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Concepcion v. Court of Appeals, et al., G.R. No. 122079, June 27, 1997, 274 SCRA614.

FACTS:

Home Savings Bank and Trust Company (now Insular Life granted to t!e Con"ep"ionsa #$%&''%''''' loan T!e latter e)e"uted in favor of t!e *ank a promissory note and areal estate mortgage over t!eir property in San +uan% ,etro ,anila T!ereafter% t!e *ankunilaterally in"reased t!e interest rate from $-. to /$. effe"tive $0 Fe*ruary $12'3from /$. to 4'. effe"tive $0 5"to*er $12&3 and from 4'. to 42. effe"tive $06ovem*er $12& In $127% t!e *ank8s #resident demanded from t!e Con"ep"ionspayment of t!e arrearages% *ut t!e latter failed to pay T!e *ank finally filed wit! t!eS!eriff of #asig City a petition for e)tra9udi"ial fore"losure of t!e real estate mortgaget!at t!ey e)e"uted  A noti"e of sale was issued on $7 ,ay $12- T!e Con"ep"ions%una*le to e)er"ise t!eir rig!t of redemption% lost t!e property to t!e *ank w!i"!"onsolidated t!e title over t!e property and !ad a new "ertifi"ate of title issued in t!e

name of Home Savings Bank and Trust Company In $120% t!e *ank e)e"uted a eedof A*solute Sale in favor of Asa9e ;ealty Corporation and a new "ertifi"ate of title wasissued ,eanw!ile% on /1 +uly $120% t!e Con"ep"ions filed an a"tion against HomeSavings Bank% for t!e "an"ellation of t!e fore"losure sale% t!e de"laration of nullity of t!e "onsolidation of title in favor of t!e *ank% and t!e de"laration of nullity of t!eunilateral in"reases of t!e interest rates on t!eir loan

ISS<=:>56 t!e es"alation "lause in t!eir mortgage "ontra"t valid?

H=L:

Some "ontra"ts "ontain w!at is known as an @es"alator "lause%8 w!i"! is defined as onein w!i"! t!e "ontra"t fi)es a *ase pri"e *ut "ontains a provision t!at in t!e event of spe"ified "ost in"reases% t!e seller or "ontra"tor may raise t!e pri"e up to a fi)edper"entage of t!e *ase Atta"ks on su"! a "lause !ave usually *een *ased on t!e "laimt!at% *e"ause of t!e open pri"eprovision% t!e "ontra"t was too indefinite to *eenfor"ea*le and did not eviden"e an a"tual meeting of t!e minds of t!e parties% or t!att!e arrangement left t!e pri"e to *e determined ar*itrarily *y one party so t!at t!e"ontra"t la"ked mutuality However% t!e SC generally up!eld its validity 6onet!eless%an es"alation "lause at *en"! w!i"! gives t!e *ank un*ridled rig!tto unilaterally upwardly ad9ust t!e interest on private respondents8 loan isun"ons"iona*le% as it would "ompletely take away from mortgagees t!e rig!t to assentto an important modifi"ation in t!eir agreement% and would negate t!e element of mutuality in "ontra"ts

anco!ilipino Savin"s an# $ort"a"e an% vs. &on. Navarro an# 'el (alle, G.R.No. )*46+91, 2 Jul- 197, 1+2 SCRA 46.

FACTS:

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el alle% t!e *orrower% o*tained a loan se"ured *y a real estate mortgage from Ban"oFilipino amounting to #&$%4'''' Said loan still !ad more t!an 04' days to run *y+anuary /% $10-% t!e date w!en CI;C<LA; 6o &1& was issued *y t!e Central BankStamped on t!e promissory note is an =s"alation Clause *ased upon a*ove mentionedCentral Bank "ir"ular In lieu of t!e said "ir"ular% Ban"o Filipino gave noti"e to el alle

of t!e in"rease of interest rate on t!e loan from $/. to $0. per annum effe"tive on,ar"! $% $10- Answering el alles Duery as to w!y was t!ere an in"rease in t!einterest rate% Ban"o Filipino wrote a letter in Septem*er /&% $10-% stating t!at it wasin"reased *y virtue of t!e es"alation "lause atta"!ed to t!eir "ontra"t and in lieu of CI;C<LA; 6o &1&

ISS<=:>56 Ban"o Filipino may validly in"rease t!e rate of its interest pursuant to t!ees"alation "lause in t!e "ontra"t and in lig!t of Central Bank Cir"ular 6o &1&% w!i"!was given a retroa"tive effe"t in t!is "ase?

