November 2009 - Philippine Supreme Court Resolutions
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[G.R. No. 176143 : November 09, 2009] MIGUEL P. SORIANO, JR. AND JULIETA B. SORIANO V. BANK OF THE PHILIPPINE ISLANDS :
[G.R. No. 176143 : November 09, 2009]
MIGUEL P. SORIANO, JR. AND JULIETA B. SORIANO V. BANK OF THE PHILIPPINE ISLANDS
Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of this Court dated 16 November 2009:
G.R. No. 176143 (Miguel P. Soriano, Jr. and Julieta B. Soriano v. Bank of the Philippine Islands).
Sometime in July 1993 petitioner Miguel P. Soriano, Jr. bought a car through a loan of P482,400.00, payable at P10,050.00 with 3% interest per month. To secure payment, he constituted a chattel mortgage on the car. The car dealer then assigned its rights in the chattel mortgage to Far East Bank & Trust Company (FEBTC).
On December 9, 1999 FEBTC sent a demand letter to petitioners Miguel and Julieta Soriano (the Sorianos) for the payment of P367,126.50 that was due as of November 1999 within five days from notice or for the surrender of the car.
Meanwhile, FEBTC merged with respondent Bank of the Philippine Islands (BPI), with the latter as the surviving entity. On October 13, 2000 respondent BPI sent another demand letter to the Sorianos, this time for the lesser amount of P209,241.18 representing their unpaid balance. Since the demand was unheeded, on January 8, 2001 the bank filed a complaint for replevin and damages against the Sorianos before the Metropolitan Trial Court (MeTC) of Manila. The bank claimed that the Sorianos defaulted in their obligations by failing to pay the last 21 installments from November 15, 1995 to July 15, 1997 despite repeated demands.
While the Sorianos admitted in their answer that they still had unpaid installments, they claimed that they were justified in suspending payments. They opened an automatic debit arrangement with FEBTC to cover their monthly payments but, despite repeated requests, the bank's car loan division gave them no receipt covering the payments made from July 1993 to March 1997. Upon the advice of the bank's branch manager, the Sorianos suspended their payments for the period April to July 1997 pending issuance of the receipts they needed. In December 1999 FEBTC demanded payment of P367,126.50 representing their alleged unpaid balance. Replying to the demand, the Sorianos questioned the computation. They also asked for an itemized statement of account but got none. They denied receiving the second demand dated October 13, 2000 for the lesser amount of P209,241.18.
In the course of trial, respondent BPI no longer pressed for the issuance of the writ of replevin.
On November 2, 2004 the MeTC rendered a decision, ordering the Sorianos, jointly and severally, to pay respondent BPI P209,241.18 with interest of 3% per month from October 13, 2000 until their obligation shall have been fully paid, 10% of the total amount due as attorney's fees, and the costs of suit.[1]
On appeal, the Regional Trial Court (RTC) of Manila,[2] modified the MeTC decision.[3] It noted that based on respondent BPI's subsidiary ledger, the Sorianos paid their monthly installments until June 21, 1996, leaving only 13 unpaid installments. While affirming the MeTC decision, it ordered the Sorianos to pay the bank only P130,650.00 with interest of 3% per month from October 13, 2000 until they shall have fully paid the judgment debt.[4] On appeal by the Sorianos, the Court of Appeals affirmed the decision of the RTC, prompting them to take recourse to this Court.
The Sorianos present the following issues before this Court: (1). whether or not they, as debtors, had the burden of proving payment; (2) whether or not respondent bank's subsidiary ledger, a mere photocopy, is admissible in evidence to prove non-payment of subsequent installments; and (3) whether or not the Sorianos can be made liable to pay interest of 3% per month or 36% per annum on their unpaid balance.[5]
One. The Sorianos assail the Court of Appeals decision for holding that they failed to discharge their burden of proving payment of the balance of their loan.
