SECOND DIVISION
August 1, 2016
G.R. No. 215954
SPOUSES JOVEN SY and CORAZON QUE SY, Petitioners
vs.
CHINA BANKING CORPORATION, Respondent
D E C I S I O N
MENDOZA, J.:
This Petition for Review on Certiorari under Rule 45 of the Rules of Court, 1 filed by Spouses Joven Sy and Corazon Que Sy (petitioners), assails the December 15, 2014 Decision2 of the Court of Appeals (CA) in CA-G.R. CV No. 97482, which affirmed the May 21, 2010 Decision3 of the Regional Trial Court, Branch 139, Makati City (RTC), in Civil Case No. 04-1215, ordering petitioners to pay respondent China Banking Corporation (China Bank) the deficiency balance of their loan obligation.
Factual Antecedents
Three promissory notes (PN)4 were executed by petitioners in favor of China Bank. The first amounted to ₱8,800,000.00, designated as PN No. 5070016047; the second covering ₱5,200,000.00, designated as PN No. 5070016030; and the third involving ₱5,900,000.00, designated as PN No. 5070014942. Under PN Nos. 5070016047 and 5070016030, petitioners promised to pay China Bank the due amounts within a period of 351 days on or before June 14, 2002 with interest payable in advance for 15 days from June 28, 2001 to July 13, 2001 at 16% per annum, with the succeeding interest payable starting July 13, 2001 and every month thereafter until fully paid at the prevailing rate as determined on the date of interest payment. In PN No. 5070014942, petitioners promised to pay the principal amount at the rate of PlOO, 000.00 monthly for a period of 59 months with interest payable monthly at prevailing rates, initially at 23.5%. Part of the terms of the PNs was an agreement for petitioners to pay jointly and severally penalty charges equivalent to 1/10 of 1 % per day of the total amount due should they default, payable and due from the date of default until fully paid. Petitioners also agreed to pay 10% of the total amount due as attorney's fees. The said PNs were also secured by a real estate mortgage5 over petitioners' property covered by TCT No. N-155159.
Petitioners, however, failed to comply with their obligation which eventually amounted to a total of ₱28,438,791.69. This forced China Bank to foreclose the mortgaged property on February 26, 2004. The foreclosure sale yielded ₱14,500,000.00 only. There being a deficiency, China Bank demanded in a letter,6 dated April 19, 2004, that petitioners settle the balance in the amount of ₱13,938,791.69, but to no avail.
China Bank then filed its complaint for sum of money before the RTC praying that judgment be rendered ordering petitioners to pay, jointly and severally, the amount of ₱13,938,791.69 representing the amount of deficiency, plus interest at the legal rate, from February 26, 2004 until fully paid; an additional amount equivalent to 1/10 of 1% per day of the total amount, until fully paid, as penalty; an amount equivalent to 10% of the said amounts as attorney's fees and expenses of litigation; and costs of suit.
During the trial, petitioners failed to appear despite notice for the initial presentation of defendants' evidence. Thus, in its Order,7 dated February 16, 2010, the RTC considered the case submitted for decision on the basis of the evidence presented by China Bank.
Ruling of the RTC
In its May 21, 2010 Decision, the RTC ruled in favor of China Bank, recognizing the latter's right to the deficiency balance in the amount of ₱13,938,971.69, as per the computations adduced by China Bank.
It, however, held as unconscionable the penalty charges stipulated in the PNs amounting to 1/10 of 1 % per day or 3% per month, compounded. Anchoring on its authority under Art. 12298 of the Civil Code, the R TC reduced the penalty charges to only 1 % on the principal loan for every month of default. It also sustained the payment of attorney's fees but modified the amount for being unreasonable to only Pl00,000.00 instead of the 10% of the total amount due. Thus, it disposed:
WHEREFORE, premises considered, judgment is hereby rendered in favor of plaintiff China B;anking Corporation and against the defendant spouses Joven Sy and Corazon Que Sy ordering the latter to jointly and severally pay the former the following:
(a) The deficiency balance of ₱13,938,791.69 plus interest thereon at the rate of 12% per annum from the date of extrajudicial demand on 19 April 2004;
(b) A 1% penalty on the said deficiency balance for every month of default;
(c) The amount of ₱100,000.00 as and by way of attorney's fees; and
(d) Costs of suit.
Furnish copies of this Decision to the parties and their respective counsels.
SO ORDERED. 9
Petitioners moved for reconsideration, but their motion was denied by the RTC in its June 7, 2011 Order.10 Petitioners then appealed the case before the CA.
Ruling of the CA
On December 15, 2014, the CA affirmed the ruling of the RTC explaining that China Bank was able to preponderantly support its claims; that petitioners should indeed pay the balance plus 12% legal interest there being no agreement as to the rate; and that the penalty charges of 1 % for every month of default modified by the RTC was proper because the agreed rate was iniquitous and unconscionable. 11
Petitioners did not move for reconsideration, but instead filed this petition before this Court, with the following
ASSIGNMENT OF ERRORS
1. The Honorable Court of Appeals in affirming the Decision of the Honorable Lower Court, failed to appreciate the fact that after finding that the imposition by the Respondent of compounded penalty of 3 % monthly on the loan as unconscionable and reduced the same to 1% per month, overlooked the fact that on Exhibit E, for the Respondent to arrive at the amount of their claim ₱28,438,79i.69 as of February 26, 2004 they have imposed compounded penalties of 3% monthly. If the proper imposition of 1% monthly be made then the deficiency balance should be much lower if not nil;
2. The Honorable Court of Appeals failed to appreciate the fact that after finding that the imposition of attorney's fees of 10% on the total obligation have overlooked the fact that on exhibit E, for the Respondent to arrive at the amount of their claim ₱28,438,791.69 as of February 26, 2004 they have imposed ₱2,585,344.70!!!!! as attorney's fees, the fee which the Honorable Court of Appeals have substantially reduced to P100,000.00 only;
3. If the penalties imposed by the Promissory Note and the Real Estate Mortgage as well as attorney's fees were struck down as unconscionable, then the terms and conditions of the Promissory Note is null and void and the very obligation must be recomputed at legal interest of 12% only;
4. The case must therefore be remanded back for the computation of the proper amount of the obligation and as to the deficiency. 12
Petitioners ascribe as error, on the part of the CA, its computation of the penalty charges because the basis for arriving at the deficiency balance was still the agreed rate of 1110 of 1 % per day instead of the 1 % per month of default imposed by the RTC. They also argue that the attorney's fees should have been computed on the basis of the modified amount and that because the penalties were struck down as unconscionable, then the terms and conditions of the PNs should have been declared null and void as a whole.
China Bank counters that petitioners violated the basic rules of fair play and justice as the issues raised were made only on appeal; that such issues, being factual in nature, were beyond the province of this Court because only questions purely of law may be raised at this stage; and that the RTC and the CA did not misappreciate the evidence, law and jurisprudence as their conclusions were supported by substantial evidence and jurisprudential rulings. China Bank, thus, prays for the denial of the petition claiming lack of merit. 13
The Court's Ruling
A reading of the positions of the parties reveal that the issue at hand centers on the mathematical correctness of the computations in determining the amount of petitioners' deficiency balance. Stated another way, the issue is simply whether the CA erred in finding no reversible error on the part of the RTC in affirming the computed amount of petitioners' liability as stated in the dispositive portion of the RTC decision. Stripped of non-essentials, petitioners question why the dispositive portion of the RTC ruling, which was affirmed by the CA, declared that the amount due remained at ₱13,938,791.69, computed net of the foreclosure earnings, considering that before arriving at that figure, the penalty charges on each PN were based on the agreed 1/10 of 1 % rate per day instead of the 1 % rate per month as reduced by the RTC as well as the fact that attorney's fees were computed at 10% of the total amount due instead of the reduced amount of ₱100,000.00. To petitioners, the CA should have noticed the inconsistency and corrected the same in reviewing the case. For all these reasons, petitioners now seek the remand of the case to the R TC for re-computation.
The petition is partly meritorious.
