and enable mortgagee-banks to dispose sooner of these acquired assets. It must be underscored that the General Banking Law of 2000, crafted in the aftermath of the 1997 Southeast Asian financial crisis, sought to reform the General Banking Act of 1949 by fashioning a legal framework for maintaining a safe and sound banking system. In this context, the amendment introduced by Section 47 embodied one of such safe and sound practices aimed at ensuring the solvency and liquidity of our banks.442 (Citation omitted)
Endnotes:
* Designated additional member per Raffle dated January 25, 2016.
1 Spouses Robert Alan L. Limso and Nancy Lee Limso were co-debtors in their personal capacities and as officers of Davao Sunrise Investment and Development Corporation.
2 Rollo (G.R. No. 158622, Vol. I), p. 284, Amended Petition for Declaratory Relief docketed as Civil Case No. 29,036-2002.
3 Id. at 6-7, Petition for Review on Certiorari.
4 Id. at 7, Petition for Review on Certiorari, and 423-446, Transfer Certificates of Title with Memorandum of Encumbrances.
5Rollo (G.R. No. 205463), p. 226, Credit Agreement.
6Rollo (G.R. No. 158622, Vol. II), p. 133, Conveyance in Payment of Subscription to Increase of Capital Stock of a Corporation.
7Rollo (G.R. No. 158622, Vol. I), p. 7.
8Rollo (G.R. No. 173194), p. 50, Petition for Review.
9 Id.
10Rollo (G.R. No. 205463), p. 274, Conversion, Restructuring and Extension Agreement.
11Rollo (G.R. No. 173194), pp. 93-94, Conversion, Restructuring and Extension Agreement.
12 Id. at 51-52, Petition for Review.
13 Id. at 93, Conversion, Restructuring and Extension Agreement.
14Rollo (G.R. No. 158622, Vol. I), p. 8.
15Rollo (G.R. No. 173194), p. 52, Petition for Review.
16 Id.
17 Id.
18 Id. at 209, Court of Appeals Decision in CA G.R. SP No. 63351.
19 Id.
20Rollo (G.R. No. 205463), p. 13, Petition for Review on Certiorari.
21Rollo (G.R. No. 158622, Vol. I), p. 9.
22 Id.
23 Id. at 106, Amended Complaint.
24Rollo (G.R. No. 173194), p. 204, Court of Appeals Decision in CA G.R. SP No. 63351. The Executive Judge at that time was Hon. Virginia Hofileña-Europa.cralawred
25Rollo (G.R. No. 158622, Vol. I), p. 241, Regional Trial Court Order in Civil Case No. 28,170-2000.
26 Id. at 10, Petition for Review on Certiorari.cralawred
27 Id. at 10-11.
28Rollo (G.R. No. 173194), pp. 149-156. The Order was issued by Judge Renato A. Fuentes of Branch 17, Regional Trial Court, Davao City.
29 Id. at 156.
30 Id. at 164, Regional Trial Court Order in Civil Case No. 28,170-2000. The Order was issued by Judge Renato A. Fuentes of Branch 17, Regional Trial Court, Davao City.
31Rollo (G.R. No. 158622, Vol. I), pp. 11-12, Petition for Review on Certiorari.
32 Id. at 12.
33Rollo (G.R. No. 173194), pp. 201-215. The Decision was penned by Associate Justice Salvador J. Valdez, Jr. (Chair) and concurred in by Associate Justices Mercedes Gozo-Dadole and Sergio L. Pestafio of the Fifteenth Division.
34Rollo (G.R. No. 158622, Vol. I), p. 12, Petition for Review on Certiorari.
35 Id.
36 Id.
37Rollo (G.R. No. 173194), p. 216. The Resolution states:
G.R. No. 152812 (Davao Sunrise Investment and Development Corporation, et al. vs. Court of Appeals, et al). - The Court Resolves to DENY the motions of petitioner for second and third extensions totalling thirty (30) days from May 7, 2002 within which to file a petition for review on certiorari:
(a) considering that the first motion for extension of time to file the petition for review on certiorari was granted with warning; and
(b) for failing to submit proof of service of the motions (e.g., the affidavits of the party serving) as required under Sec. 13, Rule 13, 1997 Rules of Civil Procedure.
The Court further Resolves to DENY the petition for review on certiorari of the decision and resolution of the Court of Appeals dated January 10, 2002 and March 15, 2002, respectively, for late filing in view of the denial of the motions for extensions of time to file the same.
38Rollo (G.R. No. 158622, Vol. 1), p. 12, Petition for Review on Certiorari; rollo (G.R. No. 205463) p. 14, Petition for Review on Certiorari.
39Rollo (G.R. No. 173194), pp. 220-227.cralawred
40 Rollo (G.R. No. 158622, Vol. I), p. 13, Petition for Review on Certiorari.
41Rollo (G.R. No. 205463), p. 14, Petition for Review on Certiorari.
42 Id.
43 Id.
44 Id.
45Rollo (G.R. No. 158622, Vol. I), P- 13, Petition for Review on Certiorari.
46 Id. at 13-17.
47 Id. at 295-296. The temporary restraining order was issued by Presiding Judge William M. Layague of Branch 14, Regional Trial Court, Davao City.
48 Id. at 17, Petition for Review on Certiorari.
49 Id. at 297, Regional Trial Court Order in SP. Civil Case No. 29,036-2002. The Order states:
"Considering that under Par. (d), Section 4 of the 1997 Rules of Civil Procedure which is based on Administrative Circular No. 20-95 as interpreted by the Supreme Court in A.M. No. MTJ-00-1250, February 28, 2001, the application for a Temporary Restraining Order can be acted upon only after all parties are heard in a summary hearing which shall be conducted within twenty-four (24) hours after the Sheriff's Return of Service, the Temporary Restraining Order issued by this Court dated April 10, 2002 pursuant to the first paragraph of Section 5 of the same Rules of Civil Procedure is hereby RECALLED and set aside."
50 Id. at 17-18, Petition for Review on Certiorari.
51 Id. at 18.
52 Id. at 142, Regional Trial Court Order in SP. Civil Case No. 29,036-2002.
53 Id. at 141-142.
54 Id. at 20, Petition for Review on Certiorari.
55 Id.
56 Rollo (G.R. No. 169441), p. 11, Petition for Review.
57 Id.
58Rollo (G.R. No. 158622, Vol. I), p. 20, Petition for Review on Certiorari.
59Rollo (G.R. No. 205463), p. 15, Petition for Review on Certiorari.
60 Id.
61 Id.
62 Id.
63 Id.
64Rollo (G.R. No. 158622, Vol. I), pp. 144-150, Regional Trial Court Order in SP. Civil Case No. 29,036- 2002.
65 Id. at 21-22, Petition for Review on Certiorari. CA G.R. SP No. 71527 was brought up to this court under Rule 45 and was docketed as G.R. No. 158622 (Id. at 3).
66Rollo (G.R. No. 205463), p. 16, Petition for Review on Certiorari.
67 Id. at 10 and 16. The Petition for Issuance of the Writ of Possession is entitled In the Matter of the Petition Ex-Partefor the Issuance of Writ of Possession under L.R.C. Record No. 12973; 18031; and LRC Cadastral Record No. 317, Philippine National Bank.
68Rollo (G.R. No. 169441), p. 16, Petition for Review.
69 Id. at 17.
70 The Petition docketed as G.R. No. 169441 states Branch 17, but it may be deemed a typographical error as Civil Case No. 29,036-2002 was raffled to Branch 14 of the Regional Trial Court of Davao City.
71Rollo (G.R. No. 169441), pp. 17-18, Petition for Review.
72Rollo (G.R. No. 169441), pp. 752-756.
73Rollo (G.R. No. 169441), p. 18, Petition for Review; rollo (G.R. No. 205463), p. 112, Omnibus Motion for Leave to Intervene; to File/Admit herein attached Comment-in-Intervention; and to Consolidate Cases, and 128, Regional Trial Court Order in Other Case No. 124-2002.
74Rollo (G.R. No. 158622, Vol. I), p. 22, Petition for Review on Certiorari.
75 Id. at 22-23.
76 Id. at 75-95. The Decision was penned by Associate Justice Eubulo G. Verzola (Chair) and concurred in by Associate Justices Eugenio S. Labitoria and Candido V. Rivera of the Special Third Division.
77 Id. at 29, Petition for Review on Certiorari.
78 Id.
79 Id.
80 Id. at 105, Court of Appeals Resolution in CA G.R. SP. No. 71527. The Resolution was penned by Associate Justice Eugenio S. Labitoria (Chair) and concurred in by Associate Justices Andres B. Reyes, Jr. and Regalado E. Maambong of the Fifth Division.
81 Id. at 3-71.
82 Id. at 3.
83 Id. at 787-804. The Decision was penned by Presiding Judge Renato A. Fuentes of Branch 17, Regional Trial Court, Davao City.
84 Id. at 791-803.
85 Id. at 803-804.
86 Id. at 805, Regional Trial Court Order in Civil Case No. 28,170-2000.
87Rollo (G.R. No. 158622, Vol. I), pp. 805-810. The Order was issued by Presiding Judge Renato A. Fuentes of Branch 17, Regional Trial Court, Davao City.
88 Id. at 810.
89Rollo (G.R. No. 196958), p. 21, Petition for Review.
90 Id.
91 Rollo (G.R. No. 169441), p. 16, Petition for Review.
92 The Petition in G.R. No. 169441 states August 20, 2003, but it may be deemed a typographical error. Based on the allegations in the Petition, the proper date would be August 20, 2002.
93 Rollo (G.R. No. 169441), p. 18, Petition for Review.
94 Id.
95 Id. at 824-826.
96 Id. at 824-825.
97 Id. at 20, Petition for Review. The Order states: "There is no basis for the Presiding Judge to inhibit himself considering that the allegation of bias and partiality is based merely on suspicion and conjecture."
98 Id. at 824-825.
99 Id. at 825.
100 Id. at 827-852.
101 Id. at 827-852.
102 Id. at 22.
103 Id.
104 Id.
105 Id. at 23.
106 Id.
107 Id.
108 Id.
109 Id. at 24.
110 Id.
111 Id. at 25.
112 Id.
113 Id. at 1129-1162. The Decision was penned by Associate Justice Teresita Dy-Liacco Flores (Chair) and concurred in by Associate Justices Romulo V. Borja and Rodrigo F. Lim, Jr. of the Twenty-Third Division.
114 Id. at 1163-1193.
115 Id. at 1197. The Resolution was penned by Associate Justice Teresita Dy-Liacco Flores (Chair) and concurred in by Associate Justices Romulo V. Borja and Rodrigo F. Lim, Jr. of the Former Twenty- Third Division.
116 Id. at 26, Petition for Review. Upon checking with the Judgment Division, G.R. No. 168947 was dismissed on August 17, 2005 for failure to show reversible error on the part of the Court of Appeals. Entry of Judgment was made on April 27, 2006.
