Today is Tuesday, December 17, 2013


Republic of the Philippines SUPREME COURT Manila !RST D!"!S!#$ G.R. No. 153852 October 24, 2012

SPOUSES HUMBERTO P. DELOSS NTOS ND C RMENC!T M. DELOS S NTOS, Petitioners, %s& METROPOL!T N B N" ND TRUST COMP N#, Respondent& D'(!S!#$ BERS M!N, J.: ) *rit of preliminary in+unction to en+oin an impendin, e-tra+udicial foreclosure sale is issued only upon a clear sho*in, of a %iolation of the mort,a,or.s unmista/able ri,ht& 1 This appeal is ta/en by the petitioners to re%ie* and re%erse the decision promul,ated on ebruary 10, 2002, 2*hereby the (ourt of )ppeals 1()2 dismissed their petition for certiorari that assailed the denial by the Re,ional Trial (ourt in Da%ao (ity 1RT(2 of their application for the issuance of a *rit of preliminary in+unction to pre%ent the e-tra+udicial foreclosure sale of their mort,a,ed asset initiated by their mort,a,ee, respondent Metropolitan 3an/ and Trust (ompany 1Metroban/2& )ntecedents rom December 0, 1004 until March 20, 1005, the petitioners too/ out se%eral loans totalin, P12,000,000&00 from Metroban/, Da%ao (ity 3ranch, the proceeds of *hich they *ould use in constructin, a hotel on their 3067s8uare7meter parcel of land located in Da%ao (ity and co%ered by Transfer (ertificate of Title $o& !7215070 of the Re,istry of Deeds of Da%ao (ity& They e-ecuted %arious promissory notes co%erin, the loans, and constituted a mort,a,e o%er their parcel of land to secure the performance of their obli,ation& The stipulated interest rates *ere 16&769 per annum for the lon, term loans 1maturin, on December 0, 20042 and 22&20:9 per annum for a short term loan of P:,:00,000&00 1maturin, on March 12, 10002& 3 The interest rates *ere fi-ed for the first year, sub+ect to escalation or de7escalation in certain e%ents *ithout ad%ance notice to them& The loan a,reements further stipulated that the entire amount of the loans *ould become due and demandable upon default in the payment of any installment, interest or other char,es&: #n December 27, 1000, Metroban/ sou,ht the e-tra+udicial foreclosure of the real estate mort,a,e 6 after the petitioners defaulted in their installment payments& The petitioners *ere notified of the foreclosure and of the forced sale bein, scheduled on March 7, 2000& The notice of the sale stated that the total amount of the obli,ation *as P14,:1:,501&34 as of #ctober 24, 1000& 4 #n )pril :, 2000, prior to the scheduled foreclosure sale 1i&e&, the ori,inal date of March 7, 2000 ha%in, been mean*hile reset to )pril 4, 20002, the petitioners filed in the RT( a complaint 1later amended2 for dama,es, fi-in, of interest rate, and application of e-cess payments 1*ith prayer for a *rit of preliminary in+unction2& They alle,ed therein that Metroban/ had no ri,ht to foreclose the mort,a,e because they *ere not in default of their obli,ations; that Metroban/ had imposed interest rates 1i&e&, 16&769 per

s and time deposits.502. there is the additional stipulation *hich reads< >The rate of interest and?or ban/ char. the petitioners= application for a *rit of preliminary in+unction& Metroban/ mo%ed for reconsideration&10 The petitioners did not file any opposition to Metroban/=s motion for reconsideration.reements. and that they *ere not yet in default because the lon. defendant Metro 3an/ pointed out that in all the promissory notes e-ecuted by the plaintiffs there is type*ritten inside a in the reser%e re8uirements.immediately follo*in. resultin.the interest rates of the loans. durin. also.000&00 that had not been secured by the mort. but Metroban/ had denied their re8uest. the first para. in their e-cess payment of P765. 2000. the in+unction permanent. and 1d2 to pay moral and e-emplary dama. Metroban/ stated that the increase in the interest rates had been made pursuant to the escalation clause stipulated in the loan a. *hich should then be applied to their accrued obli.e& !n the meantime. because some had been applied to another loan of theirs amountin.ation.000&00 for the losses suffered in their hotel business.a.s.ment ma/in. the escalation clause *ritten in the loan a. order to en+oin the foreclosure sale& 5 )fter hearin. Metroban/. interest on the short7term loan in ad%ance& The complaint prayed that a *rit of preliminary in+unction to en+oin the scheduled foreclosure sale be issued& They further prayed for a +ud.reement. and that not all of the payments by the petitioners had been applied to the loans co%ered by the real estate mort.