H=L:T!e su*stantial Duestion in t!is "ase is not really w!et!er t!e =s"alation Clause is avalid or void stipulation% *ut w!et!er t!e *ank "an in"rease t!e interest rate on t!eL5A6 from $/. to $0. per annum under t!e =s"alation Clause T!e SC !eld in t!enegative T!e es"alation "lause in t!e "ontra"t provides t!at t!e interest rate may *ein"reased Ein t!e event a laws!ould *e ena"ted in"reasing t!e lawful rate of interest t!atmay *e "!arged on t!is parti"ular kind of loanE Said "lause was dependent on anin"rease of rate made *y ElawE alone Cir"ular 6o &1& of t!e ,onetary Board was nott!e ElawE "ontemplated *y t!e parties% nor s!ould said Cir"ular *e !eld as appli"a*le toloans se"ured *y registered real estate in t!e a*sen"e of any su"! spe"ifi" indi"ationand in "ontravention of t!e poli"y *e!ind t!e <sury Law

/ilippine National an% vs. Court of Appeals an# Arosio /a#illa, G.R. No.0, 0 April 1991, 196 SCRA +6.

FACTS:In +uly $12/% #adilla applied for and was granted *y #6B% a "redit line of 4/$2 million%se"ured *y a real estate mortgage% for a term of two (/ years% wit! $2. interest per annum However% in a span of four mont!s% #6B in"reased t!e interest rate% from $2.to &2. #adilla% al*eit "omplying wit! t!e *anks "onditions% registered !is protests asregards t!e in"rease in t!e rates #6 insists t!at said in"reases are valid and inpursuant to t!e es"alation "lause in t!e "ontra"t w!i"! was a""eded to *y #adilla

ISS<=:>!et!er t!e *ank% wit!in t!e term of t!e loan w!i"! it granted to t!e private respondent%may unilaterally "!ange or in"rease t!e interest rate stipulated t!erein at will and asoften as it pleased?

H=L:

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T!e SC !eld in t!e negative Alt!oug! Se"tion / of # 6o $$- aut!ories t!e,onetary Board to pres"ri*e t!e ma)imum rate or rates of interest for loans or renewalt!ereof and to "!ange su"! rate or rates w!enever warranted *y prevailing e"onomi"and so"ial "onditions% it e)pressly provides t!at Esu"! "!anges s!all not *e madeoftener t!an on"e every twelve mont!sE In t!is "ase% #6B% over t!e o*9e"tion of t!e

private respondent% and wit!out aut!ority from t!e ,onetary Board% wit!in a period of only four (& mont!s% in"reased t!e $2. interest rate on t!e private respondents loano*ligation t!ree (4 times As pointed out *y CA% w!ile #adilla did agree t!at t!e interestrate may *e in"reased during t!e life of t!e "ontra"t% su"! in"rease must *e wit!in t!erate allowed *y law% *ut% no law was ever passed in +uly to 6ovem*er $12& in"reasingt!e interest rates on loans or renewals t!ereof Hen"e% t!e su*seDuent in"reases fromt!e $2. interest rate *en"!mark is !eld invalid

/3 v. Court of Appeals, G.R. No. 9717, Januar- 10, 1994, 299 SCRA 22

FACTS:B#I filed wit! ;TC #asig a "omplaint against ;u*y Industrial Corporation (;<BG% for fore"losure of real estate mortgage ;<BG su*mitted to t!e trial "ourt a motion for suspension of t!e pro"eedings on t!e ground t!at on $12&% S=C issued an 5rder pla"ing ;<BG under a re!a*ilitation plan 5n $1 e"em*er $12&% t!e trial "ourt issuedan order granting t!e motion of ;<BG and suspended t!e pro"eedings 5n 4$ +uly$11'% petitioner B#I filed a motion for reopening of t!e pro"eedings However% on //

 August $11'% t!e trial "ourt denied t!e motion of B#I% !olding t!at t!e suspension of payment applies to all "reditors% w!et!er se"ured or unse"ured% in order to pla"e t!emon eDual footing 5n appeal% CA affirmed t!e trial "ourt

ISS<=:>!et!er petitioner% w!i"! is a se"ured "reditor of respondent ;<BG% may still 9udi"iallyenfor"e its "laim against t!e latter w!i"! !as already *een pla"ed *y S=C under re!a*ilitation?

