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1.
vs.
DECISION
PERALTA, J.:
Respondent established a pension loan product for bona fide veterans or their
surviving spouses, as well as salary loan product for teachers and low-salaried
employees pursuant to its mandate under Republic Act (RA) Nos. 35183 and
71694 to provide financial assistance to veterans and teachers.
As its clientele usually do not have real estate or security to cover their pension
or salary loan, other than their continuing good health and/or employment,
respondent devised a program by charging a premium in the form of a higher fee
known as Credit Redemption Fund(CRF) from said borrowers. Resultantly,
Special Trust Funds were established by respondent for the pension loans of the
veteran-borrowers, salary loans of teachers and low-salaried employees. These
trust funds were, in turn, managed by respondents Trust and Investment
Department, with respondent as beneficiary. The fees charged against the
borrowers were credited to the respective trust funds, which would beused to
fully pay the outstanding obligation of the borrowers in case of death.
On April 30, 2002, an examination was conducted by the Supervision and
Examination Department (SED) II of the Bangko Sentral ng Pilipinas (BSP). It
found, among other things, that respondents collection of premiums from the
proceeds of various salary and pension loans of borrowers to guarantee payment
of outstanding loans violated Section 54 of RA No. 87915 which states that banks
shall not directly engage in insurance business as insurer.
In a letter dated March 17, 2003, the BSP notified respondent about the
Insurance Commissions opinion that the CRF is a form of insurance. Thus,
respondent was requested to discontinue the collection of said fees.
On February 24, 2004, respondent complied with the BSPs directive and
discontinued the collection of fees for CRF.
On September 16, 2005, petitioners issued Monetary Board (MB) Resolution No.
1139 directing respondents Trust and Investment Department to return to the
borrowers all the balances of the CRF in the amount of P144,713,224.54 as of
August31, 2004, and to preserve the records of borrowers who were deducted
CRFs from their loan proceeds pending resolution or ruling of the Office of the
General Counsel of the BSP. Thus, respondent requested reconsideration of said
MB Resolution. However, the same was denied ina letter dated December 5,
2006.
Accordingly, respondent filed a Petition for Declaratory Relief with the RTC of
Makati City.
In response, petitioners filed a Motion to Dismiss alleging that the petition for
declaratory relief cannot prosper due to respondents prior breach of Section 54
of RA No. 8791.
Upon a thorough analysis of the allegations of the petition and the documents
attached thereto as annexes,the arguments of both parties in support of their
respective position on the incident up for resolution, the Court finds that an
ordinary civil action or other else but certainly not the present action for
declaratory relief, is the proper remedy.
Hence, the issue of whether or not petitioner violated the foregoing law can only
be fittingly resolved thru an ordinaryaction. For which reason, the Court has no
recourse but to put an end to this case.
In view of the foregoing, the Court deems it unnecessary to tackle the other
grounds relied upon by [petitioners] in their motion to dismiss.
SO ORDERED.
Almost a year later, respondent filed a Motion to Admit its Motion for
Reconsideration against said order alleging that it did not receive a copy thereof
until September 3, 2008.
Petitioners opposed said motion on the ground that per Certification of the
Philippine Postal Office, an official copy of the RTCs Order was duly served and
received by respondent on October 17, 2007.
Despite the foregoing, the RTC allowed respondents motion for reconsideration
and required petitioners to file their answer.
In a Decision dated June 15, 2009,the RTC of Makati City granted respondents
petition for declaratory relief disposing as follows:
WHEREFORE, premises considered, it is hereby DECLARED that [respondent],
when it collected additional fees known as "Credit Redemption Fund (CRF)" from
its loan borrowers was not directly engaged in insurance business as insurer;
hence, it did not violate Sec. 54, R.A. 8791, otherwise known as the "General
Banking Law of 2000."
The Monetary Board Resolution No. 1139 dated August 26, 2005 is hereby
DECLARED null and void.
SO ORDERED.7
Petitioners filed a motion for reconsideration against said decision, but the same
was denied in anOrder dated August 25, 2009.
Hence, the present petition wherein petitioners raise the following grounds to
support their petition:
I.
II.
THE COURT A QUOS ORDER, DISMISSING THE PETITION FOR
DECLARATORY RELIEF HAS LONG BECOME FINAL AND EXECUTORY AND
MAY NO LONGER BE DISTURBED.
III.
In essence, the issue is whether or not the petition for declaratory relief is proper.
Section 1, Rule 63 of the Rules of Court governs petitions for declaratory relief,
viz.:
SECTION 1. Who may file petition. Any person interested under a deed, will,
contract or other written instrument, whose rights are affected by a statute,
executive order or regulation, ordinance, or any other governmental regulation
may, before breach or violation thereof, bring an action in the appropriate
Regional Trial Court to determine any question of construction or validity arising,
and for a declaration of his rights or duties, thereunder.