> There bein.ed from time to time by the ban/ *ithout ad%ance notice to me?us in the e%ent of chan. on notice.7term loans *ould become due and demandable on December the reconsideration of the order. this (ourt resol%es to reconsider and set aside the #rder of this (ourt dated May 2.< >)t the effecti%e rate of 16&769 for the first year sub+ect to up*ard?do*n*ard ad+ustments for the ne-t year thereafter&> Moreo%er. or plus attorney=s fees& 7 !n its ans*er. the term of this Promissory $ote. in the interest rates on sa%in.7term loans and 22&20:9 per annum for the short term loan2 on three of their loans that *ere different from the rate of 1:&769 per annum a. 2004 yet and they had been payin. 1b2 to pay P160.raph the follo*in.e. and directin.667&57 instead of only P1. or other*ise chan. rene*als or other modifications. namely< 1a2 to apply the e-cess payment of P765. that they had re8uested the reduction of the escalated interest rates on se%eral occasions because of its dama.!n the motion at bench as *ell as at the hearin. 2000. holdin. 1c2 to fi. no opposition to the motion despite receipt of a copy thereof by the plaintiffs throu.641. this mornin. of the motion for reconsideration& #n May 10. or in the o%erall costs of fundin. may be increased.547&00 based on the stipulated interest rates.ranted Metroban/=s motion for reconsideration. the RT( issued a temporary herein7stipulated.h counsel and in the interest rates prescribed by la* of the Monetary 3oard of the (entral 3an/ of the Philippines. that Metroban/ had increased the interest rates on some of their loans *ithout any basis by in%o/in. for *hich the RT( re8uired the parties to submit their respecti%e memoranda& !n their memorandum.400&57 to the accrued interest. decreased. effect on their hotel business. 2000& ---S# #RD'R'D& The petitioners sou. 11 as follo*s< --. the RT( issued its order dated May 2. that they had paid P2.400&57 as interest. the RT( . in the rediscount rate of member ban/s *ith the (entral 3an/ of the Philippines. 0 . its e-tension. in part. in the form of the same promissory notes. to P600. they did not attend the scheduled hearin.annum for t*o lon. the petitioners insisted that they had an e-cess payment sufficient to co%er the amounts due . merit to the motion for reconsideration.a. in the interest rates on the 3an/=s borro*in.reed upon.

a copy of *hich *as recei%ed by )tty& Philip Panto+an for the plaintiffs on May 14. 2000& There is no opposition nor appearance for the plaintiffs this mornin. *ith the interest thereon at the rate they contend to be the true and correct rate a.. as *ell as the propriety of the application of escalated interest rate *hich *as applied to their loans by the latter& !n the instant interest rate on the loans they obtained from the pri%ate respondent. the in8uiry bein. 2000 and @une 5. 2001. limited essentially to *hether the public respondent acted *ithout or in e-cess of its +urisdiction or *ith .on the principal& $onetheless.ra%e abuse of discretion in issuin.ree& The (ourt belo* did not e-cessi%ely e-ercise its +udicial authority not only in settin. the RT( denied the petitioners= motion for reconsideration. 2000.ra%e.ation to the pri%ate respondent& Be disa.ation& BA'R' #R'. the same *ith this (ourt. 2000 #rder. petitioners failed to oppose the same despite receipt of said motion for reconsideration& The public respondent (ourt said C > or resolution is the Motion for Reconsideration filed by the defendant Metropolitan 3an/ and Trust (ompany. the 8uestioned #rders. 2002. 2001 *as --. neither is the instant petition a%ailable to correct mista/es in the +ud. remiss in their obli.rie%ed. . the M#T!#$ #R R'(#$S!D'R)T!#$ is denied& the issue of *hether or not the pri%ate respondent has collected the ri. the petition for certiorari for lac/ of merit.. of said motion .reed upon by the parties& Aence. and affirmin. that petitioners are in default in the payment of their obli.->& (orollarily. but also in denyin. the () rendered the assailed decision dismissin. at the scheduled hearin. petitioners= motion for reconsideration due to the faults attributable to them& Bhen pri%ate respondent Metroban/ mo%ed for the reconsideration of the #rder of May 2.e=s findin.ation to update their installment payments& The Supreme (ourt ruled in this *ise< To +ustify the issuance of the *rit of certiorari.13 statin. of the () ).ra%e abuse of discretion to the RT( *hen it issued the orders dated May 10. e%en if their contention *ith respect to the rates of interest is true and correct. aside the May 2.s and . they are in default +ust the same in the payment of their principal obli.based on petitioners= bein. 2000 *hich . the petitioners commenced a special ci%il action for certiorari in the ().enerally permitted. 