G.R. No. 244414 - LAND BANK OF THE PHILIPPINES, VS. SPRINT BUSINESS NETWORK AND CARGO SERVICES, INC. REPRESENTED BY ITS VICE-PRESIDENT IRENE VELASCO, AND SPOUSES ALBERT VELASCO AND IRENE VELASCO.D E C I S I O N - Supreme Court E-Library

Ruling

WHEREFORE , in view of all the foregoing, the instant complaint is hereby ordered DISMISSED for lack of merit. No pronouncement as to cost. [25] (Emphasis in the original) The lower court held that Sprint failed to show any document evidencing the agreement to restructure its loan, or that petitioner bank assured it that no foreclosure proceedings will be initiated until such time the restructuring is resolved. Even assuming that there was indeed a verbal agreement to restructure the loan as shown by the willingness of the petitioner bank in its letters dated April 6, 2006 and August 18, 2005, the same did not materialize as Sprint failed to submit a proposal plan for the possible restructuring of its loan. Accordingly, petitioner bank has the right to initiate the foreclosure proceedings as there was actually no agreement to restructure the loan. [26] The lower court also held that the alleged exorbitant interest rates as increased unilaterally by petitioner bank was never questioned by Sprint before the foreclosure proceedings. In its letter dated May 7, 2007, wherein Sprint asked for the deferment of the foreclosure, it did not question the interest rate imposed and the amount asked by petitioner bank. Thus, as of that date, the loan obligation was clear to both parties and there was no dispute as to the total amount due. [27] LBP was also able to adduce evidence to prove that it complied with the requirements for a valid foreclosure under Act No. 3135, as amended. [28] Aggrieved, Sprint elevated the case to the CA. Ruling of the Court of Appeals The CA granted the appeal and reversed the lower court's findings in its May 2, 2018 Decision, [29] to wit: WHEREFORE , the Appeal is GRANTED. The Decision dated 1 December 2015 of the Regional Trial Court, National Capital Judicial Region, Makati City, Branch 143 is hereby REVERSED and SET ASIDE. Judgment is hereby rendered as follows: 1. The interest rates imposed by LBP are declared null and void. The principal amount of the loan shall instead be subject to the interest rate of twelve percent (12%) per [ annum ] up to June 30, 2013, and starting July 1, 2013, six percent (6%) per [ annum ] until full satisfaction; 2. In view of the nullity of the interest rate[s] imposed on the loan which affected the arrearages upon which the foreclosure was based, the foreclosure of mortgage, certificate of sale, affidavit of consolidation are declared VOID and TCT No. 006-2011000594 is hereby ordered CANCELLED. SO ORDERED.