Kathryn P.

Akmad
Bulacan State University
College of Law
SECOND DIVISION
[G.R. No. 141811. November 15, 2001]
FIRST METRO INVESTMENT CORPORATION, petitioner, vs. ESTE E! SO! MO"NTAIN
RESERVE, INC., VA!ENTIN S. AE#, $R., MAN"E! %. SA!IENTES, MA. ROCIO A. E
VEGA, A!E&ANER G. AS"NCION, A!'ERTO
(
M. !AORES, VICENTE M. E VERA, $R.,
)*+ FE!IPE '. SESE, respondents.
E C I S I O N
E !EON, $R., J.,
Before us is a petition for review on certiorari of the Decision
[1]
of the Court of Appeals
[2]
ate Nove!"er
#$ 1%%% in CA&'()( CV No( *++2# reversin, the Decision
[+]
of the )e,ional -rial Court of .asi, Cit/$ Branch 1*%
ate 0une 2$ 1%%1 in Civil Case No( +%221( Essentiall/$ the Court of Appeals foun an eclare that the fees
provie for in the 2nerwritin, an Consultanc/ A,ree!ents e3ecute "/ an "etween petitioner 4irst 5etro
Invest!ent Corp( 645IC7 an responent Este el Sol 5ountain )eserve$ Inc( 6Este el Sol7 si!ultaneousl/ with
the 8oan A,ree!ent ate 0anuar/ +1$ 1%9# were !ere su"terfu,es to ca!oufla,e the usurious interest char,e
"/ petitioner 45IC(
-he facts of the case are as follows:
It appears that on 0anuar/ +1$ 1%9#$ petitioner 45IC ,rante responent Este el Sol a loan of Seven 5illion
-hree ;unre Ei,ht/&4ive -housan 4ive ;unre .esos 6.9$+#*$*<<(<<7 to finance the construction an
evelop!ent of the Este el Sol 5ountain )eserve$ a sports=resort co!ple3 pro>ect locate at Barrio .ura/$
5ontal"an$ )i?al(
[1]
2ner the ter!s of the 8oan A,ree!ent$ the procees of the loan were to "e release on sta,,ere
"asis( Interest on the loan was pe,,e at si3teen 61@A7 percent per annu! "ase on the i!inishin, "alance( -he
loan was pa/a"le in thirt/&si3 6+@7 eBual an consecutive !onthl/ a!orti?ations to co!!ence at the "e,innin, of
the thirteenth !onth fro! the ate of the first release in accorance with the Scheule of A!orti?ation(
[*]
In case
of efault$ an acceleration clause was$ a!on, others$ provie an the a!ount ue was !ae su">ect to a twent/
62<A7 percent one&ti!e penalt/ on the a!ount ue an such a!ount shall "ear interest at the hi,hest rate
per!itte "/ law fro! the ate of efault until full pa/!ent thereof plus liBuiate a!a,es at the rate of two
62A7 percent per !onth co!poune Buarterl/ on the unpai "alance an accrue interests to,ether with all the
penalties$ fees$ e3penses or char,es thereon until the unpai "alance is full/ pai$ plus attorne/Cs fees eBuivalent
to twent/&five 62*A7 percent of the su! sou,ht to "e recovere$ which in no case shall "e less than -went/
-housan .esos 6.2<$<<<(<<7 if the services of a law/er were hire(
[@]
In accorance with the ter!s of the 8oan A,ree!ent$ responent Este el Sol e3ecute several
ocu!ents
[9]
as securit/ for pa/!ent$ a!on, the!$ 6a7 a )eal Estate 5ort,a,e ate 0anuar/ +1$ 1%9# over two
627 parcels of lan "ein, utili?e as the site of its evelop!ent pro>ect with an area of appro3i!atel/ One 5illion
-went/&Ei,ht -housan an -went/&Nine 61$<2#$<2%7 sBuare !eters an particularl/ escri"e in -C- Nos( N&
21++2 an N&21+*@ of the )e,ister of Dees of )i?al$ inclusive of all i!prove!ents$ as well as all the
