G.R. No. 221220 - Metropolitan Bank and Trust Co. vs. Cruz

On October 12, 2006, KT Construction Supply, Inc. (KT Construction) obtained a loan of ₱2.5 million from Philippine Savings Bank (PSBank).
The loan was evidenced by a Promissory Note executed on the same date.
The note was signed by William K. Go (Go) and Nancy Go-Tan (Go-Tan) both as corporate officers (Vice-President/General Manager and Secretary/Treasurer, respectively) and in their personal capacities.
The Promissory Note stipulated payment within sixty (60) months from November 12, 2006, to October 12, 2011, included an acceleration clause making the entire loan due upon default, and provided for attorney’s fees in case of litigation.

On January 3, 2011, PSBank sent a demand letter to KT Construction to pay the outstanding loan obligation amounting to ₱725,438.81, excluding interest, penalties, legal fees, and other charges.
Despite the demand, KT Construction failed to pay the obligation.

PSBank filed a complaint for sum of money against KT Construction before the Regional Trial Court (RTC), Branch 133, Makati City.
On June 11, 2014, the RTC ruled in favor of PSBank, declaring that acceleration clause made the entire loan immediately due and payable upon default.
The RTC reduced the interest rate to 12% per annum, awarded ₱725,438.81 plus interest and attorney’s fees of ₱50,000 against KT Construction, Go, and Go-Tan as solidary obligors.

KT Construction appealed the RTC decision.
On April 22, 2016, the Court of Appeals (CA) affirmed the RTC decision with modification reducing interest to 6% per annum from finality of decision until full payment and directed collection of additional docket fees from PSBank.
The CA held the acceleration clause valid and rejected the claim that the promissory note was a contract of adhesion.
It ruled attorney’s fees were properly awarded as stipulated in the note.
The CA agreed with the trial court that Go and Go-Tan were solidarily liable as co-makers under the promissory note.
KT Construction moved for reconsideration, but the CA denied the motion in a November 23, 2016 Resolution.

KT Construction filed a petition for review on certiorari, raising the following issues:

Erroneous holding of Go and Go-Tan’s joint and several liability without proper impleading or summons.
The complaint was prematurely filed.
Promissory note was a contract of adhesion and hence void.
Improper award of attorney’s fees.

Whether Go and Go-Tan could be held jointly and severally liable with KT Construction in the absence of their impleading and service of summons.
Whether the complaint filed by PSBank was premature given the status of KT Construction’s payments.
Whether the promissory note is null and void for being a contract of adhesion.
Whether the award of attorney’s fees in favor of PSBank was proper.