Mathematical computations are painted in jurisprudence as factual determinations 14 and, thus, generally beyond the province of this Court as it is not a trier of facts. 15 Thus, when supported by substantial evidence, the mathematical computations of the appellate court and the lower court are conclusive and binding on the parties and are not reviewable by this Court. The Court, however, has the option to decide the case in the exercise of its sound discretion and despite having to deal with factual issues in an appeal by certiorari, taking into account the attendant circumstances, 16 particularly if the following conditions exist:
1. When the conclusion is a finding grounded entirely on speculation, surmises and conjectures;
2. When the inference made is manifestly mistaken, absurd or impossible;
3. Where there is a grave abuse of discretion;
4. When the judgment is based on a misapprehension of facts;
5. When the findings of fact are conflicting;
6. When the Court of Appeals, in making its findings, went beyond the issues of the case and the same is contrary to the admissions of both appellant and appellee;
7. When the findings are contrary to those of the trial court;
8. When the findings of fact are conclusions without citation of specific evidence on which they are based;
9. When the facts set forth in the petition as well as in the petitioners' main and reply briefs are not disputed by the respondents; and
10. When the findings of fact of the Court of Appeals are premised on the supposed absence of evidence and contradicted by the evidence on record.17
Hence, if the lower court committed palpable error or gravely misappreciated facts in arriving at a conclusion, this Court has the full authority to pass upon issues despite being factual in character. In this case, petitioners request that this Court do the same arguing that the R TC and the CA misappreciated the facts and committed a blatant error in coming up with the amounts they should be held liable to China Bank.
The Court agrees in part.
Undisputed is the fact that China Bank only sought the collection of the deficiency balance from petitioners to cover the amounts petitioners promised to pay as evinced by three PNs. In other words, China Bank was no longer collecting under the terms of the three PNs issued by petitioners, but was anchoring all its claims on its right to the deficiency balance owed by petitioners after failing to recover the full amount due from the foreclosure sale of the mortgaged property.
It finds similarity in the case of BPI Family Savings Bank, Inc. v. Spouses Avenido, 18 where the petitioner therein sought to collect from the respondents the deficiency balance after also failing to recover in a foreclosure sale the full amount of the obligations due. There, two figures were found to be material by the Court. First was the amount of the outstanding obligation, inclusive of interests, penalty and charges. Second was the value to be attributed to the foreclosed property, which would be applied against the outstanding loan obligation of the respondents to the petitioner. The only perceptible difference is that the issue there centered on the value of the foreclosed property to be imputed against the outstanding loan, while here, the questioned value is the outstanding obligation itself.
In its submission to the R TC, China Bank stated that petitioners' deficiency balance as of February 26, 2004, the date of the foreclosure sale, amounted to ₱13,938,791.69. The RTC later ruled in China Bank's favor and declared petitioners liable for that amount plus interest thereon at the rate of 12% per annum from the date of the extrajudicial demand on April 19, 2004.
Apparently, the said amount was arrived at after the computation of the component penalty charges due at the agreed rate of 1/10 of 1 % per day of default, plus the principal amount and then added thereto the attorney's fees at the agreed rate of 10% of the total obligation, and the subtraction from the computed amount of the net proceeds realized from the foreclosure. Obvious also is the fact that the interest charges forming part of the deficiency balance were computed at the prevailing interest rate on a daily basis using 360 days as divisor per China Bank's computation. All these were blatantly erroneous computations for the following reasons:
First, on the penalty charges, it is clear that the computation should be at the rate of 1 % per month as held by the RTC instead of 1/10 of 1 % per day or 3% per month compounded as agreed upon by the parties. The RTC explicitly declared such agreed rate as unconscionable. It wrote:
Now with respect to the penalty charges stipulated in the Promissory Notes. The Promissory Notes executed by the parties uniformly provided for the payment of an amount equivalent to 1/10 of 1% per day compounded monthly of the amount due or the payment of 3% penalty compounded monthly. This surcharge or penalty partakes of the nature of liquidated damages under Article 2227 of the Civil Code of the Philippines, and is separate and distinct from interest payment.
Also referred to as a penalty clause, it is expressly recognized by law. It is an accessory undertaking to assume greater liability on the part of the obligor in case of breach of an obligation. The obligor would then be bound to pay the stipulated amount of indemnity without the necessity of proof on the .existence and on the measure of damages caused by the breach. Although the courts may not at liberty ignore the freedom of the parties to agree on such terms and conditions as they see fit that contravene neither law nor morals, good customs, public order or public policy, a stipulated penalty, nevertheless, may be equitably reduced if it's iniquitous or unconscionable.
