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206459

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THIRDDIVISION

April6,2016

G.R.No.206459

SPOUSESFLORANTEE.JONSAYandLUZVIMINDAL.JONSAYandMOMARCOIMPORTCO.,INC.,
Petitioners,
vs.
SOLIDBANKCORPORATION(nowMETROPOLITANBANKANDTRUSTCOMPANY),Respondent.

DECISION

REYES,J.:

BeforethisCourtisaPetitionforReview1fromtheAmendedDecision2datedNovember26,2012oftheCourtof
Appeals(CA)inCAG.R.CVNo.94012,whichreconsidereditsearlierDecision3thereindatedApril27,2012,and
grantedinparttheappealofhereinrespondentSolidbankCorporation(Solidbank)fromtheAmendedDecision4
datedJuly7,2009oftheRegionalTrialCourt(RTC)ofCalambaCity,Branch35,inCivilCaseNo.29122000C,
whichannulledtheextrajudicialforeclosureproceedingsinstitutedbySolidbankagainsttheSpousesFloranteE.
Jonsay (Florante) and Luzviminda L. Jonsay (Luzviminda) (Spouses Jonsay) and Momarco Import Co., Inc.
(Momarco)(petitioners)overthemortgagedproperties.

FactualAntecedents

Momarco, controlled and owned by the Spouses Jonsay, is an importer, manufacturer and distributor of animal
healthandfeedmillproductscateringtocattle,hogandpoultryproducers.OnNovember9,1995,andagainon
April28,1997,MomarcoobtainedloansofP40,000,000.00andP20,000,000.00,respectively,fromSolidbankfor
whichtheSpousesJonsayexecutedablanketmortgageoverthreeparcelsoflandtheyownedinCalambaCity,
Laguna registered in their names under Transfer Certificates of Title Nos. T224751, T210327 and T269668
containing a total of 23,733 square meters.5 On November 3, 1997,6 the loans were consolidated under one
promissorynote7forthecombinedamountofP60,000,000.00,signedbyFloranteasPresidentofMomarco,with
hiswifeLuzvimindaalsosigningascomaker.8Thestipulatedrateofinterestwas18.75%perannum,alongwith
anescalationclausetiedtoincreasesinpertinentCentralBankdeclaredinterestrates,bywhichSolidbankwas
eventuallyabletounilaterallyincreasetheinterestchargesupto30%perannum.9

MomarcoreligiouslypaidthemonthlyinterestschargedbySolidbankfromNovember199510untilJanuary1998,
whenitpaidPl,370,321.09.Claimingbusinessreversesbroughtonbythe1997Asianfinancialcrisis,Momarco
triedunsuccessfullytonegotiateamoratoriumorsuspensioninitsinterestpayments.Duetopersistentdemands
by Solidbank, Momarco made its next, and its last, monthly interest payment in April 1998 in the amount of
Pl,000,000.00.SolidbankappliedthesaidpaymenttoMomarco'saccruedinterestforFebruary1998.Momarco
soughtaloanfromLandbankofthePhilippinestopayoffitsaforesaiddebtbutitsapplicationfellthrough.The
anticipated expropriation by the Department of Public Works and Highways of the mortgaged lots for the
extensionoftheSouthLuzonExpressway(SLEX)alsodidnotmaterialize.11

Solidbankproceededtoextrajudiciallyforecloseonthemortgage,andattheauctionsaleheldonMarch5,1999,
it submitted the winning bid of P82,327,249.54, 12 representing Momarco's outstanding loans, interests and
penalties,plusattorney'sfeesofP3,600,000.00.ButMomarconowclaimsthatonthedateoftheauctionthefair
marketvalueoftheirmortgagedlotshadincreasedsevenfoldtoP441,750,000.00. 13OnMarch22,1999,Sheriff

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AdelioPerocho(SheriffPerocho)issuedacertificateofsaletoSolidbank,dulyannotatedonApril15,1999onthe
lots'titles.14

On March 9, 2000, a month before the expiration of the period to redeem the lots, the petitioners filed a
Complaint15againstSolidbank,SheriffPerochoandtheRegisterofDeedsofCalamba,Laguna,docketedasCivil
Case No. 29122000C, for Annulment of the Extrajudicial Foreclosure of Mortgage, Injunction, Accounting and
Damages with Prayer for the Immediate Issuance of a Writ of Preliminary Prohibitory Injunction. They averred
that: (a) the amount claimed by Solidbank as Momarco's total loan indebtedness is bloated (b) Solidbank's
interestchargesareillegalforexceedingthelegalrateof12%perannum(c)thefilingfeeitchargedhasnolegal
.and factual basis (d) the attorney's fees of P3,600,000.00 it billed the petitioners is excessive and
unconscionable (e) their previous payments from 1995 to 1997 were not taken into account in computing their
principalindebtedness(t)SheriffPerocho'scertificateofpostingwasinvalidand(g)thepublicationofthenotice
of the auction sale was defective because the Morning Chronicle which published the said notice was not a
newspaperofgeneralcirculationinCalamba,Laguna.16

AfterSolidbankfileditsAnswerwithCounterclaim17onApril12,2000,theRTCheardandgrantedthepetitioners'
applicationfortemporaryrestrainingorderonApril13,2000,18followedonMay2,200019byissuanceofawritof
preliminaryprohibitoryinjunction,thussuspendingtheconsolidationofSolidbank'stitlestothesubjectlots.

The petitioners' principal witness was Florante, whose testimony was summarized by the RTC in its amended
decision,asfollows:

[Florante]signedtheloandocumentsinblankandthesigningtookplaceathisofficeinQuezonCityheasserted
thattheywereabletopaymorethanTwentyFourMillionPesosbutthesamewerenotdeductedbythebankto
arrive at the correct amount of indebtedness. He said that his accountant prepared statement of payments
showingthepaymentsmadetothebank.Hefurtherclaimedthattherearestillotherpayments,thereceiptsof
whicharebeingretrievedbyhisaccountant.Healsoassertedthatthenewspaperwherethenoticeofforeclosure
salewaspublishedisnotanewspaperofgeneralcirculation.