In view of the foregoing, the decision of the BSP Monetary Board cannot be a
proper subject matter for a petition for declaratory relief since it was issued by the
BSP Monetary Board inthe exercise of its quasi-judicial powers or functions.
The authority of the petitioners to issue the questioned MB Resolution emanated
from its powers under Section 3711 of RA No. 765312 and Section 6613 of RA
No. 879114 to impose, at its discretion, administrative sanctions, upon any bank
for violation of any banking law.
The nature of the BSP Monetary Board as a quasi-judicial agency, and the
character of its determination of whether or not appropriate sanctions may be
imposed upon erring banks, as anexercise of quasi-judicial function, have been
recognized by this Court in the case of United Coconut Planters Bank v. E.
Ganzon, Inc.,15 to wit:
A perusal of Section 9(3) of Batas Pambansa Blg. 129, as amended, and Section
1, Rule 43 of the 1997 Rules of Civil Procedure reveals that the BSP Monetary
Board is not included among the quasi judicial agencies explicitly named therein,
whose final judgments, orders, resolutions or awards are appealableto the Court
of Appeals. Such omission, however, does not necessarily mean that the Court of
Appeals has no appellate jurisdiction over the judgments, orders, resolutions, or
awards of the BSP Monetary Board.
It bears stressing that Section 9(3) of Batas Pambansa Blg. 129, as amended, on
the appellate jurisdiction of the Court of Appeals, generally refers to quasi-judicial
agencies, instrumentalities, boards or commissions. The use of the word
"including" in the said provision, prior to the naming of several quasi-judicial
agencies, necessarily conveys the very idea of non-exclusivity of the
enumeration. The principle of expressio unius est exclusio alterius does not apply
where other circumstances indicate that the enumeration was not intended to be
exclusive, or where the enumeration is by way of example only.
Similarly, Section 1, Rule 43 of the 1997 Revised Rules of Civil Procedure merely
mentions several quasi-judicial agencies without exclusivity in the phraseology.
The enumeration of the agencies therein mentioned is not exclusive. The
introductory phrase "[a]mong these agencies are" preceding the enumeration of
specific quasi-judicial agencies only highlights the fact that the list is not meant to
be exclusive or conclusive. Further, the overture stresses and acknowledges the
existence of other quasi-judicial agencies not included inthe enumeration but
should be deemed included.
A quasi-judicial agency or body isan organ of government other than a court and
other thana legislature, which affects the rights of private parties through either
adjudication or rule-making. The very definition of an administrative agency
includes itsbeing vested with quasi-judicial powers. The ever increasing variety of
powers and functions given to administrative agencies recognizes the need for
the active intervention of administrative agencies in matters calling for technical
knowledge and speed in countless controversies which cannot possibly be
handled by regular courts. A "quasi-judicial function" is a term which applies to
the action, discretion, etc. of public administrative officers or bodies, who are
required to investigate facts, or ascertain the existence of facts, hold hearings,
and draw conclusions from them, as a basis for their official action and to
exercise discretion of a judicial nature.
A priori, having established that the BSP Monetary Board is indeed a quasi-
judicial body exercising quasi-judicial functions, then its decision in MB
Resolution No. 1139 cannot be the proper subject of declaratory relief.
Lastly, also worth noting is the fact that the court a quo's Order dated September
24, 2007, which dismissed respondent's petition for declaratory relief, had long
become final and executory.
To recall, said Order was duly served on and received by respondent on October
1 7, 2007, as evidenced by the Ce1iification issued by the Philippine Postal
Corporation. Almost a year later, however, or on October 15, 2008, respondent
moved for reconsideration of the court a quo's Order of dismissal, claiming it
received a copy of said Order only on September 3, 2008. Thus, respondent's
self-serving claim should not have prevailed over the Certification issued by the
Philippine Postal Corporation. It was error for the trial court to ente1iain it for the
second time despite the lapse of almost a year before respondent filed its motion
for reconsideration against said Order.
SO ORDERED.
2.
DECISION
Before the Court is a petition for review on certiorari which seeks to reverse and
set aside the Decision1 dated November 19, 2010 and Resolution2 dated
January 31, 2011 of the Court of Appeals (CA) in CA-G.R. CV No. 91120. The CA
affirmed the Decision3 dated January 8, 2007 of the Regional Trial Court (RTC)
of- Valenzuela City, Branch 171 dismissing the complaint in Civil Case No. 295-V
-01.
In its Answer with Counterclaim,8 respondent pointed out that petitioner cannot
claim that it was unaware of the redemption price which is clearly provided in
Section 47 of R.A. No. 8791, and that petitioner had all the opportune time to
redeem the foreclosed properties from the time it received the letter of demand
and the notice of sale before the registration of the certificate of sale. As to the
check payment tendered by petitioner, respondent said that even assuming
arguendo such redemption was timely made, it was not for the amount as
required by law.