Article 1229 of the Civil Code provides:
"Art. 1229. The judge shall equitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor. Even if there has been no performance, the penalty may also be reduced by the courts if it is iniquitous or unconscionable."
In the case at bar, this Court finds the 3% stipulated penalty to be iniquitous and unconscionable. Applying the ruling of the Supreme Court in Ruiz v. Court of Appeals, supra, a 1% penalty on the principal loan for every month of default is proper under the circumstances. 19
Thus, in holding petitioners liable for the deficiency balance of ₱13,938,791.69, the computation of which already included penalty charges at the rate of 1/10 of 1 % per day, the RTC committed a palpable error and contradicted its own ruling. The penalty charges and, necessarily, the deficiency balance, should have been computed much lower after applying the reduced rate of 1 % per month of default. To be exact, petitioner's total penalty charges should only amount to ₱1,849,541.26 and not ₱5,548,623.78.
|
Covered period is from 04/30/03 to 02/26/04 or |
At 1/10of 1 % per day based on PN |
At 1 % per month based on RTC ruling 302 days |
|
PN#5070016047 (P8,800,000.00) |
2,657,600.00 |
885,866.67 |
|
PN#5070016030
(P5,200,000.00) |
1,570,400.00 |
523,466.67 |
|
PN#5070014942 (P4,372,926.43) |
1,320,623.78 |
440,207.93 |
|
TOTAL |
P5,548,623.78 |
P1,849,541.26 |
Second, as held by the RTC, the deficiency balance was based on interest charges computed at the prevailing market rates but with the divisor, used to arrive at the daily basis of the interest rates per annum by China Bank, at 360 days. For instance, for the period of April 30, 2003 to May 30, 2003 covering 30 days and with a prevailing market rate of 13% per annum, the interest charges stood at ₱95,333.33. This was arrived at by using the following formula: amount of loan x interest rate per annum I 360 days x number of days covered by the period. Thus ₱8,800,000 x 13%/360 x 30 = ₱95,333.33. To the Court, this was erroneous.
Article 1320 of the Civil Code provides that when the law speaks of years it shall be understood that years are of 365 days each and not 360 days. There being no agreement between the parties, this Court adopts the 365 day rule as the proper reckoning point to determine the daily basis of the interest rates charged per annum.
Verily, instead of being liable for interest charges in the amount of ₱1,938,216.15, petitioners should have been adjudged only liable for ₱1,911,665.24. .
Adding the interest charges plus penalty and the principal amount due as of the date of the foreclosure sale would show that the outstanding obligation of petitioners stood only at ₱22,134,132.93.
Third, the attorney's fees to be paid by petitioners as agreed upon should then be added to the total outstanding balance computed above. The RTC, however, in adopting the computation of China Bank in toto, did not notice that it included attorney's fees in the amount of 112,585,344.70 representing 10% of the total amount as stated in the PNS. This was clearly improper and contrary to its pronouncement reducing the attorney's fees to only Pl00,000.00. To recall, the RTC itself declared that the 10% of the total amount due for attorney's fees was unreasonable and immoderate, to wit:
The Court likewise sustains the prayer for the payment of attorney's fees and costs of suit as this was expressly stipulated in the Promissory Notes executed by the parties. However, with respected to the award of attorney's fees, as ruled by the Supreme Court in Estrella Palmares vs. Court of Appeals and M.B. Lending Corporation (G.R. No. 126490, 31 March 1998), "even with an agreement thereon between the parties, the court may nevertheless reduce such attorney's fees fixed in the contract when the amount thereof appears to be unconscionable or unreasonable. To that end, it is not even necessary to show, as in other contracts, that it is contrary to morals or public policy." The grant of attorney's fees equivalent to 10% of the total amount due, including interest, charges, and penalties, as stipulated by the parties is, in the opinion of this Court, unreasonable and immoderate, considering the extent of the work in this simple action for collection of sum of money. This Court therefore holds that the amount of P.100,000.00 as and for attorney's fees would be sufficient in this case. 21
Unfortunately, the CA also failed to take note of this plain oversight by the RTC.