The same cannot be found in a newspaper stand in the place where the mortgaged properties are located he
further claimed that [he] suffered moral, emotional and mental injury he is a graduate of Doctor of Veterinary
Medicine a permanent member of the Philippine Veterinary Medical Association graduated and passed the
BoardheisthePresidentof[Momarco]andthePresidentofMomarcoResorthehasbeenengagedinthisline
ofbusinessfor31yearsnowhiswifeisagraduateofDentalMedicineandpartnerof[Momarco]hehasfour(4)
children three of them had already graduated and one still in college x x x he is also claiming for exemplary
damagesofFiveMillionPesostosetanexampleforotherbankslikeSolidbank,torefrainfromfilingactswhich
areirregularandaffectborrowerslikehim,heclaimedalsoforattorney[']sfeesofThree

MillionPesos.20

Solidbank's witnesses, Lela Quijano, head of its collection division, and Benjamin Apan, its senior manager for
retailoperations,admittedthatthemonthlyinterestsitcollectedfrom1995to1998rangedfrom18.75%to30%,
andthatfor1998,MomarcopaidP2,370,321.09ininterest.21

RulingoftheRTC

OnJuly7,2009,theRTCissueditsAmendedDecision,thefalloofwhichreads,asfollows:

Wherefore,premisesconsidered,judgmentisrenderedinfavorofthe[petitioners]andagainstthedefendant[s]
by:

1)DeclaringtheextrajudicialforeclosureproceedingsNULLandVOIDandwithoutanylegaleffectandthe
defendantsareprohibitedtoconsolidatethetitlesinthenameof[Solidbank]withoutprejudicetothefiling
of the action for collection or recovery of the sum of money secured by the real estate mortgage in the
properforum

2)Orderingthattheinterestratesonthe[petitioners']indebtednessbereducedto12%perannum

3)Declaringthattheattorney'sfeesandfilingfeebeingcollectedby[Solidbank]tobedevoidofanylegal
basis

4)Ordering[Solidbank]topaythe[petitioners]thefollowingsums,towit:

a)Php20,000,000.00moraldamages

b)Php2,500,000.00exemplarydamages

c)Phpl,[500],000.00forattorney'sfees.
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5)Orderingthedismissalofthecounterclaimforlackofmerit.

SOORDERED.22

TheRTCruledthatthemortgagecontractandthepromissorynotespreparedbySolidbank,whichtheSpouses
Jonsay signed in blank, were contracts of adhesion that Solidbank failed to take into account Momarcos
paymentsinthetwoyearspreceding1998totalingP24,277,293.22(thisamountwasnotdisputedbySolidbank)
thattheinterestrates,rangingfrom19%to30%,aswellasthepenalties,chargesandattorney'sfeesimposedby
Solidbank,wereexcessive,unconscionableandimmoral,andthatSolidbankhasnocarteblancheauthorityunder
the Usury Law to unilaterally raise the interest rates to levels as to enslave the borrower and hemorrhage its
assets that Solidbank's verification in its application for foreclosure of mortgage was defective because it was
signednotbyitsPresidentbutonlybyavicepresidentthattheMorningChronicle,inwhichthenoticeofauction
waspublished,wasnotanewspaperofgeneralcirculationbecauseithadnobonafidelistofpayingsubscribers
that Solidbank manipulated the foreclosure sale through a defective publication of the notice of auction and by
submittinganunconscionablylowbidofP82,327,000.00,whereasthevalueofthelotshadrisensevenfoldsince
therehabilitationoftheSLEX.23

RulingoftheCA

OnappealtotheCA,SolidbankinterposedthefollowingerrorsoftheRTC,towit:

THE[RTC]GRAVELYERREDINNULLIFYINGTHEFORECLOSUREPROCEEDINGSCONDUCTED
AGAINST [THE PETITIONERS'] PROPERTIES ON THE GROUND THAT THE REAL ESTATE
MORTGAGEEXECUTEDBYTHEPARTIESWASACONTRACTOFADHESION

THE[RTC]GRAVELYERREDINNULLIFYINGTHEFORECLOSUREPROCEEDINGSCONDUCTED
AGAINST[THEPETITIONERS']PROPERTIESONTHEGROUNDTHATTHENEWSPAPERWHERE
THE NOTICE OF FORECLOSURE WAS PUBLISHED IS NOT A NEWSPAPER OF GENERAL
CIRCULATION

THE [RTC] GRAVELY ERRED IN NULLIFYING THE FORECLO[S]URE PROCEEDINGS

CONDUCTED AGAINST [THE PETITIONERS'] PROPERTIES ON THE GROUNDS THAT THE
INTEREST RATES, PENALTIES, ATTORNEY'S FEES CHARGED ARE EXCESSIVE,
UNCONSCIONABLE AND IMMORAL AND THAT THE [SOLIDBANK] DID NOT TAKE INTO
ACCOUNT[THEPETITIONERS']PREVIOUSPAYMENT[S]INTHEAMOUNTOFP24,277,293.27

THE [RTC] GRAVELY ERRED IN AWARDING MORAL DAMAGES, EXEMPLARY DAMAGES AND
ATTORNEY'SFEESINFAVOROFTHE[PETITIONERS]

THE [RTC] GRAVE[LY] ERRED IN FAILING TO REGARD [THE PETITIONERS] [IN] ESTOPPEL
WHEN THE LATTER DID NOT IMPUGN THE VALIDITY OF THE LOAN AND MORTGAGE
DOCUMENTSWITHINAREASONABLETIME.24

OnApril27,2012,theCArenderedjudgmentaffirmingtheRTCintoto.ItagreedthatSolidbankdidnotcomply
withthepublicationrequirementsunderSection3,ActNo.3135,whichprovides:

Sec.3.Noticeshallbegivenbypostingnoticesofthesalefornotlessthantwentydaysinatleastthreepublic
places of the municipality or city where the property is situated, and if such property is worth more than four
hundred pesos, such notice shall also be published once a week for at least three consecutive weeks in a
newspaperofgeneralcirculationinthemunicipalityorcity.25(Emphasisours)

According to the CA, the Morning Chronicle was not a newspaper of general circulation, notwithstanding the
affidavit of publication issued by its publisher, Turing R. Crisostomo (Crisostomo), to that effect as well as the
certificationoftheClerkofCourtofRTCCalambaCitythatitwasdulyaccreditedbythecourtsinceMay28,1997
topublishlegalnotices.TheCAruledthatitwasnotenoughforCrisostomotomerelystateinhisaffidavitthatthe
MorningChroniclewaspublishedandeditedintheprovinceofLagunaandinSanPabloCitywithoutashowing
that it was published to disseminate local news and general information, that it had a bona fide list of paying
subscribers,thatitwaspublishedatregularintervals,andthatitwasingeneralcirculationinCalambaCitywhere
thesubjectpropertiesarelocated.26

InMetropolitan Bank and Trust Company, Inc. v. Peafiel, 27 cited by the CA, the Court explained that: (1) the
object of a notice of sale is to achieve a reasonably wide publicity of the auction by informing the public of the
natureandconditionofthepropertytobeauctioned,andofthetime,placeandtermsofthesale,andthereby
secure bidders and prevent a sacrifice of the property (2) a newspaper to be considered one of general
circulation need not have the largest circulation but must be able to appeal to the public in general and thus
ensureawidereadership,andmustnotbedevotedsolelytoentertainmentortheinterestofaparticularclass,
profession,trade,calling,race,orreligiousdenominationand(3)Section3ofActNo.3135,asamendedbyAct

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No. 4118, does not only require the newspaper to be of general circulation but also that it is circulated in the
municipalityorcitywherethepropertyislocated.28

The CA held that the accreditation of the Morning Chronicle by the Clerk of Court of the RTC to publish legal
noticesisnotdeterminativeofwhetheritisanewspaperofgeneralcirculationinCalambaCity.29

