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United Coconut Planters Bank V Sps Beluso PDF
United Coconut Planters Bank V Sps Beluso PDF
United Coconut Planters Bank V Sps Beluso PDF
Facts:
Apr 16, 1996: UCPB granted the Sps Beluso a Promissory Notes Line under a Credit Agreement whereby the Belusos could avail a credit up
to a max amt of P1.2 mil for a term ending on Apr 30, 1997. The Belusos, in addition to the promissory notes, executed a real estate mortgage
over some land in Roxas as additional security.
o Later on, their Credit Agreement was amended to increase the amount of the Promissory Notes Line to P2.3 mil. The term was also
amended: extended to Feb 23, 1998.
The Belusos availed of 3 promissory notes amounting to P2mil, which were renewed several times. Apr 30, 1997, the payment of the
principal + interest of the last 2 notes was debited form their account with UCPB (both added up to P1.3 mil). Later, a loan of P1.3mil was still
released to them under a promissory note whose due date was Feb 28, 1998. (meaning their loan was still an even P2mil)
o To completely avail of the P2.35 mil credit line, they executed 2 more promissory notes amounting to P350k. However, they allege
that the notes were never released to them so they claim that their debt is still only P2mil.
(Anyway) UCPB applied interest rates on the promissory notes ranging from 18% to 34%:
o From 1996 to Feb 1998, the Belusos paid P763k.
o From Feb 1998 to June 1998, UCPB charged them interests and penalties. The Belusos failed to make any payment on these.
o Sept 1998, UCPB demanded pay P2.93 mil PLUS 25% atty fees. Belusos did not pay.
o Dec 1998, UCPB foreclosed on the Belusos’ mortgaged properties. (by that time already ballonned to P3.7 mil)
RTC: interest rate provided in the promissory notes are void. Imposed fine of P26k for violating the Truth in Lending Act.
CA: affirmed because the rates were determined solely by the UCPB.
Issues/Held:
Are the interest rates valid? NO
Is UCPB liable for violation of the Truth in Lending Act? YES
Ratio: