evelyn j. sangrador, joined by her husband rodrigo sangrador, sr., petitioners,

7/25/2019 Evelyn j. Sangrador, Joined by Her Husband Rodrigo Sangrador, Sr., Petitioners,

1/8

G.R. No. 79552 November 29, 1988

EVELYN J. SANGRADOR, joined b !er !"#b$nd RODR%GO SANGRADOR, SR., petitioners,

vs.

S&O'SES (RAN)%S)O VALDERRA*A $nd +ERES%+A *. VALDERRA*A, respondents.

Enrique G. Arguelles for petitioners.

Rex Suiza Castillon for respondents.

&AD%LLA, J.:

This is a petition for review on certiorari of the decision 1of the Court of Appeals in CA-G.R. CV No. 0881, dated 1 Au!ust 1"8#, which

$odified the decision 2of the Re!ional Trial Court of %loilo Cit&, 'ranch ((%%%, in Civil Case No. 1)*10, entitled +vel&n . an!rador, /oined &

her husand, Rodri!o an!rador, laintiffs, versus pouses 2rancisco Valderra$a and Teresita Valderra$a, 3efendants.+

The factual ac4!round of the case is narrated in the decision of the Court of Appeals as follows5

6n April 11, 1"8 the defendants-spouses 2rancisco and Teresita Valderra$a otained a 700,000 loan fro$ anuel Asencio pa&ale on

or efore April 1*, 1"89, and secured & a real estate $ort!a!e on their house and lot :actuall& lots; in front of the aro la


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This note is secured & a Real state ort!a!e over three :; parcels of residential land, @ots #00, #01 and #70, of the Cadastral urve&

of aro, covered & TCT Nos. T-91#1", T91#*1 and T-91#*0, respectivel&, of the Re!istr& of 3eeds for the Cit& of %loilo, to!ether with the

i$prove$ents thereon.

%n case of /udicial e=ecution of this oli!ation or an& part thereof, the detors waive all their ri!hts under the provisions of Rule ", ec.

1*, of the Rules of Court.

(CT3 in the Cit& of %loilo, hilippines, on this )th da& of April 1"89.

:G3; TR%TA 6NT%N6@A-VA@3RRAA

a4er

:G3; 2RANC%C6 VA@3RRAA

a4er

i!ned in the presence of.

:ille!ile; :ille!ile;

:=h. ';

The detors alle!e that the a$ount actuall& received & the$ was onl& 1,000,000 the disposition of which was ite$iilson esena a, on a $e$o pad of +esena Realt&+ as follows5

2ro$ the des4 of5

RA@T6R >%@6N G. esena, r.

resident E Gen. ana!er

(N

)*7,000.00Fanuel Asencio70,000.00FCo$$ission 'o&

9,000.00FAtt&. Ar!uelles

1,"8.)"FTransfer feesF

Re!ister of 3eeds and '.%.R.

)"*,"8.)"

1,000,000.00

F )"*,"8.)"

0#,)01.90 F 'alance :=h. 1;

Accordin!l&, a rudential 'an4 Cashier?s chec4 for )*7,000 was issued & an!rador to Asencio to redee$ the defendants? propert&

fro$ hi$. A receipt for that chec4 was issued & the Valderra$as to the plaintiff as follows5

R C % T

3ate April ), 1"89

Received fro$ V@BN NA ANGRA36R the a$ount of %( N3R3 T>NTB 2%V T6AN3 6 :)*7,000.00;

'an4 Prudential Bank Cashier's Check o. !"#$%. The alance of TR N3R3 VNTB 2%V T6AN3 6


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:#7,000.00; is to e paid to the undersi!ned after deductin! all e=penses incurred in pa&$ent of real estate ta=es, attorne&?s fees,

co$$ission, 'ureau of %nternal Revenue fees and Re!ister of 3eeds fees. All e=penses are to e supported & receipts.