!achineries$ eBuip!ent$ furnishin,s an furnitures e3istin, thereonD an 6"7 iniviual Continuin, Suret/ship
a,ree!ents "/ co&responents Valentin S( Dae?$ 0r($ 5anuel E( Salientes$ 5a( )ocio A( De Ve,a$ Ale3aner '(
Asuncion$ Al"erto 5( 8aores$ Vicente 5( De Vera$ 0r( an 4elipe B( Sese$ all ate 4e"ruar/ 2$ 1%9#$ to
,uarantee the pa/!ent of all the o"li,ations of responent Este el Sol up to the a,,re,ate su! of Seven 5illion
4ive ;unre -housan .esos 6.9$*<<$<<< <<7 each(
[#]
1
Kathryn P. Akmad
Bulacan State University
College of Law
)esponent Este el Sol also e3ecute$ as provie for "/ the 8oan A,ree!ent$ an 2nerwritin, A,ree!ent
on 0anuar/ +1$ 1%9# where"/ petitioner 45IC shall unerwrite on a "est&efforts "asis the pu"lic offerin, of One
;unre -went/ -housan 612<$<<<7 co!!on shares of responent Este el SolCs capital stocF for a one&ti!e
unerwritin, fee of -wo ;unre -housan .esos 6.2<<$<<<(<<7( In aition to the unerwritin, fee$ the
2nerwritin, A,ree!ent provie that for supervisin, the pu"lic offerin, of the shares$ responent Este el Sol
shall pa/ petitioner 45IC an annual supervision fee of -wo ;unre -housan .esos 6.2<<$<<<(<<7 per annu!
for a perio of four 617 consecutive /ears( -he 2nerwritin, A,ree!ent also stipulate for the pa/!ent "/
responent Este el Sol to petitioner 45IC a consultanc/ fee of -hree ;unre -hirt/&-wo -housan 4ive
;unre .esos 6.++2$*<<(<<7 per annu! for a perio of four 617 consecutive /ears( Si!ultaneous with the
e3ecution of an in accorance with the ter!s of the 2nerwritin, A,ree!ent$ a Consultanc/ A,ree!ent was also
e3ecute on 0anuar/ +1$ 1%9# where"/ responent Este el Sol en,a,e the services of petitioner 45IC for a fee
as consultant to rener ,eneral consultanc/ services(
[%]
In three 6+7 letters all ate 4e"ruar/ 22$ 1%9# petitioner "ille responent Este el Sol for the a!ounts of
[a] -wo ;unre -housan .esos 6.2<<$<<<(<<7 as the unerwritin, fee of petitioner 45IC in connection with
the pu"lic offerin, of the co!!on shares of stocF of responent Este el SolD ["] One 5illion -hree ;unre
-hirt/ -housan .esos 6.1$++<$<<<(<<7 as consultanc/ fee for a perio of four 617 /earsD an [c] -wo ;unre
-housan .esos 6.2<<$<<<(<<7 as supervision fee for the /ear "e,innin, 4e"ruar/$ 1%9#$ in accorance to the
2nerwritin, A,ree!ent(
[1<]
-he sai a!ounts of fees were ee!e pai "/ responent Este el Sol to petitioner
45IC which eucte the sa!e fro! the first release of the loan(
Since responent Este el Sol faile to !eet the scheule of repa/!ent in accorance with a revise
Scheule of A!orti?ation$ it appeare to have incurre a total o"li,ation of -welve 5illion Si3 ;unre Sevent/&
Nine -housan Si3 ;unre -hirt/ .esos an Ninet/&Ei,ht Centavos 6.12$@9%$@+<(%#7 per the petitionerCs
State!ent of Account ate 0une 2+$ 1%#<$
[11]
to wit:
S-A-E5EN- O4 ACCO2N- O4
ES-E DE8 SO8 5O2N-AIN )ESE)VE$ INC(
AS O4 02NE 2+$ 1%#<
.A)-IC28A)S A5O2N-
-otal a!ount ue as of 11&22&9# per
revise a!orti?ation scheule ate
1&+&9# .9$%%%$@+1(12
Interest on .9$%%%$@+1(12 G 1@A p(a( fro!