Concerning the loans due from the petitioners, the CA noted that under the proforma promissory note which
SolidbankpreparedandwhichtheSpousesJonsaysignedinblank,Solidbankenjoyedunrestrainedfreedomto
unilaterallyincreasetheinterestrateinanymonth.Thenotegaveitauthoritytoincreaseordecreasetheinterest
ratefromtimetotime,"withoutanyadvancenotice"and"intheeventtheMonetaryBoardoftheCentralBankof
the Philippines raises or lowers the interest rates on loans." According to the CA, this provision violated the
principleofmutualityofcontractsembodiedinArticle130830oftheCivilCode.31

TheCAalsoheldthatthehereinpetitionerswerenotinestoppelforfailingtoseasonablyquestionthevalidityof
themortgageloansincetheprescriptiveperiodisreckonedfromtheirnoticeofthestatementsofaccountissued
by Solidbank showing the unilateral increases in the interest, for only by then would their cause of action have
accrued. Since only three years had elapsed from the execution of the mortgage contract to the filing of the
complaintonMarch15,2000,theactionwasbroughtwithinthe10yearprescriptiveperiod.32

Solidbankmovedforreconsideration33ofthedecision,whichtheCAgrantedinpartonNovember26,2012,viaits
AmendedDecision,towit:

WHEREFORE,premises considered, the Motion is GRANTED IN PART. Our Decision promulgated on April 27,
2012isherebyamended.Paragraphs2and5ofthedispositiveportionoftheJuly7,2009Decisionofthe[RTC]
ofCalambaCity,Branch35remainaffirmed.Paragraphs1,3and4thereofareherebyreversedandsetaside.

SOORDERED.34

Thus,inacompletereversalofitsdecision,theCAnownotonlyfoundtheparties'mortgagecontractvalid,but
alsodeclaredthatSolidbank'sextrajudicialforeclosureofthemortgageenjoyedthepresumptionofregularity.It
tookintoaccountthe(a)AffidavitofPublicationissuedbyCrisostomothatitdulypublishedthenoticeofauction
saleonFebruary8,15,and22,1999,(b)theCertificationbytheClerkofCourtoftheRTCCalambaCitythatthe
MorningChroniclewasdulyaccreditedbythecourttopublishlegalnotices,and(c)theRaffleofPublicationdated
February 1, 1999 showing that the said newspaper participated in and won the raffle on February 1, 1999 to
publishthesubjectnotice.TheCAstressedthatsincetheselectionofMorningChronicletopublishthenoticewas
throughacourtsupervisedraffle,Solidbankwasfullyjustifiedinrelyingontheregularityofthepublicationofits
noticeintheaforesaidnewspaper,inthechoiceofwhichithadnohandwhatsoever.35

TheCAfurtherheldthatnomalicecanbeimputedonSolidbank'srefusaltoacceptthepetitioners'offerofdacion
en pago, since it was duly authorized under the parties' mortgage contract to extra judicially foreclose on the
mortgageintheeventthatMomarcodefaultedinitsinterestpayments.Thus,whenSolidbankoptedtoforeclose
on the mortgage, it was merely exercising its contractual right to protept its interest, and Solidbank's supposed
insensitivity or lack of sympathy toward Momarco's financial plight is irrelevant and is not indemnifiable as bad
faith.36

Ontheotherhand,theCApointedoutthatotherthanFlorante'sbaretestimonialallegations,thepetitionersfailed
toadduceevidencetodebunkSolidbank'scompliancewiththepublicationofitsauctionnotice.Theywereunable
toshowthattheMorningChroniclewas not a newspaper of general circulation in Calamba City, that it was not
publishedonceaweek,orthatitcouldnotbefoundinnewsstands.37

Thus, the CA in its amended decision: (a) upheld the validity of the extrajudicial foreclosure proceedings, the
consolidationofthetitlesofSolidbankintheforeclosedproperties,andthedismissalofSolidbank'scounterclaim
(b)orderedthereductionoftheinterestratesonthepetitioners'indebtednesstothelegalrateof12%perannum,
therebyaffirmingthattheunilateralincreasesinthemonthlyinterestrates,whichaveraged2.19%permonthor
26.25% per annum, "without notice to the mortgagors," are void for being iniquitous, excessive and
unconscionableand(c)upheldthecollectionbytheSolidbankofattorney'sfeesandfilingfee.Nonetheless,the
CA invalidated for lack of basis the award by the RTC to the petitioners of P20,000,000.00 as moral damages,
P2,500,000.00asexemplarydamages,andPl,500,000.00asattorney'sfees.38

Thepetitionersmovedforpartialreconsideration39oftheCA'sAmendedDecisiondatedNovember26,2012,but
theCAdeniedthesameinitsResolution40datedMarch19,2013.

PetitionforReviewintheSupremeCourt

Inthispetitionforreview,thepetitionersinterposethefollowingassignmentoferrors,towit:

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1. WITH ALL DUE RESPECT, THE [CA] GRAVELY ERRED BY RENDERJNG TWO (2) CONFLICTING
DECISIONS ON THE SAME SET OF FACTS AND EVIDENCE. THE AMENDED DECISION IS NOT IN
ACCORDWITHLAWANDEXISTINGJURJSPRUDENCE[AND]

2.WITHALLDUERESPECT,THE[CA]GRAVELYERREDINNOTCORRECTLYAPPLYINGTHELAWAND
JURJSPRUDENCE ON EXTRAJUDICIAL FORECLOSURE OF REAL ESTATE MORTGAGE, DAMAGES
ANDCONTRACTOFADHESIONINTHEAMENDEDDECISION.41

Thepetitionersdecryhow,afterfirstdeclaringthat"[a]lltold,wefindnoreasontodisturb,muchlessreverse,the
assaileddecisionoftheRTC,"theCAcouldnowbepermittedtomakeacompleteturnaroundfromitsprevious
decision over the same set of facts, and declare that the subject foreclosure is valid, order the consolidation of
Solidbank'stitles,anddeletetheawardofmoralandexemplarydamages,attorney'sfeesandcostsofsuit.42

RulingoftheCourt

Thereismeritinthepetition.

Thereisnolegalproscription
againstanadjudicatingcourt
adoptingonmotionfor
reconsiderationbyapartya
positionthatiscompletelycontrary
tooneithadpreviouslytakeninacase.

Thepetitioners'dismayoverhowthesamedivisionoftheCAcouldmaketwooppositeandconflictingdecisions
overexactlythesamefactsisunderstandable.Yet,whattheCAsimplydidwastoadmitthatithadcommittedan
error of judgment, one which it was nonetheless fully authorized to correct upon a timely motion for
reconsideration.Sections1,2and3ofRule37oftheRulesofCourtarepertinent:

Sec.1.Groundsofandperiodforfilingmotionfornewtrialorreconsideration.xxx.

Withinthesameperiod,theaggrievedpartymaymoveforreconsiderationuponthegroundsthatthedamages
awardedareexcessive,thattheevidenceisinsufficienttojustifythedecisionorfinalorder,orthatthedecisionor
finalorderiscontrarytolaw.

