Lex Louie Langkit Credit Transaction Autocorp vs. Intra Strata Assurance Corporation G.R. No.

166662 June 27, 2008 Facts: Petitioner autocorp represented by its President, Petitioner Rodriguez, secured an ordinary re-export bond from the private respondent ISAC in favor of the public respondent BOC, in the amount of 327,040 to guarantee the re-export a Hyundai excel. Petitioners obtained another ordinary re-export bond from ISAC in favor of BOC. In the amount of 447671, whcich was eventually increased to 707,609 to guarantee to re-export of Hyundai sonata. Petitioners executed and signed two indemnity agreements with identical stipulations in favor of ISAC, agreeing to act as a surety of the subject bonds. Petitioner Rodriguez signed the indemnity agreements both as a president of the autocorp group and his personal capacity. ISAC issued the subject bonds to guarantee compliance by petitioners with their undertaking with the BOC to re-export the imported vehicles within the given period and pay the taxes and duties due thereon. In turn, petitioners agreed, as surety, to indemnify ISAC for the liability the latter may incur on the said bonds. Petitioner autocorp failed to re-export the items guaranteed despite repeated demands made by the BOC, as well as ISAC. Thus, BOC considered the two bonds with a total face value of 1,034,649. Upon the failure of ISAC to secure the payment of the face value from the petitioners, ISAC filed with the RTC an action against the petitioners for the recovery of the sum of 1,034,649 plus 258,662.25 as attorneys fees. Petitioners filed a motion to dismiss but was denied by the RTC. Petitioners filed an answer to the complaint claiming that they asked permission from the BOC for an extension of time to re-export; that BOC has yet to issue an assessment for petitioners alleged default; and that the claim of ISAC for payment is premature as the subject bonds are not yet due and demandable. RTC rendered its decision in favor of the respondents. This was affirmed by the Court of Appeals. Petitioner Rodriguez questioned the decision of CA making him jointly liable when amendments were introduced, without his consent and approval. He invokes Art 2079 of the civil code on extinguishment of guaranty. He asserts that there was an amendment as to the effectivity of the bonds, and this constitutes a modification of the agreement without his consent, thereby exonerating him from liability. Issue: w/n Rodriguez is liable Held: Yes. Petitioners assumed liability as a regular party and obligated themselves as original promissors, in their indemnity agreement. Granting that there was a modification as to the effectivity of the bonds, petitioners would still not be absolved from liability since they had authorized ISAC to consent to the granting of any extension, modification, alteration and renewal of the subject bonds, as expressly set out in the indemnity agreements. Citing the case of Philippine American Insurance Co., Inc. vs. Mutuc, the court held that an agreement whereby the sureties bound themselves to be liable in case of an extension or renewal of the bond, without the necessity of executing another indemnity agreement for the purpose and without the necessity of being notified of such extension or renewal, is valid; and that there is nothing in it that militates against the law, good customs, good morals, public order or public policy.
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Spouses Castro vs. Tan G.R. No. 168940 November 24, 2009 Facts: Respondent Tan and her husband was the former owner of 240-square meter. They entered into an agreement with petitioners spouses Castro to secure a loan of 30,000 they obtained from the latter. Respondents undertook to pay the mortgage debt within six months with an interest rate of 5% per month. Respondent tan failed to pay upon the maturity of the loan. Thereafter respondent Tan offered to pay the principal amount plus a portion of interest but petitioners refused and instead demanded payment of the total accumulated amount of 359,000. Petitioners caused the extrajudicial foreclosure of the real mortgage and emerged as the only bidder in the auction sale. Respondent Tan failed to redeem the property, thus title over the same was consolidated in favor of the petitioner. A writ of possession was issued; the sheriff ejected the respondents from the property and delivered the possession to the petitioners. Respondent Tan joined by the other respondents filed a complaint for nullification of mortgage and foreclosure and partial recession of documents before the RTC Malolos. They allege that the interest rate imposed was unconscionable. The RTC rendered judgment in favor of the respondents. The RTC rendered 12% per annum and additional 1% for penalty charges. This was affirmed by the Court of Appeals. Petitioners questioned the decision of the CA. Petitioners contend that with the removal by the Bangko Sentral of the ceiling on the rate of interest that may be stipulated in a contract of loan, the lender and the borrower could validly agree on any interest rate on loans. Thus, the court of appeals gravely erred when it declared the stipulated interest as null as if there was no express stipulation on the compounded interest. Issue: w/n CA erred Held: The CA correctly found that the 5% monthly interest is unconscionable and should be equitably reduced to the legal rate of 12% per annum. Citing the case of Medel v. CA the court stated that they annulled a stipulated 5.5% per month or 66% per annum interest and a 6% per month or 72% per annum interest excessive, iniquitous, unconscionable and exorbitant. In Ruiz v. CA, the court declared a 3% monthly interest imposed on four separate loans to be excessive. In both cases, the interest rates were reduced to 12% per annum.

Sagarbbaria vs. Philippine Business Bank G.R. No. 178330 July 23, 2009 Facts: Petitioner Sagarbbaria executed a deed of real estate mortgage over his property in favor of respondent PBB to secure the 11,500,000 loan of Key commodities Inc. Key Commodities failed to pay. Consequently, PBB filed an application for foreclosure. Then the auction sale was set. But in order to enjoin the PBB from proceeding with the foreclosure, petitioner filed a complaint of annulment of real estate mortgage, nullification of application for extrajudicial foreclosure of real estate mortgage with prayer for the immediate issuance of TRO and preliminary injunction with the RTC Makati. Petitioner succeeded in pre-empting the auction sale as PBB withdrew its application for extra-judicial foreclosure.

PBB contended that there was no basis for the annulment of the mortgage. By way of counterclaim, PBB prayed for the payment of mortgage loan which had already reached 18,000,000. While the annulment case was pending, PBB revived the remedy for foreclosure which was granted by the RTC. A notice of sale was issued setting the auction sale. The sale proceeded and the property was awarded to PBB as the sole bidder. RTC Makati issued a writ of possession in favor of PBB. Then petitioner assailed the said issuance on the ground that it was conducted and issued without notice and in violation of the rule against forum shopping. CA affirmed PBBs entitlement to a writ of possession. Issue: w/a PBB is entitle to the writ of possession Held: Yes. Petitioner failed to redeem the property within one year from the registration of the sheriffs certificate of sale with the register of deeds. PBB, being the purchaser of the property at public auction, has the right to file an ex parte motion for the issuance of a writ of possession; and considering that it was a ministerial duty to do so, the trial court has to grant the motion and to thereafter issue the writ of possession. It is settled that the proceeding in a petition for a writ of possession is ex parte in nature. It is a judicial proceeding brought for the benefit of one party only, and without notice to, or consent by any person adversely interested. It is proceeding wherein relief is granted without the opportunity for the person against the relief id sought to be heard. No notice is needed to be served upon persons interested in the subject property. Hence, there is no necessity of giving notice to the petitioner since he had already lost all his interests in the property when he failed to redeem the same. Any question regarding the validity of the mortgage or its foreclosure cannot be a legal ground for the refusal to issue a writ of possession. Regardless whether or not there is a pending suit for the annulment of the mortgage or the foreclosure itself, the purchaser is entitled to a writ of possession, without prejudice, of course, to the eventual outcome of the pending annulment case.