But the Sorianos admitted in their answer to the complaint that they still had unpaid monthly installments owing respondent bank. What they dispute, however, is the amount they have not yet paid. Respondent bank presented its subsidiary ledger showing that the Sorianos paid their monthly installments only up to June 21, 1996, leaving 13 unpaid monthly installments from July 1996 to July 21, 1997. The Sorianos claim, on the other hand, that they have only four unpaid installments from April 1997 to July 1997. Since the Sorianos alleged having paid more than what respondent bank was willing to admit, it was incumbent upon them to prove such affirmative allegation.
Jurisprudence abounds that in civil cases, the party who alleges a fact has the burden of proving it. Thus, a party who pleads payment as a defense has the burden of proving that such payment has, in fact, been made. When the plaintiff alleges non-payment, still, the general rule is that the burden rests on the defendant, who has admitted the basic obligation, to prove payment rather than on the plaintiff to prove non-payment.[6] Here, the Sorianos miserably failed in this respect. They did not present evidence of their automatic debit arrangement with FEBTC, of the official receipts of their monthly payments, or even of their passbook. Neither have they shown any written requests to respondent bank to furnish them with official receipts or a statement of account.
The Court finds petitioners' reliance in Citibank, N.A. Mastercard v. Teodoro[7]misplaced. In Citibank, the bank failed to prove that defendant owed it P24,388.36 since it presented only the photocopies of the original sales invoices. These photocopies were inadmissible in evidence. Here, however, the bank established the existence of the Sorianos' indebtedness both by the evidence and the admission of the parties. Indeed, the Sorianos acknowledged that they still had unpaid monthly installments. They even adopted as their own evidence respondent bank's subsidiary ledger that was presented to prove the unpaid balance of the loan.
Two. The Sorianos argue that respondent bank's subsidiary ledger, a mere photocopy, should not have been given consideration since no witness who prepared and has custody of it identified it and since it was not offered in evidence.
But the Sorianos were the very ones who offered the ledger in evidence, adopting it as their own to prove that they already paid the monthly installments until June 21, 1996. Yet, they would now reject the ledger for not reflecting their subsequent payments. The Court cannot allow petitioners to use the ledger where it benefits them and to reject the same when it is adverse to them.[8] Besides, petitioners raised this issue only after the RTC had already modified the MeTC decision.
Three. On the matter of interest, the Court has repeatedly ruled that stipulated interest rates of 3% per month and higher are excessive, iniquitous, unconscionable and exorbitant. Such stipulations are void for being contrary to morals, if not against the law. While Central Bank Circular No. 905-82[9] effectively removed the ceiling on interest rates for both secured and unsecured loans, regardless of maturity, it did not grant a carte blanch authority to lenders to raise interest rates to levels which would either enslave their borrowers or lead to a hemorrhaging of their assets.[10] Consequently, the Court reduces such interest to 1% per month or 12% per annum.
WHEREFORE, the Court PARTIALLY GRANTS the petition and MODIFIES the Decision dated September 26, 2006 and the Resolution dated January 2, 2007 of the Court of Appeals in CA-G.R. SP 94013, such that petitioners Miguel and Julieta Soriano are ordered to pay, jointly and severally, respondent Bank of the Philippine Islands (1) P130,650.00 with interest at 1% per month from October 13, 2000 until the finality of this Decision and thereafter 12%o interest per annum until full payment; (2) an amount equivalent to 10% of the total amount due as attorney's fees; and (3) the costs of suit.
SO ORDERED.
WITNESS the Honorable Antonio T. Carpio, Chairperson, Honorable Teresita Leonardo-De Castro (designated additional member per S.O. No. 776), Arturo D. Brion, Mariano C. Del Castillo and Roberto A. Abad, Members, Second Division, this 16th day of November, 2009.
G.R. No. 176143 (Miguel P. Soriano, Jr. and Julieta B. Soriano v. Bank of the Philippine Islands).
Sometime in July 1993 petitioner Miguel P. Soriano, Jr. bought a car through a loan of P482,400.00, payable at P10,050.00 with 3% interest per month. To secure payment, he constituted a chattel mortgage on the car. The car dealer then assigned its rights in the chattel mortgage to Far East Bank & Trust Company (FEBTC).
