Sangrador v. Valderrama

PADILLA, J.:

This is a petition for review on certiorari of the decision1 of the Court of Appeals in CA-G.R. CV No. 08813, dated 13 August 1987, which modified the decision2 of the Regional Trial Court of Iloilo City, Branch XXIII, in Civil Case No. 16210, entitled "Evelyn J. Sangrador, joined by her husband, Rodrigo Sangrador, Plaintiffs, versus Spouses Francisco Valderrama and Teresita Valderrama, Defendants." The factual background of the case is narrated in the decision of the Court of Appeals as follows: "On April 11, 1983 the defendants-spouses Francisco and Teresita Valderrama obtained a P500,000 loan from Manuel Asencio payable on or before April 12, 1984, and secured by a real estate mortgage on their house and lot (actually 3 lots) in front of the Jaro Plaza in Iloilo City (Exh. 9).

"Foreseeing that they would not be able to pay the loan and redeem their property upon maturity of the loan, the defendants scouted around for money-lenders who would be willing to lend them money with which to pay off their mortgage to Asencio. "Through the help of a loan broker, Wilson Jesena, they were able to obtain on April 6, 1984 a P1,000,000 loan from the plaintiff Teresita Sangrador, who is an aunt of Jesena, on the security of the same property which they redeemed from Asencio. The loan is evidenced by the following promissory note (Exh.

B) dated April 6, 1 984 providing for the payment of P1,400,000 to the creditor eight months after date'. 'FOR VALUE RECEIVED, we jointly and severally promise to pay EVELYN J. SANGRADOR, or order, at her address at No. 2 Locsin Street, Molo, Iloilo City, Philippines, the sum of ONE MILLION FOUR HUNDRED THOUSAND PESOS (P1,400,000.00) Philippine Currency, EIGHT (8) MONTHS after date without need of demand. "Should we default in the payment of the obligation or in the manner of performance thereof and it shall become necessary to enforce and collect on this note by or through an attorney, the makers shall jointly and severally pay TWENTY (20) PER CENTUM of the amount due, principal and interest and charges then unpaid, which in no case shall be less than P1,000.00.

"The makers hereby submit to the jurisdiction of the Municipal Trial Court of Iloilo or the Regional Trial Court of Iloilo, Sixth Judicial Region, Iloilo City, as the case may be, in the event of litigation arising from this note. "The makers of this note, jointly and severally undertake that in the event that an extraordinary inflation of the Philippine Peso should supervene between now and eight (8) months after date, then the value of the Philippine Peso at the time of the establishment of this obligation, shall be the basis of payment pursuant to Art. 1250 of the Civil Code of the Philippines, and for this purpose, we hereby acknowledge the official exchange rate of the Philippine Peso to the US Dollar at P14.002 to $1. The corresponding adjustment in the value of the Philippine Peso shall be made in the event that at the time of the maturity of this obligation, the rate of exchange will have changed as a result of the supervening inflation.

We further agree that the official rate of exchange as set by the Central Bank of the Philippines for private transactions, shall be the basis of this adjustment. "This note is secured by a Real Estate Mortgage over three (3) parcels of residential land, Lots 700, 701 and 750, of the Cadastral Survey of Jaro, covered by TCT Nos. T-41719, T41721 and T-41720, respectively, of the Registry of Deeds for the City of Iloilo, together with the improvements thereon. "In case of judicial execution of this obligation or any part thereof, the debtors waive all their rights under the provisions of Rule 39, Sec.

12, of the Rules of Court. "EXECUTED in the City of Iloilo, Philippines, on this 6th day of April 1984. (Sgd) TERESITA MONTINOLA-VALDERRAMA Maker (Sgd) FRANCISCO VALDERRAMA Maker Signed in the presence of.

(illegible)