Sec.2.Contentsofmotionfornewtrialorreconsiderationandnoticethereofxxx.

xxxx

Amotionforreconsiderationshallpointoutspecificallythefindingsorconclusionsofthejudgmentorfinalorder
which are not supported by the evidence or which are contrary to law[,] making express reference to the
testimonial or documentary evidence or to the provisions of law alleged to be contrary to such findings or
conclusions.

xxxx

Sec.3.Actionuponmotionfornewtrialorreconsideration.xxxIfthecourtfindsthatexcessivedamageshave
beenawardedorthatthejudgmentorfinalorderiscontrarytotheevidenceorlaw,itmayamendsuchjudgment
orfinalorderaccordingly.

Theruleisthatwhilethedecisionofacourtbecomesfinaluponthelapseoftheperiodtoappealbyanyparty, 43
butthefilingofamotionforreconsiderationornewtrialinterruptsorsuspendstherunningofthesaidperiod,and
prevents the finality of the decision or order from setting in.44 A motion for reconsideration allows a party to
requesttheadjudicatingcourtorquasijudicialbodytotakeasecondlookatitsearlierjudgmentandcorrectany
errorsitmayhavecommitted.45AsexplainedinSalcedoIIv.COMELEC,46amotionforreconsiderationallowsthe
adjudicatororjudgetotakeasecondopportunitytoreviewthecaseandtograppleanewwiththeissuestherein,
andtodecideagainaquestionpreviouslyraised,therebeingnolegalproscriptionimposedagainstthedeciding
bodyadoptingtherebyanewpositioncontrarytooneithadpreviouslytaken.47

Solidbankhassufficientlycomplied
withtherequirementofpublication
underSection3ofActNo.3135.

InPhilippineSavingsBankv.SpousesGeronimo, 48theCourtstressedthattherightofabanktoextrajudicially
foreclose on a real estate mortgage is wellrecognized, provided it faithfully complies with the statutory
requirementsofforeclosure:

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While the law recognizes the right of a bank to foreclose a mortgage upon the mortgagor's failure to pay his
obligation, it is imperative that such right be exercised according to its clear mandate. Each and every
requirement of the law must be complied with, lest, the valid exercise of the right would end. It must be
remembered that the exercise of a right ends when the right disappears, and it disappears when it is abused
especiallytotheprejudiceofothers.49

InCristobalv.CA,50theCourtexplicitlyheldthatforeclosureproceedingsenjoythepresumptionofregularityand
themortgagorwhoallegestheabsenceofarequisitehastheburdenofprovingsuchfact:

Further, as respondent bank asserts, a mortgagor who alleges absence of a requisite has the burden of
establishing that fact. Petitioners failed in this regard. Foreclosure proceedings have in their favor the
presumption of regularility and the burden of evidence to rebut the same is on the petitioners.x x x. 51 (Citation
omitted)

ThepetitionersinsistthattheCAwascorrectwhenitfirstruledinitsDecisiondatedApril27,2012thattherewas
no valid publication of the notice of auction, since the Morning Chronicle was not shown to be a newspaper of
general circulation in Calamba City. The CA disregarded the affidavit of publication executed by its publisher to
that effect, as well as the certification by the Clerk of Court of RTCCalamba City that the said paper was duly
accredited by the court to publish legal notices. It ruled that there was no showing by the Solidbank that the
MorningChroniclewaspublishedtodisseminatelocalnewsandgeneralinformation,thatithadabonafidelistof
payingsubscribers,thatitwaspublishedatregularintervals,andthatitwasincirculationinCalambaCitywhere
thesubjectpropertiesarelocated.

But in its Amended Decision on November 26, 2012, the CA now ruled that the questioned foreclosure
proceedings enjoy the presumption of regularity, and it is the burden of the petitioners to overcome this
presumption.TheCAstated:

Itisanelementaryrulethattheburdenofproofisthedutyofapartytopresentevidenceonthefactsinissue
necessary to establish his claim or defense as required by law. The Court has likewise ruled in previous cases
thatforeclosureproceedingsenjoythepresumptionofregularityandthatthemortgagorwhoallegesabsenceofa
requisitehastheburdenofprovingsuchfact.52(Citationomitted)

InFortuneMotors(Phils.)Inc.v.MetropolitanBankandTrustCo.,53itwasstressedthatinorderforpublicationto
serve its intended purpose, the newspaper should be in general circulation in the place where the foreclosed
propertiestobeauctionedarelocated.54ButinMetropolitanBankandTrustCo.v.SpousesMiranda,55theCourt
alsoclarifiedthatthematterofcompliancewiththenoticeandpublicationrequirementsisafactualissuewhich
neednotberesolvedbythehighcourt:

It has been our consistent ruling that the question of compliance or noncompliance with notice and publication
requirementsofanextrajudicialforeclosuresaleisafactualissue,andtheresolutionthereofbythetrialcourtis
generallybindingonthisCourt.Thematterofsufficiencyofpostingandpublicationofanoticeofforeclosuresale
need not be resolved by this Court, especially when the findings of the RTC were sustained by the CA. Well
established is the rule that factual findings of the CA are conclusive on the parties and carry even more weight
whenthesaidcourtaffirmsthefactualfindingsofthetrialcourt.56(Citationomitted)

InSpousesMiranda,theCourtruledthattheforeclosingbankcouldnotinvokethepresumptionofregularityof
thepublicationofthenoticeofauctionabsentanyproofwhatsoeverofthefactofpublication.57Inthecaseatbar,
thereisnodisputethattherewaspublicationoftheauctionnotice,whichtheCAinitsamendeddecisionnowheld
tohavesufficientlycompliedwiththerequirementofpublicationunderSection3ofActNo.3135.Unfortunately,
against the fact of publication and the presumption of regularity of the foreclosure proceedings, the petitioners'
only contrary evidence is Florante's testimonial assertion that the Morning Chronicle was not a newspaper of
generalcirculationinCalambaCityandthatitcouldnotbefoundinthelocalnewsstands.

Admittedly, the records are sparse as to the details of the publication. In his Affidavit of Publication, publisher
Crisostomostatedconcerningthecirculationofhispaper,asfollows:

I, [CRISOSTOMO], legal age, Filipino, resident of Brgy. IIID, San Pablo City with postal address at
SanPabloCity,afterhavingbeendulysworninaccordancetolaw,deposeandsay[:]

ThatIamthePublisherofTheMorningChronicleWeeklynewspaperofLuzonProvinceandGreater
ManilaArea,Cavite,[p]ublishedandeditedintheProvinceofLagunaandSanPabloCity.

xxxx58

In Spouses Geronimo,59 it was held that the affidavit of publication executed by the account executive of the
newspaperisprimafacieproof that the newspaper is generally circulated in the place where the properties are
located.60 But in substance, all that Crisostomo stated is that his newspaper was ''published and edited in the

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provinceofLagunaandSanPabloCity."Hedidnotparticularlymention,astheCAseemedtodemandinitsinitial
decision, that the Morning Chronicle was published and circulated to disseminate local news and general
informationinCalambaCitywheretheforeclosedpropertiesarelocated.

Nonetheless,whentheRTCaccreditedtheMorningChronicletopublishlegalnoticesinCalambaCity,itcanbe
presumedthattheRTChadmadeapriordeterminationthatthesaidnewspaperhadmettherequisitesforvalid
publicationoflegalnoticesinthesaidlocality,guidedbytheunderstandingthatforthepublicationoflegalnotices
inCalambaCitytoserveitsintendedpurpose,itmustbeingeneralcirculationtherein.Thispresumptionlaysthe
burdenuponthepetitionerstoshowotherwise,contrarytotheCA'sfirstruling.

It is true that the Court also held in Peafiel,61 concerning the evidentiary weight of the publisher's affidavit of
publication,thattheaccreditationbytheRTCexecutivejudgeisnotdecisiveontheissueofwhetheranewspaper
isofgeneralcirculation:

The accreditation of Maharlika Pilipinas by the Presiding Judge of the RTC is not decisive of whether it is a
newspaper of general circulation in Mandaluyong City. This Court is not bound to adopt the Presiding Judge's
determination, in connection with the said accreditation, that Maharlika Pilipinas is a newspaper of general
circulation.Thecourtbeforewhichacaseispendingisboundtomakearesolutionoftheissuesbasedonthe
evidenceonrecord.62

But as the Court has seen, the petitioners failed to present proof to overcome the presumption of regularity
created by the publisher's affidavit of publication and the accreditation of the Morning Chronicle by the RTC.63
Significantly, in A.M. No. 01107SC,64 the Court now requires all courts beginning in 2001 to accredit local
newspapersauthorizedtopublishlegalnotices.65

Thepetitioners'mereproposalto
extinguishtheirloanobligationsby
wayofdacionenpagodoesnot
novatethemortgagecontract.

Onthequestionofthepetitioners'failedproposaltoextinguishtheirloanobligationsbywayofdacionenpago,no
badfaithcanbeimputedtoSolidbankforrefusingtheofferedsettlementastorenderitselfliableformoraland
exemplary damages after opting to extrajudicially foreclose on the mortgage. 66 In Tecnogas Philippines
ManufacturingCorporationv.PhilippineNationalBank,67theCourtheld:

Dacionenpagoisaspecialmodeofpaymentwherebythedebtoroffersanotherthingtothecreditorwhoaccepts
itasequivalentofpaymentofanoutstandingobligation.Theundertakingisreallyoneofsale,thatis,thecreditor
isreallybuyingthethingorpropertyofthedebtor,paymentforwhichistobechargedagainstthedebtor'sdebt.
Assuch,theessentialelementsofacontractofsale,namely,consent,objectcertain,andcauseorconsideration
mustbepresent.Itisonlywhenthethingofferedasanequivalentisacceptedbythecreditorthatnovationtakes
place,thereby,totallyextinguishingthedebt.

Onthefirstissue,theCourtofAppealsdidnoterrinrulingthatTecnogashasnoclearlegalrighttoaninjunctive
relief because its proposal to pay by way of dacion en pago did not extinguish its obligation. Undeniably,
Tecnogas'proposaltopaybywayofdacionenpagowasnotacceptedbyPNB.Thus,theunacceptedproposal
neithernovatestheparties'mortgagecontractnorsuspendsitsexecutionastherewasnomeetingoftheminds
between the parties on whether the loan will be extinguished by way of dacion en pago. Necessarily, upon
Tecnogas'defaultinitsobligations,theforeclosureoftheREMbecomesamatterofrightonthepartofPNB,for
suchisthepurposeofrequiringsecurityfortheloans.68(Citationomitted)

Anescalationclauseinaloan
agreementgrantingthelending
bankauthoritytounilaterally
increasetheinterestratewithout
priornoticetoandconsentofthe
borrowerisvoid.

Afterannullingtheforeclosureofmortgage,theRTCreducedtheinterestimposableonthepetitioners'loansto
12%,thelegalinterestallowedforaloanorforbearanceofcredit,citingMedelv.CA.69Ineffect,theRTCvoided
notjusttheunilateralincreasesinthemonthlyinterest,butalsothecontractedinterestof18.75%.Theimplication
istoallowthepetitionerstorecoverwhattheymayhavepaidinexcessofwhatwasvalidlyduetoSolidbank,if
any.

InFloirendo,Jr.v.MetropolitanBankandTrustCo., 70thepromissorynoteprovidedforinterestat15.446%per
annumfor the first 30 days, subject to upward/downward adjustment every 30 days thereafter.71 It was further
providedthat:

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Therateofinterestand/orbankchargeshereinstipulated,duringthetermofthisPromissoryNote,itsextension,
renewals or other modifications, may be increased, decreased, or otherwise changed from time to time by the
Bank without advance notice to me/us in the event of changes in the interest rate prescribed by law or the
MonetaryBoardoftheCentralBankofthePhilippines,intherediscountrateofmemberbankswiththeCentral
Bank of the Philippines, in the interest rates on savings and time deposits, in the interest rates on the banks
borrowings,inthereserverequirements,orintheoverallcostsoffundingormoney[.]72(Italicsours)

The Court ordered the "reformation" of the real estate mortgage contract and the promissory note, in that any
increasesintheinterestratebeyond15.446%perannumcouldnotbecollectedbyrespondentbanksinceitwas
devoid of prior consent of the petitioner, as well as ordered that the interest paid by the debtor in excess of
15.446%beappliedtothepaymentoftheprincipalobligation.73

InPhilippineNationalBankv.CA, 74theCourtdeclaredvoidtheescalationclauseinacreditagreementwhereby
the"bankreservestherighttoincreasetheinterestratewithinthelimitsallowedbylawatanytimedependingon
whateverpolicyitmayadoptinthefuturexxx."75TheCourtsaid:

It is basic that there can be no contract in the true sense in the absence of the element of agreement, or of
mutual assent of the parties. If this assent is wanting on the part of one who contracts, his act has no more
efficacythanifithadbeendoneunderduressorbyapersonofunsoundmind.

Similarly,contractchangesmustbemadewiththeconsentofthecontractingparties.Themindsofalltheparties
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
makeorbreakacapitalventure.Thus,anychangemustbemutuallyagreedupon,otherwise,itisbereftofany
bindingeffect.