On January 8, 2007, the trial court rendered its decision dismissing the complaint
as well as the counterclaim. It noted that the issue of constitutionality of Sec. 47
of R.A. No. 8791 was never raised by the petitioner during the pre-trial and the
trial. Aside from the fact that petitioner's attempt to redeem was already late,
there was no valid redemption made because Atty. Judy Ann Abat-Vera who
talked to Atty. Joseph E. Mabilog of the Legal Division of respondent bank, was
not properly authorized by petitioner's Board of Directors to transact for and in its
behalf; it was only a certain Chan Guan Pue, the alleged President of petitioner
corporation, who gave instruction to Atty. Abat-Vera to redeem the foreclosed
properties.9chanroblesvirtualawlibrary
Aggrieved, petitioner appealed to the CA which affirmed the trial court's decision.
According to the CA, petitioner failed to justify why Section 47 of R.A. No. 8791
should be declared unconstitutional. Furthermore, the appellate court concluded
that a reading of Section 47 plainly reveals the intention to shorten the period of
redemption for juridical persons and that the foreclosure of the mortgaged
properties in this case when R.A. No. 8791 was already in effect clearly falls
within the purview of the said provision.10chanroblesvirtualawlibrary
Petitioner then argues that applying Section 47 of R.A. No. 8791 to the present
case would be a substantial impairment of its vested right of redemption under
the real estate mortgage contract. Such impairment would be violative of the
constitutional proscription against impairment of obligations of contract, a patent
derogation of petitioner's vested right and clearly changes the intention of the
contracting parties. Moreover, citing this Court's ruling in Rural Bank of Davao
City, Inc. v. Court of Appeals12 where it was held that "Section 119 prevails over
statutes which provide for a shorter period of redemption in extrajudicial
foreclosure sales", and in Sulit
v. Court of Appeals,13 petitioner stresses that it has always been the policy of
this Court to aid rather than defeat the mortgagor's right to redeem his property.
Petitioner further argues that since R.A. No. 8791 does not provide for its
retroactive application, courts therefore cannot retroactively apply its provisions
to contracts executed and consummated before its effectivity. Also, since R.A.
8791 is a general law pertaining to the banking industry while Act No. 3135 is a
special law specifically governing real estate mortgage and foreclosure, under
the rules of statutory construction that in case of conflict a special law prevails
over a general law regardless of the dates of enactment of both laws, Act No.
3135 clearly should prevail on the redemption period to be applied in this case.
The constitutional issue having been squarely raised in the pleadings filed in the
trial and appellate courts, we shall proceed to resolve the same.
SEC. 6. In all cases in which an extrajudicial sale is made under the special
power hereinbefore referred to, the debtor, his successors-in-interest or any
judicial creditor or judgment creditor of said debtor, or any person having a lien
on the property subsequent to the mortgage or deed of
trust under which the property is sold, may redeem the same at any time within
the term of one year from and after the date of the sale; and such redemption
shall be governed by the provisions of sections four hundred and sixty-four to
four hundred and sixty-six, inclusive, of the Code of
Civil Procedure,15 in so far as these are not inconsistent with the provisions of
this Act.
The one-year period of redemption is counted from the date of the registration of
the certificate of sale. In this case, the parties provided in their real estate
mortgage contract that upon petitioner's default and the latter's entire loan
obligation becoming due, respondent may immediately foreclose the mortgage
judicially in accordance with the Rules of Court, or extrajudicially in accordance
with Act No. 3135, as amended.
However, Section 47 of R.A. No. 8791 otherwise known as "The General Banking
Law of 2000" which took effect on June 13, 2000, amended Act No. 3135. Said
provision reads:chanroblesvirtualawlibrary
Under the new law, an exception is thus made in the case of juridical persons
which are allowed to exercise the right of redemption only "until, but not after, the
registration of the certificate of foreclosure sale" and in no case more than three
(3) months after foreclosure, whichever comes first.16chanroblesvirtualawlibrary
May the foregoing amendment be validly applied in this case when the real
estate mortgage contract was executed in 1985 and the mortgage foreclosed
when R.A. No. 8791 was already in effect?
Section 47 did not divest juridical persons of the right to redeem their foreclosed
properties but only modified the time for the exercise of such right by reducing
the one-year period originally provided in Act No. 3135. The new redemption
period commences from the date of foreclosure sale, and expires upon
registration of the certificate of sale or three months after foreclosure, whichever
is earlier. There is likewise no retroactive application of the new redemption
period because Section 47 exempts from its operation those properties
foreclosed prior to its effectivity and whose owners shall retain their redemption
rights under Act No. 3135.