H=L:T!e SC !eld in t!e negative It was already esta*lis!ed under e)isting 9urispruden"est!at w!enever a distressed "orporation asks S=C for re!a*ilitation and suspension of payments% preferred "reditors may no longer assert su"! preferen"e% *ut s!all stand oneDual footing wit! ot!er "reditors Fore"losure s!all *e disallowed so as not to pre9udi"eot!er "reditors or "ause dis"rimination among t!em T!e rationale *e!ind # 1'/A% asamended% is to effe"t a feasi*le and via*le re!a*ilitation T!is "annot *e a"!ieved if one"reditor is preferred over t!e ot!ers

uintos vs. ec% G.R. No. )*46240, Nov. , 199, 69 /il 10

FACTS:

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Be"k is a tenant of uintos In t!eir "ontra"t of lease renewal% it was stipulated t!ereint!at uintos gratuitously granted Be"k t!e use of furniture t!at were spe"ified% providedt!at t!e latter would return it to !im on"e t!e former reDuired !im to do so In $14-%uintos sold t!e property to t!e Lopees >!en uintos was demanding t!e furniture*a"k% Be"k stated t!at !e "ould not return t!e t!ree gas !eaters and & ele"tri" lamps to

uintos until t!e end of t!eir lease "ontra"t Before va"ating t!e !ouse% Be"k "onsignedt!e furniture to t!e s!eriff w!en uintos refused to re"eive all t!e furniture on t!epremise t!at t!ey werent "omplete

ISS<=:>!at kind of "ontra"t e)ists and w!at are Be"ks o*ligations in relation to t!e said"ontra"t?

H=L: A "ontra"t of "ommodatumparti"ulary% t!at of pre"ariume)ists In pre"arium% t!epermissive use of a mova*le was granted *y t!e *ailor to t!e *ailee on t!e "ondition

t!at t!e *ailor may demand t!e property loaned at will I6 t!is "ase% t!e *alieeso*ligation is to return t!e property loaned

In t!is "ase% Be"k was ordered to deliver to t!e residen"e of uintos all t!e furniture Alle)penses in relation to t!e safekeeping and delivery of t!e furniture s!all *e *orne *ydefendant

5ata vs. 3ntere#iate Appellate Court et. Al.G.R. No. )*72714, June 29, 199, 174SCRA 464

FACTS:

=mata pur"!ased a "ar on installment from iolago ,otor wit! a down payment of #$&%12/'' and e)e"uted in favor of t!e seller a promissory note and a "!attel mortgageover t!e "ar as se"urity for t!e payment of t!e note T!e total amount t!at t!e petitioner was supposed to pay was # 0/%$2-''% wit! # 70%/'&'' as t!e *alan"e after dedu"tingt!e down payment T!e total amount paya*le was # //%/&-'' more t!an t!e Elist "as!pri"eE of # &1%1&''' for said ve!i"le iolago endorsed t!e promissory note andassigned t!e "!attel mortgage to Filinvest Credit Corp upon its payment of t!e unpaid*alan"e of t!e "ars list pri"e T!ree years later% Filinvest assigned to private respondentServi"ewide Spe"ialists% In" t!e remaining installment *alan"e Alleging nonpaymentof five (7 "onse"utive installments% Servi"ewide initiated said "ase in t!e ;TC for a writof replevin or for t!e payment *y petitioner of t!e remaining *alan"e plus $&. interestper annum until fully paid =mata disputes t!e vera"ity of t!e promissory note% statingt!at t!e same was made t!roug! fraud% de"eit% tri"kery and misrepresentation3 said"!attel mortgage was e)e"uted to se"ure !is remaining *alan"e wit! Filinvest% and t!at!e !ad already paid% al*eit overpaid% !is *alan"e He avers t!at t!e e)or*itant ratesgiven *y Filnvest is violative of t!e <sury Law

ISS<S:>56 t!e Law in <sury is still in effe"t?

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H=L:<sury Law% A"t 6o /-77% is not appli"a*le t!ereto T!e amount added to t!e "as! pri"eof t!e "ar is w!at is "ommonly known as t!e Etime pri"e differentialE and not interestwit!in t!e meaning of t!e <sury Law T!e law is appli"a*le only in "ase of a loan or 

for*earan"e of money% goods or "redit w!i"! is not t!e "ase !ere T!e transa"tioninvolved !ere *eing admittedly a "onditional sale *ased on an installment plan and not aloan% it !as *een !eld t!at t!e alleged in"rease in t!e pri"e of t!e arti"le sold "annot *e"onsidered a mere prete)t to "over a usurious loan