Credit - Loan Digest

7/25/2019 Credit - Loan Digest

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1. Spouses Barrera vs. Spouses Lorenzo

2. SIGA-AN V. VILLANUEVA, (2009)

(Compensatory, Penalty or Indemnity Interest)Interests:

a) Monetary interest is a compensation fixed by the parties for the use or forbearance of money.

b) Compensatory interest - imposed by law or by courts as penalty or indemnity for damages.

The right to interest arises only by irtue of a contract or by irtue of damages for delay or failure to pay the

principal loan on which interest is demanded.

Article 19!of the !iil !ode, which refers to monetary interest, specifically mandates that no interest shall be

due unless it has been expressly stipulated in writing.

". #ence, payment of monetary interest is allowed only if$

%) there was an e"press stipulationfor the payment of interest& and

2) the agreement for the payment of interest was reduced in #ritin$.

The concurrence of the two conditions is re'uired for the payment of monetary interest. Thus, we hae

held that collection of interest without any stipulation therefor in writing is prohibited by law.

onetary interest is due only when these re'uirements are present.

"". #oweer, there are instances in which an interest may be imposed een in the absence of express stipulation,

erbal or written, regarding payment of interest.Article 22%9of the !iil !ode states that if the obligation

consists in the payment of a sum of money, and the debtor incurs delay, a legal interest of %2 (no# !&' per

annum may be imposed as indemnity for damages if no stipulation on the payment of interest was agreed upon.

((o)pensator* interest'

This interest may be imposed only as a penalty or damages for breach of contractual obligations. "t cannot

be charged as a compensation for the use or forbearance of money. This applies only to compensatory interest

and not to monetary interest.

Solutio Indebiti

*nderArticle 19!%of the !iil !ode, if the borrower of loan pays interest when there has been no stipulation

therefor, the proisions of the !iil !ode concerning solutioindebitishall be applied.

Article 21+proides that if something is receied when there is no right to demand it, and it was unduly

deliered through mista+e, the obligation to return it arises. e hae held that the principle of solutio

indebitiapplies in case of erroneous payment of undue interest.

,EL$ "t was duly established that respondent paid interest to petitioner. espondent was under no duty to

ma+e such payment because there was no express stipulation in writing to that effect. There was no binding


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relation between petitioner and respondent as regards the payment of interest. The payment was clearly a

mista+e. ince petitioner receied something when there was no right to demand it, he has an obligation to

return it.

3. S/USES 0UI(/ V. (,INA BANING (/.

(Conventional Interest&Escalation Clause)

("nclude !oncurring /pinion)

an+$that the interest rate changes eery month based on the preailing mar+et rate and notified

petitioners of the preailing rate by calling them thru a telephone monthly before their account becomes past

due. hen as+ed if there was any written authority from petitioners for respondent to increase the interest rate

unilaterally, respondent answered that petitioners signed a promissory note indicating that they agreed to pay

interest at the preailing rate.

!hina an+ unilaterally increased the interest rates from %1 to as high as 2.10.

*34 on 4scalation !lauses$

a) Escalation clauses are not void per se.

Escalation clausesrefer to stipulations allowing an increase in the interest rate agreed upon by the

contracting parties. This !ourt has long recogni5ed that there is nothing inherently wrong with escalation clauses

which are alid stipulations in commercial contracts to maintain fiscal stability and to retain the alue of money

in long term contracts. #ence, such stipulations are not oid per se.

b) Escalation clauses violating the principle of mutuality of contracts are void.

6eertheless, an escalation clause 7which grants the creditor an unbridled right to ad8ust the interest

independently and upwardly, completely depriing the debtor of the right to assent to an important modification

in the agreement7 is oid. stipulation of such nature iolates the principle of mutuality of contracts. Thus, this

!ourt has preiously nullified the unilateral determination and imposition by creditor ban+s of increases in the

rate of interest proided in loan contracts.

anco :ilipino aings ; ortgage an+ . 6aarro$ hile escalation clauses in general are considered

alid, we ruled that anco :ilipino may not increase the interest on respondent borrower


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!entral an+ !ircular 6o. 901, nothing therein 7grants lenders carte blanche authority to raise interest rates to

leels which will either enslae their borrowers or lead to a hemorrhaging of their assets.7

4calation clause in this case$">e hereby authori5e the !#"6 6?"6@ !/A/T"/6 to increase or

decrease as the case may be, the interest rate>serice charge presently stipulated in this note without any

advance noticeto me>us in the eent a law or !entral an+ regulation is passed or promulgated by the !entralan+ of the Ahilippines or appropriate goernment entities, increasing or decreasing such interest rate or serice

charge.

