FIRST DIVISION
G.R. No. 204672, February 18, 2015
SPOUSES RODOLFO AND MARCELINA GUEVARRA, Petitioners, v. THE COMMONER LENDING CORPORATION, INC., Respondent.
D E C I S I O N
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1are the Decision2 dated October 3, 2011 and the Resolution3 dated October 17, 2012 of the Court of Appeals (CA) in CA-G.R. CV No. 02895,which affirmed with modification the Order4 dated October 20, 2008 of the Regional Trial Court of Guimbal, Iloilo, Branch 67 (RTC) in Cadastral Case Nos. 118 and 122, allowing petitioners-spouses Rodolfo and Marcelina Guevarra (Sps. Guevarra) to exercise their right to repurchase the mortgaged property subject of this case, conditioned upon the payment of the purchase price fixed by respondent The Commoner Lending Corporation, Inc. (TCLC).chanroblesvirtuallawlibrary
SEC. 119. Every conveyance of land acquired under the free patent or homestead provisions, when proper, shall be subject to repurchase by the applicant, his widow, or legal heirs, within a period of five years from the date of the conveyance.cralawlawlibrary
Now, as regards the redemption price, applying Sec. 30 of Rule 39 of the [Rules], the petitioners should reimburse the private respondent the amount of the purchase price at the public auction plus interest at the rate of one per centum per month up to November 17, 1983, together with the amounts of assessments and taxes on the property that the private respondent might have paid after purchase and interest on the last named amount at the same rate as that on the purchase price. (Emphases supplied)55cralawlawlibrary
Settled is the principle which this Court has affirmed in a number of cases that stipulated interest rates of three percent (3%) per month and higher are excessive, iniquitous, unconscionable, and exorbitant. While Central Bank Circular No. 905-82, which took effect on January 1, 1983, effectively removed the ceiling on interest rates for both secured and unsecured loans, regardless of maturity, nothing in the said circular could possibly be read as granting carte blanche authority to lenders to raise interest rates to levels which would either enslave their borrowers or lead to a hemorrhaging of their assets. Since the stipulation on the interest rate is void for being contrary to morals, if not against the law, it is as if there was no express contract on said interest rate; thus, the interest rate may be reduced as reason and equity demand. (Emphases supplied)67cralawlawlibrary
Principal | P320,000.00 | ||
Add: Interest from 12/12/1996 to 09/05/2005 | |||
from 12/12/1996 to 12/12/2004: (P320,000.00 x 12% x 8 years) | P307,200.00 | ||
from 12/13/2004 to 09/08/2005: (P320,000.00 x 12% x 270/365) | 28,405.48 | 335,605.48 | |
Total Amount due under the mortgage | P655,605.48 | ||
Add: | Capital Gains Tax | 18,203.17 | |
Documentary Stamp Tax | 4,501.46 | ||
Judicial Commission | 4,150.00 | ||
Publication Fee | 4,000.00 | ||
Sheriff’s Fee | 3,000.00 | ||
Repurchase Price | P689,460.11 | ||
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Endnotes:
1Rollo, pp. 9-22.
2 Id. at 27-36. Penned by Associate Justice Eduardo B. Peralta, Jr. with Acting Executive Justice Pampio A. Abarintos and Associate Justice Gabriel T. Ingles concurring.
3 Id. at 38-39. Penned by Acting Executive Justice Pampio A. Abarintos with Associate Justices Gabriel T. Ingles and Carmelita Salandanan Manahan concurring.
4 Records (Cadastral Case No. 118), pp. 100-102. Penned by Judge Domingo D. Diamante.
5 See Promissory Note No. 5721 dated December 16, 1996 for ?377,600.00 inclusive of interest; records (Cadastral Case No. 122), p. 15. The same was stated as December 12, 1996 in the CA Decision; rollo, p. 27.
6 Dated December 12, 1996. Records (Cadastral Case No. 118), pp. 12-14.
7Rollo, pp. 55-57 (including dorsal portions).
8 Id. at 27-28.
9 Id. at 28.
10 Entitled “AN ACT TO REGULATE THE SALE OF PROPERTY UNDER SPECIAL POWERS INSERTED IN OR ANNEXED TO REAL-ESTATE MORTGAGES” (March 6, 1924).
11 See Certificate of Sale at Public Auction; rollo, pp. 49-50.
12 Id. at 28.
13 Id. at 58.
14 Id. at 28.
15 See Petition for Issuance of Writ of Possession; records (Cadastral Case No. 118), pp. 5-8.
16 See Opposition (to Petition for Issuance of Writ of Possession) filed on July 28, 2005; id. at 21-25.
17 Id. at 17-18. Issued by Ex-Officio Provincial Sheriff and Clerk of Court VII Magdalena L. Lometillo on September 6, 2001.
18 Id. at 22.
19 Records (Cadastral Case No. 122), pp. 5-11.
20 Id. at 6-7.
21 Id. at 8-9.
22 See Official Receipt No. 19205006; id. at 4.
23 See Order dated March 8, 2006; records (Cadastral Case No. 118), p. 44. Penned by Judge Teodulo A. Colada.
24 Id. at 54-55.
25 Dated July 31, 2006 issued by Clerk of Court VI Atty. Marlo C. Brasales. Id. at 56-57.
26 Dated August 1, 2006 signed by Sheriff IV Cresencio Gomez, Jr. Id. at 59.
27 See signature of petitioner Marcelina Guevarra; id. at 57 and 59.
28 Dated August 8, 2006. Id. at 68-79.
29 Dated August 8, 2006.Id. at 80-84.
30 Id. at 100-102.
31 Entitled “AN ACT TO AMEND AND COMPILE THE LAWS RELATIVE TO LANDS OF THE PUBLIC DOMAIN” (December 1, 1936).
32 Records (Cadastral Case No. 118), p. 101.
33 Records (Cadastral Case No. 118), pp. 101-102.
34 Filed on December 2, 2008. Records (Cadastral Case No. 122), pp. 54-57.
35 Id. at 61.
36 See Notice of Appeal filed on January 30, 2009; id. at 63.
37 Rollo, pp. 27-36.
38 Id. at 34-35.
39 Dated November 8, 2011.Id. at 40-46.
40 Id. at 38-39.
41 Entitled “AN ACT PROVIDING FOR THE CREATION, ORGANIZATION AND OPERATION OF RURAL BANKS, AND FOR OTHER PURPOSES” (June 6, 1952). (See Section 3 of Batas Pambansa Blg. 65, further amending Section 5 of RA 720).
42 See Section 6 of Act No. 3135.
43 See Spouses Hilaga v. Rural Bank of Isulan, 631 Phil. 526, 534 (2010), citing Sta. Ignacia Rural Bank, Inc. v. CA, G.R. No. 97872, March 1, 1994, 230 SCRA 513, 525.
44 See Development Bank of the Phils. v. CA, 375 Phil. 114, 128 (1999).
45 See Comment filed on September 18, 2013; rollo, pp. 122-123.
46Vda. de Panaligan v. CA, 328 Phil. 1232, 1238-1239 (1996).
47Rollo, p. 20.
48 247-A Phil. 184 (1988).
49 251 Phil. 764 (1989).
50Rollo, p. 122. Total repurchase price incorrectly computed as P3,216,660.63 by TCLC in its Appellant’s Brief before the CA; see CA rollo, p. 31. Total repurchase should be P3,216,560.63, computed as follows:
Principal Amount of P377,600 plus interest at 18% per 180 days from
July 16, 1997 and Penalty at 3% per month from February 16, 1997 P3,182,706.00
Capital Gains Tax 18,203.17
Documentary Stamp Tax 4,501.46
Judicial Commission 4,150.00
Publication Fee 4,000.00
Sheriff’s Fee 3,000.00
Total Claim P3,216,560.63
51 Then Section 78 of RA 337 entitled “AN ACT REGULATING BANKS AND BANKING INSTITUTIONS AND FOR OTHER PURPOSES” (July 24, 1948), as amended by Presidential Decree No. (PD) 1828 entitled “AMENDING FURTHER REPUBLIC ACT NO. 337, AS AMENDED, OTHERWISE KNOWN AS THE ‘GENERAL BANKING ACT’” (January 16, 1981).
52 RA 8791 entitled “AN ACT PROVIDING FOR THE REGULATION OF THE ORGANIZATION AND OPERATIONS OF BANKS, QUASI-BANKS, TRUST ENTITIES AND FOR OTHER PURPOSES” (May 23, 2000). Incorrectly referred to as the “New Banko Sentral ng Filipinas Act” in TCLC’s Comment; see rollo, p. 122.
53 See Heirs of Canque v. CA, 341 Phil. 738, 748 (1997); Belisario v. Intermediate Appellate Court, supra note 48, at 194; Spouses Hilaga v. Rural Bank of Isulan, supra note 43, at 530-531.
54Salenillas v. CA, supra note 49, at 771.
55 Id.
56 See Tolentino v. CA, 546 Phil. 557, 567 (2007), Sy v. CA, 254 Phil. 120, 127-129 (1989), and Ponce de Leon v. Rehabilitation Finance Corp., 146 Phil. 862, 878 (1970).
57 Section 78 of RA 337, as amended by PD 1828, provides:chanRoblesvirtualLawlibrarySEC. 78. Loans against real estate security shall not exceed seventy percent (70%) of the appraised value of the respective real estate security, plus seventy percent (70%) of the appraised value of the insured improvements, and such loans shall not be made unless title to the real estate shall be in the mortgagor. In the event of foreclosure, whether judicially or extra[-]judicially, of any mortgage on real [estate] which is security for any loan granted before the passage of this Act or under the provisions of this Act, the mortgagor or debtor whose real property [had] been sold at public auction, judicially or extra[-]judicially, for the full or partial payment of an obligation to any bank, banking or credit institution, within the purview of this Act shall have the right, within one year after the sale of the real estate as a result of the foreclosure of the respective mortgage, to redeem the property by paying the amount fixed by the court in the order of execution, or the amount due under the mortgage deed, as the case may be, with interest thereon at the rate specified in the mortgage, and all the costs, and judicial and other expenses incurred by the bank or institution concerned by reason of the execution and sale and as a result of the custody of said property less the income received from the property. However, the purchaser at the auction sale concerned in a 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 by the court and administer the same in accordance with law.chanrobleslaw
x x x x (Emphases and underscoring supplied)cralawlawlibrary
58 Tolentino v. CA, supra note 56.
59Rollo, p. 122.
60Spouses Viola v. Equitable PCI Bank, Inc., 592 Phil. 611, 619 (2008).
61 See CA rollo, p. 31.
62Spouses Viola v. Equitable PCI Bank, Inc., supra note 60, at 620.
63Agner v. BPI Family Savings Bank, Inc., G.R. No. 182963, June 3, 2013, 697 SCRA 89, 102.
64RGM Industries, Inc. v. United Pacific Capital Corporation, G.R. No. 194781, June 27, 2012, 675 SCRA 400, 405.
65Chua, v. Timan, 584 Phil. 144, 148 (2008).
66 Supra note 63; citations omitted.
67 Id. at 102.
68 Records (Cadastral Case No. 118), pp. 12-13.
69 Section 47 of RA 8791 provides:chanRoblesvirtualLawlibrarySEC. 47. Foreclosure of Real Estate Mortgage. - In the event of foreclosure, whether judicially or extra-judicially, of any [mortgage] on real estate which is security for any loan or other credit accommodation granted, the mortgagor or debtor whose real property [had] 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 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.
Notwithstanding Act [No.] 3135, juridical persons whose property is being sold pursuant to an extra[-]judicial 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 [had] been sold in a foreclosure sale prior to the effectivity of this Act shall retain their redemption rights until their expiration. (Emphasis and underscoring supplied)cralawlawlibrary
70 Entitled “FURTHER AMENDING REVENUE MEMORANDUM ORDER NO. 29-86 DATED SEPTEMBER 3, 1986, AS AMENDED BY REVENUE MEMORANDUM ORDER NO. 16-88 DATED APRIL 18, 1988, AS FURTHER AMENDED BY REVENUE MEMORANDUM ORDER NO. 27-89 DATED APRIL 18, 1989, AND AS LAST AMENDED BY REVENUE MEMORANDUM ORDER NO. 6-92 DATED JANUARY 15, 1992 RELATIVE TO THE PAYMENT OF CAPITAL GAINS TAX AND DOCUMENTARY STAMP TAX ON EXTRA-JUDICIAL FORECLOSURE SALE OF CAPITAL ASSETS INITIATED BY BANKS, FINANCE AND INSURANCE COMPANIES” (March 16, 1999), pertinent portions of which provide:chanRoblesvirtualLawlibrarySEC. 3. CAPITAL GAINS TAX. –
(1) In case the mortgagor exercises his right of redemption within one year from the issuance of the certificate of sale, no capital gains tax shall be imposed because no capital gains [have] been derived by the mortgagor and no sale or transfer of real property was realized. x xx.
(2) In case of non-redemption, the capital gains tax on the foreclosure sale imposed under Secs. 24(D)(1) and 27(D)(5) of the Tax Code [entitled “An Act Amending the National Internal Revenue Code, As Amended, and for Other Purposes” (January 1, 1998)] shall become due based on the bid price of the highest bidder but only upon the expiration of the one-year period of redemption provided for under Sec. 6 of Act No. 3135, as amended by Act No. 4118 [entitled “An Act to Amend Act Numbered Thirty-One Hundred And Thirty-Five, Entitled ‘An Act To Regulate the Sale of Property Under Special Powers Inserted In or Annexed to Real-Estate Mortgages’” (December 7, 1933)], and shall be paid within thirty (30) days from the expiration of the said one-year redemption period.
SEC. 4. DOCUMENTARY STAMP TAX. –
(1) In case the mortgagor exercises his right of redemption, the transaction shall only be subject to the P15.00 documentary stamp tax imposed under Sec. 188 of the Tax Code of 1997 because no land or realty was sold or transferred for a consideration.
(2) In case of non-redemption, the corresponding documentary stamp tax shall be levied, collected and paid by the person making, signing, issuing, accepting, or transferring the real property wherever the document is made, signed, issued, accepted or transferred where the property is situated in the Philippines. x x x. (Underscoring supplied)