11&22&9# to 2&22&9% 6%2 a/s7 +29$<%@(<1
Balance #$+2@$929(1@
One ti!e penalt/ of 2<A of the entire unpai
o"li,ations uner Section @(<2 6ii7 of
8oan A,ree!ent 1$@@*$+1*(1%
.ast ue interest uner Section @(<2 6iii7
of loan A,ree!ent:
G 1%A p(a( fro! 2&22&9% to 11&+<&9%
62#1 a/s7 1$1#1$#9%(%+
G 21A p(a( fro! 11&+<&9% to @&2+&#<
62<@ a/s7 1$2<<$911(1<
Other char,es H pu"lication of e3tra >uicial
2
Kathryn P. Akmad
Bulacan State University
College of Law
foreclosure of )E5 !ae on
*&2+&#< I @&@&#< 1$%@1(<<
-otal A!ount Due an Collecti"le as of
0une 2+$ 1%#< P 12,-./,-00./8
Accorin,l/$ petitioner 45IC cause the e3tra>uicial foreclosure of the real estate !ort,a,e on 0une 2+$
1%#<(
[12]
At the pu"lic auction$ petitioner 45IC was the hi,hest "ier of the !ort,a,e properties for Nine
5illion .esos 6.%$<<<$<<<(<<7( -he total a!ount of -hree 5illion One ;unre Ei,ht/&Ei,ht -housan Si3
;unre -hirt/ .esos an Sevent/&4ive Centavos 6.+$1##$@+<(9*7 was eucte therefro!$ that is$ for the
pu"lication fee for the pu"lication of the SheriffCs Notice of Sale$ 4our -housan Nine ;unre Si3t/&4our .esos
6.1$%@1(<<7D for SheriffCs fees for conuctin, the foreclosure proceein,s$ 4ifteen -housan .esos 6.1*$<<<(<<7D
an for Attorne/Cs fees$ -hree 5illion One ;unre Si3t/&Ei,ht -housan Si3 ;unre Si3t/&Si3 .esos an
Sevent/&4ive Centavos 6.+$1@#$@@@(9*7( -he re!ainin, "alance of 4ive 5illion Ei,ht ;unre Eleven -housan
-hree ;unre Si3t/&Nine .esos an -went/&4ive Centavos 6.*$#11$+@%(2*7 was applie to interests an penalt/
char,es an partl/ a,ainst the principal$ ue as of 0une 2+$ 1%#<$ there"/ leavin, a "alance of Si3 5illion Ei,ht
;unre Si3t/&-hree -housan -wo ;unre Ninet/&Seven .esos an Sevent/&-hree Centavos 6.@$#@+$2%9(9+7
on the principal a!ount of the loan as of 0une 2+$ 1%#<(
[1+]
4ailin, to secure fro! the iniviual responents$ as sureties of the loan of responent Este el Sol "/ virtue
of their continuin, suret/ a,ree!ents$ the pa/!ent of the alle,e eficienc/ "alance$ espite iniviual e!ans
sent to each of the!$
[11]
petitioner institute on Nove!"er 11$ 1%#< the instant collection suit
[1*]
a,ainst the
responents to collect the alle,e eficienc/ "alance of Si3 5illion Ei,ht ;unre Si3t/&-hree -housan -wo
;unre Ninet/&Seven .esos an Sevent/&-hree Centavos 6.@$#@+$2%9(9+7 plus interest thereon at twent/&one
621A7 percent per annu! fro! 0une 21$ 1%#< until full/ pai$ an twent/&five 62*A7 percent thereof as an for
attorne/Cs fees an costs(
In their Answer$ the responents sou,ht the is!issal of the case an set up several special an affir!ative
efenses$ fore!ost of which is that the 2nerwritin, an Consultanc/ A,ree!ents e3ecute si!ultaneousl/ with
an as inte,ral parts of the 8oan A,ree!ent an which provie for the pa/!ent of 2nerwritin,$ Consultanc/
an Supervision fees were in realit/ su"terfu,es resorte to "/ petitioner 45IC an i!pose upon responent
Este el Sol to ca!oufla,e the usurious interest "ein, char,e "/ petitioner 45IC(
[1@]
-he petitioner 45IC presente as its witnesses urin, the trial: Cesar Valen?uela$ its for!er Senior Vice&
.resient$ 4elipe Neri$ its Vice&.resient for 5arFetin,$ an Dennis Ara,on$ an Account 5ana,er of its Account
