Case Digest (G.R. No. 92328)
Facts:
In Corazon G. Ruiz v. Court of Appeals and Consuelo Torres, decided April 22, 2003 under the 1987 Constitution, petitioner Corazon G. Ruiz, a jewelry dealer, secured multiple loans from private respondent Consuelo P. Torres in 1995—P100,000, P200,000, P300,000 and P150,000—which were consolidated into a P750,000 promissory note dated March 22, 1995, bearing 3% monthly interest, 1% monthly surcharge and 10% compounded interest post-maturity, and secured by a real estate mortgage over Ruiz’s 240-sqm lot in New Haven Village, Novaliches, Quezon City (TCT No. RT-96686). Two days before the note, a mortgage was executed by Ruiz as principal and attorney-in-fact for her husband, Rogelio, though no special power of attorney was presented later. Ruiz also executed three additional promissory notes totaling P300,000 secured by pledged jewelry. She paid 3% interest from April 1995 to March 1996 but defaulted thereafter. Torres initiated an extrajudicial foreclosure, scheduling a sheriff’sCase Digest (G.R. No. 92328)
Facts:
- Loan Transactions and Security
- Corazon G. Ruiz, a jewelry dealer, obtained successive loans from Consuelo P. Torres: P100,000; P200,000; P300,000; P150,000.
- Consolidation: On March 22, 1995, Ruiz executed a promissory note for P750,000 (3% monthly interest, 10% compounded post‐maturity, 1% surcharge, 25% attorney’s fees) secured by a real estate mortgage on a 240 sqm lot (TCT No. RT‐96686) registered in her name; Rogelio Ruiz signed only as surety.
- Additional Loans: Three promissory notes (April 21, May 23, December 21, 1995) totaling P300,000 secured by pledged jewelry.
- Payments and Defaults: Ruiz paid 3% interest from April 1995 to March 1996 (P270,000); thereafter she defaulted on interest and principal.
- Trial Court Proceedings
- Foreclosure Initiation: Torres extrajudicially foreclosed the mortgage; sale scheduled October 8, 1996.
- Preliminary Injunction: On October 7, 1996, Ruiz filed Civil Case No. Q-96-29024 seeking to enjoin sale and fix indebtedness at P706,000; RTC issued TRO and writ of preliminary injunction.
- RTC Decision (May 19, 1997): Held the mortgage unenforceable for lack of husband’s signature (no special power of attorney presented) and declared the P750,000 note an adhesion contract against public policy.
- Obligation Computation: Ruiz ordered to pay principal P750,000 + P392,000 other loans + interest (3% per month) + publication & attorney’s fees (P15,000 each) = P1,307,000 plus legal interest.
- Court of Appeals Proceedings
- CA Decision (August 25, 2000): Reversed RTC; held mortgage valid (paraphernal property) and foreclosure proper.
- Interest and Surcharge Adjustments: Invalidated 10% compounded interests, excessive surcharges; applied 12% per annum interest post‐maturity and 1% monthly surcharge (no compounding).
- Attorney’s Fees: Reduced stipulated fees to a reasonable P50,000.
Issues:
- Whether the P750,000 promissory note is a contract of adhesion.
- Whether the mortgaged property is paraphernal property of petitioner.
- Whether the stipulated interest rates and surcharges are valid or usurious.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)