*3"6@$ t no time did petitioners protest the new rates imposed on their loan een when their property was

foreclosed by respondent. This notwithstanding, we hold that the escalation clause is stillV/Ibecause it

grants respondent the power to impose an increased rate of interest without a written notice to petitioners and

their written consent. espondent


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4. EAS3EN S,IING LINES IN(. V. (A6199+'

(Compensatory, Penalty or Indemnity Interest)

ules on "nterest$

"nterest upon an obligation which calls for the payment of money, absent a stipulation, is the le$al rate.

uch interest normally is allowable from the date of demand, 8udicial or extra8udicial. The trial court opted for

8udicial demand as the starting point. ut then upon the proisions of rticle 22%= of the !iil !ode, interest 7cannot be recoered upon

unli'uidated claims or damages, except when the demand can be established with reasonable certainty. #ere ,

interest should be counted from the date of the decision (when the amount of damages are ascertained).

Art. 22%9 ((. D "f the obligation consists in the payment of a sum of money, and the debtor incurs in

delay, the indemnity for damages, there being no stipulation to the contrary, shall be the payment of interest

agreed upon, and in the absence of stipulation, the legal interest which is six percentper annum.

ules o5 tu)8 6on te a#ar4 o5 interests':

*NOTE: he legal rate of !"# has been amended to $#. %ee Circular &o. ' (amending Circular &o. *)

effective +uly !, "!, and the case of &-C- /. 0-11E2 3-4E% -&567 875E2 ("!). herefore,

there is no need to distinguish now the obligations breached as the legal interest applicable is $#.

%) hen an obligation, regardless of its source, i.e., law, contracts, 'uasi-contracts, delicts or 'uasi-delictsis

breached, the contraenor can be held liable for damages. The proisions under Title EF""" on 7Gamages7 of the

!iil !ode goern in determining the measure of recoerable damages.

2) ith regard particularly to an award of interest in the concept of !T*3 6G !/A46T/H

G@4, the rate of interest, as well as the accrual thereof, is imposed, as follows$

a) 7bligation breached$ consists in the payment of a sum of money, i.e., a loan or forbearance of money

Interest 5ue$

i) that which may hae been stipulated in writing. :urthermore, the interest due shall itself earn legal

interest from the time it is 8udicially demanded.

ii) "n the absence of stipulation, the rate of interest shall be %2per annumto be computed from

default, i.e., from 8udicial or extra8udicial demand under and sub8ect to the proisions of rticle %%B9 of the !iil

!ode. 6a)en4e4 to !&'

b) 7bligation breached$ not constituting a loan or forbearance of money,

Interest due$ may be imposed at the discretion of the court at the rate of Bper annum.

6o interest, howeer, shall be ad8udged on unli'uidated claims or damages except when or until the demand

can be established with reasonable certainty.o ccordingly, where the demand is established with reasonable certainty, the interest shall begin to run

from the time the claim is made 8udicially or extra8udicially (rt. %%B9, !iil !ode)

o hen 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 8udgment of the court is made (at which time the 'uantification of

damages may be deemed to hae been reasonably ascertained). The actual base for the computation of legal

interest shall, in any case, be on the amount finally ad8udged.


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c) hen the 8udgment of the court awarding a sum of money becomes final and executory, the rate of legal

interest, whether the case falls under paragraph % or paragraph 2, aboe, shall be %2 per annumfrom such

finality until its satisfaction, this interim period being deemed to be by then an e'uialent to a forbearance of

credit. 6a)en4e4 to !&'

5.

6. SPS. MALLARI vs. PRUDENTIAL BANK[G.R. No. 197861. June 5 !"1#. 697 SCRA 555$

DOCTRINE:

Unconscionable interest rates T%e S& %'s (u)e* +n ,%e -o))o+n/ 0'ses ,%', ,%e +n,e(es, +s un0ons0+on')e2

#3 'n* #.813 4e( on,% on ' P1" M+))+on )o'n Toring vs. Sps. Ganzon-Olan, !""8 663 4e( 'nnu o( 5.53 4e(

on,% on ' P5"" ,%ous'n* )o'n Medel vs. Court of Appeals,1998 'n* 73 'n* 53 o( 83 'n* 6"3 4e( 'nnu

Chua vs. Timan !""8. T%e &ou(, %'s ')so (u)e* '--+(e* +n ' 4)e,%o(' o- 0'ses ,%', s,+4u)',e* +n,e(es, (',es

o- #3 4e( on,% 'n* %+/%e( '(e e:0ess+ve un0ons0+on')e 'n* e:o(+,'n,.