117 Id.
118 Id.
119 Id.
120 Id. at 27.
121 Id.
122 Id.
123 Id.
124 Id. at 27-28.
125 Id. at 28.
126 Id.
127 Id. at 28-29.
128 Id. at 29-30.
129 Id. at 30.
130 Id. at 30-31.
131 Id. at 32.
132 Id. at 1447. The Order was issued by Judge Jesus V. Quitain of Branch 15, Regional Trial Court, Davao City.
133 Id. at 32, Petition for Review.
134 Id.
135 Id.
136 Id. at 1465-1514.
137 Id. at 33, Petition for Review.
138 Id. at 1465-1466, Petition docketed as CA G.R. SP No. 85847.
139 Id. at 63-70. The Decision was penned by Associate Justice Mariflor P. Punzalan Castillo (Chair) and concurred in by Associate Justices Sesinando E. Villon and Edgardo A. Camello of the Special Twenty- Second Division.
140 Id. at 64. CA G.R. SP No. 79500 is a Petition for Certiorari questioning the trial court's denial of the Motion for Inhibition.
141 Id. at 33, Petition for Review.
142 Id. at 69, Court of Appeals Decision in CA G.R. SP No. 79500.
143 Id. at 72-73. The Resolution was penned by Associate Justice Edgardo A. Camello and concurred in by Associate Justices Teresita Dy-Liacco Flores (Chair) and Myrna Dimaranan-Vidal of the Twenty-First Division.
144 Id. at 33-34, Petition for Review.
145Rollo (G.R. No. 205463), p. 87, Land Registration Authority's Resolution in Adm. Case No. 02-13. The administrative case was for Grave Misconduct and Conduct Unbecoming of a Public Official. The complaints against Atty. Patriarca were filed in 2002. The Resolution of the Land Registration Authority in the administrative case against Atty. Patriarca states that in a directive dated July 31, 2002, she was directed to show cause why disciplinary action should not be taken against her.
146 Id. at 16, Petition for Review on Certiorari. The criminal Complaint was filed before the Office of the Ombudsman-Mindanao for violation of Rep. Act No. 3019, sec. 3(f), which provides:
SECTION 3. Corrupt practices of public officers. — In addition to acts or omissions of public officers already penalized by existing law, the following shall constitute corrupt practices of any public officer and are hereby declared to be unlawful:
....
(f) Neglecting or refusing, after due demand or request, without sufficient justification, to act within a reasonable time on any matter pending before him for the purpose of obtaining, directly or indirectly, from any person interested in the matter some pecuniary or material benefit or advantage, or for the purpose of favoring his own interest or giving undue advantage in favor of or discriminating against any other interested party.
147 Id. at 16, Petition for Review on Certiorari. The administrative case against Atty. Patriarca was entitled Ma. L. Pesayco v. Florenda F. T. Patriarca.
148 Id. at 87-90.
149 Id. at 90.
150 Id. at 17, Petition for Review on Certiorari.
151 Id.
152 Id.
153 The parties used the term "snowpake." "Snowpake" is a colloquial term describing the white correction fluid used to cover errors written or printed on paper. In this case, a signature was erased using correction fluid.
154Rollo (G.R. No. 205463), p. 17, Petition for Review on Certiorari.
155Rollo (G.R. No. 173194), pp. 262 and 317.
156 Id. at 58, Petition for Review.
157 Id. at 58-59.
158 Id. at 59.
159 Id. at 79-80, Court of Appeals Resolution in CA-G.R. CV. No. 79732.
160 Id. at 80-81.
161 Id. at 80, citing Commodities Storage & Ice Plant Corporation v. Court of Appeals, 340 Phil. 551, 559 (1997) [Per J. Puno, Second Division].
162 Id. at 80.
163 Rules of Court, Rule 59, sec. l(a) provides: Rule 59. Receivership
SECTION 1. Appointment of Receiver. — Upon a verified application, one or more receivers of the property subject of the action or proceeding may be appointed by the court where the action is pending, or by the Court of Appeals or by the Supreme Court, or a member thereof, in the following cases: (a) When it appears from the verified application, and such other proof as the court may require, that the party applying for the appointment of a receiver has an interest in the property or fund which is the subject of the action or proceeding, and that such property or fund is in danger of being lost, removed, or materially injured unless a receiver be appointed to administer and preserve it[.]
164Rollo (G.R. No. 173194), p. 81, Court of Appeals Resolution in CA-G.R. CV. No. 79732.
165 Id.
166 Id. at 77-82. The Resolution was penned by Associate Justice Normandie B. Pizarro and was concurred in by Associate Justices Edgardo A. Camello (Chair) and Ricardo R. Rosario of the Twenty-Third Division.
167 Id. at 82.
168 Id. at 84-86. The Resolution was penned by Associate Justice Normandie B. Pizarro and was concurred in by Associate Justices Edgardo A. Camello (Chair) and Ramon R. Garcia, of the Special Twenty-Third Division.
169 Id. at 59, Petition for Review.
170 Id. at 45-75.
171 Id. at 59.
172 Id. at 45.
173 Id. at 558-561. Other Case No. 124-2002 was re-raffled to Branch 16 of the Regional Trial Court of Davao City. The Order was issued by Presiding Judge Emmanuel C. Carpio.
174Rollo (G.R. No. 205463), p. 19, Petition for Review on Certiorari; Rollo (G.R. No. 173194), p. 561, Order in Other Case No. 124-2002.
175Rollo (G.R. No. 205463), p. 19, Petition for Review on Certiorari.
176 Id. at 21.
177 Id. at 23.
178 Id. at 23, Petition for Review on Certiorari, and 55, Court of Appeals Decision in CA-G.R. CV No. 01464-MIN.
179Rollo (G.R. No. 173194), p. 82, Court of Appeals Resolution in CA-G.R. CV No. 79732.