The equal protection clause is directed principally against undue favor and
individual or class privilege. It is not intended to prohibit legislation which is
limited to the object to which it is directed or by the territory in which it is to
operate. It does not require absolute equality, but merely that all persons be
treated alike under like conditions both as to privileges conferred and liabilities
imposed.23 Equal protection permits of reasonable classification.24 We have
ruled that one class may be treated differently from another where the groupings
are based on reasonable and real distinctions.25 If classification is germane to
the purpose of the law, concerns all members of the class, and applies equally to
present and future conditions, the classification does not violate the equal
protection guarantee.26chanroblesvirtualawlibrary
We agree with the CA that the legislature clearly intended to shorten the period of
redemption for juridical persons whose properties were foreclosed and sold in
accordance with the provisions of Act No. 3135.27chanroblesvirtualawlibrary
The difference in the treatment of juridical persons and natural persons was
based on the nature of the properties foreclosed whether these are used as
residence, for which the more liberal one-year redemption period is retained, or
used for industrial or commercial purposes, in which case a shorter term is
deemed necessary to reduce the period of uncertainty in the ownership of
property and enable mortgagee-banks to dispose sooner of these acquired
assets. It must be underscored that the General Banking Law of 2000, crafted in
the aftermath of the 1997 Southeast Asian financial crisis, sought to reform the
General Banking Act of 1949 by fashioning a legal framework for maintaining a
safe and sound banking system.28 In this context, the amendment introduced by
Section 47 embodied one of such safe and sound practices aimed at ensuring
the solvency and liquidity of our banks. It cannot therefore be disputed that the
said provision amending the redemption period in Act 3135 was based on a
reasonable classification and germane to the purpose of the law.
The freedom to contract is not absolute; all contracts and all rights are subject to
the police power of the State and not only may regulations which affect them be
established by the State, but all such regulations must be subject to change from
time to time, as the general well-being of the community may require, or as the
circumstances may change, or as experience may demonstrate the necessity.32
Settled is the rule that the non-impairment clause of the Constitution must yield to
the loftier purposes targeted by the Government. The right granted by this
provision must submit to the demands and necessities of the State's power of
regulation.33 Such authority to regulate businesses extends to the banking
industry which, as this Court has time and again emphasized, is undeniably
imbued with public interest.34chanroblesvirtualawlibrary
Having ruled that the assailed Section 47 of R.A. No. 8791 is constitutional, we
find no reversible error committed by the CA in holding that petitioner can no
longer exercise the right of redemption over its foreclosed properties after the
certificate of sale in favor of respondent had been registered.
WHEREFORE, the petition for review on certiorari is DENIED for lack of merit.
The Decision dated November 19, 2010 and Resolution dated January 31, 2011
of the Court of Appeals in CA-G.R. CV No. 91120 are hereby AFFIRMED.
SO ORDERED.
3.
4.
G.R. No. 204672, February 18, 2015
DECISION
PERLAS-BERNABE, J.:
Assailed in this petition for review on certiorari1are the Decision2 dated October 3, 2011 and the
Resolution3 dated October 17, 2012 of the Court of Appeals (CA) in CA-G.R. CV No. 02895,which
affirmed with modification the Order4 dated October 20, 2008 of the Regional Trial Court of Guimbal,
Iloilo, Branch 67 (RTC) in Cadastral Case Nos. 118 and 122, allowing petitioners-spouses Rodolfo
and Marcelina Guevarra (Sps. Guevarra) to exercise their right to repurchase the mortgaged
property subject of this case, conditioned upon the payment of the purchase price fixed by
respondent The Commoner Lending Corporation, Inc. (TCLC). chanroblesvirtuallawlibrary
The Facts
On December 16, 1996,5Sps. Guevarra obtained a P320,000.00 loan from TCLC, which was secured
by a real estate mortgage6 over a 5,532- square meter parcel of land situated in Guimbal, Iloilo,
covered by Original Certificate of Title (OCT) No. F-31900 7 (subject property), emanating from a
free patent granted to Sps. Guevarraon February 25, 1986.8 cralawred
Sps. Guevarra, however, defaulted in the payment of their loan, promptingTCLC to extra-judicially
foreclose the mortgage on the subject property9 in accordance with Act No. 3135,10 as amended.In
the process, TCLCemerged as the highest bidder at the public auction sale held on June 15, 2000 for
the bid amount of P150,000.00,11and on August 25, 2000, the certificate of sale was registered with
the Registry of Deeds of Iloilo.12 cralawre d
Eventually, Sps. Guevarrafailed to redeem the subject property within the one-year reglementary
period, which led to the cancellation of OCT No. F-31900 and the issuance of Transfer Certificate of
Title No.T-1618713 in the name of TCLC. Thereafter, TCLCdemanded that Sps. Guevarra vacate the
property, but to no avail.14
cralawre d
On June 10, 2005, TCLC applied for a writ of possession 15 before the RTC, docketed as Cadastral
Case No. 118.Sps. Guevarraopposed16 the samebychallenging the validity of the foreclosure
proceedingsdue tothe purported failure of TCLC to comply with the notice, posting and publication
requirements, and lack of authority, as a corporation,to acquire the subject property. Sps. Guevarra
also assailed the issuance by the Sheriff of Iloilo of a Final Deed of Sale 17 to be premature, as they
were still entitled to redeem the subject property within five (5) yearsfrom the expiration of the
one-year period to repurchase.18 cralawre d
Subsequently, or on September 8, 2005, Sps. Guevarra filed before the RTC a petition for
redemption,19 docketed as Cadastral Case No. 122, maintaining that the redemption period did not
expire on August 25, 2001, or one (1) year from the registration of the certificate of sale, but will
still expire five (5) years therefrom, or on August 25, 2006. 20 They further averred that they
pleaded to be allowed to redeem the subject property but TCLC unjustifiably refused the same,
constraining them to file said petition, offering to redeem the subject property at P150,000.00, plus
one percent (1%) interest per month for five (5) years from August 25, 2000, or in the amount of
P240,000.00,21which they consigned22 to the RTC.
Inan Order24 dated July 12, 2006, the RTC granted TCLCs petition in Cadastral Case No. 118,
resulting in the issuance of the corresponding Writ of Possession 25 andNotice to Vacate26which were
duly served uponSps. Guevarra.27Accordingly, the latterfiled a motion for reconsideration 28andMotion
to Hold in Abeyance the Implementation of the Writ of Possession. 29 cralawre d
In an Order30 dated October 20, 2008, the RTC denied the motion for reconsideration in Cadastral
Case No. 118, but granted Sps. Guevarraspetition in Cadastral Case No. 122. In so doing, the RTC
recognizedSps. Guevarras right to repurchase the subject property, pointing out that they were able
to file their petition within the five-yearperiod provided under Section 119 of Commonwealth Act No.
141,31 otherwise known as the Public Land Act (Public Land Act).32As a consequence, the RTC
directed TCLC to reconvey the subject propertyto Sps. Guevarraand execute the corresponding deed
of reconveyance upon payment of the purchase price of ?150,000.00, plus one percent(1%) interest
per month from the date of the auction sale on June 15, 2000upto August 8, 2006,as well as the
corresponding tax assessments and foreclosure expenses. 33 cralawred
Dissatisfied, TCLC filed a motion for reconsideration34 which was, however, denied in an Order35dated
January 6, 2009; thus, itfiled an appeal36 before the CA. chanroblesvirtuallawlibrary
The CA Proceedings
In a Decision37 dated October 3, 2011, the CA affirmed the RTCs October 20, 2008 Order, upholding
Sps. Guevarras right to repurchase the subject property pursuant to Section 119 of the Public Land
Act, with modification that the same be conditioned upon the payment of the purchase price fixed
by TCLC. It ruled that after the expiration of the redemption period, the present owner, i.e.,
TCLC,has the discretion to set a higher price.38 cralawred
Aggrieved, Sps. Guevarra filed a motion for reconsideration 39 which was, however, denied in a
Resolution40 dated October 17, 2012, hence, this petition.
The essential issue in this case is whether or not the CA committed a reversible error in ruling that
the repurchase price for the subject property should be fixed by TCLC.
In an extra-judicial foreclosure of registered land acquired under a free patent, the mortgagor may
redeem the property within two (2) years from the date of foreclosure if the land is mortgaged to a
rural bank under Republic Act No. (RA) 720,41 as amended, otherwise known as the Rural Banks Act,
or within one (1) year from the registration of the certificate of sale if the land is mortgaged to
parties other than rural banks pursuant to Act No. 3135.42 If the mortgagor fails to exercise such
right, he or his heirs may still repurchase the property within five (5) years from the expiration of
the aforementioned redemption period43 pursuant to Section 119 of the Public Land Act, which
states:chanRoble svirtualLawlibrary
SEC. 119. Every conveyance of land acquired under the free patent or homestead provisions, when
proper, shall be subject to repurchase by the applicant, his widow, or legal heirs, within a period of
five years from the date of the conveyance. cralawlawlibrary
In this case, the subject property was mortgaged to and foreclosed by TCLC, which is a lending or
credit institution, and not a rural bank; hence, the redemption period is one (1) year from the
registration of the certificate of sale on August 25, 2000, or until August 25, 2001. Given that Sps.
Guevarra failed to redeem the subject property within the aforestated redemption period, TCLC was
entitled, as a matter of right, to consolidate its ownership and to possess the same. 44 Nonetheless,
such right should not negate Sps. Guevarras right to repurchase said property within five (5) years
from the expiration of the redemption period on August 25, 2001, or until August 25, 2006, in view
of Section 119 of the Public Land Act as above-cited.
