G.R. No. 206459 - Spouses Jonsay vs. Solidbank Corp.

Spouses Florante E. Jonsay and Luzviminda L. Jonsay were co-owners of three parcels in Calamba City, Laguna registered under TCT Nos. T-224751, T-210327 and T-269668 totaling 23,733 sq. m.
Momarco Import Co., Inc., controlled and owned by the Spouses Jonsay, obtained loans of P40,000,000.00 on November 9, 1995 and P20,000,000.00 on April 28, 1997 from Solidbank Corporation (now Metropolitan Bank and Trust Company).
The Spouses Jonsay executed a blanket real estate mortgage over the three parcels to secure Momarco’s obligations.
On November 3, 1997 the loans were consolidated under one promissory note for P60,000,000.00 signed by Florante as President of Momarco with Luzviminda as co-maker.

The promissory note stipulated an interest rate of 18.75% per annum and contained an escalation clause tied to Central Bank-declared rates that allowed Solidbank to raise interest up to about 30% per annum.
Momarco paid monthly interests from November 1995 to January 1998, including a payment of P1,370,321.09 in January 1998, and made a final payment of P1,000,000.00 in April 1998 applied to accrued interest for February 1998.
Momarco claimed business reverses due to the 1997 Asian financial crisis and unsuccessfully sought a moratorium; an attempted loan from Landbank failed.

Solidbank initiated extrajudicial foreclosure; public auction was held on March 5, 1999.
Solidbank submitted the winning bid of P82,327,249.54 representing outstanding loans, interests, penalties, and attorney’s fees of P3,600,000.00.
Sheriff Adelio Perocho issued a certificate of sale on March 22, 1999, and entries were annotated on the titles on April 15, 1999.

On March 9, 2000 the petitioners filed Civil Case No. 2912-2000-C against Solidbank, Sheriff Perocho and the Register of Deeds for Annulment of Extrajudicial Foreclosure, Injunction, Accounting and Damages with prayer for preliminary prohibitory injunction.
Allegations included: (a) Solidbank’s claimed indebtedness was bloated; (b) interest charges exceeded legal rate of twelve percent per annum; (c) filing fee lacked basis; (d) attorney’s fees were excessive; (e) prior payments were not accounted for; (f) de...(Subscriber-Only)

Whether the extrajudicial foreclosure and sale conducted by Solidbank were valid and complied with publication and posting requirements under Act No. 3135.
Whether the mortgage and promissory note constituted a contract of adhesion and whether the escalation clause allowing unilateral interest increases violated Art. 1308 (mutuality of contracts).
Whether Solidbank failed to account for petitioners’ prior payments totaling P24,277,293.22.
Whether the interest rates, penalties, charges and attorney’s fees imposed by Solidbank were excessive, unconscionable or immoral.
Whether petitioners’ proposal of dacion en pago operated as novation or estopped Solidbank from foreclosing.
Whether the petitioners were in estoppel for not timely impugning the loan and mortgage documents, and whether the action was barred by pre...(Subscriber-Only)