G.R. NO. 165662 - SELEGNA MANAGEMENT AND DEVELOPMENT CORPORATION; AND SPOUSES EDGARDO AND ZENAIDA ANGELES, VS. UNITED COCONUT PLANTERS BANK,*.

Ruling

WHEREFORE, the Motion for Reconsideration is GRANTED. The July 18, 2003 Decision is hereby REVERSED and SET ASIDE and another one entered GRANTING the petition and REVERSING and SETTING ASIDE the March 15, 2002 Order of the Regional Trial Court, Branch 58, Makati City in Civil Case No. 99-1061." [4] The assailed Resolution denied reconsideration. The Facts On September 19, 1995, Petitioners Selegna Management and Development Corporation and Spouses Edgardo and Zenaida Angeles were granted a credit facility in the amount of P70 million by Respondent United Coconut Planters Bank (UCPB). As security for this credit facility, petitioners executed real estate mortgages over several parcels of land located in the cities of Muntinlupa, Las Piñas, Antipolo and Quezon; and over several condominium units in Makati. Petitioners were likewise required to execute a promissory note in favor of respondent every time they availed of the credit facility. As required in these notes, they paid the interest in monthly amortizations. The parties stipulated in their Credit Agreement dated September 19, 1995, [5] that failure to pay "any availment of the accommodation or interest, or any sum due" shall constitute an event of default, [6] which shall consequently allow respondent bank to "declare [as immediately due and payable] all outstanding availments of the accommodation together with accrued interest and any other sum payable." [7] In need of further business capital, petitioners obtained from UCPB an increase in their credit facility. [8] For this purpose, they executed a Promissory Note for P103,909,710.82, which was to mature on March 26, 1999. [9] In the same note, they agreed to an interest rate of 21.75 percent per annum, payable by monthly amortizations. On December 21, 1998, respondent sent petitioners a demand letter, worded as follows: "Gentlemen: "With reference to your loan with principal outstanding balance of [P103,909,710.82], it appears from the records of United Coconut Planters Bank that you failed to pay interest amortizations amounting to [P14,959,525.10] on the Promissory Note on its due date, 30 May 1998. "x x x x x x x x x "Accordingly, formal demand is hereby made upon you to pay your outstanding obligations in the total amount of P14,959,525.10, which includes unpaid interest and penalties as of 21 December 1998 due on the promissory note, eight (8) days from date hereof." [10] Respondent decided to invoke the acceleration provision in their Credit Agreement. Accordingly, through counsel, it relayed its move to petitioners on January 25, 1999 in a letter, which we quote: "Gentlemen: "x x x x x x x x x "It appears from the record of [UCPB] that you failed to pay the monthly interest due on said obligation since May 30, 1998 as well as the penalty charges due thereon. Despite repeated demands, you refused and continue to refuse to pay the same. Under the Credit Agreements/Letter Agreements you executed, failure to pay when due any installmen