In this relation, it is apt to clarify that contrary to TCLCs claim, 45the tender of the repurchase price
is not necessary for the preservation of the right of repurchase, because the filing of a judicial action
for such purpose within the five-year period under Section 119 of the Public Land Actis already
equivalent to a formal offer to redeem. On this premise, consignation of the redemption price is
equally unnecessary.46 cralawre d
Thus, the RTC and CAboth correctly ruled that Sps. Guevarras right to repurchase the subject
property had not yet expiredwhen Cadastral Case No. 122 was filed on September 8, 2005. That
being said, the Court now proceeds to determine the proper amount of the repurchase price.
Sps. Guevarrainsist that the repurchase price should be the purchase price at the auction sale plus
interest of one percent (1%) per month and other assessment fees, 47citing the rulings in the cases
of Belisario v. Intermediate Appellate Court48 (Belisario) and Salenillas v. CA49 (Salenillas). On the
other hand, TCLC maintains that it is entitled to its total claims under the promissory note and the
mortgage contract50in accordance with Section 4751 of the General Banking Law of 2000.52 cralawred
To resolve the matter, it must first be pointed out that case law has equated a right of repurchase of
foreclosed properties under Section 119 of the Public Land Act as a right of redemption 53 and the
repurchase price as a redemption price.54 Thus, in Salenillas, the Court applied then Section 30,
now Section 28, Rule 39 of the Rules of Court (Rules) in the redemption of the foreclosed property
covered by a free patent: chanRoble svirtualLawlibrary
Now, as regards the redemption price, applying Sec. 30 of Rule 39 of the [Rules], the petitioners
should reimburse the private respondent the amount of the purchase price at the public auction
plus interest at the rate of one per centum per month up to November 17, 1983, together
with the amounts of assessments and taxes on the property that the private respondent might
have paid after purchase and interest on the last named amount at the same rate as that
on the purchase price. (Emphases supplied)55 cralawlawlibrary
The Court has,however, ruled56 that redemptions from lending or credit institutions, like TCLC, are
governed by Section 7857 of the General Banking Act (now Section 47 of the General Banking Law of
2000), which amended Section 6 of Act No. 3135 in relation to the proper redemption price when
the mortgagee is a bank, or a banking or credit institution. 58 cralawre d
Nonetheless, the Court cannot subscribe to TCLCs contention that it is entitled to its total claims
under the promissory note and the mortgage contract59in view of the settled rule that an action to
foreclose must be limited to the amount mentioned in the mortgage.60Hence, amounts not
stated therein must be excluded, like the penalty charges of three percent (3%) per
month included in TCLCs claim.61A penalty charge is likened to a compensation for damages in case
of breach of the obligation. Being penal in nature,it must be specific and fixed by the contracting
parties.62
cralawre d
Moreover, the Court notes that the stipulated three percent (3%) monthly interest is excessive
and unconscionable.In a plethora of cases, the Court has affirmed that stipulated interest rates
of three percent (3%) per month and higher are excessive, iniquitous, unconscionable,
and exorbitant,63hence, illegal64and void for being contrary to morals.65 In Agner v. BPI
Family Savings Bank, Inc.,66 the Court had the occasion to rule: chanRoble svirtualLawlibrary
Settled is the principle which this Court has affirmed in a number of cases that stipulated interest
rates of three percent (3%) per month and higher are excessive, iniquitous, unconscionable, and
exorbitant. While Central Bank Circular No. 905-82, which took effect on January 1, 1983,
effectively removed the ceiling on interest rates for both secured and unsecured loans, regardless of
maturity, nothing in the said circular could possibly be read as granting carte blanche authority to
lenders to raise interest rates to levels which would either enslave their borrowers or lead to a
hemorrhaging of their assets. Since the stipulation on the interest rate is void for being
contrary to morals, if not against the law, it is as if there was no express contract on said
interest rate; thus, the interest rate may be reduced as reason and equity demand.
(Emphases supplied)67 cralawla wlibrary
As such, the stipulated three percent (3%) monthly interest should be equitably reduced to one
percent (1%) per month or twelve percent (12%) per annum reckoned from the execution of the
real estate mortgage on December 12, 1996,68 until the filing of the petition in Cadastral Case No.
122 on September 8, 2005.
In addition to the principal and interest, the repurchase price should also include all the expenses of
foreclosure, i.e., Judicial Commission, Publication Fee, and Sheriffs Fee, in accordance with Section
4769 of the General Banking Law of 2000. Considering further that Sps. Guevarra failed to redeem
the subject property within the one-year reglementary period, they are liable to reimburse TCLC for
the corresponding Documentary Stamp Tax (DST) and Capital Gains Tax (CGT) it paid pursuant to
Bureau of Internal Revenue (BIR) Revenue Regulations No. 4-99, 70which requires the payment of
DST on extra-judicial foreclosure sales of capital assets initiated by banks, finance and insurance
companies, as well as CGT in cases of non-redemption. CGT and DST are expenses incident to
TCLCs custody of the subject property, hence, likewise due, under the above provision of law.