Conscionable interest rates In ,%+s 0'se !#3 4e( 'nnu o( !3 4e( on,% 's '/(ee* u4on ; 4e,+,+one( 'n*

(es4on*en, 'n< +s N=T un0ons0+on')e. I, +s u0% )oe( ,%'n ,%e 'ove en,+one* un0ons0+on')e +n,e(es,

(',es 'n* ,%e(e +s no s++)'(+,; o- -'0,u') +)+eu.

FACTS:

[Decided 2013] In 1984, Petitioner Florentino Mallari obtained a loan from respondent Prdential!an" in t#e amont of P300,000$00$ It %as sb&ect to an interest rate of 21' per annm and, incase of defalt, a penalt( of 12' per annm of t#e total amont de and attorne(s feese)i*alent of 1+' of t#e total amont de$ #is %as secred b( a Deed of -ssi.nment /D- o*erpetitioners time deposit accont$ In 1989, poses Florentino and -rea Mallari obtained anot#erloan from respondent for P1$ million, stiplatin. interest of 23' per annm %it# t#e samepenalties in case of defalt$ #is %as secred b( 5eal 6state Mort.a.e /56M$

Petitioners defalted$ 7#en compted in 1992, t#e total debt %as P+1,218$+4 and P2,991,294$82for t#e rst and second loans respecti*el($

5espondent tried to etra&diciall( foreclose t#e mort.a.e$ Petitioners on t#e ot#er #and tried tonllif( t#e mort.a.e claimin. t#at t#e !an" imposed oneros terms and conditions and t#at t#eban" %as nilaterall( increasin. its c#ar.es and interest o*er and abo*e t#ose stiplated$ #e!an" claimed t#at t#e basis for its comptation %as all %ritten in t#e Promissor( :otes$

#e 5; rled in fa*or of respondent ban"$ ;- a


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:o$ #e ;ort #as also rled a


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"u/e( o" te "es$on(ent. +et%t%one"s a$$ea/e( te (ec%s%on to te Cou"t o A$$ea/s CA, !ut te

CA a%"e( te /o-e" cou"t;s (ec%s%on an(, su!seuent/#, (en%e( te ot%on o" "econs%(e"at%on

ence, t%s $et%t%on.

Issue:


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oo/ )anuactu"%n' Co"$o"at%on . Cou"t o A$$ea/s.

e "ee(%es $"o%(e( o" %n A"t. 1484 a"e a/te"nat%e, not cuu/at%e. e e*e"c%se o one !a"s

te e*e"c%se o te ote"s. %s /%%tat%on a$$/%es to cont"acts $u"$o"t%n' to !e /eases o $e"sona/

$"o$e"t# -%t o$t%on to !u# !# %"tue o A"t. 1485.

Co$a"e( -%t =/%sco, te e%c/e su!ect atte" o t%s case -as nee" "ecoe"e( an( (e/%e"e(

to "es$on(ent (es$%te te %ssuance o a -"%t o "e$/e%n. As te"e -as no se%u"e tat t"ans$%"e(, %t

cannot !e sa%( tat $et%t%one"s -e"e (e$"%e( o te use an( eno#ent o te o"t'a'e( e%c/e

o" tat "es$on(ent $u"sue(, coence( o" conc/u(e( %ts actua/ o"ec/osu"e. e t"%a/ cou"t,

te"eo"e, "%'tu//# '"ante( te a/te"nat%e $"a#e" o" su o one#, -%c %s eu%a/ent to te

"ee(# o ?@e*act@%n' u/%//ent o te o!/%'at%on.? Ce"ta%n/#, te"e %s no (ou!/e "ecoe"# o"

unust en"%cent to s$ea o.

8.An(a/ s. +N

9. LAND BANK OF THE PHILIPPINES, PETITIONER, VS. EMMANUEL OATE,

R=S+N&=N.