:G3; 2RANC%C6 :G3; TR%TA 6NT%N6@A- VA@3RRAA VA@3RRAA

:=h. *;

laintiff vel&n an!rador $ade a list of the e=penses char!eale to the detors :=h. 7; and su$itted it to the$ :** t.s.n., a& #,

1"87;. a&$ent of Att&. Ar!uelles? attorne&?s fees was dul& ac4nowled!ed & hi$ :=h. 8;. esena issued the followin! receipt to the

defendants for his 7 co$$ission in procurin! the loan for the$H

R C % T

Received fro$ pouses 2rancisco Valderra$a and Teresita ontinola Valderra$a the a$ount of 2%2TB T6AN3 6

:70,000.00; representin! co$$ission for $& efforts and e=pertise in effectin! the procure$ent of a loan fro$ a financier for the a$ount

of 6N %@@%6N 6 :1,000,000.00;.

:G3; RA@T6R >%@6N NA, R.

R' @icense No. 991-R

:=h. ;

The alance of 0#,)01.90 was paid to the defendants & $eans of another rudential 'an4 chec4 for which the correspondin! receipt

:=h. 9; was also si!ned & the $ort!a!ors5

R C % T

April #, 1"89

Received fro$ V@BN . ANGRA36R the a$ount of TR N3R3 VN T6AN3 %( N3R3 6N 6 AN3

26RTB CNTAV6 :0#,)01.90; representin! full pa&$ent per ro$issor& Note dated April ),1"89.

:G3; 2RANC%C6 :G3; TR%TA 6NT%N6@A- VA@3RRAA VA@3RRAA

aid &Frudential 'an4 Ch4.

I19978-*FApril #, 1"89 0#,)01.90

cJo I00-000**-0 paid &Fvel&n . an!rador

:=h. 9;

vel&n an!rador ad$itted that the receipts :=hs. * and 9; were issued to her & the defendants :19, *1 t.s.n., a& #, 1"87;.

>hen the defendants failed to pa& the su$ of 1,900,000 stated in the pro$issor& note on 3ece$er ), 1"89 despite the plaintiffs?written de$ands :=hs. C and 3; a co$plaint for /udicial foreclosure of the real estate $ort!a!e was filed a!ainst the$ on 3ece$er *1,

1"89.

:=h. G;.

The defendants in their answer denied that the loan was 1,900,000. The& alle!ed that it was onl& 1,000,000.00 and that the additional

900,000 represented usurious interest.


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At the trial, the plaintiff testified that the su$ of 1,900,000 was received & the defendants. he alle!ed that esides the e=penses of

)#,"8.)" ite$i


5/8

. T%R3 A%GN3 RR6R5

T 6N6RA'@ C6RT 62 AA@ RR3 %N R3C%NG T%T%6NR? A>AR3 62 ATT6RNB? 2 T6 70,000.00

%NTA3 62 *0 62 T T6TA@ %N3'T3N A 26N3 'B T TR%A@ C6RT. 7

The pivotal issue to e resolved in this case is whether or not the loan otained & private respondents fro$ petitioners was in the a$ount of

1,900,000.00 or 1,000,000.00 onl&.

%n resolvin! this issue, the Court of Appeals in its decision under review, held5

After carefull& reviewin! the evidence, >e are convinced that the trial court erred in findin! that the loan was 1,900,000 as stated in

the pro$issor& note :=h. '; and deed of $ort!a!e. @i4e the trial court, >e do not elieve defendant Valderra$a?s alle!ation that he

did not notice that the a$ount stated in the pro$issor& note was 1,900,000, instead of onl& 1,000,000, until de$ands for pa&$ent

were sent to hi$ & the plaintiffs? counsel. 'ut neither do >e elieve the p laintiff vel&n an!rador?s alle!ation that esides the su$ of

1,000,000 ad$ittedl& received & the defendants and evidenced & chec4s and receipts, she also !ave the$ 900,000.00 in cash

without receipt. This is a case, therefore, where oth parties prevaricated.

The docu$entar& evidence preponderantl& proves that the loan was onl& 1,000,000, not 1,900,000. The chec4s and receipts and

the ro4er?s co$putations found in =hiit ?l? show clearl& that the loan was onl& 1,000,000. ven the ro4er?s 70,000 co$$issionwas co$puted on the asis of 7 of 1 $illion. The circu$stance that the alle!ed pa&$ent of 900,000 in cash to the detors is not

evidenced & a receipt, is conclusive proof that it was not a part of the loan. The loan was onl& 1 $illion.