From this repurchase priceshall be deducted the amount consigned to the RTC, or P240,000.00.
Sps. Guevarramay repurchase the subject property within thirty (30) days from finality of this
Decision upon payment of the net amount of P449,460.11.
WHEREFORE, the petition is DENIED. The Decision dated October 3, 2011 and the Resolution
dated October 17, 2012 of the Court of Appeals in CA-G.R. CV No. 02895 are
hereby AFFIRMED with MODIFICATION allowing petitioners-spouses Rodolfo and
MarcelinaGuevarra to repurchase the subject property from respondent The Commoner Lending
Corporation, Inc. (TCLC) within thirty (30) days from the finality of this Decision for the price
of P689,460.11, less the amount of P240,000.00 previously consigned to the court a quo, or the net
amount of P449,460.11, for which the corresponding deed of absolute conveyance shall be executed
by TCLC.
5.
6.
7.
DECISION
This is an appeal from the January 18, 2012 Decision [1] of the Court of
Appeals in CA-G.R. SP No. 108571 entitled Philippine National Bank v.
Department of Justice, Amelio C. Tria and John Doe which affirmed the
Resolution dated December 26, 2007 issued by the Department of Justice.
The Facts
To withdraw from the account, PNB checks must be issued and three
signatures securedone signatory each from MWSS, Maynilad Water
Services, Inc. (MWSI), and the contractor, China-Geo Engineering
Corporation (China-Geo).[2]
On April 16, 2003, C/A 244-850099-6 became dormant with a balance
of PhP 5,397,154.07.[3]
Veniegas verified that PhP 5,200,000 was indeed debited and was
encashed using Managers Check No. 1165848 in favor of Atty. Rodrigo A.
Reyes. Veniegas also attempted to retrieve the files for the transaction on
April 22, 2004 but discovered that the duplicate copy of Managers Check
No. 1165848, the managers check application form and the letter of
authority were all missing.[21]
Pulida notified Veniegas that MWSS did not apply for the issuance of the
managers check payable to Atty. Reyes. Upon verification with the
Integrated Bar of the Philippines, it was discovered that there was no
Rodrigo A. Reyes included in its membership roster. Further, upon
inspection of the PNB-MWSS microfilm copy of Managers Check No.
1165848, it was shown that the check was negotiated and encashed at the
PNB-Circle on April 26, 2004 and was annotated with ok for payment per
confirmation and approval of PNB MWSS by Tria on the dorsal portion of
the check.[22]
On February 14, 2005, MWSS wrote the new Branch Manager of PNB-
MWSS, Ofelia Daway, about the unauthorized withdrawal from their PNB
C/A No. 244-850099-6.[23]MWSS expressed surprise at the withdrawal of
PhP 5,200,030 from its account when it had not issued any PNB checks. The
MWSS letter also stated that:
PNB conducted its own investigation and, at its conclusion, sought to hold
Tria liable for qualified theft.[24]
Undaunted, PNB filed a petition for review with the Department of Justice
(DOJ) and prayed for the reversal of the August 15, 2006 and April 13, 2007
Resolutions issued by the Office of the City Prosecutor of Quezon City
(OCP).
PNB sought recourse before the Court of Appeals (CA). It alleged that both
the OCP and the DOJ committed grave abuse of discretion in failing to
consider that Tria and Atty. Reyes/John Doe conspired in committing the
crime of qualified theft; and the DOJ committed grave abuse of discretion in
failing to consider the existence of probable cause in the instant case and
affirming the OCPs findings that there is no probable cause to hold Tria and
Atty. Reyes/John Doe for trial in the crime of qualified theft.
On January 18, 2010, the CA decided in favor of Tria. In affirming the DOJ
Resolution issued by Secretary Gonzales, the CA took notice of how
Managers Check No. 1165848 was issued and paid by PNB after the
verification made by PNBs own employees.
The CA ruled that probable cause against Tria and Atty. Reyes was not
established since the employees of PNB made the encashment after their
own independent verification of C/A No. 244-850099-6. Further, the CA
deferred to the DOJs determination of probable cause for the filing of an
information in court as it is an executive function and ruled that the
resolutions were not reversible as PNB was unable to show that these
resolutions of the DOJ were tainted with grave abuse of discretion. The CA,
thus, affirmed the OCPs finding that Trias identification of the payee did not
by itself bring about the payment of the subject managers check and
concluded that the element of taking of personal property belonging to
another without the owners consent is lacking since PNB consented to the
taking by Atty. Reyes.
SO ORDERED.
It must be emphasized at the outset that what is necessary for the filing of a
criminal information is not proof beyond reasonable doubt that the person
accused is guilty of the acts imputed on him, but only that there is probable
cause to believe that he is guilty of the crime charged.