Thus, with the ₱100,000.00 representing attorney's fees, the amount of the outstanding balance should now amount to only ₱22,234,132.93. And because China Bank already realized ₱14,500,000.00 from the foreclosure of petitioners' mortgaged property, the outstanding balance should stand only at ₱7,734,132.93. Thus:
| PN#5070016047 |
|
|
|
|
|
OUTSTANDING BALANCE |
INTEREST |
DAYS |
RATE |
INTEREST DUE |
|
FROM |
TO |
|
8,800,000.00 |
30-Apr-03 |
30-May-03 |
30 |
13.00% |
94,027.40 |
|
8,800,000.00 |
30-May-03 |
30-Jun-03 |
31 |
12.75% |
95,293.15 |
|
8,800,000.00 |
30-Jun-03 |
30-Jul-03 |
30 |
12.50% |
90,410.96 |
|
8,800,000.00 |
30-Jul-03 |
3 l-Aug-03 |
32 |
12.50% |
96,438.36 |
|
8,800,000.00 |
3 l-Aug-03 |
30-Sep-03 |
30 |
12.50% |
90,410.96 |
|
8,800,000.00 |
30-Sep-03 |
3 l-Oct-03 |
31 |
12.50% |
93,424.66 |
|
8,800,000.00 |
31-0ct-03 |
30-Nov-03 |
30 |
12.50% |
90,410.96. |
|
8,800,000.00 |
30-Nov-03 |
31-Dec-03 |
31 |
12.50% |
93,424.66 |
|
Interest Due (04/30/03 to 12/31103) |
|
|
743,841.10 |
|
Add: Penalty charged computed per RTC ruling |
| |
(P8,800,000.00 from 04/30/03 to 12/31/03 or 245 days @ 1 % per month) |
718,666.67 |
|
Total interest Due & Penalty Charged (04/30/03-12/31/03) |
|
|
1,462,507.76 |
|
8,800,000.00 |
31-Dec-03 |
3 l-Jan-04 |
31 |
12.50% |
93,424.66 |
|
8,800,000.00 |
3l-Jan-04 |
26-Feb-04 |
26 |
12.50% |
78,356.16 |
| Interest Due (12/31103 to 02126104) |
|
|
|
|
|
Add: Penalty charged computed per RTC ruling |
|
|
|
| |
(₱8,800,000.00 from 12/31103 to 02/26/04 or 57 days @ 1 % per month) |
167,200.00 |
|
Total interest Due & Penalty Charged (12/31103-02/26/04) |
|
|
3381980.82 |
|
SUB-TOTAL |
|
|
|
|
1,801,488.58 |
| |
|
|
|
|
|
| PN#5070016030 |
|
|
|
|
|
|
5,200,000.00 |
30-Apr-03 |
30-May-03 |
30 |
13.00% |
55,561.64 |
|
5,200,000.00 |
30-May-03 |
30-Jun-03 |
31 |
12.75% |
56,309.59 |
|
5,200,000.00 |
30-Jun-03 |
30-Jul-03 |
30 |
12.50% |
53,424.66 |
|
5,200,000.00 |
30-Jul-03 |
31-Aug-03 |
32 |
12.50% |
56,986.30 |
|
5,200,000.00 |
31-Aug-03 |
30-Sep-03 |
30 |
12.50% |
53,424.66 |
|
5,200,000.00 |
30-Sep-03 |
3 l-Oct-03 |
31 |
12.50% |
55,205.48 |
|
5,200,000.00 |
3 l-Oct-03 |
30-Nov-03 |
30 |
12.50% |
53,424.66 |
|
5,200,000.00 |
30-Nov-03 |
3 l-Dec-03 |
31 |
12.50% |
55,205.48 |
| Interest Due (04/30/03 to 12/31103) |
|
|
|
439,542.47 |
|
Add: Penalty charged computed per RTC ruling |
|
|
|
| |
(P5,200,000.00 from 04/30/03 to 12/31/03 or 245 days @ 1 % per month) |
424,666.67 |
|
Total interest Due & Penalty Charged (04/30/03-12/31103) |
|
|
864,209.13 |
|
5,200,000.00 |
3 l-Dec-03 |
31-Jan-04 |
31 |
12.50% |
55,205.48 |
|
5,200,000.00 |
3 l-Jan-04 |
26-Feb-04 |
26 |
12.50% |
46,301.37 |
| Interest Due (12/31 /03 to 02/26/04) |