180Rollo (G.R. No. 196958), p. 98, Court of Appeals Decision in CA-G.R. CV No. 79732-MIN.
181Rollo (G.R. No. 196958), p. 111, Court of Appeals Decision in CA-G.R. CVNo. 79732-MIN.
182 Id. at 98-127. The Decision was penned by Associate Justice Ruben C. Ayson, concurred in by Associate Justices Romulo V. Borja (Chair) and Edgardo A. Camello, and dissented from by Associate Justices Rodrigo F. Lim, Jr. and Michael P. Elbinias, of the Special Division of Five, Mindanao Station. Associate Justice Camello penned a Concurring Opinion. Associate Justice Lim, Jr. penned a Separate Dissenting Opinion.
183 Id. at 111-114.
184 Id. at 111, citing par. 1.04 of the original revolving credit line agreement.
185 Id. at 112, citing par. 1.03 of the original loan agreement.
186 Id., citing par. 2.04 of the interest provision of Loan I.
187 Id. at 118.
188 Id. at 119-120.
189 Id. at 124.
190 CIVIL CODE, art. 1229 provides:
Article 1229. The judge shall equitable reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor. Even if there has been no performance, the penalty may also be reduced by the courts if it is iniquitous or unconscionable.
191Rollo (G.R. No. 196958), pp. 125-126.
192 Id.
193 Id. at 126-127.
194 Id. at 45, Petition for Review.
195 Id. at 154, Court of Appeals Resolution in CA-G.R. CV No. 79732-MIN.
196 Id.
197 Id.
198 Id. at 45, Petition for Review.
199 Id. at 160, Court of Appeals Resolution in CA-G.R. CV No. 79732-MfN.
200 Id. at 153-168. The Resolution was penned by Associate Justice Romulo V. Borja (Chair), concurred in by Associate Justices Edgardo A. Camello and Zenaida Galapate Laguilles, and dissented from by Associate Justices Rodrigo F. Lim, Jr. and Edgardo T. Lloren, of the Special Former Special Twenty-Second Division, Mindanao Station. Associate Justice Lim, Jr. penned a Dissenting Opinion.
201 Id. at 160.
202 Id. at 167.
203 Id. at 8-96.
204 Id. at 56-75.
205 Id. at 8.
206Rollo (GR. No. 197120), pp. 3-39.
207 Id. at 4.
208 Id.
209 Id. at 3.
210 Rollo (G.R. No. 205463), pp. 65-66, Court of Appeals Decision in CA-G.R. CV No. 01464-MIN.
211 Id. at 23-24, Petition for Review on Certiorari.
212 Id. at 8-52.
213 Id. at 8.
214Rollo (G.R. No. 158622, Vol. I), p. 3, Petition for Review on Certiorari.
215Rollo (G.R. No. 169441), p. 3, Petition for Review.
216Rollo (G.R. No. 172958), p. 66, Petition for Review.
217Rollo (G.R. No. 173194), p. 45, Petition for Review.
218Rollo (G.R. No. 196958), p. 8, Petition for Review.
219Rollo (G.R. No. 197120), p. 3, Petition for Review.
220Rollo (G.R. No. 205463), p. 8, Petition for Review on Certiorari.
221Rollo (G.R. No. 158622, Vol. I), p. 205, Regional Trial Court Order in SP. Civil Case No. 29,036-2002.
222 Id. at 94, Court of Appeals Decision in CA G.R. SP. No. 71527.
223Rollo (G.R. No. 169441), pp. 640-647.
224 Id. at 3, Petition for Review.
225 Id. at 18-20 and 22.
226Rollo (G.R. No. 169441), pp. 640-647.
227Rollo (G.R. No. 172958), pp. 131-149. The Decision was penned by Associate Justice Edgardo A. Camello and concurred in by Associate Justices Teresita Dy-Liacco Flores (Chair) and Myrna Dimaranan-Vidal of the Twenty-First Division.
228 Id. at 150-156. The Resolution was penned by Associate Justice Edgardo A. Camello and concurred in by Associate Justices Teresita Dy-Liacco Flores (Chair) and Myrna Dimaranan-Vidal of the Former Twenty-First Division.
229 Id. at 132, Court of Appeals Decision in CA G.R. SP No. 85847.
230Rollo (G.R. No. 173194), pp. 131-148, Amended Complaint in Civil Case No. 28,170-2000.
231 Id. at 77-82. The Resolution was penned by Associate Justice Normandie B. Pizarro and concurred in by Associate Justices Edgardo A. Camello (Chair) and Ricardo R. Rosario of the Twenty-Third Division.
232 Id. at 84-86. The Resolution was penned by Associate Justice Normandie B. Pizarro and concurred in by Associate Justices Edgardo A. Camello (Chair) and Ramon R. Garcia of the Special Twenty-Third Division.
233Rollo (G.R. No. 196958), p. 16. Petition for Review.
234 Id. at 98-127, Court of Appeals Decision in CA-G.R. CV No. 79732-MIN. The Decision was penned by Associate Justice Ruben C. Ayson, concurred in by Associate Justices Romulo V. Borja (Chair) and Edgardo A. Camello, and dissented from by Associate Justices Rodrigo F. Lim, Jr. and Michael P. Elbinias of the Special Division of Five, Mindanao Station. Associate Justice Camello penned a Concurring Opinion. Associate Justice Lim, Jr. penned a Separate Dissenting Opinion. The dispositive portion of the Court of Appeals decision stated:Wherefore, the assailed Decision dated June 19, 2002 and Order dated August 13, 2002 of the Regional Trial Court of Davao City, Branch 17 in Civil Case No. 28, 170-2000 declaring the unilateral imposition of interest rates by defendant-appellant PNB as null and void appealed from are affirmed with the modification that the obligation of plaintiffs-appellees arising from the Loan and Revolving Credit Line and subsequent Conversion, Restructuring and Extension Agreement as Loan I and Loan II should earn interest at the legal rate of twelve percent (12%) per annum computed from September 1, 1993 until fully paid and satisfied.