The acts of Tria and the relevant circumstances that led to the
encashment of the check provide more than sufficient basis for the finding of
probable cause to file an information against him and John Doe/Atty. Reyes
for qualified theft. In fact, it is easy to infer from the factual milieu of the
instant case the existence of all the elements necessary for the prosecution of
the crime of qualified theft.
In the instant case, the first and second elements are unquestionably
present. The money involved is the personal property of Trias employer,
PNB. Trias argument that the amount does not belong to PNB even if it is
the depositary bank is erroneous since it is well established that a bank
acquires ownership of the money deposited by its clients.[36]
The third element, intent to gain or animus lucrandi, is an internal act that is
presumed from the unlawful taking by the offender of the thing subject of
asportation.[37] This element is immediately discernable from the
circumstances narrated in the affidavits submitted by PNBs employees. In
particular, it is plain from Trias misrepresentation that the person he called
Atty. Reyes was a valued client of PNB-MWSS who was authorized to
encash the managers check and his act of revising his functions as stated in
the Minutes of the Meeting referred to by Veniegas to make it appear that he
had been tasked with accompanying valued client/clients to QC Circle
Branch for encashment of MCs merely to identify the bearer/payee and
confirmation of the MC whenever we are short in cash.
The fifth element is undisputed, while the last element, that the taking be
done with grave abuse of confidence, is sufficiently shown by the affidavits
of PNB and Trias own admission of the position he held at the Bank.
A banks employees are entrusted with the possession of money of the bank
due to the confidence reposed in them and as such they occupy positions of
confidence.[38]
On the contrary, the facts portray the stark absence of consent on the
part of PNB for the issuance of managers check payable to Atty. Rodrigo A.
Reyes and its felonious encashment by John Doe/Atty. Reyes in complicity
with Tria.
Tria, it must be reiterated, was PNBs bank manager for its MWSS
branch. The check in question was a managers check. A managers check
is one drawn by a banks manager, Tria in this case, upon the bank itself.
We have held that it stands on the same footing as a certified check, which is
deemed to have been accepted by the bank that certified it, as it is an order
of the bank to pay, drawn upon itself, committing in effect its total resources,
integrity and honor behind its issuance. By its peculiar character and general
use in commerce, a managers check is regarded substantially to be as
good as the money it represents.[39] In fact, it is obvious from the PNB
affidavits that the MWSS C/A was deducted upon the issuance of the
managers check and not upon its encashment. Indeed, as the banks own
check, a managers check becomes the primary obligation of the bank and is
accepted in advance by the act of its issuance.[40]
Taking this fact into consideration, it cannot be denied that the wheels
of the felony started turning days before the misrepresentations made by Tria
at PNB-Circle. And the encashment was a mere culmination of the crime
that was commenced in PNB-MWSS.
The felony of qualified theft started with the use of the now missing
falsified letter-request and supporting documents for the issuance of the
managers check and the re-activation of the MWSS C/A. It was the
pretense of an authority from MWSS that deprived PNB the liberty to
either withhold or freely give its consent for the valid reactivation of the
account and issuance of the check. Quoting from Black v. State,[41] this
Court held in Gaviola v. People[42] that such pretense does not validate a
taking:
In all cases where one in good faith takes anothers property under
claim of title in himself, he is exempt from the charge of larceny,
however puerile or mistaken the claim may in fact be. And the
same is true where the taking is on behalf of another, believed to
be the true owner. Still, if the claim is dishonest, a mere pretense,
it will not protect the taker.
In more conventional words, this Court sustained the finding of
qualified theft in People v. Salonga,[43] where the taking was done through
the issuance of a check by the very person responsible for, and in custody of,
the said check, viz:
Tria could just have waited for a call from the branch manager of the
PNB Quezon City Circle Branch to verify the authenticity of said
check. Such extra effort and unexplained gesture on the part of Tria to
provide assistance to Atty. Reyes, a fake lawyer, to ensure the encashment of
the check leaves one to believe that he is in cahoots with the impostor.
Nonetheless, nothing is more damning than the fact that Tria vouched
for the identity of John Doe/Atty. Reyes, even claimed that Atty. Reyes is a
valued client of PNB-MWSS, affixed his signature at the back portion of the
check to guarantee that Atty. Reyes is the true and legal payee, and
ultimately guaranteed that the Managers check is legally effective and valid
and everything is aboveboard. PNB-Circle could have verified from MWSS
if the deduction is authorized especially considering that the money will be
deducted from an account of a government corporation. The identification
by Tria of Atty. Reyes as payee precluded and preempted the bank officials
from verifying the transaction from MWSS. Thus, the identification made by
Tria impliedly warranted to the PNB-Circle that said Managers check was
validly issued with the consent of PNB, and that the encashment is legal and
warranted.
SO ORDERED.