6viousl&, the 900,000 that was added to the principal represents a hidden interest char!e for the pro$issor& note contains no

e=press provision fi=in! the rate of interest on the loan. 8

etitioners assail the fore!oin! findin!s and conclusions of the Court of Appeals, contendin! that the a$ount of the loan as clearl& and

e=pressl& stated in the 3eed of Real state ort!a!e 9and the ro$issor& Note, 1/is 1,900,000.00 and not 1,000,000.00 onl&.

'ecause the findin!s of the trial court and the Court of Appeals differ on this crucial factual issue, we have carefull& reviewed and e=a$ined the

evidence. The findin! of the Court of Appeals that the loan is in the a$ount of 1,000,000.00 onl& is supported & sustantial evidence.

The ro$issor& Note :=h- '; and the 3eed of Real state ort!a!e :=h. A; e=ecuted & the respondents in favor of the petitioners indeed

state that the loan is in the a$ount of 1,900,000.00. owever, the other docu$ents e=ecuted & the parties conte$poraneousl& with said

ro$issor& Note and 3eed of Real state ort!a!e clearl& show that the actual loan, i.e. the a$ount received & respondents, was onl&

1,000,000.00. Thus, for the pa&$ent $ade & the petitioners for the account of the respondents to anuel Asencio, there& releasin! the

$ort!a!e on the propert&, so that it could in turn e $ort!a!ed to the petitioners, the respondents si!ned a receipt in favor of the petitioners in

the a$ount of )*7,000.00 :=h. *;. The respondents e=ecuted another receipt in favor of the petitioners for the a$ount of 0#,)01.90,+

representin! full pa&$ent per pro$issor& note dated ) April 1"89+ :=h. 9;. The ro4er who arran!ed for the loan si!ned a receipt in favor of

the respondents for the a$ount of 70,000.00 representin! his co$$ission in effectin! the loan +for the a$ount of 1,000,000.00+ :=h.

;.&re((an)*!+,- The attorne& who assisted in the transaction was paid attorne&?s fees in the a$ount of 9,000.00 :=h. 8;. The petitioners

su$itted a list of e=penses char!eale to the respondents, totallin! 1,"8.)" coverin! transfer fees, e=penses in the Re!ister of 3eeds and

pa&$ents to the '%R :=h. 7;. All told, the loan of 1,000,000.00 otained & the respondents fro$ the petitioners was applied or used in the

followin! $anner at the ti$e the loan was otained5

)*7,00.00 F to pa& anuel Asencio :first creditor;

70,000.00 F to pa& >ilson esena :for ro4er?s co$$ission;

9,000.00 F to pa& Att&. nriKue Ar!uelles :for attorne&?s fees;

1,"8.)" F to pa& transfer fees and other e=penses in Re!ister of 3eeds and '%R

0#,)01.90 F to pa& respondents as alance of the loan

1,000,000.0" T6TA@


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The aove ite$iilson esena :=h. 1;.

etitioners contend that over and aove the 1,000,000.00, the a$ount of 900,000.00 was delivered & the$ to the respondents in cash and

that this deliver& was not evidenced & a receipt ecause, an&wa&, said a$ount :900,000.00; is alread& included in the state$ent of the loan

a$ount in the pro$issor& note and the deed of real estate $ort!a!e, which is 1,900,000.00. >e find this contention to e Kuite incredile, to

sa& the least. %t is contrar& to ordinar& hu$an e=perience. Nor$all&, in deliverin! a heft& su$ li4e 900,000.00 in cash, one would reKuire so$e

sort of receipt or ac4nowled!$ent fro$ the recipient.

oreover, if petitioners were careful enou!h to reKuire fro$ the respondents the separate receipts aove-$entioned, there was no reason wh&

the& would not reKuire another receipt fro$ the respondents for said a$ount of 900,000.00. And if, as petitioners now alle!e, the& did not

an&$ore reKuire a receipt for the 900,000.00 alle!edl& delivered & the$ in cash to the respondents ecause the loan a$ount stated in the

pro$issor& note and the real estate $ort!a!e alread& included said a$ount of 900,000.00, then, & the sa$e reasonin!, there was no need

for reKuirin! the other separate receipts aove$entionedFas the a$ounts the& referred to were alread& a part of the loan a$ount stated in the

pro$issor& note and real estate $ort!a!eFand &et, said separate receipts were reKuired & petitioners of the respondents.