235 Id. at 153-168, Court of Appeals Resolution in CA-G.R. CV No. 79732-MIN. The Resolution was penned by Associate Justice Romulo V. Borja (Chair), concurred in by Associate Justices Edgardo A. Camello and Zenaida Galapate Laguilles, and dissented from by Associate Justices Rodrigo F. Lim, Jr. and Edgardo T. Lloren of the Special Former Special Twenty-Second Division, Mindanao Station. Associate Justice Lim, Jr. penned a Dissenting Opinion. The dispositive portion of the Resolution states:Wherefore, the Motion for Reconsideration dated September 3, 2009 filed by defendant-appellant, Philippine National Bank and the Motion for Partial Reconsideration dated September 4, 2009 filed by plaintiffs-appellees Davao Sunrise Investment and Development Corporation and Spouses Robert Alan L. Limso and Nancy Lee Limso, are BOTH DENIED for lack of merit.
SO ORDERED.
236 Rollo (G.R. No. 196958), pp. 98-127.
237 Id. at 153-168.
238 Id. at 98.
239 Rollo (G.R. No. 197120), pp. 235-252.
240 Id. at 44-73. The Decision was penned by Associate Justice Ruben C. Ayson, concurred in by Associate Justices Romulo V. Borja (Chair) and Edgardo A. Camello, and dissented from by Associate Justices Rodrigo F. Lim, Jr. and Michael P. Elbinias of the Special Division of Five, Mindanao Station. Associate Justice Camello penned a Concurring Opinion. Associate Justice Lim, Jr. penned a Separate Dissenting Opinion.
241 Id. at 99-114. The Resolution was penned by Associate Justice Romulo V. Borja (Chair), concurred in by Associate Justices Edgardo A. Camello and Zenaida Galapate Laguilles, and dissented from by Associate Justices Rodrigo F. Lim, Jr. and Edgardo T. Lloren, of the Special Former Special Twenty-Second Division, Mindanao Station. Associate Justice Lim, Jr. penned a Dissenting Opinion. Id. at 4, Petition for Review.
242 Rollo (G.R. No. 205463), p. 56, Court of Appeals Decision in CA-G.R. CV No. 01464-MIN.
244 Id. at 55-66. The Decision was penned by Associate Justice Romulo V. Borja and concurred in by Associate Justices Ma. Luisa Quijano-Padilla and Marie Christine Azcarraga-Jacob of the Twenty-First Division.
245Rollo (G.R. No. 169441), pp. 3000-3003.
246Rollo (G.R. No. 158622, Vol. I), pp. 1422-1423.
247Rollo (G.R. No. 169441), pp. 1775-1776.
248 Id. at 1776.
249Rollo (G.R. No. 173194), pp. 470A-470B.
250Rollo (G.R. No. 197120), pp. 565-566.
251Rollo (G.R. No. 196958), pp. 381-382, Notice of Death.
252Rollo (G.R. No. 158622, Vol. II), pp. 1140-1149.
253 Id. at 1142-1143.
254 Id. at 1158, Regional Trial Court Order in Other Case No. 124-2002.
255 Id. at 1158-1160. The Order was penned by Presiding Judge Emmanuel C. Carpio of Branch 16, Regional Trial Court, Davao City.
256 Id. at 1143-1144, Spouses Limso and Davao Sunrise's Motion to Withdraw Petitions in G.R. Nos. 172958,169441, and 158622.
257 Id. at 1147.
258 Rollo (G.R. No. 205463), p. 1087.
259 Id.
260 Id. at 111-125.
261 Id. at 113-114.
262 Id. at 108-109.
263 Id. at 983-1005.
264 Id. at 968-969.
265 Id. at 972-973.
266 Id. at 972.
267 Id. at 973.
268 Id. at 77-82. The Resolution was penned by Associate Justice Normandie B. Pizarro and concurred in by Associate Justices Edgardo A. Camello (Chair) and Ricardo R. Rosario of the Twenty-Third Division.
269 Id. at 1001-1002.
270 As amended by A.M. 07-7-12-SC.
271 556 Phil. 178 (2007) [Per J. Chico-Nazario, Third Division].
272 Id. at 188-189.
273 RULES OF COURT, Rule 57, sec. 20 provides:
SECTION 20. Claim for Damages on Account of Improper, Irregular or Excessive Attachment. — An application for damages on account of improper, irregular or excessive attachment must be filed before the trial or before appeal is perfected or before the judgment becomes executory, with due notice to the attaching party and his surety or sureties, setting forth the facts showing his right to damages and the amount thereof. Such damages may be awarded only after proper hearing and shall be included in the judgment on the main case[.]
274Rollo (G.R. No. 173194), p. 65, Petition for Review. Note that CA-G.R. CV No. 79732 was subsequently re-docketed as CA-G.R. CV No. 79732-MIN.
275 Id. at 67.
276 Id. at 67-68.
277 Id. at 471-498.
278 Id. at 477-481.
279 144 Phil. 143 (1970) [Per J. J.B.L. Reyes, En Banc].
280Rollo (G.R. No. 173194), p. 479, Comment.
281 This Decision refers to that in G.R. No. 152812.
282Rollo (G.R. No. 173194), pp. 478-479, Comment.
