Metro Alliance Holdings v · G.R. 240495

Petitioner: Metro Alliance Holdings
Respondent: Philippine Veterans Bank
Citation: G.R. No. 240495
Court: Supreme Court
Division: Second Division
Ponente: Inting, J.
Decided: September 15, 2021

Summary

Supreme Court resolved consolidated petitions involving P550 million loan dispute between Philippine Veterans Bank and Metro Alliance Holdings, et al. Bank unilaterally increased interest rates from agreed 14% to 14.74% then 12.6316% per annum without borrowers' consent, violating mutuality of contracts principle. Court declared these unilateral rate increases null and void, applying instead 12% per annum legal interest rate prevailing when loan agreement was executed in 2004. Court computed final outstanding obligation at P66,202,988.64 as of December 29, 2006. Significantly, Court nullified November 24, 2009 foreclosure proceedings as premature since borrowers were not in default due to invalid interest computation. Ordered reconstitution of foreclosed property's title and payment of reasonable rent to wrongfully dispossessed mortgagor. Decision establishes important precedent that foreclosure based on void interest rate schemes cannot proceed, protecting borrowers from unconscionable banking practices while recognizing legitimate debt obligations at legal rates.

Statutes applied

Civil Code, Art. 1308

Related cases

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Gf Equity v. Arturo Valenzona G.R. No. 156841
United Coconut Planters Bank v. Editha F. Ang G.R. No. 222448
Philippine National Bank v. Spouses Enrique Manalo & Rosalinda Jacinto G.R. No. 174433
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Fedman Development Corporation v. Federico Agcaoili G.R. No. 165025
Spouses Ponciano Almeda v. The Court of Appeals G.R. No. 113412
Philippine National Bank v. The Hon. Court of Appeals G.R. No. 88880
Philippine Development & Industrial Corporation v. Equitable Pci Bank (Now Known As Banco de Oro-Epci G.R. No. 207242

By Intellegal Editorial Board · September 15, 2021

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