5ana,e!ent 'roup$ as well as ocu!entar/ evience( On the other han$ co&responents Vicente 5( De Vera$ 0r(
an Valentin S( Dae?$ 0r($ an .erfecto Doro>a$ for!er Senior 5ana,er an Assistant Vice&.resient of 45IC$
testifie for the responents(
After the trial$ the trial court renere its ecision in favor of petitioner 45IC$ the ispositive portion of
which reas:
J;E)E4O)E$ >u,!ent is here"/ renere in favor of plaintiff an a,ainst efenants$ orerin, efenants
>ointl/ an severall/ to pa/ to plaintiff the a!ount of .@$#@+$2%9(9+ plus 21A interest per annu!$ fro! 0une 21$
1%#<$ until the entire a!ount is full/ pai$ plus the a!ount eBuivalent to 2*A of the total a!ount ue$ as
attorne/Cs fees$ plus costs of suit(
DefenantsC counterclai!s are is!isse$ for lacF of !erit(
4inin, the ecision of the trial court unaccepta"le$ responents interpose an appeal to the Court of
Appeals( On Nove!"er #$ 1%%%$ the appellate court reverse the challen,e ecision of the trial court( -he
appellate court foun an eclare that the fees provie for in the 2nerwritin, an Consultanc/ A,ree!ents
were !ere su"terfu,es to ca!oufla,e the e3cessivel/ usurious interest char,e "/ the petitioner 45IC on the loan
of responent Este el SolD an that the stipulate penalties$ liBuiate a!a,es an attorne/Cs fees were
+
Kathryn P. Akmad
Bulacan State University
College of Law
Ke3cessive$ iniBuitous$ unconsciona"le an revoltin, to the conscience$L an eclare that in lieu thereof$ the
stipulate one ti!e twent/ 62<A7 percent penalt/ on the a!ount ue an ten 61<A7 percent of the a!ount ue as
attorne/Cs fees woul "e reasona"le an suffice to co!pensate petitioner 45IC for those ite!s( -hus$ the
appellate court is!isse the co!plaint as a,ainst the iniviual responents sureties an orere petitioner
45IC to pa/ or rei!"urse responent Este el Sol the a!ount of Nine ;unre Sevent/&One -housan .esos
6.%91$<<<(<<7 representin, the ifference "etween what is ue to the petitioner an what is ue to responent Este
el Sol$ "ase on the followin, co!putation:
[19]
KA: D2E -O -;E [.E-I-IONE)]
.rincipal of 8oan .9$+#2$*<<(<<
A: 2<A one&ti!e
.enalt/ 1$19@$*<<(<<
Attorne/Cs fees %<<$<<<(<< .%$9*%$<<<(<<
8ess: .rocees of foreclosure
Sale %$<<<$<<<(<<
Deficienc/ . 9*%$<<<(<<
B( D2E -O [)ES.ONDEN- ES-E DE8 SO8]
)eturn of usurious interest in the for! of:
2nerwritin, fee . 2<<$<<<(<<
Supervision fee 2<<$<<<(<<
Consultanc/ fee 1$++<$<<<(<<
-otal a!ount ue Este . 1$9+<$<<<(<<
-he appellee is$ therefore$ o"li,e to return to the appellant Este el Sol the ifference of .%91$<<<(<< or
6.1$9+<$<<<(<< less .9*%$<<<(<<7(L
.etitioner !ove for reconsieration of the appellate courtCs averse ecision( ;owever$ this was enie in a
)esolution
[1#]
ate 4e"ruar/ %$ 2<<< of the appellate court(
;ence$ the instant petition anchore on the followin, assi,ne errors:
[1%]
T1E APPE!!ATE CO"RT 1AS ECIE %"ESTIONS OF S"'STANCE IN A 2A3 NOT IN
ACCOR 2IT1 !A2 AN 2IT1 APP!ICA'!E ECISIONS OF T1IS 1ONORA'!E CO"RT
21EN IT,
)] 1E! T1AT A!!EGE!3 T1E "NER2RITING AN CONS"!TANC3 AGREEMENTS
S1O"! NOT 'E CONSIERE SEPARATE AN ISTINCT FROM T1E !OAN AGREEMENT,
AN INSTEA, T1E3 S1O"! 'E CONSIERE AS A SING!E CONTRACT.