12 to *it< The record does not sho* that plaintiffs ha%e updated their installment payments by depositin. the assailed orders. dated May 12. ascribin. on @une 5.ra%ely abused its discretion in findin. 2001& #n ebruary 10.ranted the issuance of the *rit of preliminary in+unction. as *hen the po*er is e-ercised in an arbitrary or despotic manner by reason of passion or personal hostility& Petitioners li/e*ise discussed at len. the issuance of the #rder of @une 5.< Petitioners a%er that the respondent (ourt . 8uestions of fact are not . the abuse of discretion on the part of the tribunal or officer must be .

ht of !RM'D& . nor to cure erroneous conclusions of la* and fact.a. they should ha%e consi.s or conclusions of the lo*er court& ) re%ie* of facts and e%idence is not the pro%ince of the e-traordinary remedy of certiorari& BA'R' #R'. their consistency *ith the le.ation to Metroban/.ra%e abuse of discretion on the part of the RT( in denyin. if there be any& (ertiorari *ill issue only to correct errors of +urisdiction. that they *ould li/ely pre%ail in their action because Metroban/ had altered the terms of the loan a. that they had no other plain and speedy remedy& Metroban/ counters that )lmeda %& (ourt of )ppeals *as not applicable because that rulin. *hether the petitioners *ere entitled to the *rit of preliminary in+unction in li.. 1c2 they must not be in default in their obli. into consideration the sense of ur.inally stipulated rate. the () should ha%e nonetheless issued a *rit of certiorari considerin.e did not e-cessi%ely e-ercise his +udicial authority in the issuance of the assailed orders.ned in court the amount of the principal and the accrued interest at the rate they claimed to be the correct one& 15 3ased on the fore.rant of the e-traordinary *rit of certiorari.ra%e abuse of discretion amountin.ations. this appeal& !ssues The petitioners pose the follo*in. the petition is D'$!'D for lac/ of merit& The assailed #rders of the respondent (ourt are ) S# #RD'R'D& The petitioners mo%ed for reconsideration of the decision.ainst the le. presupposed the e-istence of the follo*in. not errors of procedure or mista/es in the findin. @ud. and hence not *ithin the pro%ince of the e-traordinary remedy of certiorari& 16 The petitioners ar.ation in%ol%ed in )lmeda %& (ourt of )ppeals. *hether or not the petitioners can a%ail of the remedy under Rule 46. had already matured prior to the filin. the interest rates *ithout their prior assent.e in issuin.reement by increasin. the 05 @une 2001 #rder.e that despite findin. 3& Bhether or not the Petition lod. the petitioners in default of their obli. but the () denied the motion for lac/ of merit on May 7.conclusions. conditions. that they could not yet be considered in default under the rulin.hly escalated interest rates prior to the application for foreclosure. no . and 1e2 upon refusal of Metroban/ to recei%e payment. in )lmeda %& (ourt of )ppeals. and that they had not tendered or consi. their application for preliminary in+unction. 2& )ssumin.ency in%ol%ed in the resolution of the issue raised.oin. 2002& 1: Aence.ue that the foreclosure of their mort. firstly. unli/e the obli. and. issues. the issues to be settled principle enunciated in the )lmeda (ase. @ud.e *as principle enunciated in the )lmeda (ase. has committed . ta/in. 1b2 the petitioners as obli.ation *ith the 3an/.14 because the trial court *as still to determine *ith certainty the e-act amount of their obli. to e-cess or lac/ of +urisdiction as the same run counter a. of the case.reement of the parties.ors must ha%e protested the hi. not*ithstandin. secondly. namely< 1& Bhether or not the Presidin. 1d2 they must ha%e tendered payment to Metroban/ e8ui%alent to the principal and accrued interest calculated at the ori.ned the tendered amount in court&17 !t asserts that the petitioners= loans. and that unless the foreclosure sale *as restrained their action *ould be rendered moot& They ur. *hether the petitioners had a cause of action for the . findin. that the Presidin.ed before the (ourt of )ppeals presented a 8uestion of fact. to *it< 1a2 the escalation and de7escalation of the interest rate *ere sub+ect to the a.

do*n the instances or situations in the Rules of (ourt in *hich a superior court may issue the *rit of certiorari to an inferior court or officer& Section 1. that the re8uisites must concurrently be attendant. and ade8uate remedy in the ordinary course of la*. if allo*ed to stand. and. for the *rit *ould enable the superior court to determine from an inspection of the record *hether the inferior court=s +ud.ents or officers of the inferior courts to return the record of a cause pendin.eneral utility tool in the le.ra%e abuse of .ly pro%ides the re8uirements for that purpose. the proceedin. order or resolution sub+ect thereof. board or officer. or to pre%ent an inferior court from committin.ra%e abuse of discretion amountin. copies of all pleadin. the temporary restrainin.ely re. a person a. or *or/shop. the proceedin. the *rit of certiorari *as issued out of (hancery.i%e the party more sure and speedy +ustice. the e-ercise of the po*er to issue the *rit of certiorari is lar. acts that courts ha%e no po*er or authority in la* to perform2 C is not a . so as to . +udicial or 8uasi7+udicial functions acted *ithout or in e-cess of +urisdiction or *ith . speedy. the petitioner must sho* that. %iE< Section 1& Petition for certiorari& F Bhen any tribunal. board or officer e-ercisin.ment *as rendered *ithout authority& 20The errors *ere of such a nature that.ra%e abuse of discretion is absurd& The commission of . ho*e%er.ulated by layin. the record *as then re%ised and corrected in matters of la*& 22 The *rit of certiorari *as limited to cases in *hich the inferior court *as said to be e-ceedin. alle. supra. 10and cannot be issued to correct e%ery error committed by a lo*er court& !n the common la*.=s 3ench. to lac/ or e-cess of +urisdiction. board or officer e-ercisin.s of such tribunal.ainst Metroban/ to stop the foreclosure sale2 *as improper& They thereby apparently misapprehended the true nature and function of a *rit of certiorari& !t is clear to us. and a s*orn certification of non7forum shoppin. such incidental reliefs as la* and +ustice may re8uire& The petition shall be accompanied by a certified true copy of the +ud.raph of section 3. +udicial or 8uasi7+udicial functions has acted *ithout or in e-cess of its or his +urisdiction. one.s and documents rele%ant and pertinent thereto.. before them.ra%e abuse of discretion amountin. or to relie%e parties from arbitrary acts of courts 1i&e&. in )lmeda %& (ourt of )ppeals& Rulin. a remedy narro* in scope and infle-ible in character. and settin. or any plain. order a. and there is no appeal. or *ith . aside its order dated May 2. the petitioners= resort to the special ci%il action of certiorari to assail the May 10. and . that the () +ustly and properly dismissed their petition for the *rit of certiorari& Be remind that the *rit of certiorari C bein. the tribunal. such . there is neither an appeal nor any plain. the herein petitioners= stance that a *rit of certiorari should ha%e been issued e%en if the () found no sho*in. of . 2000 order of the RT( *ith.ment be rendered annullin. to lac/ or e-cess of +urisdiction.& (onsiderin. commandin. 2000 issuin. or the Din. a. accordin. to essential re8uirements of la* and *ould lie only to re%ie* +udicial or 8uasi7+udicial acts&23 The concept of the remedy of certiorari in our +udicial system remains much the same as it has been in the common la*& !n this +urisdiction.rie%ed thereby may file a %erified petition in the proper court. its +urisdiction or *as not proceedin. the facts *ith certainty and Rule :4& 11a2 Pursuant to Section 1.ra%e abuse of discretion amountin. as pro%ided in the third para. The appeal has no merit& To be. t*o. they *ould result in a substantial in+ury to the petitioner to *hom no other remedy *as a%ailable& 21 !f the inferior court acted *ithout authority.ment. that +ud. or modifyin. therefore.rantin. speedy and ade8uate remedy in the ordinary course of la* for the purpose of amendin.the rulin. *hose purpose is to /eep an inferior court *ithin the bounds of its +urisdiction. from *hich the remedy of certiorari e%ol%ed. Rule 46 of the Rules of (ourt compellin. to e-cess of +urisdiction.