283 Id. at 480.
284 Id. at 480-481.
285 Id. at 481.
286 Id. at 488.
287 Id. at 492.
288 Id. at 666, Reply.
289 Id. at 667.
290 228 Phil. 529 (1986) [Per J. Gutierrez, Jr., Second Division].
291Rollo (G.R. No. 173194), p. 667, Reply.
292 Id. at 671-674.
293 Id. at 683.
294 Id. at 684.
295 Id.
296Rollo (G.R. No. 173194), pp. 79-80, Court of Appeals Resolution in CA-G.R. CV No. 79732. The injunction referred to is the writ of preliminary injunction issued in Civil Case No. 28,170-2000.
297 Id. at 216, Supreme Court Resolution.
298 Id. at 55-56, Petition for Review.
299 Id. at 201-202, Court of Appeals Decision in CAG.R. SPNo. 63351.
300 Id. at 201-215. The Decision was penned by Associate Justice Salvador J. Valdez, Jr. (Chair) and concurred in by Associate Justices Mercedes Gozo-Dadole and Sergio L. Pestafio of the Fifteenth Division.
301 Id. at 212-215, Court of Appeals Decision in CAG.R. SPNo. 63351.
302 Id. at 216-217.
303 Id. at 218.
304 508 Phil. 260 (2005) [Per J. Tinga, Second Division].
305 Id. at 277-278.
306 Rollo (G.R. No. 173194), pp. 262-272.
307 Id. at 271.
308Rollo (G.R. No. 196958), p. 98, Court of Appeals Decision in CA-G.R. CV No. 79732-MIN.
309 Phil. 551 (1997) [Per J. Puno, Second Division].
310 Id. at 559.
311Rollo (G.R. No. 173194), p. 33, Court of Appeals Resolution in CA-G.R. CV No. 79732.
312 Id. at 33-34.
313Ortigas & Company Limited Partnership v. Velasco, G.R. No. 109645, January 21, 2015 39-40 [Per J. Leonen, Second Division].
314Rollo (G.R. No. 173194), p. 682, Philippine National Bank's Reply. '
315 Id. at 337-340, Application for the Appointment of PNB as Receiver.
316Rollo (G.R. No. 196958), p. 13, Petition for Review; rollo (G.R. No. 197120), p. 4, Petition for Review.
317 Rollo (G.R. No. 196958), p. 52, Petition for Review.
318 Id. at 61.
319 Id. at 53-56.
320 Id. at 63.
321 639 Phil. 289 (2010) [Per J. Carpio, Second Division].
322 Rollo (G.R. No. 196958), p. 71, Petition for Review.
323 Id. at 78-79.
324 Id. at 294, Comment.
325 Id. at 321-322.
326 Id. at 297-298.
327 Id. at 298-300.
328 Id. at 300-301.
329 Id. at 322.
330 Id. at 292.
331 Id. at 365, Reply.
332 Id. at 367-368.
333 Id. at 304, Comment.
334 Id. at 314.
335 G.R. No. 187678, April 10, 2013, 695 SCRA 520 [Per J. Villarama, Jr., First Division].
336 Id. at 531.
337Allied Banking Corporation v. Court of Appeals, 348 Phil. 382, 390 (1998) [Per J. Bellosillo, First Division].
338Rollo (G.R. No. 196958), p. 113, Court of Appeals Decision in CA-G.R. CV No. 79732-MIN.
339 Id. at 121-122.
340Clemente v. Court of Appeals, G.R. No. 175483, October 14, 2015 7 [Per J. Jardeleza, Third Division]. See also Heirs of Spouses Mac v. Court of Appeals, et al, 697 Phil. 373, 383 (2012) [Per J. Mendoza, Third Division].
341Clemente v. Court of Appeals, G.R. No. 175483, October 14, 2015 7 [Per J. Jardeleza, Third Division].
342Rollo (G.R. No. 173194), p. 102.
343 Id. at 103.
344Rollo (G.R. No. 196958), p. 320, Comment.
345Spouses Castro v. Tan, et al, 620 Phil. 239, 247 (2009) [Per J. Del Castillo, Second Division].
346Spouses Abella v. Spouses Abella, G.R. No. 195166, July 8, 2015 12 [Per J. Leonen, Second Division].
347Rollo (G.R. No. 197120), pp. 139-140, Credit Agreement.
348 Id. at 143-144, Loan Agreement.
349 Id. at 181, Conversion, Restructuring and Extension Agreement.
350 Rollo (G.R. No. 196958), p. 118, Court of Appeals Decision in CA-G.R. CV No. 79732-MIN.
351 Id. at 313-314, Comment.
352 Id. at 314. The promissory notes are dated January 5, 1999.
353 Id.
354 236 Phil. 370 (1987) [Per J. Melencio-Herrera, En Banc].
355Rollo (G.R. No. 196958), p. 313, Comment. '.
356 Juico v. China Banking Corporation, G.R. No. 187678, April 10, 2013, 695 SCRA 520, 531 [Per J. Villarama, Jr., First Division].
357 Id. at 531-539.
358Philippine National Bank v. Court of Appeals, 273 Phil. 789, 798-799 (1991) [Per J. Griflo-Aquino, First Division]; Philippine National Bank v. Court of Appeals, G.R. No. 107569, November 8, 1994, 238 SCRA 20, 26 [Per J. Puno, Second Division]; Philippine National Bank v. Court of Appeals, 328 Phil. 54, 60-61 (1996) [Per J. Mendoza, Second Division]; Philippine National Bank v. Manalo, G.R. No. 174433, February 24, 2014, 717 SCRA 254, 269-270 [Per J. Bersamin, First Division]; Silos v. Philippine National Bank, G.R. No. 181045, July 2, 2014, 728 SCRA 617, 643-655 [Per J. Del Castillo, Second Division].