Wecannotcountenancepetitionerbank'sposturingthattheescalationclauseatbenchgivesitunbridledrightto
unilaterally upwardly adjust the interest on private respondents' loan. That would completely take away from
private respondents the right to assent to an important modification in their agreement, and would negate the
elementofmutualityincontracts.xxx.76(Citationomittedanditalicsintheoriginal)

In New Sampaguita Builders Construction, Inc. (NSBCJ) v. PNB,77 the Court condemned as the "zenith of
farcicality" a mortgage contract whereby the parties "specify and agree upon rates that could be subsequently
upgraded at whim by only one party to the agreement."78 The Court declared as a contract of adhesion a pro
formapromissorynotewhichcreatesa"takeitorleaveit"dilemmaforborrowerandgivesthemortgageebank
an unbridled right to adjust the interest independently and upwardly, thereby completely taking away from the
borrower the "right to assent to an important modification in their agreement," thus negating the element of
mutualityintheircontracts.79TheCourtquotes:

IncreasesinInterestBaseless

Promissorv Notes. In each drawdown, the Promissory Notes specified the interest rate to be charged: 19.5
percent in the first, and 21.5 percent in the second and again in the third. However, a uniform clause therein
permitted respondent to increase the rate "within the limits allowed by law at any time depending on
whatever policy it may adopt in the future x x x," without even giving prior notice to petitioners. The
Court holds that petitioners' accessory duty to pay interest did not give respondent unrestrained freedom to
chargeanyrateotherthanthatwhichwasagreedupon.Nointerestshallbedue,unlessexpresslystipulatedin
writing.Itwouldbethezenithoffarcicalitytospecifyandagreeuponratesthatcouldbesubsequentlyupgraded
atwhimbyonlyonepartytotheagreement.

The "unilateral detennination and imposition" of increased rates is "violative of the principle of mutuality of
contractsordainedinArticle1308oftheCivilCode."Onesidedimpositionsdonothavetheforceoflawbetween
theparties,becausesuchimpositionsarenotbasedontheparties'essentialequality.

Althoughescalationclausesarevalidinmaintainingfiscalstabilityandretainingthevalueofmoneyonlongterm
contracts, giving respondent an unbridled right to adjust the interest independently and upwardly would
completely take away from petitioners the "right to assent to an important modification in their agreement" and
wouldalsonegatetheelementofmutualityintheircontracts.Theclausecitedearliermadethefulfillmentofthe
contracts"dependentexclusivelyupontheuncontrolledwill"ofrespondentandwasthereforevoid.Besides,the
pro forma promissory notes have the character of a contract d'adhesion, "where the parties do not bargain on
equalfooting,theweakerparty's[thedebtor's]participationbeingreducedtothealternative'totakeitorleaveit."'

"While the Usury Law ceiling on interest rates was lifted by [Central Bank] Circular No. 905, nothing in the said
Circular grants lenders carte blanche authority to raise interest rates to levels which will either enslave their
borrowersorleadtoahemorrhagingoftheirassets."Infact,wehavedeclarednearlytenyearsagothatneither
thisCircularnorPD1684,whichfurtheramendedtheUsuryLaw,"authorizedeitherpartytounilaterallyraisethe
interestratewithouttheother'sconsent."

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Moreover, a similar case eight years ago pointed out to the same respondent (PNB) that borrowing signified a
capital transfusion from lending institutions to businesses and industries and was done for the purpose of
stimulating their growth yet respondent's continued "unilateral and lopsided policy" of increasing interest rates
"without the prior assent" of the borrower not only defeats this purpose, but also deviates from this
pronouncement.Althoughsuchincreasesarenotusurious,sincethe"UsuryLawisnowlegallyinexistent"the
interest ranging from 26 percent to 35 percent in the statements of account "must be equitably reduced for
beinginiquitous,unconscionableandexorbitant."Ratesfoundtobeiniquitousorunconscionablearevoid,asifit
therewerenoexpresscontractthereon.Aboveall,itisundoubtedlyagainstpublicpolicytochargeexcessivelyfor
theuseofmoney.80(Citationsomittedandemphasisours)

InNewSampaguita,theCourtinvokedArticle131081oftheCivilCodewhichgrantscourtsauthoritytoreduceor
increaseinterestratesequitably.Iteliminatedtheescalatedrates,insuranceandpenaltiesandimposedonlythe
stipulated interest rates of 19.5% and 21.5% on the notes, to be reduced to the legal rate of 12% upon their
automaticconversionintomediumtermloansaftermaturity:82

[T]ogivefullforcetotheTruthinLendingAct,onlytheinterestratesof19.5percentand21.5percentstipulated
in the Promissory Notes may be imposed by respondent on the respective availments. After 730 days, the
portionsremainingunpaidareautomaticallyconvertedintomediumtermloansatthelegalrateof12percent.In
allinstances,thesimplemethodofinterestcomputationisfollowed.xxx.83

Thus,allpaymentsmadebythepetitionerswereappliedproratedtothenotes,andaftereliminatingthecharges,
penalties and insurance, the result of the recomputation was an overcollection by the bank of P3,686, 101.52,
whichtheCourtorderedrefundedtothepetitionerswithstraightinterestat6%perannumfromthefilingofthe
complaintuntilFinality.84

InEquitablePCIBankv.NgSheungNgor, 85the Court annulled the escalation clause and imposed the original
stipulated rate of interest on the loan, until maturity,and thereafter, the legal interest of 12% per annum was
imposedontheoutstandingloans.Thus,theCourtorderedtheborrowertopayEquitablethestipulatedinterest
rate of 12.66% per annum for the dollar denominated loans, and the stipulated 20% per annum for the peso
denominatedloans,uptomaturity,andafterwardsEquitablewastocollectlegalinterestof12%perannumonall
loansdue.86Incidentally,underMonetaryBoardCircularNo.799,therateofinterestfortheloanorforbearance
ofmoney,intheabsenceofstipulation,shallnowbe6%perannumstartingJuly1,2013.87

Thus, the Court disregarded the unilaterally escalated interest rates and imposed the mutually stipulated rates,
whichitapplieduptothematurityoftheloans.Thereafter,theCourtimposedthelegalrateof12%perannumon
theoutstandingloans,or6%perannumlegalrateontheexcessoftheborrower'spayments.

Attorney'sfeesdonotforman
integralpartofthecostof
borrowing,butariseonlywhen
collectinguponthenotesorloans
becomesnecessary.Courtshave
thepowertodeterminetheir
reasonablenessbasedonquantum
meruitandtoreducetheamount
thereofifexcessive.

ConcerningtheP3,000,000.00attorney'sfeeschargedbySolidbankandaddedtotheamountofitsauctionbid,
as part of the cost of collecting the loans by way of extrajudicial foreclosure, the Court finds no factual basis to
justifysuchanexcessiveamount.TheCourthasnothesitatedtodeleteorequitablyreduceattorney'sfeeswhich
arebaselessorexcessive.InNewSampaguita,the Court reduced from 10% to 1% the attorney's fees, holding
thattheyarenotanintegralpartofthecostofborrowingbutariseonlyonthebasisofquantummeruitwhenthe
lendercollectsuponthenotes.88

Mortgagee institutions are reminded that extrajudicial foreclosure proceedings are not adversarial suits filed
beforeacourt.Itisnotcommencedbyfilingacomplaintbutanexparteapplicationforextrajudicialforeclosure
ofmortgagebeforetheexecutivejudge,pursuanttoActNo.3135,asamended,andspecialadministrativeorders
issued by this Court, particularly Administrative Matter No. 9910050 (Re: Procedure in ExtraJudicial
ForeclosureofMortgage).Theexecutivejudgereceivestheapplicationneitherinajudicialcapacitynoronbehalf
of the court the conduct of extrajudicial foreclosure proceedings is not governed by the rules on ordinary or
special civil actions. The executive judge performs therein an administrative function to ensure that all
requirementsfortheextrajudicialforeclosureofamortgagearesatisfiedbeforetheclerkofcourt,astheexofficio
sheriff, goes ahead with the public auction of the mortgaged property. Necessarily, the orders of the executive
judgeinsuchproceedings,whethertheybetoallowordisallowtheextrajudicialforeclosureofthemortgage,are
notissuedintheexerciseofajudicialfunctionbutintheexerciseofhisadministrativefunctiontosupervisethe
ministerialdutyoftheClerkofCourtasExOfficioSheriffintheconductofanextrajudicialforeclosuresale.89

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Therecomputationofthe
petitioners'totalloanindebtedness
basedonthestipulatedinterest,and
theexclusionofthepenaltiesand
reductionoftheattorney'sfees
resultsinanexcessoftheauction
proceedswhichmustbepaidtothe
petitioners.