|
|
|
101,506.85 |
|
Add: Penalty charged computed per RTC ruling |
|
|
|
| |
(P5,200,000.00 from 12/31/03 to 02/26/04 or 57 days @ l % per month) |
98,800.00 |
| |
|
|
|
|
200,306.85 |
| |
|
|
|
|
1,064,515.98 |
| PN#5070014942 |
|
|
|
|
|
|
4,372,926.43 |
30-Apr-03 |
30-May-03 |
30 |
13.00% |
46,724.42 |
|
4,372,926.43 |
30-May-03 |
30-Jun-03 |
31 |
12.75% |
47,353.40 |
|
4,372,926.43 |
30-Jun-03 |
30-Jul-03 |
30 |
12.50% |
44,927.33 |
|
4,372,926.43 |
30-Jul-03 |
31-Aug-03 |
32 |
12.50% |
47,922.48 |
|
4,372,926.43 |
31-Aug-03 |
30-Sep-03 |
30 |
12.50% |
44,927.33 |
|
4,372,926.43 |
30-Sep-03 |
31-0ct-03 |
31 |
12.50% |
46,424.90 |
|
4,372,926.43 |
31-Oct-03 |
30-Nov-03 |
30 |
12.50% |
44,927.33 |
|
4,372,926.43 |
30-Nov-03 |
3 l-Dec-03 |
31 |
12.50% |
46,424.90 |
|
Interest Due (04/30/03 to 12/31/03) |
|
|
|
|
Add: Penalty charged computed per RTC ruling |
|
|
|
| |
(P-4,372,926.43 from 04/30/03 to 12/31/03 or 245 days @l % per month) |
357,122.33 |
|
Total interest Due & Penalty Charged (04/30/03-12/31103) |
|
|
726,754.41 |
|
4,372,926.43 |
31-Dec-03 |
31-Jan-04 |
31 |
12.50% |
46,424.90 |
|
4,372,926.43 |
31-Jan-04 |
26-Feb-04 |
26 |
12.50% |
38,937.02 |
|
Interest Due (12/31 /03 to 02/26/04) |
|
|
85,361.92 |
|
| |
|
|
| |
(P4,372,926.43 from 12/31103 to 02/26/04 or 57 days @ 1 % per month) |
83,085.60 |
|
Total interest Due & Penalty Charged (12/31103-02/26/04) |
|
|
168,447.52 |
|
SUB-TOTAL |
|
|
|
|
895,201.94 |
| Computation: |
|
|
|
|
|
| Total Interest Due from 3 PNS |
|
|
|
1,911,665.24 |
| Total Penalty Charges from 3 PNS |
|
|
|
1,849,541.26 |
| Add: Principal (3 PNS) |
|
|
|
18,372,926.43 |
|
Add: Attorney’s Fee |
|
|
|
100,000.00 |
|
TOT AL INTERST DUE, PENAL TY CHARGE[D], and PRINCIPAL, (AS OF 02/26/2004) |
|
|
22,234,132.93 |
| Less: BID PRICE |
|
|
|
14,500,000.00 |
| DEFICIENCY BALANCE |
|
|
|
117,734,132.93 |
Despite all these errors, however, China Bank argues that what the petitioners are doing is introducing new issues only on appeal, which is not allowed.1avvphi1
The Court disagrees.
As correctly stated by petitioners, their theory indeed never changed,
and there was neither new evidence presented nor an attempt to prove that no liability existed.1âwphi1 Petitioners were merely asking the Court to look into the mathematical correctness of the computations of the R TC, pointing out obvious inconsistencies and, in the process, for this Court to correct them. Indeed, this Court could have just remanded the case to the lower court; but in the interest of speedy disposition of cases, this Court decided to resolve the issues and make the necessary corrections. If these errors were left unchecked, justice would not have been served.