b] 1E! T1AT T1E "NER2RITING AN CONS"!TANC3 AGREEMENTS ARE 4MERE
S"'TERF"GES TO CAMO"F!AGE T1E "S"RIO"S INTEREST C1ARGE5 '3 T1E
PETITIONER.
6] REF"SE TO CONSIER T1E TESTIMONIES OF PETITIONER7S 2ITNESSES ON T1E
SERVICES PERFORME '3 PETITIONER.
+] REF"SE TO CONSIER T1E FACT [i] T1AT RESPONENTS 1A 2AIVE T1EIR RIG1T
TO SEE8 RECOVER3 OF T1E AMO"NTS T1E3 PAI TO PETITIONER, AN [ii] T1AT
1
Kathryn P. Akmad
Bulacan State University
College of Law
RESPONENTS 1A AMITTE T1E VA!IIT3 OF T1E "NER2RITING AN CONS"!TANC3
AGREEMENTS.
e] MAE AN ERRONEO"S COMP"TATION ON S"PPOSE!3 421AT IS "E TO EAC1
PART3 AFTER T1E FOREC!OS"RE SA!E5, AS SHOWN IN PP. 34-35 OF THE ASSAILED
DECISION, EVEN GRANTING $"ST FOR T1E SA8E OF ARG"MENT T1AT T1E APPE!!ATE
CO"RT 2AS CORRECT IN STIGMATI#ING [i] T1E PROVISIONS OF T1E !OAN AGREEMENT
T1AT REFER TO STIP"!ATE PENA!TIES, !I%"IATE AMAGES AN ATTORNE37S FEES
AS S"PPOSE!3 4E&CESSIVE, INI%"ITO"S AN "NCONSCIONA'!E AN REVO!TING TO T1E
CONSCIENCE5 AN [ii] T1E "NER2RITING, S"PERVISION AN CONS"!TANC3 SERVICES
AGREEMENT AS S"PPOSE!3 4MERE S"'TERF"GES TO CAMO"F!AGE T1E "S"RIO"S
INTEREST C1ARGE5 "PON T1E RESPONENT ESTE '3 PETITIONER.
9] REF"SE TO CONSIER T1E FACT T1AT RESPONENT ESTE, AN T1"S T1E
INIVI"A! RESPONENTS, ARE STI!! O'!IGATE TO T1E PETITIONER.