%n short, we a!ree with the findin! of the Court of Appeals that the disputed a$ount of 900,000.00 was a hidden interestthat the petitioners

had reKuired the respondents to pa& at the $aturit& of the loan, ut said a$ount of 900,000.00 was not received & or delivered to the

respondents. This conclusion is stren!thened & the fact that the pro$issor& note and the deed of real estate $ort!a!e :=hs. ' and A;,

stran!el& enou!h, do not contain an& e=press stipulation on interest, or rate of interest, when the loan involved therein is in the sustantial

a$ount of alle!edl& 1,900,000.00.

etitioners $a& conceival& ar!ue that, !rantin! that the disputed a$ount of 900,000.00 is interest on the loan of 1,000,000.00, &et, in line

with this Court?s decision in ia/ a, 0s. 1riental Sa,/ill Co.2 et al., 11there is no lon!er an& ceilin! on interest or interest rates on loans. This

$a& e so in a situation where the parties openl& and e=pressl& a!ree on a specific rate of interest to accrue on the loan ut, as the Court of

Appeals in its decision under review correctl& pointed out, in the case at ar, no interest rate is e=pressl& stipulated in the pro$issor& note and

deed of real estate $ort!a!e. Circular No. "07 of the Central 'an4 dated 10 3ece$er 1"8* provides5

ection 1. 3he rate of interest, includin! co$$issions, pre$iu$s, fees and other char!es on a loan or forearance of an&

$one&, !oods, or credits, re!ardless of $aturit& and whether secured or unsecured, that /a4 5e charged or collected 54

an4 person, whether natural or /uridical, shall not 5e su56ect to an4 ceiling prescried under or pursuant to the sur& law,

as a$ended.

ection *. 3he rate of interest for the loan or forearance of an& $one&, !oods or credits and the rate allowed in

/ud!$ents, in the a5sence of express contract as to such rate of interest, shall continue to e twelve per cent :1 *; per

annu$. :$phasis supplied;

The rate of interest for loans or forearance of $one&, in the asence of e=press contract as to such rate of interest, shall continue therefore to

e twelve per cent :1*; per annu$. 12

Accordin!l&, the loan of 1,000,000.00 in the instant case should earn a twelve per cent :1*; interest per annu$ co$puted fro$ ) April 1"89

when the loan was otained & the respondents fro$ the pet itioners until paid.

etitioners also i$pu!n the Court of Appeals in nullif&in! the escalation clause in the 3eed of Real state ort!a!e and ro$issor& Note.

nder such escalation clause, sustained & the trial court, the a$ount of 7)",#18.)1 was awarded to herein petitioners & wa& of ad/ust$entof the loan of 1,900,000.00 after the ei!ht :8; $onth period of the loan. 1

The 3eed of Real state ort!a!e provides, a$on! others, as follows5

19. 3hat in the e0ent that an extra7ordinar4 inflation of the Philippine peso should super0ene, it is here& stipulated that

the value of the currenc& at the ti$e of the estalish$ent of the oli!ation shall e the asis of pa&$ent pursuant to Art.

1*70 of the New Civil Code of the hilippines. 2or this purpose, 6RTGAG6R here& reco!ni


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Peso shall 5e /ade should at the ti/e of the /aturit4 of this o5ligation2 the rate of exchange ,ill ha0e changed as a

result of the super0ening inflation. %t is further a!reed that the official rate of e=chan!e as set & the Central 'an4 for

private transactions shall e the asis of this ad/ust$ent. :$phasis supplied;.

