### G.R. No.

175949
## United Alloy Philippines Corp. v. United Coconut Planters Bank
######
### Facts:
- United Alloy Philippines Corporation (UNIALLOY) applied for and was granted a
credit accommodation by United Coconut Planters Bank (UCPB) in the amount of
PhP50,000,000.00.
- Part of UNIALLOY's obligation under the Credit Agreement was secured by a Surety
Agreement executed by UNIALLOY Chairman, Jakob Van Der Sluis, UNIALLOY President,
David Chua and his spouse, Luten Chua, and one Yang Kim Eng.
- Six Promissory Notes were executed by UNIALLOY in UCPB's favor.
- UNIALLOY failed to pay its loan obligations, resulting in UCPB filing a Sum of
Money with Prayer for Preliminary Attachment against UNIALLOY, the spouses Chua,
Yang, and Van Der Sluis.
- UNIALLOY filed a complaint for Annulment and/or Reformation of Contract with
Damages against UCPB, UCPB Vice-President Robert Chua, and Van Der Sluis.
- UNIALLOY filed an Urgent Motion to Dismiss the collection case on the ground of
litis pendentia and forum shopping, which was denied by the RTC of Makati.
- UCPB and its co-defendants filed a Motion to Dismiss UNIALLOY's complaint for
annulment of contract on the grounds of improper venue, forum shopping, litis
pendentia, and harassment or nuisance suit, which was granted by the RTC of CDO.
- UNIALLOY filed a petition for certiorari and mandamus with the CA, which granted a
writ of preliminary injunction.
- UCPB filed a petition for certiorari with the Supreme Court, which restrained the
CA from enforcing the writ of preliminary injunction.
- The Supreme Court denied UCPB's petition and affirmed the CA's resolution granting
the writ of preliminary injunction.
- The CA dismissed UNIALLOY's certiorari petition and affirmed the dismissal of
UNIALLOY's complaint for annulment of contract.
- UNIALLOY filed a petition for review on certiorari with the Supreme Court, which
denied the petition.
- UNIALLOY filed an omnibus motion for the suspension of the proceedings of the
collection case, which was denied by the RTC of Makati.
- The RTC of Makati rendered judgment in favor of UCPB in the collection case.
- The CA denied UNIALLOY's appeal and affirmed the RTC's decision.
### Issue:
- Whether or not UNIALLOY and its co-defendants are liable to pay UCPB the amounts
awarded by the RTC.
### Ruling:
- The Court ruled in the affirmative and affirmed the CA's decision.
### Ratio:
- UNIALLOY and its co-defendants failed to pay their obligations under the promissory
notes and executed a Surety Agreement binding themselves to pay UNIALLOY's loan
obligations with UCPB.
- Obligations arising from contracts have the force of law between the contracting
parties and should be complied with in good faith.
- UNIALLOY's insistence on the improper venue of their complaint lacks merit as the
lease-purchase agreement expressly provides that any legal action arising out of or
in connection with the agreement shall be brought exclusively in the proper courts of
Makati City.
- UNIALLOY engaged in forum shopping by failing to disclose the pendency of another
case involving the same parties and causes of action.
- The interest rates imposed on the promissory notes were subject to review and
adjustment at the sole discretion of UCPB, which is invalid as it grants the lender
unrestrained power to increase interest rates without notice or consent from the
borrowers.
- The Court modified the interest rates imposed on the obligation and ordered
UNIALLOY and its co-defendants to pay the principal amounts, legal interest, penalty
charge, and additional interest as specified in the decision.
------------------------------------------------------------------
Downloaded at www.jurisprudence.ph
------------------------------------------------------------------