.etitioner essentiall/ assails the factual finin,s an conclusion of the appellate court that the 2nerwritin,
an Consultanc/ A,ree!ents were e3ecute to conceal a usurious loan( InBuir/ upon the veracit/ of the
appellate courtCs factual finin,s an conclusion is not the function of this Court for the Supre!e Court is not a
trier of facts( Onl/ when the factual finin,s of the trial court an the appellate court are oppose to each other
oes this Court e3ercise its iscretion to re&e3a!ine the factual finin,s of "oth courts an wei,h which$ after
consierin, the recor of the case$ is !ore in accor with law an >ustice(
After a careful an thorou,h review of the recor incluin, the evience auce$ we fin no reason to
epart fro! the finin,s of the appellate court(
4irst$ there is no !erit to petitioner 45ICCs contention that Central BanF Circular No( %<* which tooF effect
on 0anuar/ 1$ 1%#+ an re!ove the ceilin, on interest rates for secure an unsecure loans$ re,arless of
!aturit/$ shoul "e applie retroactivel/ to a contract e3ecute on 0anuar/ +1$ 1%9#$ as in the case at "ar$ that is$
while the 2sur/ 8aw was in full force an effect( It is an ele!entar/ rule of contracts that the laws$ in force at the
ti!e the contract was !ae an entere into$ ,overn it(
[2<]
5ore si,nificantl/$ Central BanF Circular No( %<* i
not repeal nor in an/ wa/ a!en the 2sur/ 8aw "ut si!pl/ suspene the latterCs effectivit/(
[21]
-he ille,alit/ of
usur/ is wholl/ the creature of le,islation( A Central BanF Circular cannot repeal a law( Onl/ a law can repeal
another law(
[22]
-hus$ retroactive application of a Central BanF Circular cannot$ an shoul not$ "e presu!e(
[2+]
Secon$ when a contract "etween two 627 parties is evience "/ a written instru!ent$ such ocu!ent is
orinaril/ the "est evience of the ter!s of the contract( Courts onl/ nee to rel/ on the face of written contracts
to eter!ine the intention of the parties( ;owever$ this rule is not without e3ception(
[21]
-he for! of the contract
is not conclusive for the law will not per!it a usurious loan to hie itself "ehin a le,al for!( .arol evience is
a!issi"le to show that a written ocu!ent thou,h le,al in for! was in fact a evice to cover usur/( If fro! a
construction of the whole transaction it "eco!es apparent that there e3ists a corrupt intention to violate the 2sur/
8aw$ the courts shoul an will per!it no sche!e$ however in,enious$ to "eclou the cri!e of usur/(
[2*]
In the instant case$ several facts an circu!stances taFen alto,ether show that the 2nerwritin, an
Consultanc/ A,ree!ents were si!pl/ cloaFs or evices to cover an ille,al sche!e e!plo/e "/ petitioner 45IC
to conceal an collect e3cessivel/ usurious interest$ an these are:
a7 -he 2nerwritin, an Consultanc/ A,ree!ents are "oth ate 0anuar/ +1$ 1%9# which is the sa!e ate
of the 8oan A,ree!ent(
[2@]
4urther!ore$ uner the 2nerwritin, A,ree!ent pa/!ent of the supervision an
consultanc/ fees was set for a perio of four 617 /ears
[29]
to coincie ulti!atel/ with the ter! of the 8oan
A,ree!ent(
[2#]
-his fact !eans that all the sai a,ree!ents which were e3ecute si!ultaneousl/ were set to
!ature or shall re!ain effective urin, the sa!e perio of ti!e(
"7 -he 8oan A,ree!ent ate 0anuar/ +1$ 1%9# stipulate for the e3ecution an eliver/ of an unerwritin,
a,ree!ent
[2%]
an specificall/ !entione that such unerwritin, a,ree!ent is a conition preceent
[+<]
for petitioner
*
Kathryn P. Akmad
Bulacan State University
College of Law
45IC to e3ten the loan to responent Este el Sol$ inicatin, an as a!itte "/ petitioner 45ICCs e!plo/ees$
[+1]
that such 2nerwritin, A,ree!ent is Kpart an parcel of the 8oan A,ree!ent(L