needless to state. sho* clearly founded on or . in *hich case it is /no*n as a preliminary mandatory in+unction& Thus. in+unction must be issued only at the instance of a party *ho possesses sufficient interest in or title to the ri. the issuance of a *rit of preliminary in+unction upon the application of the 2: The sole office of the *rit of certiorari is the correction of errors of to be protected e-ists prima and the %iolation of the ri. an e-traordinary remedy. the petitioners is authoriEed to foreclose the mort.ations the performance of *hich the mort.a. or the property sou. System 1( *hich is merely contin. a prohibitory in+unction is one that commands a party to refrain from doin. a particular to the final relief sou. in the past& 1âwphi1 )s *ith all e8uitable remedies. 1b2 that the act and factual bases& Be need to emphasiEe. *hile a mandatory in+unction commands the performance of some positi%e act to correct a *ron.ainst the RT(& Bithout their stron.e& )n in+unction *ill not issue to protect a ri.ra%e abuse of discretion amountin.ard. *hich includes the commission of .ee has a clear to be en+oined is %iolati%e of that to pre%ent the foreclosure did not e-ist& Aence.i%e rise to a cause of action. or of . *hich must a%er the e-istence of the ri. mere abuse of discretion is not enou. they must strictly obser%e the rules laid do*n by la* for .ranted only if the RT( *as fully satisfied that the la* permitted it and the emer. *hich means either that the +udicial or 8uasi7+udicial po*er *as e-ercised in an arbitrary or despotic manner by reason of passion or personal hostility.e contract and promissory note that the to lac/ or e-cess of to the foreclosure in case of the mort.ment or final order re8uirin. the conditions for the issuance of the in+uncti%e *rit are< 1a2 that the ri. and 1b2 they had an e-cess payment sufficient to co%er the amounts due& !n support of their alle.ranted the in+unction they sou. an a.ent and paramount necessity for the *rit to pre%ent serious dama. or *hose a%erments must in the minimum constitute a prima facie sho*in. prior to the +ud.ra%e.a. means a ri. the relief sou.e of an action or by la* or is enforceable as a matter of la*& 13old emphasis supplied2 Thirdly.or *ill be improper&26 Mindful that an in+unction *ould be a limitation upon the freedom of action of Metroban/. a party or a court. or a person to refrain from a particular act or acts& !t may also re8uire the performance of a particular act or acts.a.a. manner.discretion *as a fundamental re8uisite for the *rit of certiorari to issue a.or=s default.e is but a necessary conse8uence of the non7payment of an obli. or a ri. *herein they pro+ected *hat they had actually paid to Metroban/ and contrasted the payments to *hat they claimed to ha%e been the correct amounts of interest. the (ourt must find that the petitioners *ere not entitled to en+oin or pre%ent the e-tra+udicial foreclosure of their mort. *as not true herein& !n (ity Go%ernment of 3utuan %& (onsolidated 3roadcastin.ation. to *it< ) preliminary in+unction is an order . the RT( +ustifiably refused to . the mort.ation secured by the mort. to lac/ of +urisdiction& !n this re.rant the petitioners= application for the *rit of preliminary in+unction& Be underscore that the *rit could be . !nc&. in an e-cess payment of to the foreclosure& !n contrast.a. that *ith certiorari bein.e& Bhere the parties ha%e stipulated in their a. of a ri. resultin.667&51& .ht.e that< 1a2 Metroban/ had increased the interest rates *ithout their assent and *ithout any basis. either of the RT(=s lac/ or e-cess of +urisdiction.e. to be protected by in+unction.e upon the )ccordin.ra%e abuse of discretion by the RT( amountin. or %irtually refused to perform the duty en+oined or to act in contemplation of la*. tribunal or board e-ercisin. they could not be %alidly . and 1c2 that there is an ur. Metroban/ had the unassailable The foreclosure of a mort.or=s default& Thereby. the *rit of certiorari *ould not issue for bein.e had precisely secured& Aence. or that the respondent +ud. they submitted a table of the interest not in esse. +udicial or 8uasi7+udicial po*ers acted in a capricious or *himsical manner as to be e8ui%alent to lac/ of +urisdiction& Secondly. too. or to pre%ent the perpetration of an act prohibited by statute& !ndeed.ent and may ne%er arise.a.ranted at any sta.e.ency. or to restrain an act *hich does not . bereft of le.a.e by Metroban/& They *ere undeniably already in default of their to be protected& !t is proper only *hen the applicant appears to be entitled to the relief demanded in the complaint. a ri.a. their ri.h to *arrant the issuance of the *rit& The abuse of discretion must be . such as *hen such +ud. tribunal or board e%aded a positi%e duty. 27 the (ourt restated the nature and concept of a *rit of preliminary in+unction in the follo*in.ency demanded it& 24 That.