A cursor& readin! of the aforeKuoted provision of the 3eed of Real state ort!a!e :si$ilar stipulation is contained in the ro$issor& Note;

shows that the escalation clause ta4es effect +in the event that an e=traordinar& inflation of the hilippine eso should supervene,+ etween the

date the loan was !ranted and the date of its $aturit&, in which case, the value of the :peso; currenc& at the ti$e of the estalish$ent of theoli!ation shall e the asis of pa&$ent. To !ive $eanin! to the +value of the currenc& at the ti$e of the estalish$ent of the oli!ation,+ the

parties a!reed that on ) April 1"89 :date of loan;, the e=chan!e rate of the peso to the dollar was 19.00* to one.

ConseKuentl&, under the aforesaid escalation clause, +:t;he correspondin! ad/ust$ent in the value of the hilippine eso+ at the $aturit& of the

oli!ation cruciall& depends upon the supervenin! of an e=traordinar& inflation in the sense conte$plated in Article 1*70 of the Civil Code of

the hilippines. 1-

%n 8ilipino Pipe and 8oundr4 Corporation 0s. ational 9ater,orks and Se,erage Authorit4, 15this Court held5

=traordinar& inflation e=ists when ?there is a decrease or increase in the purchasin! power of the hilippine currenc&

which is unusual or e&ond the co$$on fluctuation in the value of said currenc&, and such decrease or increase could

not have een reasonal& foreseen or was $anifestl& e&ond the conte$plation of the parties at the ti$e of the

estalish$ent of the oli!ation. :Tolentino Co$$entaries and urisprudence on the Civil Code Vol. %V, p. *89.;

An e=a$ple of e=traordinar& inflation is the followin! description of what happened to the deutsch$ar4 in 1"*05

ore recentl&, in the 1"*0?s Ger$an& e=perience a case of h&per-inflation. %n earl& 1"*1, the value

of the Ger$an $ar4 was 9.* to the .. dollar. '& a& of the sa$e &ear, it had stu$led to )* to

the .. dollar. And as prices went up rapidl&, so that & 6ctoer 1"*, it had reached 9.* trillion to

the .. dollarL :'ernardo . Ville!as E Victor R. Aola, cono$ics, An %ntroduction MThird dition.

As reported, +prices were !oin! up ever& wee4, then ever& da&, then ever& hour. >o$en were paid several ti$es a da&

so that the& could rush out and e=chan!e their $one& for so$ethin! of value efore what little purchasin! power was left

dissolved in their hands. o$e wor4ers tried to eat the constantl& risin! prices & throwin! their $one& out of the

windows to their waitin! wives, who would rush to unload the nearl& worthless paper. A posta!e sta$p cost $illions of

$ar4s and a loaf of read, illions,+ :idne& Ruter!, +The one& 'aloon+ New Bor4H i$on and chuster, 1"#7, p. 1",

cited in cono$ics, An %ntroduction & Ville!as E Aola, rd d.;

>hile appellant?s volu$inous records and statistics proved that there has een a decline in the purchasin! power of the

hilippine peso, this downward fall of the currenc& cannot e considered +e=traordinar&.+ %t is si$pl& a universal trend that

has not spared our countr&. 1

ince petitioners failed to prove the supervenin! of e=traordinar& inflation etween ) April 1"89 and # 3ece$er 1"89Fno proofs were

presented on how $uch, for instance, the price inde= of !oods and services had risen durin! the intervenin! periodFan e=traordinar& inflation

cannot e assu$edH conseKuentl&, there is no reason or asis, le!al or factual, for ad/ustin! the value of the hilippine eso in the settle$ent

of respondents? oli!ation.

2inall&, the Court of Appeals did not co$$it an& error in reducin! the award of attorne&?s fees to 70,000.00. The contractual provision for

attorne&?s fees $a& e $odified & the courts in the e=ercise of their sound /udicial discretion. 17

>R26R, the petition is 3N%3. The decision of the Court of Appeals dated 1* Au!ust 1"8# is A22%R3. >ith costs a!ainst

petitioners.

6 6R3R3.


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evelyn j. sangrador, joined by her husband rodrigo sangrador, sr., petitioners,

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