8 But Mendoza is now alleging that the foreclosure was null and void since he

8 but mendoza is now alleging that the foreclosure

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8. But Mendoza is now alleging that the foreclosure was null and void since he still had time to pay for the loans, since his 5-year term was not yet done. a. He presented letters where PNB allegedly accepted his request for the restructuring. ISSUE: 1. WON the foreclosure was valid YES 2. WON PNB had agreed to the restructuring NO 3. WON escalation clause was valid NO regarding the increase in the stipulated interest because he was not even informed beforehand by respondent bank of the change in the stipulated interest rates. (Estoppel became an issue because apparently, Mendoza, never raised the issue of the escalation clause.) Solangon v Salazar 1. Spouses Solangons executed 3 mortgages secured by the same Bulacan lot in favor of Salazar. In order, the 3 loans were: a. (1) P60,000 payable within 4 months at 6% interest per month b. (2) P136,512 payable within 1 year with interest at legal rate. c. (3) P230,000 payable within 4 months with interest at legal rate. 2. Salazar was now foreclosing the property because of non-payment of the last loan. But the Sps. Brought an action to prevent the foreclosure, alleging that: a. They were able to obtain only 1 loan from Sazalar (60k) b. The subsequent mortgages were only continuations of the 1 st one and that they are void for being unconscionable c. They also contend that they paid Salazar 78k and tendered 47k more but Salazar initiated the forclosure proceedings for their alleged failure to pay the 3 rd loan. 3. RTC and CA – ruled that there were 3 separate loans obtained ISSUE: 1. WON there were 3 separate loans YES 2. WON the 6% interest rate/month (72% per year) is unconscionable YES While the Usury Law ceiling on interest rates was lifted by Central Bank Circular No. 905, nothing in the said circular grants lenders carte blanche authority to raise interest rates to levels which will either enslave their borrowers or lead to a hemorrhaging of their assets 1. [The SC noted how the spouses were raising issues of fact as they used Rule 45 of the 1997 Rules of Civil Procedure (used only for questions of law). The settled rule is that findings of fact by the lower courts are final and conclusive and will not be reviewed on appeal. This case does not fall with any of the exceptions.] 2. While the Usury Law ceiling on interest rates was lifted by Central Bank Circular No. 905, nothing in the said circular grants lenders carte blanche authority to raise interest rates to levels which will either enslave their borrowers or lead to a hemorrhaging of their assets. 3. In this case, the spouses stand on a worse situation. They are required to pay the stipulated interest rate of 6% per month or 72% per annum which is definitely outrageous and inordinate. Surely, it is more consonant with justice that the said interest rate be reduced equitably. An interest of 12% per annum is deemed fair and reasonable.
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