G.R. No.
159912 August 17, 2007
UNITED COCONUT PLANTERS BANK, Petitioner,
vs.
SPOUSES SAMUEL and ODETTE BELUSO, Respondents.
DECISION
CHICO-NAZARIO, J.:
This is a Petition for Review on Certiorari under Rule 45 of the Rules of Court, which seeks to annul
the Court of Appeals Decision1 dated 21 January 2003 and its Resolution2 dated 9 September 2003
in CA-G.R. CV No. 67318. The assailed Court of Appeals Decision and Resolution affirmed in turn
the Decision3 dated 23 March 2000 and Order4 dated 8 May 2000 of the Regional Trial Court (RTC),
Branch 65 of Makati City, in Civil Case No. 99-314, declaring void the interest rate provided in the
promissory notes executed by the respondents 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 ₱1.2
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. T-31539 and T-27828, 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 ₱2.35 Million pesos and to extend the term thereof to 28 February 1998.
The spouses Beluso availed themselves of the credit line under the following Promissory Notes:
PN # Date of PN Maturity Date Amount Secured
8314-96-00083-3 29 April 1996 27 August 1996 ₱ 700,000
8314-96-00085-0 2 May 1996 30 August 1996 ₱ 500,000
8314-96-000292-2 20 November 1996 20 March 1997 ₱ 800,000
The three promissory notes were renewed several times. On 30 April 1997, the payment of the
principal and interest of the latter two promissory notes were debited from the spouses Beluso’s
account with UCPB; yet, a consolidated loan for ₱1.3 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 ₱2.35 Million credit line extended to them by UCPB, the
spouses Beluso executed two more promissory notes for a total of ₱350,000.00:
PN # Date of PN Maturity Date Amount Secured
97-00363-1 11 December 1997 28 February 1998 ₱ 200,000
98-00002-4 2 January 1998 28 February 1998 ₱ 150,000
However, the spouses Beluso alleged that the amounts covered by these last two promissory notes
were never released or credited to their account and, thus, claimed that the principal indebtedness
was only ₱2 Million.
In any case, UCPB applied interest rates on the different promissory notes ranging from 18% to
34%. From 1996 to February 1998 the spouses Beluso were able to pay the total sum of
₱763,692.03.
From 28 February 1998 to 10 June 1998, UCPB continued to charge interest and penalty on the
obligations of the spouses Beluso, as follows:
PN # Amount Secured Interest Penalty Total
97-00363-1 ₱ 200,000 31% 36% ₱ 225,313.24
97-00366-6 ₱ 700,000 30.17% 32.786% ₱ 795,294.72
(7 days) (102 days)
97-00368-2 ₱ 1,300,000 28% 30.41% ₱ 1,462,124.54
(2 days) (102 days)
98-00002-4 ₱ 150,000 33% 36% ₱ 170,034.71
(102 days)
The spouses Beluso, however, failed to make any payment of the foregoing amounts.
On 2 September 1998, UCPB demanded that the spouses Beluso pay their total obligation of
₱2,932,543.00 plus 25% attorney’s fees, but the spouses Beluso failed to comply therewith. On 28
December 1998, UCPB foreclosed the properties mortgaged by the spouses Beluso to secure their
credit line, which, by that time, already ballooned to ₱3,784,603.00.
On 9 February 1999, the spouses Beluso filed a Petition for Annulment, Accounting and Damages
against UCPB with the RTC of Makati City.
On 23 March 2000, the RTC ruled in favor of the spouses Beluso, disposing of the case as follows:
PREMISES CONSIDERED, judgment is hereby rendered declaring the interest rate used by [UCPB]
void and the foreclosure and Sheriff’s Certificate of Sale void. [UCPB] is hereby ordered to return to
[the spouses Beluso] the properties subject of the foreclosure; to pay [the spouses Beluso] the
amount of ₱50,000.00 by way of attorney’s fees; and to pay the costs of suit. [The spouses Beluso]
are hereby ordered to pay [UCPB] the sum of ₱1,560,308.00.5
On 8 May 2000, the RTC denied UCPB’s Motion for Reconsideration, 6 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. 99-314 is hereby AFFIRMED subject to the modification
that defendant-appellant UCPB is not liable for attorney’s fees or the costs of suit. 7
On 9 September 2003, the Court of Appeals denied UCPB’s Motion for Reconsideration for lack of
merit. UCPB thus filed the present petition, submitting the following issues for our resolution:
