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567
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THIRD DIVISION.
568
568
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569
cess amount in such a demand does not nullify the demand itself,
which is valid with respect to the proper amount. A contrary
ruling would put commercial transactions in disarray, as validity
of demands would be dependent on the exactness of the
computations thereof, which are too often contested. There being
a valid demand on the part of UCPB, albeit excessive, the spouses
Beluso are considered in default with respect to the proper
amount and, therefore, the interests and the penalties began to
run at that point.
Same Same Interest The Court sees sufficient basis to
impose a 12% legal interest in favor of the lender in the case at
bar, as what was voided is merely the stipulated rate of interest
and not the stipulation that the loan shall earn interest.All these
show that the spouses Beluso had acknowledged before the RTC
their obligation to pay a 12% legal interest on their loans. When
the RTC failed to include the 12% legal interest in its
computation, however, the spouses Beluso merely defended in the
appellate courts this noninclusion, as the same was beneficial to
them. 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.
Same Same Same Compounded Interest The contracting
parties may by stipulation capitalize the interest due and unpaid,
which as added principal, shall earn new interest.We must
likewise uphold the contract stipulation providing the
compounding of interest. The provisions in the Credit Agreement
and in the promissory notes providing for the compounding of
interest were neither nullified by the RTC or the Court of
Appeals, nor assailed by the spouses Beluso in their petition with
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570
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571
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572
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573
separately and independently from the criminal case for the same
offense. In the case at bar, therefore, the civil action to recover the
penalty under Section 6(a) of the Truth in Lending Act had been
jointly instituted with (1) the action to declare the interests in the
promissory notes void, and (2) the action to declare the foreclosure
void. This joinder is allowed under Rule 2, Section 5 of the Rules
of Court.
Same Same Same Same Due Process Due process
mandates that a defendant should be sufficiently apprised of the
matters he or she would be defending himself or herself against.
In attacking the RTCs disposition on the violation of the Truth in
Lending Act since the same was not alleged in the complaint,
UCPB is actually asserting a violation of due process. Indeed, due
process mandates that a defendant should be sufficiently apprised
of the matters he or she would be defending himself or herself
against. However, in the 1 July 1999 pretrial brief filed by the
spouses Beluso before the RTC, the claim for civil sanctions for
violation of the Truth in Lending Act was expressly alleged, thus:
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574
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575
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found in paragraphs (f), (h) and (i) that the action cannot be
refiled. As regards all the other grounds, the complainant is
allowed to file same action, but should take care that, this time, it
is filed with the proper court or after the accomplishment of the
erstwhile absent condition precedent, as the case may be. UCPB,
however, brings to the attention of this Court a Motion for
Reconsideration filed by the spouses Beluso on 15 January 1999
with the RTC of Roxas City, which Motion had not yet been ruled
upon when the spouses Beluso filed Civil Case No. 99314 with
the RTC of Makati. Hence, there were allegedly two pending
actions between the same parties on the same issue at the time of
the filing of Civil Case No. 99314 on 9 February 1999 with the
RTC of Makati. This will still not change our findings. It is indeed
the general rule that in cases where there are two pending actions
between the same parties on the same issue, it should be the later
case that should be dismissed. However, this rule is not absolute.
According to this Court in Allied Banking Corporation v. Court of
Appeals, 259 SCRA 371 (1996): In these cases, it is evident that
the first action was filed in anticipation of the filing of the later
action and the purpose is to preempt the later suit or provide a
basis for seeking the dismissal of the second action. Even if this
is not the purpose for the filing of the first action, it may
nevertheless be dismissed if the later action is the more
appropriate vehicle for the ventilation of the issues between
the parties.
576
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99314,
void
interest
rate provided
in the
PNdeclaring
#
Datethe
of PN
Maturity
Date Amount
promissory notes executed by the respondents Secured
Spouses
Samuel and Odette Beluso (spouses Beluso) in favor of
petitioner United Coconut Planters Bank (UCPB).
The procedural and factual antecedents of this case are
as follows:
On 16 April 1996, UCPB granted the spouses Beluso a
Promissory Notes Line under a Credit Agreement whereby
the latter could avail from the former credit of up to a
maximum amount of P1.2 Million pesos for a term ending
on 30 April 1997. The spouses Beluso constituted, other
than their promissory notes, a real estate mortgage over
parcels of land in Roxas City, covered by Transfer
Certificates of Title No. T31539 and T27828, as additional
security for the obligation. The Credit Agreement was
subsequently amended to increase the amount of the
Promissory Notes Line to a maximum of
_______________
1
Rollo, p. 82.