Facts:

Bate o$ene( an( a%nta%ne( seen t"ust accounts -%t an( an. =ac t"ust account -as coe"e( !#

an Inestent )ana'eent Account I)A -%t Fu// &%sc"et%on an( as a co""es$on(%n' $ass!oo

-e"e (e$os%ts an( -%t("a-a/s -e"e "eco"(e(.

In a /ette" (ate( cto!e" 8, 1981, an( an (ean(e( "o Bate te "etu"n o +4 %//%on %t c/a%e(


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to ae !een %na(e"tent/# (e$os%te( to "ust Account No. 01>125 as %s a((%t%ona/ un(s !ut actua//#

"e$"esents te tota/ aount o te cecs %ssue( to an( an !# %ts co"$o"ate !o""o-e"s as $a#ent

o" te%" $"e>te"%nate( /oans. Bate "euse( ence te %ssue o D%sc"e(%t%n'E "ea%ne( unsett/e(.

en on June 21, 1991, an( an un%/ate"a//# a$$/%e( te outstan(%n' !a/ance %n a// o Bates t"ust

accounts a'a%nst %s "esu/t%n' %n(e!te(ness !# "eason o te D%sc"e(%t%n'E o un(s. A/tou' %t

e*auste( te un(s %n a// o Bates t"ust accounts, an( an -as a!/e to (e!%t te aount o

+1,528,583.48 on/#.

o "ecou$ te "ea%n%n' !a/ance o Bates %n(e!te(ness, an( an %/e( a Co$/a%n o" Su o

)one# see%n' to "ecoe" te aount o +8,222,687.89 $/us %nte"est at te /e'a/ "ate o 12 $e" annu

co$ute( "o )a# 15, 1992 unt%/ u//# $a%(.

Bate asse"te( tat te seto -as -%tout /e'a/ an( actua/ !ases. He s$ec%%ca//# (en%e( an#

no-/e('e o" %no/eent %n te t"ansact%on !et-een an( an an( %ts c/%ents +%/%$$%ne %"'%n%a

o!acco A(%n%st"at%on +A an( +%/%$$%ne %"'%n%a o!acco oa"( +. He a/so (en%e( tat

e a(e "au(u/ent %s"e$"esentat%on to %n(uce te !an to (e$os%t to %s "ust Account No. 01>125 as

%s a((%t%ona/ ca$%ta/ te $a#ents a//e'e(/# ten(e"e( !# te !ans co"$o"ate !o""o-e"s. He

a%nta%ne( tat a// te un(s %n %s accounts cae "o /e'%t%ate sou"ces an( tat e -as tota//#

una-a"e o an( a( not%n' to (o -%t te a//e'e( D%sc"e(%t%n'.E

# -a# o co$u/so"# counte"c/a%, Bate $o%nte( out tat $e" a/ance Seets as o June 30, 1982 te

un(s %n %s t"ust accounts a/"ea(# tota/e( +35,555,464.78. An( as o Janua"# 1993, te accuu/ate(


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!a/ance o %s accounts "eace( +229,222,160.25 an( 3,472,683.94.

Hence, een % te aount o +8,222,687.89 as o )a# 15, 1992 %s (e(ucte( "o te outstan(%n'

!a/ance o %s t"ust accounts as o Janua"# 1993, te !an st%// o-es % +220,999,472.36 on to$ o %s

(o//a" (e$os%ts aount%n' to 3,472,683.94.

Bate $"a#e( tat a u('ent !e %ssue( (%s%ss%n' te Co$/a%nt an( o"(e"%n' an( an to $a# %.

In a "e$o"t su!%tte( !# te oa"( %nest%'at%n' te case, %t -as oun( out tat !a/ance o eac t"ust

account a# not !e accu"ate cons%(e"%n' tat %t -as not '%en a$/e o$$o"tun%t# to co//ate an( so"t out

te (ocuents "e/ate( to eac t"ust account an( tat te"e a# ae !een (ou!/e tae u$ o accounts

s%nce te (ocuents $"e%ous/# "e%e-e( a# ae !een cons%(e"e( a'a%n %n su!seuent "e$o"ts.