On December 9, 1999 FEBTC sent a demand letter to petitioners Miguel and Julieta Soriano (the Sorianos) for the payment of P367,126.50 that was due as of November 1999 within five days from notice or for the surrender of the car.
Meanwhile, FEBTC merged with respondent Bank of the Philippine Islands (BPI), with the latter as the surviving entity. On October 13, 2000 respondent BPI sent another demand letter to the Sorianos, this time for the lesser amount of P209,241.18 representing their unpaid balance. Since the demand was unheeded, on January 8, 2001 the bank filed a complaint for replevin and damages against the Sorianos before the Metropolitan Trial Court (MeTC) of Manila. The bank claimed that the Sorianos defaulted in their obligations by failing to pay the last 21 installments from November 15, 1995 to July 15, 1997 despite repeated demands.
While the Sorianos admitted in their answer that they still had unpaid installments, they claimed that they were justified in suspending payments. They opened an automatic debit arrangement with FEBTC to cover their monthly payments but, despite repeated requests, the bank's car loan division gave them no receipt covering the payments made from July 1993 to March 1997. Upon the advice of the bank's branch manager, the Sorianos suspended their payments for the period April to July 1997 pending issuance of the receipts they needed. In December 1999 FEBTC demanded payment of P367,126.50 representing their alleged unpaid balance. Replying to the demand, the Sorianos questioned the computation. They also asked for an itemized statement of account but got none. They denied receiving the second demand dated October 13, 2000 for the lesser amount of P209,241.18.
In the course of trial, respondent BPI no longer pressed for the issuance of the writ of replevin.
On November 2, 2004 the MeTC rendered a decision, ordering the Sorianos, jointly and severally, to pay respondent BPI P209,241.18 with interest of 3% per month from October 13, 2000 until their obligation shall have been fully paid, 10% of the total amount due as attorney's fees, and the costs of suit.[1]
On appeal, the Regional Trial Court (RTC) of Manila,[2] modified the MeTC decision.[3] It noted that based on respondent BPI's subsidiary ledger, the Sorianos paid their monthly installments until June 21, 1996, leaving only 13 unpaid installments. While affirming the MeTC decision, it ordered the Sorianos to pay the bank only P130,650.00 with interest of 3% per month from October 13, 2000 until they shall have fully paid the judgment debt.[4] On appeal by the Sorianos, the Court of Appeals affirmed the decision of the RTC, prompting them to take recourse to this Court.
The Sorianos present the following issues before this Court: (1). whether or not they, as debtors, had the burden of proving payment; (2) whether or not respondent bank's subsidiary ledger, a mere photocopy, is admissible in evidence to prove non-payment of subsequent installments; and (3) whether or not the Sorianos can be made liable to pay interest of 3% per month or 36% per annum on their unpaid balance.[5]
One. The Sorianos assail the Court of Appeals decision for holding that they failed to discharge their burden of proving payment of the balance of their loan.
But the Sorianos admitted in their answer to the complaint that they still had unpaid monthly installments owing respondent bank. What they dispute, however, is the amount they have not yet paid. Respondent bank presented its subsidiary ledger showing that the Sorianos paid their monthly installments only up to June 21, 1996, leaving 13 unpaid monthly installments from July 1996 to July 21, 1997. The Sorianos claim, on the other hand, that they have only four unpaid installments from April 1997 to July 1997. Since the Sorianos alleged having paid more than what respondent bank was willing to admit, it was incumbent upon them to prove such affirmative allegation.
Jurisprudence abounds that in civil cases, the party who alleges a fact has the burden of proving it. Thus, a party who pleads payment as a defense has the burden of proving that such payment has, in fact, been made. When the plaintiff alleges non-payment, still, the general rule is that the burden rests on the defendant, who has admitted the basic obligation, to prove payment rather than on the plaintiff to prove non-payment.[6] Here, the Sorianos miserably failed in this respect. They did not present evidence of their automatic debit arrangement with FEBTC, of the official receipts of their monthly payments, or even of their passbook. Neither have they shown any written requests to respondent bank to furnish them with official receipts or a statement of account.
