CABALLO VERDE PARA LA POESÍA

LOS ALIMENTOSLOS ALIMENTOS

G.R. No. 160107, 22 October 2014 BERSAMIN, J.

Facts: Herein Petitioner Spouses were employees of the Respondent BPI, Jaime being a Branch Manager and Evangeline a bank teller. On October 30, 1987, they availed themselves of a housing loan from BPI Family as one of the benefits extended to its employees. Their loan amounted to P273,000.00, and was covered by a Loan Agreement, whereby they agreed that the loan would be payable in 108 equal monthly amortizations of P3,277.57 starting on January 10, 1988 until December 10, 19963 and that the monthly amortizations would be deducted from his monthly salary.

To secure the payment of the loan, they executed a real estate mortgage in favor of BPI Family5 over the property situated in Bo. Ibayo, Marilao, Bulacan and covered by TCT No. T-30.827 (M) of the Register of Deeds of Bulacan.

The petitioner’s amortizations were regularly deducted from Jaime’s salary until he received a notice of termination from BPI. Evangeline also received notice of her termination. The notices of termination contain a demand for the full payment of the outstanding loan balance. The spouses both questioned their dismissal before the NLRC.

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About a year after their termination from employment, the petitioners received a demand letter dated January 28, 1991 from BPI Family’s counsel requiring them to pay their total outstanding obligation amounting to P221,534.50. In the meantime, BPI Family instituted a petition for the foreclosure of the real estate mortgage.

The petitioners received on March 6, 1991 the notice of extrajudicial foreclosure of mortgage dated February 21, 1991. To prevent the foreclosure of their property, the petitioners filed against the respondents their complaint for injunction and damages with application for preliminary injunction and restraining order in the RTC in Malolos, Bulacan. They therein alleged that their obligation was not yet due and demandable considering that the legality of their dismissal was still pending resolution by the labor court; hence, there was yet no basis for the foreclosure of the mortgaged property; and that the property sought to be foreclosed was a family dwelling in which they and their four children resided.

The RTC dismissed the spouses’ complaint. Subsequently, the CA promulgated its assailed decision affirming the judgment of the RTC in toto. The petitioners then filed their motion for reconsideration,²² in which they contended for the first time that their rights under Republic Act No.

6552 (Realty Installment Buyer Protection Act) had been disregarded, considering that Section 3 of the law entitled them to a grace period within which to settle their unpaid installments without interest.

The MR was denied.

Issue: Whether or not the foreclosure of the real estate mortgage on petitioners’ family home proper.

Held: Yes, the foreclosure of petitioner’s family home was proper.

Accordingly, the petitioners could not raise the applicability of Republic Act No. 6552, or the strict construction of the loan agreement for being a contract of adhesion as issues for the first time either in their motion for reconsideration or in their petition filed in this Court. To allow them to do so would violate the adverse parties’ right to fairness and due process.

It is well-settled that no question will be entertained on appeal unless it has been raised in the proceedings below. Points of law, theories, issues and arguments not brought to the attention of the lower court, administrative agency or quasi-judicial body, need not be considered by the viewing court, as they cannot be raised for the first time at that late stage. Basic considerations of fairness and due process impel this rule. Any issue raised for the first time on appeal is barred by estoppel.

Republic Act No. 6552 was enacted to protect buyers of real estate on installment payments against onerous and oppressive conditions. Having paid monthly amortizations for two years and four months, the petitioners now insist that they were entitled to the grace period within which to settle the unpaid amortizations without interest provided under Section 3, supra. Otherwise, the foreclosure of the mortgaged property should be deemed premature inasmuch as their obligation was not yet due and demandable.

The petitioners’ insistence would have been correct if the monthly amortizations being paid to BPI Family arose from a sale or financing of real estate. In their case, however, the monthly

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amortizations represented the installment payments of a housing loan that BPI Family had extended to them as an employee’s benefit. The monthly amortizations they were liable for was derived from a loan transaction, not a sale transaction, thereby giving rise to a lender-borrower relationship between BPI Family and the petitioners. It bears emphasizing that Republic Act No.

6552 aimed to protect buyers of real estate on installment payments, not borrowers or mortgagors who obtained a housing loan to pay the costs of their purchase of real estate and used the real estate as security for their loan. The “financing of real estate in installment payments” referred to in Section 3, supra, should be construed only as a mode of payment vis-à-vis the seller of the real estate, and excluded the concept of bank financing that was a type of loan.

Accordingly, Sections 3, 4 and 5, supra, must be read as to grant certain rights only to defaulting buyers of real estate on installment, which rights are properly demandable only against the seller of real estate.

There was basis to declare the petitioners’ entire outstanding loan obligation mature as to warrant the foreclosure of their mortgage. It is settled that foreclosure is valid only when the debtor is in default in the payment of his obligation. The petitioners, having signed a deed of mortgage in favor of appellee bank, appellants should have foreseen that when their principal obligation was not paid when due, the mortgagee has the right to foreclose the mortgage and to have the property seized and sold with a view to applying the proceeds to the payment of the principal obligation.

Petition DENIED.

By: TORRES, ALJEANE F.