In %s Coent, Bate asse"te( tat te un(ocuente( -%t("a-a/s ent%one( %n te conso/%(ate(

"e$o"t sou/( not !e cons%(e"e( as cas out/o-s. Rate", te# sou/( !e t"eate( as unauto"%e(

t"ansact%ons an( te aounts su!ect te"eo ust !e c"e(%te( !ac to %s accounts. Bate "e%te"ate(

tat an( an sou/( !e e/( /%a!/e o" te un(ocuente( -%t("a-a/s an( ("a-%n's.

n )a# 31, 2006, te RC "en(e"e( a &ec%s%on (%s%ss%n' an( ans Co$/a%nt o" %ts a%/u"e to

esta!/%s tat te aount o +4,086,888.89 a//e'e(/# D%sc"e(%te(E to Bates "ust Account No. 01>

125 actua//# cae "o te %nestents o +A an( +. Hence, te RC o"(e"e( an( an to

"esto"e te tota/ aount o +1,471,416.52 -%c te !an un%/ate"a//# (e!%te( "o Bates %e t"ust

accounts -%t /e'a/ "ate o %nte"est o 12 $e" annu, co$oun(e( #ea"/#, eect%e on 21 June 1991

unt%/ u//# $a%(. e RC a/so "u/e( tat Bate %s (eee( to ae a$$"oe( te ent"%es %n te

stateents o account tat -e"e sent to % as e nee" %nte"$ose( an# o!ect%on te"eto -%t%n te


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$e"%o( '%en % to (o so. Conseuent/#, te CA (en%e( an( ans a$$ea/ an( '"ante( tat o Bate.

e CA a%"e( te RCs "u/%n' tat an( an a%/e( to esta!/%s te sou"ce o te un(s %t c/a%e(

to ae !een e""oneous/# c"e(%te( to Bates account.

an( an %/e( a )ot%on o" Recons%(e"at%on (ate( )a# 27, 2010, o-ee", te CA (en%e( %ts ot%on.

Hence, an( an %/e( te %nstant +et%t%on o" Re%e- on Ce"t%o"a"%.

Issues:


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%neste(, %n #ou" so/e (%sc"et%on, -%tout (%st%nct%on !et-een $"%nc%$a/ an( %ncoe.E As o" te

coenceent (ate, %t -as su''este( tat D-e"e te (ean( %s esta!/%se( -%t "easona!/e ce"ta%nt#,

te %nte"est sa// !e'%n to "un "o te t%e te c/a% %s a(e u(%c%a//# o" e*t"au(%c%a//# A"t. 1169,

C%%/ Co(e !ut -en suc ce"ta%nt# cannot !e so "easona!/# esta!/%se( at te t%e te (ean( %s

a(e, te %nte"est sa// !e'%n to "un on/# "o te (ate te u('ent o te cou"t %s a(e at -%c

t%e te uant%%cat%on o (aa'es a# !e (eee( to ae !een "easona!/# asce"ta%ne(.E In

acco"(ance to tat, te Cou"t "u/e( tat te (e!%te( aount o +1,471,416.52, sa// ea"n %nte"est

!e'%nn%n' )a# 31, 2006 o" te (a# te RC "en(e"e( %ts &ec%s%on '"ant%n' sa%( aount to Bate. As

to te un(ocuente( -%t("a-a/s o +60,663,488.11 an( LS3,210,222.85, te /e'a/ "ate o %nte"est

sou/( sta"t to "un te (a# te CA $"ou/'ate( %ts &ec%s%on on &ece!e" 18, 2009.

&u"%n' te $en(enc# o t%s case, o-ee", te )oneta"# oa"( %ssue( Reso/ut%on No. 796 (ate( )a#

16, 2013, stat%n' tat %n te a!sence o e*$"ess st%$u/at%on !et-een te $a"t%es, te "ate o %nte"est %n

/oan o" o"!ea"ance o an# one#, 'oo(s o" c"e(%ts an( te "ate a//o-e( %n u('ents sa// !e 6 $e"

annu. Sa%( Reso/ut%on %s e!o(%e( %n an'o Sent"a/ n' +%/%$%nas C%"cu/a" No. 799, Se"%es o 2013,

-%c too eect on Ju/# 1, 2013. Hence, te 12 annua/ %nte"est ent%one( a!oe sa// a$$/# on/#

u$ to June 30, 2013. e"eate", o" sta"t%n' Ju/# 1, 2013, te a$$/%ca!/e "ate o %nte"est o" !ot te

(e!%te( aount an( un(ocuente( -%t("a-a/s sa// !e 6 $e" annu, co$oun(e( annua//#, unt%/

u//# $a%(.

10. Re$u!/%c s So"%ano


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11. &e/a +a s M J &et

12. A/!os s =!%san

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Credit - Loan Digest