Additionally, an interest of twelve (12) percent per annum on the deficiency balance to be computed from April 19, 2004 until June 30, 2013, and six (6) percent per annum thereafter, until fully satisfied, should be paid by the petitioners following Bangko Sentral ng Pilipinas Monetary Board Resolution No. 796, dated May 16, 2013, and its Circular No. 799, Series of 2013, together with the Court's ruling in Nacar vs. Gallery Frames.22 An interest of 1 % per month is no longer imposed as the terms of the PNs no longer govern. As explained earlier, China Bank's claims are based now solely on the deficiency amount after failing to recover everything from the foreclosure sale on February 26, 2004.
WHEREFORE, the petition is PARTLY GRANTED. The December 15, 2014 Decision of the Court of Appeals is hereby modified to read as follows:
WHEREFORE, premises considered, the instant appeal is hereby DENIED. The challenged decision, dated 21 May 2010, as well as the order, dated 7 June 2011, are hereby AFFIRMED with MODIFICATIONS. Respondent spouses Joven Sy and Corazon Que Sy are ORDERED to pay petitioner China Banking Corporation ₱7,734,132.93, representing the deficiency of their obligation, net of the proceeds of the foreclosed property, plus legal interest of 12% per annum from April 19, 2004 until June 30, 2013, and 6% per annum thereafter, until fully satisfied.
SO ORDERED.
JOSE CATRAL MENDOZA
Associate Justice
WE CONCUR:/p>
ANTONIO T. CARPIO
Associate Justice
Chairperson
(On Leave)
ARTURO D. BRION*
Associate Justice |
MARIANO C. DEL CASTILLO
Associate Justice |
MARVIC M.V.F. LEONEN
Associate Justice
A T T E S T A T I O N
I attest that the conclusions in the above Decisionhad been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
ANTONIO T. CARPIO
Associate Justice
Chairperson, Second Division
C E R T I F I C A T I O N
Pursuant to the Section 13, Article VIII of the Constitution and the Division Chairperson’s Attestation, I certify that the conclusions in the above Decision had been reached in consultation before the case was assigned to the writer of the opinion of the Court’s Division.
MARIA LOURDES P.A. SERENO
Chief Justice
Footnotes
* On Leave.
1 Rollo, pp. 13-29.
2 Id. at 34-44. Penned by Associate Justice Leoncia Real-Dimagiba, with Associate Justices Rebecca De Guia-Salvador and Ricardo R. Rosario, concurring.
3 Id. at 187-193. Penned by Judge Benjamin T. Pozon.
4 Id. at 164-166.
5 Id. at 160-163.
6 Id. at 61.
7 Id. at 184.
8 Article 1229. The judge shall equitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor. Even if there has been no performance, the penalty may also be reduced by the courts if it is iniquitous or unconscionable.
9 Rollo, p. 193.
10 Id. at 197-198. Penned by Judge Benjamin T. Pozon.
11 Id. at 43.
12 Id. at 18-19.
13 See China Bank's Comment, id. at 276-292.
14 See National Transmission Corporation v. Alphaomega Integrated Corporation, G.R. No. 184295, July 30, 2014, 731SCRA299, 307.
15 Alina v. Heirs of Angelica A. Lorenzo, 578 Phil. 698, 706 (2008); Diesel Construction Co., Inc. v. UPS! Property Holdings, Inc., 572 Phil. 494, 511 (2008).
16 See Armed Forces of the Philippines Mutual Benefit Association, Inc. v. Court of Appeals, 370 Phil. 150 (1999).
17 New City Builders, Inc. v. NLRC, 499 Phil. 207, 212-213 (2005), citing Insular Life Assurance Company, Ltd. v. CA, G.R. No. 126850, April 28, 2004, 428 SCRA 79.
18 678 Phil. 148 (2011).
19 Rollo, pp. 192-193.
20 Art. 13. Civil Code. When the laws speak of years, months, days or nights, it shall be understood that years are of three hundred sixty-five days each; months, of thirty days; days, of twenty-four hours; and nights from sunset to sunrise.
If months are designated by their name, they shall be computed by the number of days which they respectively have.
In computing a period, the first day shall be excluded, and the last day included.
21 Rollo, p. 193.
22 716 Phil. 267 (2013).
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