Case Digest (G.R. No. 243891)
Facts:
Megalopolis Properties, Inc. (now, Kaizen Builders, Inc.), Geraldine Fajardo, and Spouses Hilario and Cecille Apostol v. D'Nhew Lending Corporation, Jonathan Del Prado and Pradeep "Paul" Lalwani, G.R. No. 243891, May 07, 2021, Supreme Court Third Division, Delos Santos, J., writing for the Court.On May 15, 2008, Megalopolis obtained a P4,000,000 loan from D'Nhew Lending evidenced by a promissory note stipulating an add‑on interest of 3% per month. To secure the loan, Fajardo executed a real estate mortgage over TCT No. T‑7972, and spouses Apostol executed a continuing surety agreement as solidarity obligors. Megalopolis delivered 12 postdated checks to cover the monthly amortizations; several checks were dishonored and petitioners paid some amounts in cash and later sought to restructure the loan.
By agreement the unpaid interest was capitalized and the parties executed a restructured Promissory Note dated October 16, 2008 setting a principal of P3,219,000.00 with an add‑on interest of 3% per month and a detailed payment schedule. Petitioners issued 24 checks under the restructured plan; several checks presented in May–July 2009 were again dishonored and petitioners failed to make the required payments thereafter. On July 23, 2009, petitioners filed suit in the Regional Trial Court (RTC), Civil Case No. 6963‑R, seeking, among other reliefs, nullification of the 3% monthly interest as unconscionable, declaration of a 12% per annum legal rate, annulment of certain checks, and damages.
During the pendency of the suit the mortgaged property was extrajudicially foreclosed and sold, with D'Nhew Lending the highest bidder. In a Decision dated May 18, 2015 the RTC dismissed the complaint, upheld the 3% monthly interest as valid but computed the indebtedness on a diminishing balance basis and held there was an alleged surplus of P1,263,651.26 from the foreclosure sale which D'Nhew should return after deducting foreclosure expenses. The RTC denied reconsideration; both parties filed partial appeals to the Court of Appeals (CA).
In a Decision dated January 12, 2018 in CA‑G.R. CV No. 105760, the CA affirmed the RTC’s dismissal of the complaint and sustained the 3% monthly rate as neither excessive nor unconscionable, but set aside the RTC directive ordering return of the alleged surplus on the ground that recovery of surplus should be sought in a separate action. The CA denied a motion for reconsideration in a Resolution dated November 12, 2018. Petitioners filed a Petition for Review on Certiorari under...(Subscriber-Only)
Issues:
- Did the Court of Appeals err in admitting respondents’ belated Appellants’ Brief and giving due course to their appeal?
- Should the Petition for Review be dismissed for petitioners’ failure to comply with Sections 4 and 5, Rule 45 (authority documents) of the Rules of Court?
- Is the stipulated 3% per month interest in the parties’ loan valid or unconscionable and therefore void?
- Was there an overpayment of P1,263,651.26 from the extrajudicial foreclosure and, if so, may petiti...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)