FOREST HILLS GOLF AND COUNTRY CLUB, INC. vs. GARDPRO, INC..

G.R. No. 164686, 22 October 2014 BERSAMIN, J.

Facts: Petitioner Forest Hills Golf and Country Club, Inc. (interchangeably Forest Hills or Club), a non-profit stock corporation, was established to promote social, recreational and athletic activities among its members. Members. In March 1993, Fil-Estate Properties, Inc., a party to a Project Agreement to develop the Forest Hills Residential Estates and the Forest Hills Golf and Country Club, undertook to market the golf club shares of Forest Hills for a fee. In July 1995, Fil-Estate Properties, Inc. (FEPI) assigned its rights and obligations under the Project Agreement to Fil- Estate Golf and Development, Inc. (FEGDI).

In 1995, FEPI and FEGDI engaged Fil-Estate Marketing Associates Inc., (FEMAI) to market and offer for sale the shares of stocks of Forest Hills. President of FEMAI made it clear that membership in the Club was a privilege, such that purchasers of shares of stock would not automatically become members of the Club, but must apply for and comply with all the requirements in order to qualify them for membership, subject to the approval of the Board of Directors.

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In 1996, Gardpro, Inc. (Gardpro) bought class “C” common shares of stock, which were special corporate shares that entitled the registered owner to designate two nominees or representatives for membership in the Club. When the general manager of the club, notified the shareholders that they were already accepting applicants, Gardpro designated Fernando R. Martin and Rolando N. Reyes to be its corporate nominees; hence, the two applied for membership in the Club. Forest Hills charged them membership fees of P50,000.00 each, prompting Martin to immediately call up Albert and complain about being thus charged despite having been assured that no such fees would be collected from them. With Albert assuring that the fees were temporary, both nominees of Gardpro paid the fees.

Later, Gardpro decided to change its designated nominees, and Forest Hills charged Gardpro new membership fees of P75,000.00 per nominee. When Gardpro refused to pay, the replacement did not take place and for this, it filed a complaint before the SEC.

The Sec hearing officer decided in favor of Gardpro. SEC En Banc affirmed the findings of the hearing officer. The SEC En Banc found that what the by-laws authorizes is the collection of a

“transfer fee,” in such amount as may be prescribed by the Board, for every change in the designated nominees of a juridical entity (Art. II, Sec. 2.2 Subsection 2.2.2). This should be differentiated from the provision of Art. III, Sec. 13.6 of the By-laws, which authorizes the collection of “transfer fee” of P60,000 for corporate members for each transfer of stock in the club's books. The transfer fee under the former provision refers to the one imposed on the change in the corporate member's designated nominee only while the transfer fee under the latter provision refers to the a transfer of the stock itself from one corporate member to another which necessitates entry in the club's books. CA affirmed the findings of SEC.

Issue: Whether or not under the applicable provisions of law on the interpretation of contracts, the replacement nominees of Gardpro, Inc., who were applying for membership in Forest Hills, should pay the required membership fees.

Held: No, Forest Hills was not authorized under its articles of incorporation and by-laws to collect new membership fees for the replacement nominees of Gardpro.

Under Section 2.2.6 of the Club’s by-laws, membership fees of P45,000.00 must be paid by the applicant within 30 days from the approval of the application before the share could be registered in the Stock and Transfer Books of the Club. Non-payment of the membership fees within the 30-day period would be deemed a withdrawal of the application. The amount of the fees could be waived, increased or decreased by the Board of Directors. Pursuant to the Club’s articles of incorporation and by-laws, the membership fees should be paid by the corporate member. Based on the procedure set forth in Section 2.2.7 of the by-laws, the applicant was the juridical entity, not its nominee or nominees. Although the nominee or nominees also accomplished their application forms for membership in the Club, it was the corporate member that was obliged to pay the membership fees in its own capacity because the share was registered in its name in the Stock and Transfer Book.

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Golf clubs usually sell shares to individuals and juridical entities in order to raise capital for the construction of their recreational facilities. In that regard, golf clubs accept juridical entities to become regular members, and allow such entities to designate corporate nominees because only natural persons can enjoy the sports facilities. In the context of this arrangement, Gardpro’s two nominees held playing rights. But the articles of incorporation of Forest Hills and Section 2.2.2 of its by-laws recognized the right of the corporate member to replace the nominees, subject to the payment of the transfer fee in such amount as the Board of Directors determined for every change. The replacement could take place for any of the following reasons, namely: (a) if the nominee should cease to be an officer of the corporate member;24 or (b) if the corporate member should request the replacement. In case of a replacement, the playing rights would also be transferred to the new nominees.

According to the second paragraph of Section 13.6 of the by-laws, the transfer of playing rights entailed the payment of P10,000.00. Yet, Section 2.2.2 of the by-laws stipulated a transfer fee for every replacement. This warranted the conclusion that Gardpro should pay to Forest Hills the transfer fee of P10,000.00 because it desired to change its nominees. Also, there was inconsistency in the amounts of membership fees. On one hand, Section 13.7 (Membership Fees) of the by-laws stated that “the membership fee of Forty Five Thousand Pesos (P45,000.00) x x x for corporate members must be paid by the applicant;” on the other, Albert’s affidavit alleged that “each nominee shall pay the P75,000.00 membership fee.” To resolve the inconsistency, the by-laws should prevail because they constituted the private statutes of the corporation and its members and must be strictly complied with and applied to the letter.