ainst the pleader&33 $or do *e discern any substantial contro%ersy that had any real bearin.reement bet*een the parties& The minds of all the parties must meet on the proposed modification as this modification affects an important aspect of the a. in )lmeda %& (ourt of )ppeals sustained the issuance of the preliminary in+unction pendin. 32 because in+unction *ill not be issued to protect a ri..reement of a de7escalation clause that *ould authoriEe a reduction in the interest rates correspondin. effect& ) stipulation on the %alidity or compliance *ith the contract that is left solely to the *ill of one of the parties is %oid. to the effect that the issuance of a preliminary in+unction pendin. and that an increase in the interest rate pursuant to such clauses *ere not necessarily %oid& !n Philippine $ational 3an/ %& Rocamora. there must e-ist an actual ri. or to restrain an act *hich does not . the mere a%erment that the e-cess payments *ere sufficient to co%er their accrued obli. an issue *hich *as ne%er settled on merit in the .oes a.ent.ation as determined by the trial court in the main case& The petitioners= reliance on the on Metroban/=s that *ere also stipulated in the loan a.i%e rise to a cause of action& )t any rate. other*ise. the determination of the issue on the interest rates.a. *ith the (ourt statin. to do*n*ard chan.30 the (ourt has said< 'scalation clauses are %alid and do not contra%ene public policy& These clauses are common in credit a.e& The mere possibility that the RT( *ould rule in the end in the petitioners= fa%or by lo*erin.7term contracts& To a%oid any resultin.:00.h it is true that the rulin. for it factored only the principal due but not the accrued interests and penalty char.The petitioners fail to con%ince& Be consider to be unsubstantiated the petitioners= claim of their lac/ of consent to the escalation clauses& They did not adduce e%idence to sho* that they did not assent to the increases in the interest rates& The records re%eal instead that they re8uested only the reduction of the interest rate or the restructurin. in )lmeda %& (ourt of )ppeals.reements as means of maintainin.e must be mutually a. 20 *as too simplistic.ation computed on the basis of the stipulated interest rate cannot be readily accepted& Their computation. citin. because of the dispute re. fiscal stability and retainin.reed upon.e carries no bindin.< !n the first to foreclose the mort. their application for the *rit of preliminary in+unction could not but be %ie*ed as a futile attempt to deter or delay the forced sale of their property& Iastly.reement. i&e&.ations and that their short7term loan of P:. any increase in the rate of interest made pursuant to an escalation clause must be the result of an a. the petitioners *ere not %oid per se. the interest rates and directin. one7sided situation that escalation clauses may brin.reements& !t is rele%ant to obser%e in this connection that escalation clauses li/e those affectin. the %alue of money on lon. the stipulation . in )lmeda %& (ourt of )ppeals *as misplaced& )lthou.ainst the principle of mutuality of contract under )rticle 1305 of the (i%il (ode& Be reiterate that in+unction *ill not protect contin. the rulin. the application of the e-cess payments to the accrued principal and interest did not diminish the fact that *hen Metroban/ filed its application for e-tra+udicial foreclosure they *ere already in default as to their obli. an application for in+uncti%e relief is strictly construed made by la* or by the Monetary 3oard& The %alidity of escalation clauses not*ithstandin. *e re8uired in 3anco ilipino the inclusion in the parties= a..hts *hose e-istence is doubtful or disputed& 31 ! to ad+ust interest rates unilaterally& )s *e said in the same 3anco ilipino case.reement& There can be no contract in the true sense in the absence of the element of an a. the interest rate increases. the resolution of the issue on the correct interest rate *ould be +ustified. as their memorandum submitted to the RT( *ould e-plain. the parties= mutual consent& Thus.ardin.i%e creditors the unbridled ri. abstract or future ri. of their loans& 25 Moreo%er. the petitioners submit that they could be ri. *e cautioned that these clauses do not . any chan.htly considered in default only after they had failed to settle the e-act amount of their obli.000&00 had already matured& Hnder such not in esse and *hich may ne%er arise. the chan.