Coming now to the question of whether Solidbank must refund any excess interest to the petitioners, the CA
agreedwiththeRTCthattheloansshouldearnonly12%forSolidbank,whichwouldresultinadrasticreduction
in the interest which the petitioners would be obliged to pay to Solidbank. Notwithstanding what this Court has
said concerning the invalidity of the unilateral increases in the interest rates, the ruling nonetheless violates the
contractualagreementofthepartiesimposinganinterestof18.75%perannum,besidesthefactthataninterest
of18.75%perannumcannotpersebedeemedasunconscionablebackin1995orin1997.

IntherecentcasesofMallariv.PrudentialBank(nowBankofthePhilippineIslands)90andSpousesVillanuevav.
The CA, et al.,91 the Court did not consider unconscionable the contractual interest rates of 23% or 24% per
annum.InMallari,theCourtupheldtheloansobtainedbetween1984and1989whichboreinterestfrom21%to
23%peryearinSpousesVillanueva,theloanssecuredin1994carriedinterestof24%peryearwereupheld.In
AdvocatesforTruthinLending,Inc.v.BangkoSentralMonetaryBoard,92theCourtnotedthatinthelater1990s,
thebanks'primelendingrateswhichtheychargedtotheirbestborrowersrangedfrom26%to31%.93

Toanswer,then,thequestionofwhetherSolidbankmustrefundanythingtothepetitioners,thecontractedrateof
18.75%, not the legal rate of 12%, will be applied to the petitioners' loans. Any excess either in the interest
paymentsofthepetitionersorintheauctionproceeds,overwhatisvalidlyduetoSolidbankontheloans,willbe
refundedorpaidtothepetitioners.Thus:

(1)ThefirstloanofP40,000.000.00carriedastipulatedinterestof18.75%perannum,andfromNovember
9,1995toMarch5,1999,whichistheauctiondateandthedatethemortgagewasterminated,aperiodof
3yearsand116days,or3.3178years,andtotalinterestearnedbythebankthereonisP24,883,500.00
thesecondloan,forP20,000,000.00,wasalsoagreedtoearn18.75%perannum,andfromApril28,1997
toMarch5,1999,aperiodof1yearand311days,or1.8520years,itearnedP6,945,000.00ininterest.In
all,SolidbankearnedP31,828,500.00ininterestuptoMarch5,1999frombothloans. 1 w p h i1

(2)FromNovember9,1995toApril1998,thepetitionerspaidmonthlyintereststotalingP24,277,283.22.
DeductingP24,277,283.22fromthesumofthetotalloanprincipalofP60,000,000.00andthetotalinterest
dueofP31,828,500.00,whichisP91,828,500.00,leavestheamountofP67,551,216.78ininterestowedby
thepetitionersasofMarch5,1999.

(3)AsinNewSampaguitaBuilders,theCourtshallexcludeallthepenaltiesorsurchargeschargedbythe
bank, and shall allow the bank to recover only 1% as attorney's fees, or P675,512.17, not the
P3,600,000.00 awarded by the RTC. Thus, all in all, the petitioners owed the bank P68,226,728.95
(P67,551,216.78plusP675,512.17)asofMarch5,1999. 1 w p h i1

(4) Deducting P68,226,728.95 from Solidbank's winning bid of P82,327,000.00 leaves an excess of
P14,100,271.05intheproceedsoftheauctionovertheoutstandingloanobligationofthepetitioners.This
amountmustbepaidbySolidbanktothepetitioners.

(5)SincetheP14,100,271.05istheexcessintheauctionproceeds,thusanordinarymonetaryobligation
andnotaloanoraforbearanceofcredit,itshallearnsimpleinterestatsixpercent(6%)perannumfrom
judicialdemanduptofinality,followingEasternShippingLines,Inc.v.CourtofAppeals 94thereafter,both
thesaidamountandtheaccumulatedinterestshalltogetherearnsixpercent(6%)perannum,pursuantto
MonetaryBoardCircularNo.799,untilfullsatisfaction.

Thus:
1 w p h i1

Particulars Amount

SolidbanksWinningBid P82,327,000.00
Less:AmountDuefromPetitioners,asMarch5,1999
LoanNo.1Principal P40,000,000.00 68,226,728.95

LoanNo.2Principal 20,000,000.00
Total 60,000,000.00
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Add:InterestDue

LoanNo.1 November9,1995
toMarch5,1999
(P40,000,000.00x18.75%p.a.x3.3178) P24,883,500.00

LoanNo.2 April28,1997to
March5,1999or
(P20,000,000.00x18.75%p.a.x1.8520) 6,945,000.00 31,828,500.00
Total 91,828,500.00

Less:InterestpaidfromNovember1995toApril1998 24,277,283.22
NetAmountDuefromPetitioners 67,551,216.78
Add:Attorneysfees(1%ofP67,551,216.78) 675,512.17
BalancePayabletoPetitioners P14,100,271.05

WHEREFORE,premisesconsidered,theAmendedDecisiondatedNovember26,2012oftheCourtofAppealsin
CAG.R. CV No. 94012 is AFFIRMED with MODIFICATION in that the stipulated interest rate on the loan
obligationof18.75%shallbeapplied,resultinginP67,551,216.78astheamountduefromtheSpousesFlorante
E.JonsayandLuzvimindaL.JonsayandMomarcoImportCo.,Inc.toSolidbankCorporation(nowMetropolitan
BankandTrustCompany).Inaddition,theSpousesFloranteE.JonsayandLuzvimindaL.JonsayandMomarco
ImportCo.,Inc.areORDEREDtoPAYatton1ey'sfeesintheamountofP675,512.17,whichisonepercent(1%)
oftheloanobligation.

Thus,SolidbankCorporation(nowMetropolitanBankandTrustCompany)isORDEREDtoPAYtothepetitioners
theamountofP14,100,271.05,representingtheexcessofitsauctionbidoverthetotalloanobligationduefrom
thepetitioners,plusinterestatsixpercent(6%)perannumcomputedfromthedateoffilingofthecomplaintor
March15,2000uptofinalityandthereafter,boththeexcessoftheauctionproceedsandthecumulativeinterest
shallearnsixpercent(6%)perannumuntilfullypaid.