The relevant provisions of the articles of incorporation and the bylaws of Forest Hills governed the relations of the parties as far as the issues between them were concerned.

Indeed, the articles of incorporation of Forest Hills defined its charter as a corporation and the contractual relationships between Forest Hills and the State, between its stockholders and the State, and between Forest Hills and its stockholder; hence, there could be no gainsaying that the contents of the articles of incorporation were binding not only on Forest Hills but also on its shareholders. The charter and the by-laws were thus the fundamental documents governing the conduct of Forest Hills’ corporate affairs; they established norms of procedure for exercising rights, and reflected the purposes and intentions of the incorporators. Until repealed, the by-laws were a continuing rule for the government of Forest Hills and its officers, the proper function being to regulate the transaction of the incidental business of Forest Hills. The bylaws constituted a binding contract as between Forest Hills and its members, and as between the members themselves. Every stockholder governed by the by-laws was entitled to access them.

In construing and applying the provisions of the articles of incorporation and the by-laws of Forest Hills, the CA has leaned on the plain meaning rule embodied in Article 1370 of the Civil Code, to the effect that if the terms of the contract are clear and leave no doubt upon the intention of the contracting parties, the literal meaning of its stipulations shall control. Our Held in Benguet Corporation, et al. v. Cesar Cabildo is instructive:

The cardinal rule in the interpretation of contracts is embodied in the first paragraph of Article 1370 of the Civil Code: “[i]f the terms of a contract are clear and leave no doubt upon the

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intention of the contracting parties, the literal meaning of its stipulations shall control.”

This provision is akin to the “plain meaning rule” applied by Pennsylvania courts, which assumes that the intent of the parties to an instrument is “embodied in the writing itself, and when the words are clear and unambiguous the intent is to be discovered only from the express language of the agreement.”

The process of interpreting a contract requires the court to make a preliminary inquiry as to whether the contract before it is ambiguous. A contract provision is ambiguous if it is susceptible of two reasonable alternative interpretations. Where the written terms of the contract are NOT AMBIGUOUS and can only be read one way, the court will interpret the contract as a matter of law. If the contract is determined to be ambiguous, then the interpretation of the contract is left to the court, to resolve the ambiguity in the light of the intrinsic evidence.

The CA was also guided by Article 1374 of the Civil Code, which declares that “[t]he various stipulations of a contract shall be interpreted together, attributing to the doubtful ones that sense which may result from all of them taken jointly.” Verily, all stipulations of the contract are considered and the whole agreement is rendered valid and enforceable, instead of treating some provisions as superfluous, void, or inoperable.

The Court AFFIRMS the decision promulgated on September 26, 2003.

By: TORRES, ALJEANE F.

Resma, Rivera, Rocero, San Andres, Siason-Contreras, Torres, Yu

November 2014

Resma, Rivera, Rocero, San Andres, Siason-Contreras, Torres, Yu

MCMP CONSTRUCTION CORP., vs. MONARK EQUIPMENT CORP..

G.R. No. 201001, November 10, 2014 VELASCO JR., J.:

Doctrine: Art. 1229. The judge shall equitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor. Even if there has been no performance, the penalty may also be reduced by the courts if it is iniquitous or unconscionable.

In exercising this power to determine what is iniquitous and unconscionable, courts must consider the circumstances of each case since what may be iniquitous and unconscionable in one may be totally just and equitable in another.

Facts: MCMP Construction Corporation (MCMP) leased heavy equipment from Monark Equipment Corporation (Monark) for various periods in 2000, the lease covered by a Rental Equipment Contract (Contract). Thus, Monark delivered five (5) pieces of heavy equipment to the project site of MCMP in Tanay, Rizal and Llavac, Quezon, the delivery evidenced by invoices as well as Documents Acknowledgment Receipt Nos. 04667 and 5706, received and signed by representatives of MCMP, namely, Jorge Samonte on December 5, 2000 and Rose Takahashi on January 29, 2001, respectively. Notably, the invoices state:

"Credit sales are payable within 30 days from the date of invoice. Customer agrees to pay interest at 24% p.a. on all amounts. In addition, customer agrees to pay a collection fee of 1% compounded monthly and 2% per month penalty charge for late payment on amounts overdue. Customer agrees to pay a sum equal to 25% of any amount due as attorney's fees in case of suit, and expressly submit to the jurisdiction of the courts of Quezon City, Makati, Pasig or Manila, Metro Manila, for any legal action arising from, this transactions."

Despite the lapse of the thirty (30)-day period indicated in the invoices, MCMP failed to pay the rental fees. Upon demands made upon MCMP to pay the amount due, partial payments were made.

Further demands went unheeded. As of April 30, 2002, MCMP owed Monark the amount of

In document REVISTA DE POESÍA. NÚMERO 19. AÑO 2022 (página 163-166)