Id., at p. 88.
577
577
Date of PN
831496000833
P 700,000
831496000850
2 May 1996
P 500,000
831496000292
2
30 August
1996
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The
PN
three
Date notes
ofInterest
PN were renewed
Maturityseveral
Amount
times.
PN
## promissory
Amount
Penalty
Total
Date
On 30 April 1997,
Secured
the payment of the principal
andSecured
interest
of the latter two promissory notes were debited from the
spouses Belusos account with UCPB yet, a consolidated
loan for P1.3 Million was again released to the spouses
Beluso under one promissory note with a due date of 28
February 1998.
To completely avail themselves of the P2.35 Million
credit line extended to them by UCPB, the spouses Beluso
executed two more promissory notes for a total of
P350,000.00:
PN #
Date of PN
Maturity
Date
Amount
Secured
97003631
11 December 1997
28 February
1998
P 200,000
98000024
2 January 1998
28 February
1998
P 150,000
578
Amount
Secured
Interest
Penalty
Total
9700363
1
P 200,000
31%
36%
P 225,313.24
9700366
6
P 700,000
30.17%
(7 days)
32.786%
(102
days)
P 795,294.72
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PN #
Amount
Secured
Interest
Penalty
Total
9700368
2
P
1,300,000
28%
(2 days)
30.41%
(102
days)
P1,462,124.54
9800002
4
P 150,000
33%
(102
days)
36%
P 170,034.71
579
On 8 May 2000,
the RTC denied UCPBs Motion for
6
Reconsideration, prompting UCPB to appeal the RTC
Decision with the Court of Appeals. The Court of Appeals
affirmed the RTC Decision, to wit:
WHEREFORE, premises considered, the decision dated March
23, 2000 of the Regional Trial Court, Branch 65, Makati City in
Civil Case No. 99314 is hereby AFFIRMED subject to the
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Id., at p. 86.
Id., at p. 88.
Id., at p. 81.
580
580
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Id., at p. 184.
581
581
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Id.
11
12
Rollo, p. 341.
582
582
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Id., at p. 342.
14
15
583
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584
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Rollo, p. 184.
585
585
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Tax Appeals, G.R. No. L28782, 12 September 1974, 59 SCRA 110, 133
134, cited in IV Tolentino, Commentaries and Jurisprudence on the Civil
Code (1986 Ed.), p. 659.
19
586
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Rollo, p. 350.
21
Id., at p. 184.
22
Id., at p. 352.
587
587
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Id., at p. 353.
24
Id., at p. 184.
588
588
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26
589
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Rollo, p. 86.
28
590
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30
Ruiz v. Court of Appeals, 449 Phil. 419, 434435 401 SCRA 410, 422
(2003).
591
591
Article 1169 of the Civil Code, which would put the obligor
in delay.
The RTC, however, also held UCPB liable for attorneys
fees in this case, as the spouses Beluso were forced to
litigate the issue on the illegality of the interest rate
provision of the promissory notes. The award of attorneys
fees, it must
be recalled, falls under the sound discretion of
33
the court. Since both parties were forced to litigate to
protect their respective rights, and both are entitled to the
award of attorneys fees from the other, practical reasons
dictate that we set off or compensate both parties
liabilities for attorneys fees. There
_______________
32
Art. 1169. Those obliged to deliver or to do something incur in delay from the time
the obligee judicially or extrajudicially demands from them the fulfillment of their
obligation.
However, the demand by the creditor shall not be necessary in order that delay
may exist:
(1) When the obligation or the law expressly so declare or
(2) When from the nature and the circumstances of the obligation it appears
that the designation of the time when the thing is to be delivered or the
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Nielson & Co., Inc. v. Lepanto Consolidated Mining Co., 135 Phil.
532, 566 26 SCRA 540, 572 (1968) Kalalo v. Luz, 145 Phil. 152, 174 34
SCRA 337, 359 (1970) San Miguel Brewery, Inc. v. Magno, 128 Phil. 328,
337 21 SCRA 292, 300 (1967) Philippine Airlines, Inc. v. Court of
Appeals, G.R. Nos. 5050405, 13 August 1990, 188 SCRA 461, 464 Pleno
v. Court of Appeals, G.R. No. L56505, 9 May 1988, 161 SCRA 208, 225.