[+2]
c7 )esponent Este el Sol was "ille "/ petitioner on 4e"ruar/ 2#$ 1%9# One 5illion -hree ;unre
-hirt/ -housan .esos 6.1$++<$<<<(<<7
[++]
as consultanc/ fee espite the clear provision in the Consultanc/
A,ree!ent that the sai a,ree!ent is for -hree ;unre -hirt/&-wo -housan 4ive ;unre .esos
6.++2$*<<(<<7 per annu! for four 617 /ears an that onl/ the first /ear consultanc/ fee shall "e ue upon si,nin,
of the sai consultanc/ a,ree!ent(
[+1]
7 -he 2nerwritin,$ Supervision an Consultanc/ fees in the a!ounts of -wo ;unre -housan .esos
6.2<<$<<<(<<7$ -wo ;unre -housan .esos 6.2<<$<<<(<<7 an One 5illion -hree ;unre -hirt/ -housan
.esos 6.1$++<$<<<(<<7$ respectivel/$ were "ille "/ petitioner to responent Este el Sol on 4e"ruar/ 22$ 1%9#$
[+*]
that is$ on the sa!e occasion of the first partial release of the loan in the a!ount of -wo 5illion -hree ;unre
Ei,ht/&-wo -housan 4ive ;unre .esos 6.2$+#2$*<<(<<7(
[+@]
It is fro! this first partial release of the loan that
the sai corresponin, "ills for 2nerwritin,$ Supervision an Consultanc/ fees were eucte an apparentl/
pai$ thus$ revertin, "acF to petitioner 45IC the total a!ount of One 5illion Seven ;unre -hirt/ -housan
.esos 6.1$9+<$<<<(<<7 as part of the a!ount loane to responent Este el Sol(
[+9]
e7 .etitioner 45IC was in fact una"le to or,ani?e an unerwritin,=sellin, s/nicate to sell an/ share of
stocF of responent Este el Sol an !uch less to supervise such a s/nicate$ thus failin, to co!pl/ with its
o"li,ation uner the 2nerwritin, A,ree!ent(
[+#]
Besies$ there was reall/ no nee for an 2nerwritin,
A,ree!ent since responent Este el Sol ha its own license !arFetin, ar! to sell its shares an all its shares
have "een sol throu,h its !arFetin, ar!(
[+%]
f7 .etitioner 45IC faile to co!pl/ with its o"li,ation uner the Consultanc/ A,ree!ent$
[1<]
asie fro! the
fact that there was no nee for a Consultanc/ A,ree!ent$ since responent Este el SolCs officers appeare to "e
!ore co!petent to "e consultants in the evelop!ent of the pro>ecte sports=resort co!ple3(
[11]
All the fore,oin, esta"lishe facts an circu!stances clearl/ "elie the contention of petitioner 45IC that the
8oan$ 2nerwritin, an Consultanc/ A,ree!ents are separate an inepenent transactions( -he 2nerwritin,
an Consultanc/ A,ree!ents which were e3ecute an elivere conte!poraneousl/ with the 8oan A,ree!ent on
0anuar/ +1$ 1%9# were e3acte "/ petitioner 45IC as essential conitions for the ,rant of the loan( An apparentl/
lawful loan is usurious when it is intene that aitional co!pensation for the loan "e is,uise "/ an ostensi"l/
unrelate contract proviin, for pa/!ent "/ the "orrower for the lenerCs services which are of little value or
which are not in fact to "e renere$ such as in the instant case(
[12]
In this connection$ Article 1%*9 of the New
Civil Coe clearl/ provies that:
KArt( 1%*9( Contracts an stipulations$ uner an/ cloaF or evice whatever$ intene to circu!vent the laws
a,ainst usur/ shall "e voi( -he "orrower !a/ recover in accorance with the laws on usur/(L
I* :;:r<o:; =o)*;, >?e e*><re ob=<@)><o* +oe; *o> be6ome vo<+ be6):;e o9 )* )@reeme*> 9or :;:r<o:;
<*>ere;>A >?e :*B)<+ Br<*6<B)= +eb> ;><== ;>)*+; )*+ rem)<*; v)=<+ b:> >?e ;><B:=)><o* ); >o >?e :;:r<o:;
<*>ere;> <; vo<+, 6o*;eC:e*>=D, >?e +eb> <; >o be 6o*;<+ere+ E<>?o:> ;><B:=)><o* ); >o >?e <*>ere;> (
[1+]
-he reason
for this rule was aeBuatel/ e3plaine in the case of Angel Jose Warehousing Co., Inc. v. Child
Enterprises
[11]
where this Court hel:
In si!ple loan with stipulation of usurious interest$ the prestation of the e"tor to pa/ the principal e"t$ which is
