FIRST FIL-SIN LENDING CORPORATION, petitioner, vs. GLORIA D.

PADILLO, Held:
respondent.
G.R. No. 160533. January 12, 2005
YNARES-SANTIAGO, J.:
Facts:
On July 22, 1997, respondent Gloria D. Padillo obtained a P500,000.00 loan
from petitioner First Fil-Sin Lending Corp. On September 7, 1997,
respondent obtained another P500,000.00 loan from petitioner. In both
instances, respondent executed a promissory note and disclosure
statement.
For the first loan, Padillo made 13 monthly interest payments of P 22,500
each and settled her full obligation on February 2,1999. In her second loan,
she made 11 monthly interest payment of P25,000 and settled her full
obligations on February 2, 1999. In sum, she paid P 702,000 for the first
loan and P775,000 for the second loan.
On January 27,2000, Padillo filed an action of sum of money against First
Fil-Sin to sought recovery on the excess amount she paid for the 2 loans.
Padillo alleged that their agreed interest rates were 4.5% and 5% per
annum. First Fil-Sen countered that interest rates were 4.5% and 5% per
month.
a.) 4.5% and 5% PER ANNUM
Court held that the lower court mistook the Loan Transactions Summary
for the Disclosure Statement. It was clearly stated in the promissory notes
and the disclosure statements which were signed by both parties that
interest rates were to be imposed annually, not monthly. When the terms
of the agreement are clear and explicit, it must be understood literally just
as they appear on the contract. First FilSen is estopped from asserting a
contrary intention given that they were the ones who prepared the
documents and made the mistake in the pro forma note p.a. to per month.
b.) 12% per annum legal interest was valid
Court ruled that imposition of 12% p.a. legal interest was correct because
it was found out that no stipulation was provided in the promissory notes.
The same promissory note provides that x x x any and all remaining
amount due on the principal upon maturity hereof shall earn interest at
the rate of _____ from date of maturity until fully paid. Applying the ruling
in Eastern Shipping Lines, Inc. v. Court of Appeals, the rate of interest shall
be 12% per annum to be computed from default.

RTC: Dismissed the complaint and ordered Padillo to pay P311,125 with
legal interest from February 3, 1999 until fully paid plus 10% of the amount
due as attorneys fees and costs of the suit.

CA: Set aside RTC decision. Ordered First Fil-Sin to pay P114,000 and
deleted attorney’s fees.

Issue: a.) Correct interest rate; b.) WON 12% legal interest p.a. imposed by
CA is valid despite agreement of parties of another applicable rate