592
592
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The spouses Beluso retort that since they had the right to
refuse payment of an excessive demand on their account,
they cannot be said to be in default for refusing to pay the
same.
593
593
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594
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and this law was intended to protect the public from hidden or
undisclosed charges on their loan obligations, requiring a full
disclosure thereof by the lender. We find that its infringement
may be inferred or implied from allegations that when
[respondents] spouses Beluso executed the promissory notes, the
interest rate chargeable thereon
_______________
35
Rollo, p. 80.
595
595
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Id.
37
Records, p. 4.
38
596
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40
Rollo, p. 376.
597
597
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598
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42
Id., at p. 68.
599
599
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600
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601
Forum Shopping
UCPB had earlier moved to dismiss the petition (originally
Case No. 99314 in RTC, Makati City) on the ground that
the spouses Beluso instituted another case (Civil Case No.
V7227) before the RTC of Roxas City, involving the same
parties and issues. UCPB claims that while Civil Case No.
V7227 initially appears to be a different action, as it
prayed for the issuance of a temporary restraining order
and/or injunction to stop foreclosure of spouses Belusos
properties, it 43poses issues which are similar to those of the
present case. To prove its point, UCPB cited the spouses
Belusos Amended Petition in Civil Case No. V7227, which
contains similar allegations as those in the present case.
The RTC of Makati denied UCPBs Motion to Dismiss Case
No. 99314 for lack of merit. Petitioner UCPB raised the
same issue with the Court of Appeals, and is raising the
same issue with us now.
The spouses Beluso claim that the issue in Civil Case
No. V7227 before the RTC of Roxas City, a Petition for
Injunction Against Foreclosure, is the propriety of the
foreclosure before the true account of spouses Beluso is
determined. On the other hand, the issue in Case No. 99
314 before the RTC of Makati City is the validity of the
interest rate provision. The spouses Beluso claim that Civil
Case No. V7227 has become moot because, before the RTC
of Roxas City could act on the restraining order, UCPB
proceeded with the foreclosure and auction sale. As the act
sought to be restrained by Civil Case No. V7227 has
already been accomplished, the spouses Beluso had to file
a different action, that of Annulment of the Foreclosure
Sale, Case No. 99314 with the RTC, Makati City.
Even if we assume for the sake of argument, however,
that only one cause of action is involved in the two civil
actions, namely, the violation of the right of the spouses
Beluso not to have their property foreclosed for an amount
they do not owe,
_______________
43
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602
603
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frauds and
(j) That a condition precedent
for filing the claim has not
44
been complied with. (Emphases supplied.)
45
604
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[T]he rule on litis pendentia does not require that the later case should
yield to the earlier case. What is required merely is that there be another
pending action, not a prior pending action. Considering the broader scope
of inquiry involved in Civil Case No. 4102 and the location of the property
involved, no error was committed by the lower court in deferring to the
Bataan courts jurisdiction.
In the case at bar, Civil Case No. V7227 before the RTC of
Roxas City was an action for injunction against a
foreclosure sale that has already been held, while Civil
Case No. 99314 before the RTC of Makati City includes an
action for the annulment of said foreclosure, an action
certainly more proper in view of the execution of the
foreclosure sale. The former case was improperly filed in
Roxas City, while the latter was filed in Makati City, the
proper venue of the action as mandated by the Credit
Agreement. It is evident, therefore, that Civil Case No. 99
314 is the more appropriate vehicle for litigating the issues
between the parties, as compared to Civil Case No. V7227.
Thus, we rule that the RTC of Makati City was not in error
in not dismissing Civil Case No. 99314.
WHEREFORE, the Decision of the Court of Appeals is
hereby AFFIRMED with the following MODIFICATIONS:
1. In addition to the sum of P2,350,000.00 as
determined by the courts a quo, respondent spouses
Samuel and Odette Beluso are also liable for the
following amounts:
605
605
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The amount still due at the time of the application of penalty charges
shall take into account the dates when the amounts in item No. 2 of this
fallo shall be deducted.
47
compounded legal interest shall take into account the dates when the
amounts in item No. 2 of this fallo shall be deducted.
606
606
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