SOORDERED.

BIENVENIDOL.REYES
AssociateJustice

WECONCUR:

PRESBITEROJ.VELASCO,JR.
AssociateJustice
Chairperson

JOSEPORTUGALPEREZ JOSECATRALMENDOZA*
AssociateJustice AssociateJustice

FRANCISH.JARDELEZA
AssociateJustice

ATTESTATION

I attest that the conclusions in the above Decision had been reached in consultation before the case was
assignedtothewriteroftheopinionoftheCourt'sDivision.

PRESBITEROJ.VELASCO,JR.
AssociateJustice
Chairperson

CERTIFICATION

PursuanttoSection13,ArticleVIIIoftheConstitutionandtheDivisionChairperson'sAttestation,Icertifythatthe
conclusionsintheaboveDecisionhadbeenreachedinconsultationbeforethecasewasassignedtothewriterof
theopinionoftheCourt'sDivision.

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6/10/2017 G.R.No.206459

MARIALOURDESP.A.SERENO
ChiefJustice

Footnotes
*
AdditionalMemberperRaffledatedJune29,2015viceAssociateJusticeDiosdadoM.Peralta.
1
Rollo,pp.927.
2
PennedbyAssociateJusticeSocorro8.Inting.withAssociate.JusticesJoseC.Reyes,Jr.andMarioV.
LopezconcurringCArollo,pp.254272.
3
Penned by Associate Justice Socorro B. lnting, with Associate Justices Fernanda Lampas Peralta and
MarioV.Lopezconcurringid.at194210.
4
RenderedbyJudgeRomeoC.DeLeonrecords,Vol.2,pp.343352.
5
Id.at343.
6
Id.at347.
7
Records,Vol.I,p.106.
8
Records,Vol.2,p.343.
9
Rollo,p.48.
10
TotalamountofP21,906,972.18fromNovember1995toDecember1997.
11
Records,Vol.2,pp.343344.
12
Records,Vol.I,p.177.
13
Id.at6.
14
Records,Vol.2,pp.344,348.
15
Records,Vol.1,pp.112.
16
Id.at7.
17
Id.at9199.
18
Id.at123124.
19
Id.at191193.
20
Records,Vol.2,pp.346347.
21
Id.at347348Records,Vol.I,p.179.
22
Id.at351352.
23
Id.at348350.
24
CArollo,pp.201202.
25
Id.at202.
26
Id.at202204.
27
599Phil.511(2009).
28
Id.at519520.
29
CArollo,p.205.
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6/10/2017 G.R.No.206459
30
Art.1308.Thecontractmustbindbothcontractingpartiesitsvalidityorcompliancecannotbelefttothe
willofoneofthem.
31
CArollo,pp.205206.
32
Id.at208209.
33
Id.at219245.
34
Id.at271.
35
Id.at262263.
36
Id.at264266.
37
Id.at262.
38
Id.at271419420.
39
Id.at276290.
40
Id.at348349.
41
Rollo,p.13.
42
Id.at1819.
43
Teodorov.CA,328Phil.116,122(1996)RULESOFCOURT,Rule36,Section2.
44
RULESOFCOURT,Rule40,Section2andRule41,Section3.
45
Reyesv.PearlbankSecurities,Inc.,582Phil.505,522(2008).
46
371Phil.377(1999).
47
Id.at392.
48
632Phil.378(2010).
49
Id.at390,citingMetropolitanBankv.Wong,412Phil.207,220(2001).
50
384Phil.807(2000).
51
Id.at815.
52
CArollo,p.305.
53
332Phil.844(1996).
54
Id.at850.
55
655Phil.265(2011).
56
Id.at272.
57
Id.at273.
58
Records,Vol.I,p.151.
59
Supranote48.
60
Id.at387,citingChinaBankingCorp.v.Sps.Martir,615Phil.728,739(2009).
61
Supranote27.
62
Id.at516.
63
CArollo,p.262.

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6/10/2017 G.R.No.206459
64
Re:GuidelinesintheAccreditationofNewspapersandPeriodicalsandintheDistributionofLegalNotices
andAdvertisementsforPublication.October16,2001.
65
SeePhil.SavingsBankv.SpousesGeronimo,supranote48,at386.
66
CArollo,p.266.
67
574Phil.340(2008).
68
Id.at346.
69
359Phil.820(1998).
70
558Phil.654(2007).
71
Id.at657.
72
Id.at658.
73
Id.at665.
74
G.R.No.107569,November8,1994,238SCRA20.
75
Id.at24.
76
Id.at2526.
77
479Phil.483(2004).
78
Id.at497.
79
PNBv.CA,328Phil.54,6263(1996).
80
NewSampaguitaBuildersConstruction,Inc.(NSBCI)v.PNB,supranote77,at496499.
81
Art.1310.Thedeterminationshallnotbeobligatoryifitisevidentlyinequitable.Insuchcase,thecourts
shalldecidewhatisequitableunderthecircumstances.
82
NewSampaguitaBuildersConstruction,Inc.(NSBCI)v.PNB,supranote77,at529.
83
Id.
84
Id.at529530.
85
565Phil.520(2007).
86
Id.at539.

ThedispositiveportionoftheCourtdecisionreads:

xxxx

2. ordering respondents Ng Sheung Ngor, doing business under the name and style of "Ken
Marketing," Ken Appliance Division, Inc. and Benjamin E. Go to pay petitioner Equitable PCI Bank
interestat:

a)12.66%p.a.withrespecttotheirdollardenominatedloansfromJanuary10,2001toJuly9,
2001

b)20%p.a.withrespecttotheirpesodenominatedloansfromJanuary10,2001toJuly9,
2001

c)pursuanttoourrulinginEasternShippingLinesv.CourtofAppeals,thetotalamountdueon
July9,2001shallearnlegalinterestat12%p.a.fromthetimepetitionerEquitablePCIBank
demandedpayment,whetherjudiciallyorextrajudiciallyand

d)afterthisDecisionbecomesfinalandexecutory,theapplicablerateshallbe12%p.a.until
fullsatisfaction

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6/10/2017 G.R.No.206459

xxxx.Id.at544545.
87
Nacarv.GalleryFrames,G.R.No.189871,August13,2013,703SCRA439,454455S.C.Megaworld
ConstructionandDevelopmentCorporationv.Parada,G.R.No.183804,September11,2013,705SCRA
584,610.
88
NewSampaguitaBuildersConstruction,Inc.(NSBCI)v.PNB,supranote77,at509510.
89
Ingles v. Estrada, G.R. No. 141809, April 8, 2013, 695 SCRA 285, 313314, citing First Marbella
CondominiumAss'n.,Inc.v.Gatmaytan,579Phil.432,438439(2008).
90
G.R.No.197861,June5,2013,697SCRA555.
91
671Phil.467(2011).
92
G.R.No.192986,January15,2013,688SCRA530.
93
Id.at538.
94
G.R.No.97412,July12,1994,234SCRA78.

TheLawphilProjectArellanoLawFoundation

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