! certify that the conclusions in the abo%e Decision had been reached in consultation before the case *as the action 8uestionin.e by a . the resolution of the main case. the interest rates in )lmeda %& (ourt of )ppeals *ere raised to such a %ery hi.-& )lmeda %& (ourt of )ppeals in%ol%ed circumstances that *ere far from identical *ith those obtainin. *ho had e%en consistently protested the increases in the stipulated interest rate& !n contrast. obli. obli. Metroban/ is not a .ations could not be determined& Thus.. and only after the spouses refused to meet their obli.h le%el that the borro*ers *ere practically ensla%ed and their assets depleted. BERS M!N )ssociate @ustice B' (#$(HR< M R! LOURDES P. SERENO (hief @ustice TERES!T $.h of 459 per annum& Aere.ation& #n the other hand. to the petitioners themsel%es& Iastly. the interest rate on the loan. Pursuant to Section 13. &!LL R M .a. the (ourt found in )lmeda %& (ourt of )ppeals that the increases in the interest rates had been made *ithout the prior assent of the borro*ers. such determination& 3: . but the herein petitioners did not& Stated other*ise. the petitioners in )lmeda %& (ourt oJ)ppeals had the e-istin. .courts belo*. ) and #RD'RS the petitioners to pay the costs of suit& S# #RD'R'D& LUC S P. . )ssociate @ustice !RMS the decision promul.e had already been foreclosed *hen they assailed the interest rates in court& Thirdly. hut the herein petitioners *ere already in default and the mort. $R.ated on ebruary 10. the e-act amount of petitioners= obli. the (ourt in )lmeda %& (ourt of )ppeals attributed . unmista/able ri.ations follo*in. the (ourt H'$!'S the petition for re%ie* on certiorari.ood faith to the petitioners by their act of consi. the petitioners in )lmeda %& (ourt of )ppeals *ere not yet in default at the time they brou.ation *as made by them& !n fine. ho*e%er. accordin.s Di%ision& M R! LOURDES P.ors.ned to the *riter of the opinion of the (ourt.o%ernment financial institution pursuant to Presidential Decree $o& 35636 should the arrears reach 209 of the total outstandin. e-tra+udicial foreclosure sale should issue e-cept upon a clear sho*in.h of only 319 per annum. )rticle "!!! of the (onstitution.nation of the amount claimed by the petitioners herein to be their correct outstandin. RE#ES )ssociate @ustice ('RT! !()T!#$ M RT!N S.ation& $o similar tender or consi. no *rit of preliminary in+unction to en+oin an impendin. 2002. obli. SERENO (hief @ustice . the (ourt cannot ma/e the same conclusion herein for lac/ of basis& ourthly. at one point a hi. herein& To start *ith.o%ernment financial institution& Secondly. )lmeda %& (ourt of )ppeals in%ol%ed the mandatory foreclosure of a to the in+unction& BA'R' #R'.ht to a *rit of preliminary in+unction pendin.nin. the propriety of the interest rate increases. of a %iolation of the mort. in court the amounts of *hat they belie%ed to be their remainin. *ith the interest rate e%en reachin. LEON RDO%DE C STRO )ssociate @ustice B!EN&EN!DO L. the foreclosure pro%isions of P&D& 356 could be %alidly in%o/ed by respondent ban/ only after settlement of the 8uestion in%ol%in.a. the increases reached a hi. ri.

