Radiowealth Finance Company v. Del Rosario
G.R. No. 138739 July 6, 2000
Lessons Applicable: Demurrer to Evidence, Promissory Note, When Demandable, Penalty, Interest (Credit Transactions)
Laws Applicable: Rule 33 of the 1997 Rules of Court (Civil Procedure)
• March 2, 1991: Spouses Vicente and Maria Sumilang del Rosario jointly and severally executed, signed and delivered in favor of Radiowealth Finance Company a Promissory Note for P138,948 without need of notice or demand, in instalments of P11,579.00 payable for 12 consecutive months leaving the period for the instalments blank. Upon default, the late payment, 2.5% penalty charge per month shall be added to each unpaid installment from due date thereof until fully paid.
• June 7, 1993: Radiowealth filed a complaint for the collection of a sum of money before the Regional Trial Court of Manila. During the trial, Jasmer Famatico, the credit and collection officer of Radiowealth, presented in evidence the Spouses’ check payments, the demand letter dated July 12, 1991, Spouses’ customer’s ledger card, another demand letter and Metropolitan Bank dishonor slips. Famatico admitted that he did not have personal knowledge of the transaction or the execution of any of these pieces of documentary evidence, which had merely been endorsed to him.
• July 29, 1994: Spouses filed a Demurrer to Evidence for alleged lack of cause of action
• RTC: Dismissed for Radiowealth’s failure to substantiate the claims, the evidence it had presented being merely hearsay
• CA: reversed and remanded the case for further proceedings
o During the pretrial, through judicial admissions or the spouses admitted the genuineness of the Promissory Note and demand letter dated July 12, 1991. Their only defense was the absence of an agreement on when the installment payments were to begin
1. W/N the spouses can still present evidence after the appellate court’s reversal of the dismissal on demurer of evidence (Civil Procedure)
2. W/N the obligation is due and demandable (Credit Transaction)
HELD: Petition is GRANTED. Appealed Decision is MODIFIED. Ordered to PAY P138,948, plus 2.5 percent penalty charge per month beginning April 2, 1991 until fully paid, and 10 percent of the amount due as attorney’s fees.
• Rule 33 of the 1997 Rules
o SECTION 1. Demurrer to evidence.—After the plaintiff has completed the presentation of his evidence, the defendant may move for dismissal on the ground that upon the facts and the law the plaintiff has shown no right to relief. If his motion is denied, he shall have the right to present evidence. If the motion is granted but on appeal the order of dismissal is reversed he shall be deemed to have waived the right to present evidence.
• Defendants who present a demurrer to the plaintiff’s evidence retain the right to present their own evidence, if the trial court disagrees with them; if the trial court agrees with them, but on appeal, the appellate court disagrees with both of them and reverses the dismissal order, the defendants lose the right to present their own evidence
• The appellate court shall resolve the case and render judgment on the merits, inasmuch as a demurrer aims to discourage prolonged litigations
• The act of leaving blank the due date of the first installment did NOT necessarily mean that the debtors were allowed to pay as and when they could. While the specific date on which each installment would be due was left blank, the Note clearly provided that each installment should be payable each month. It also provided for an acceleration clause and a late payment penalty, both of which showed the intention of the parties that the installments should be paid at a definite date. Per the acceleration clause, the whole debt became due one month (April 2, 1991) after the date of the Note because the check representing their first installment bounced.
• Respondents started paying installments on the Promissory Note, even if the checks were dishonored by their drawee bank.
• The Note already stipulated a late payment penalty of 2.5 percent monthly to be added to each unpaid installment until fully paid. Payment of interest was not expressly stipulated in the Note. Thus, it should be deemed included in such penalty. Liquidated damages, however, should no longer be imposed for being unconscionable. Such damages should also be deemed included in the 2.5 percent monthly penalty. Furthermore, we hold that petitioner is entitled to attorney’s fees, but only in a sum equal to 10 percent of the amount due which we deem reasonable under the proven facts
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