359Philippine National Bank v. Court of Appeals, 273 Phil. 789, 798 (1991) [Per J. Grino-Aquino, First Division].
360 G.R. No. 107569, November 8, 1994,238 SCRA 20 [Per J. Puno, Second Division].
361 Id. at 26-27.
362 Id. at 22.
363 Id. at 26.
364Philippine National Bank v. Court of Appeals, 328 Phil. 54, 63 (1996) [Per J. Mendoza, Second Division]. In this case, the assailed interest rate provision in the real estate mortgage stated:
"(k) INCREASE OF INTEREST RATE:
The rate of interest charged on the obligation secured by this mortgage as well as the interest on the amount which may have been advanced by the MORTGAGEE, in accordance with the provision hereof, shall be subject during the life of this contract to such an increase within the rate allowed by law, as the Board of Directors of the MORTGAGEE may prescribe for its debtors" (Id. at 57).
365 Id. at 63.
366 Mallari v. Prudential Bank (now Bank of the Philippine Islands), G.R. No. 197861, June 5, 2013, 697 SCRA 555, 566 [Per J. Peralta, Third Division].
367 See Andal v. Philippine National Bank, G.R. No. 194201, November 27, 2013, 711 SCRA 15, 28 [Per J. Perez, Second Division].
368 G.R. No. 195166, July 8, 2015
[Per J. Leonen, Second Division].
369 Id. at 10.
370 Id. The term "conventional interest" was defined in the case as "interest as the cost of borrowing money" (Id. at 7).
371 CIVIL CODE, art. 2212 provides:
Article 2212. Interest due shall earn legal interest from the time it is judicially demanded, although the obligation may be silent upon this point.
372 G.R. No. 189871, August 13, 2013, 703 SCRA 439 [Per J. Peralta, En Banc], specifically: "1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 6% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code" (Id. at 457-458).
373Spouses Abella v. Spouses Abella, G.R. No. 195166, July 8, 2015 13 [Per J. Leonen, Second Division].
374 Id.
375Rollo (G.R. No. 173194), pp. 106-112.
376 Id. at 52, Petition for Review.
377Rollo (G.R. No. 196958), pp. 78-79, Petition for Review.
378 St. James College of Paranaque, et al. v. Equitable PCI Bank, 641 Phil. 452, 462 (2010) [Per J. Velasco, Jr., First Division].
379Rollo (G.R. No. 205463), pp. 221-224.
380 Id. at 223.
381 Id. at 272-277.
382 Id. at 276.
383 Id. at 272-273.
384Rollo (G.R. No. 196958), p. 105, Court of Appeals Decision in CA-G.R. CV No. 79732-MIN.
385 Id. at 34, Petition for Review.
386 Id. at 125-127, Court of Appeals Decision in CA-G.R. CV No. 79732-MIN.
387 PH Credit Corporation v. Court of Appeals, 421 Phil. 821, 833 (2001) [Per J. Panganiban, Third Division].
388 Civil Code, art. 1409 provides:
Article 1409. The following contracts are inexistent and void from the beginning:
(1) Those whose cause, object or purpose is contrary to law, morals, good customs, public order or public policy;
(2) Those which are absolutely simulated or fictitious;
(3) Those whose cause or object did not exist at the time of the transaction;
(4) Those whose object is outside the commerce of men;
(5) Those which contemplate an impossible service;
(6) Those where the intention of the parties relative to the principal object of the contract cannot be ascertained;
(7) Those expressly prohibited or declared void by law.
These contracts cannot be ratified. Neither can the right to set up the defense of illegality be waived.
389 Rollo (G.R. No. 205463), p. 25, Petition for Review on Certiorari.
390 Id. at 25-26.
391 Id. at 30.
392 Id. at 64-65, Court of Appeals Decision in CA-G.R. CV No. 01464-MIN.
393 G.R. No. 172551, January 15, 2014, 713 SCRA 370 [Per J. Brion, Second Division].
394 Id. at 378-379.
395 632 Phil. 471,494 (2010) [Per J. Leonardo-De Castro, First Division].
396Rollo (GR, No. 205463), p. 38, Petition for Review on Certiorari.
397 Id. at 39.
398 Id.
399 Id. at 906, Philippine National Bank's Memorandum.
400 Id. at 930.
401 Id.
402 Id. at 89.
403 Id. at 41-42, Petition for Review on Certiorari.
404 General Banking Law of 2000.
405 Rollo (G.R. No. 205463), pp. 44-48, Petition for Review on Certiorari.
406 Id. at 79-84.
407 Id. at 80.
408 Id.
409 Id. at 80-81.
410 Id. at 81.
411 481 Phil. 298 (2004) [Per J. Puno, Second Division].
412Rollo (G.R. No. 205463), pp. 81-82, Office of the Solicitor General's Comment.
413 Id. at 82.
414 Id. at 951, Office of the Solicitor General's Memorandum.
415 Id. at 860-897.
416 Pres. Decree No. 1529 (1978), sec. 117 provides:
SECTION 117.Procedure. — When the Register of Deeds is in doubt with regard to the proper step to be taken or memorandum to be made in pursuance of any deed, mortgage or other instrument presented to him for registration, or where any party in interest does not agree with the action taken by the Register of Deeds with reference to any such instrument, the question shall be submitted to the Commissioner of Land Registration by the Register of Deeds, or by the party in interest thru the Register of Deeds.
Where the instrument is denied registration, the Register of Deeds shall notify the interested party in writing, setting forth the defects of the instrument or legal grounds relied upon, and advising him that if he is not agreeable to such ruling, he may, without withdrawing the documents from the Registry, elevate the matter by consulta within five days from receipt of notice of the denial of registration to the Commissioner of Land Registration upon payment of a consulta fee in such amount as shall be prescribed by the Commissioner of Land Registration.
The Register of Deeds shall make a memorandum of the pending consulta on the certificate of title which shall be cancelled motu proprio by the Register of Deeds after final resolution or decision thereof, or before resolution, if withdrawn by petitioner.
The Commissioner of Land Registration, considering the consulta and the records certified to him after notice to the parties and hearing, shall enter an order prescribing the step to be taken or memorandum to be made. His resolution or ruling in consultas shall be conclusive and binding upon all Registers of Deeds, provided, that the party in interest who disagrees with the final resolution, ruling or order of the Commissioner relative to consultas may appeal to the Court of Appeals within the period and in the manner provided in Republic Act No. 5434.
417Rollo (G.R. No. 205463), pp. 881-882, Spouses Limso and Davao Sunrise's Memorandum.
418 Id. at 883-884.
419 Id. at 881. Although the records do not show whether DSIDC and Spouses Limso were allowed to intervene, a copy of the Resolution requiring the parties to submit their respective memoranda was sent to counsel for DSIDC and Spouses Limso.
420 Id. at 884.
421 Pres. Decree No. 1529 (1978), sec. 56 provides:
SECTION 56. Primary Entry Book; Fees; Certified Copies. — Each Register of Deeds shall keep a primary entry book in which, upon payment of the entry fee, he shall enter, in the order of their reception, all instruments including copies of writs and processes filed with him relating to registered land. He shall, as a preliminary process in registration, note in such book the date, hour and minute of reception of all instruments, in the order in which they were received. They shall be regarded as registered from the time so noted, and the memorandum of each instrument, when made on the certificate of title to which it refers, shall bear the same date: Provided, that the national government as well as the provincial and city governments shall be exempt from the payment of such fees in advance in order to be entitled to entry and registration.
Every deed or other instrument, whether voluntary or involuntary, so filed with the Register of Deeds shall be numbered and indexed and endorsed with a reference to the proper certificate of title. All records and papers relative to registered land in the office of the Register of Deeds shall be open to the public in the same manner as court records, subject to such reasonable regulations as the Register of Deeds, under the direction of the Commissioner of Land Registration, may prescribe. All deeds and voluntary instruments shall be presented with their respective copies and shall be attested and sealed by the Register of Deeds, endorsed with the file number, and copies may be delivered to the person presenting them.
Certified copies of all instruments filed and registered may also be obtained from the Register of Deeds upon payment of the prescribed fees.
422 Property Registration Decree (1978).
423Rollo (G.R. No. 205463), p. 885, Nancy Limso and Davao Sunrise's Memorandum.
424 Id. at 886-888.
425 Id. at 887-888.
426 Id. at 886-887.
427 Id. at 887.
428 Id. at 894.
429Autocorp Group and Autographies, Inc. v. Court of Appeals, 481 Phil. 298, 312 (2004) [Per J. Puno, Second Division].
430 Id. at 311-312.
431Rollo (G.R. No. 205463), p. 89, Land Registration Authority's Resolution.
432Rollo (G.R. No. 173194), pp. 560-561, Regional Trial Court Order in Other Case No. 124-2002.
433 The General Banking Law of 2000.
434 An Act to Regulate the Sale of Property Under Special Powers Inserted in or Annexed to Real Estate Mortgages (1924).
435 G.R. No. 172504, July 31, 2013, 702 SCRA615 [Per J. Brion, Second Division].
436 Id. at 623.
437Tolosa v. United Coconut Planters Bank, G.R. No. 183058, April 3, 2013, 695 SCRA 138, 146 [Per J. Perez, Second Division].
438Rollo (G.R. No. 158622, vol. 1), pp. 13-17, Petition for Review on Certiorari.
439 Act 3135 (1924), sec. 6, as amended by Act 4118 (1933), sec. 1, provides:
SEC. 6. In all cases in which an extrajudicial sale is made under the special power hereinbefore referred to, the debtor, his successors in interest or any judicial creditor or judgment creditor of said debtor, or any person having a lien on the property subsequent to the mortgage or deed of trust under which the property is sold, may redeem the same at any time within the term of one year from and after the date of the sale; and such redemption shall be governed by the provisions of sections four hundred and sixty-four to four hundred and sixty-six, inclusive, of the Code of Civil Procedure, in so far as these are not inconsistent with the provisions of this Act.
440 Rep. Act No. 8791 (2000), sec. 47.
441 G.R. No. 195540, March 13, 2013. 693 SCRA439 [Per J. Villarama, Jr., First Division].
442 Id. at 453.
443Rollo (G.R. No. 173194), pp. 106-111, Petition for Extrajudicial Foreclosure of Real Estate Mortgage.
444 G.R. No. 189871, August 13, 2013, 703 SCRA 439, 457-458 [Per J. Peralta, En Banc]. In Nacar, this court held: "To recapitulate and for future guidance, the guidelines laid down in the case of Eastern Shipping Lines are accordingly modified to embody BSP-MB Circular No. 799, as follows:
I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi- delicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII on 'Damages' of the Civil Code govern in determining the measure of recoverable damages.
II. With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:
1. When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 6% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.
2. When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages, except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code), but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount finally adjudged.
3. When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 6% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.
And, in addition to the above, judgments that have become final and executory prior to July 1, 2013, shall not be disturbed and shall continue to be implemented applying the rate of interest fixed therein." (Emphasis in the original, citation omitted)