264 S(R) 202& Rollo. ::5. G&R& $o& 146442.:50 S(R) 126.enio S& Iabitoria 1retired2. Sch*ander %& eeney=s Del& Super&. 33 )la& )pp& 377 110:52. . )pril 17. p& 126& Rollo. :0 So& 311. pp& 3376: Rollo.ement and De%elopment (orporation %& Hnited (oconut Planters 3an/. 140 )la& 227 110002. 3: So&2d 22. 23. penned by )ssociate @ustice 'u. 127& 1 Rollo. 4207421& : 6 4 7 5 0 10 11 12 13 1: 16 14 17 15 10 (ushman %& (ommissioners= (ourt of 3lount ( (o& %& (ommissioners of Boodland Bater Dist& in To*n of )uburn. pp& 1:471:5& Records. 20 )&2d 340. pp& 17:7176 !d& at 17:7176 'stares %& (ourt of )ppeals. G&R& $o& 1::766. p& 110& !d& at 111711: !d& at 1217122& !d& at 03& !d& at :37:5& !d& at 45740& !d& at 20721& G&R& $o& 113:12. *ith )ssociate @ustice Teodoro P& Re. 2004. 2006. @une 5. :0 $&'&2d ::7. p& 110& Rollo.'oot(ote) Sele.& 2 3 Rollo. May 3.parte Aennies.ino 1retired2 and )ssociate @ustice Rebecca de Guia7Sal%ador concurrin. '. pp& :37:5. 371 110:22& 20 21 Borcester Gas Mana. :60 S(R) 40:. pp& 077105& Records. p& 100& Records. 312. 1004.

427 S(R) 325. )u. G&R& $o& amountin. G&R& $o& 146060. 246& 2: 26 '8uitable P(! 3an/. 623 S(R) :06. Go%ernment inancial !nstitutions to oreclose Mandatorily )ll Ioans *ith )rreara. )lmeida %& (ourt of )ppeals. !nc&. :047:07& 24 27 25 20 30 3oncodin %& $ational Po*er (orporation 'mployees (onsolidated Hnion 1$'(H2. !nterest and (har. 1005. 2003. 10: So& 547. September 15. :05 S(R) 623. !nc& %& #@7Mar/ Tradin.31: Mass& 40 110:32& 22 Toulouse %& 3oard of Konin.ation& 36 The Ia*phil Pro+ect 7 )rellano Ia* oundation . G&R& $o& 170035. 2012& G&R& $o& 167316. @anuary 17. 360& 33 3: Supra note 14. December 1. 2000.ust 7. 545.. 2006. September 27. 434 S(R) 320. 473. 400 S(R) 306. at 32:& Re8uirin. 2010. 57 )&2d 470. G&R& $o& 16012:. :137:1:. pp& 1117112 and 341& !d& at 3617367 G&R& $o& 14:6:0. G&R& $o& 142714. 1:2 la& 300 110:02& 23 Serrano %& Galant Maritime Ser%ices. 3347337& Records. G&R& $o& 170::1. 624. 2010.e of ParaMa8ue %& '8uitable P(! 3an/. citin. 603 S(R) 411. 425 S(R) 70. @uly 11. G& R& $o& 115307. @une 7.ust 11. to at least T*enty Percent 12092 of the Total #utstandin. 423& 31 Du%aE (orporation %& '-port and !ndustry 3an/. Manila Midto*n Aotels L Iand (orp& %& $IR(. ::5 S(R) 451& 32 St& @ames (olle. !nc&. )u. March 27. (orporation %& (iriaco. 255 S(R) 260. 01702& (hina 3an/in. )d+ustment.ust 0. 2004. #bli. G&R& $o& 143011. 2010. 1:7 Me& 357 110622& Greater Miami De%elopment (orp& %& Pender. )u. includin.