The Court finds petitioners' reliance in Citibank, N.A. Mastercard v. Teodoro[7]misplaced. In Citibank, the bank failed to prove that defendant owed it P24,388.36 since it presented only the photocopies of the original sales invoices. These photocopies were inadmissible in evidence. Here, however, the bank established the existence of the Sorianos' indebtedness both by the evidence and the admission of the parties. Indeed, the Sorianos acknowledged that they still had unpaid monthly installments. They even adopted as their own evidence respondent bank's subsidiary ledger that was presented to prove the unpaid balance of the loan.
Two. The Sorianos argue that respondent bank's subsidiary ledger, a mere photocopy, should not have been given consideration since no witness who prepared and has custody of it identified it and since it was not offered in evidence.
But the Sorianos were the very ones who offered the ledger in evidence, adopting it as their own to prove that they already paid the monthly installments until June 21, 1996. Yet, they would now reject the ledger for not reflecting their subsequent payments. The Court cannot allow petitioners to use the ledger where it benefits them and to reject the same when it is adverse to them.[8] Besides, petitioners raised this issue only after the RTC had already modified the MeTC decision.
Three. On the matter of interest, the Court has repeatedly ruled that stipulated interest rates of 3% per month and higher are excessive, iniquitous, unconscionable and exorbitant. Such stipulations are void for being contrary to morals, if not against the law. While Central Bank Circular No. 905-82[9] effectively removed the ceiling on interest rates for both secured and unsecured loans, regardless of maturity, it did not grant a carte blanch authority to lenders to raise interest rates to levels which would either enslave their borrowers or lead to a hemorrhaging of their assets.[10] Consequently, the Court reduces such interest to 1% per month or 12% per annum.
WHEREFORE, the Court PARTIALLY GRANTS the petition and MODIFIES the Decision dated September 26, 2006 and the Resolution dated January 2, 2007 of the Court of Appeals in CA-G.R. SP 94013, such that petitioners Miguel and Julieta Soriano are ordered to pay, jointly and severally, respondent Bank of the Philippine Islands (1) P130,650.00 with interest at 1% per month from October 13, 2000 until the finality of this Decision and thereafter 12%o interest per annum until full payment; (2) an amount equivalent to 10% of the total amount due as attorney's fees; and (3) the costs of suit.
SO ORDERED.
WITNESS the Honorable Antonio T. Carpio, Chairperson, Honorable Teresita Leonardo-De Castro (designated additional member per S.O. No. 776), Arturo D. Brion, Mariano C. Del Castillo and Roberto A. Abad, Members, Second Division, this 16th day of November, 2009.
Very truly yours,
(Sgd.) MA. LUISA L. LAUREA
Clerk of Court
(Sgd.) MA. LUISA L. LAUREA
Clerk of Court
Endnotes:
[1] Rollo, p.94.
[2] Branch 173 in Civil Case 05-111730.
[3] Rollo, pp. 124-133. Penned by Judge Rosario C. Cruz.
[4] Id. at 133.
[5] Id. at 23-24.
[6] Royal Cargo Corporation v. DFS Sports Unlimited, Inc., G.R. No. 158621, December 10, 2008, 573 SCRA 414, 422; Co v. Admiral United Savings Bank, G.R. No. 154740, April 16, 2008, 551 SCRA 472, 480.
[7] 458 Phil. 480 (2003).
[8] Golden (Iloilo) Delta Sales Corporation v. Pre-Stress International Corporation, G.R. No. 176768, January 12, 2009, 576 SCRA 23, 37.
[9] Effective on January 1, 1983.
[10] Taring v. Gamon-Olan, G.R. No. 168782, October 10, 2008, 568 SCRA 376, 383; Chua v. Timan, G.R. No. 170452, August 13, 2008, 562 SCRA 146, 150; See also Poltan v. BPI Family Savings Bank, Inc.. G.R. No. 164307, March 5, 2007, 517 SCRA 430.