the cause of the contract 6Article 1+*<$ Civil Coe7$ is not ille,al( -he ille,alit/ lies onl/ as to the prestation to
pa/ the stipulate interestD hence$ "ein, separa"le$ the latter onl/ shoul "e ee!e voi$ since it is the onl/ one
that is ille,al(
-hus$ the nullit/ of the stipulation on the usurious interest oes not affect the lenerCs ri,ht to receive "acF
the principal a!ount of the loan( Jith respect to the e"tor$ the a!ount pai as interest uner a usurious
a,ree!ent is recovera"le "/ hi!$ since the pa/!ent is ee!e to have "een !ae uner restraint$ rather than
voluntaril/(
[1*]
@
Kathryn P. Akmad
Bulacan State University
College of Law
-his Court a,rees with the factual finin,s an conclusion of the appellate court$ to wit:
Je fin the stipulate penalties$ liBuiate a!a,es an attorne/Cs fees$ e3cessive$ iniBuitous an unconsciona"le
an revoltin, to the conscience as the/ harl/ allow the "orrower an/ chance of survival in case of efault( An
true enou,h$ ES-E fole up when the appellee e3tra>uiciall/ foreclose on its 6ES-ECs7 evelop!ent pro>ect
an literall/ close its offices as "oth the appellee an ES-E were at the ti!e holin, office in the sa!e
"uilin,( Accorin,l/$ we hol that 2<A penalt/ on the a!ount ue an 1<A of the procees of the foreclosure
sale as attorne/Cs fees woul suffice to co!pensate the appellee$ especiall/ so "ecause there is no clear showin,
that the appellee hire the services of counsel to effect the foreclosureD it en,a,e counsel onl/ when it was
seeFin, the recover/ of the alle,e eficienc/(
Attorne/Cs fees as provie in penal clauses are in the nature of liBuiate a!a,es( So lon, as such
stipulation oes not contravene an/ law$ !orals$ or pu"lic orer$ it is "inin, upon the parties( Nonetheless$
courts are e!powere to reuce the a!ount of attorne/Cs fees if the sa!e is KiniBuitous or
unconsciona"le(L
[1@]
Articles 122% an 2229 of the New Civil Coe provie that:
Art( 122%( -he >u,e shall eBuita"l/ reuce the penalt/ when the principal o"li,ation has "een partl/ or
irre,ularl/ co!plie with "/ the e"tor( Even if there has "een no perfor!ance$ the penalt/ !a/ also "e reuce
"/ the courts if it is iniBuitous or unconsciona"le(
Art( 2229( 8iBuiate a!a,es$ whether intene as an ine!nit/ or a penalt/$ shall "e eBuita"l/ reuce if the/
are iniBuitous or unconsciona"le(
In the case at "ar$ the a!ount of -hree 5illion One ;unre Ei,ht/&Ei,ht -housan Si3 ;unre -hirt/
.esos an Sevent/&4ive Centavos 6.+$1##$@+<(9*7 for the stipulate attorne/Cs fees eBuivalent to twent/&five
62*A7 percent of the alle,e a!ount ue$ as of the ate of the auction sale on 0une 2+$ 1%#<$ is !anifestl/
e3or"itant an unconsciona"le( Accorin,l/$ we a,ree with the appellate court that a reuction of the attorne/Cs
fees to ten 61<A7 percent is appropriate an reasona"le uner the facts an circu!stances of this case(
8astl/$ there is no !erit to petitioner 45ICCs contention that the appellate court erre in awarin, an a!ount
alle,el/ not asFe nor pra/e for "/ responents( Jhether the e3act a!ount of the relief was not e3pressl/
pra/e for is of no !o!ent for the reason that the relief was plainl/ warrante "/ the alle,ations of the
responents as well as "/ the facts as foun "/ the appellate court( A part/ is entitle to as !uch relief as the facts
!a/ warrant(
[19]
In view of all the fore,oin,$ the Court is convince that the appellate court co!!itte no reversi"le error in
its challen,e Decision(
21EREFORE$ the instant petition is here"/ DENIED$ an the assaile Decision of the Court of Appeals is
A44I)5ED( Costs a,ainst petitioner(
SO ORERE.
Bellosillo, (Chairman), Mendoza, uisum!ing, an Buena, JJ., concur.
9