February, 2024 - Sadsad Tamesis Legal and Accountancy Firm

MANILA CREDIT CORPORATION vs VIROOMAL

Facts Respondent Sps. Ramon and Anita Viroomal obtained a loan from petitioner Manila Credit Corporation (MCC) under Promissory Note (PN) No. 7155 in the amount of 467,600.00 payable in 60 months. gacor4d slot gacor 4d cantiktoto login totoagung pay4d slot gacor 4d situs toto slot bonus restoslot4d bandar toto situs toto situs toto totoagung login agen slot situs 4d situs toto angka jitu toto togel situs toto slot situs pay4d situs judi slot situs toto situs idn toto panel slot slot gacor 4d terbaru situs gacor bandar togel online agen toto togel online slot gacor hari ini idn toto togel online resmi situs slot slot gacor 4d toto slot slot server thailand gacor4d slot thailand gacor 4d slot gacor link bandar togel slot qris slot gampang scatter situs toto slot gacor 4d idn slot bandar togel toto slot agen toto slot link gacor agen slot gacor situs toto situs toto situs toto slot gacor gacor4d toto slot situs judi slot link gampang menang situs toto slot The loan has an interest rate of 23.36% per annum, and is secured by a real estate mortgage (REM) over Ramon’s property in Paranaque City. They later requested a loan restructuring, resulting in the execution of a second promissory note, Promissory Note No. 8351 (PN 8351), in the amount of PhP495,840 payable in 84 months at 24.99% interest per annum. The restructured amount represents the unpaid balance in PN 7155, including interests and penalty charges. When Spouses Viroomal failed to make timely authorizations, MCC demanded full payment of the outstanding obligation of PhP549,029.69 as of October 15, 2016. The spouses, however, claimed they had already paid a total of PhP1,175,638.12 and thus asked for a recomputation, but were ignored by MCC. MCC then proceeded with the extrajudicial foreclosure of the real estate mortgage, prompting Spouses Viroomal to file a complaint with the RTC for the declaration of nullity of real estate mortgage as well as of the interest rate and other charges for being unconscionable, iniquitous, and immoral. The spouses argued that their loan obligation was already fully paid, had they not been burdened with the 36% per annum effective interest rate (EIR) and other charges which they claim were surreptitiously imposed by MCC. RTC Decision The RTC subsequently rendered a Decision in favor of Spouses Viroomal, declaring void PN 8351 and the interests compounded by MCC in PN 7155 for being grossly excessive. The spouses were thus allowed to recover from MCC overpayment in the amount of PhP417,859.58. The RTC also ordered the title in the name of MCC canceled, and Ramon’s title reinstated. CA Decision The RTC was affirmed by the CA, hence the recourse of MCC to the Court. It held that MCC imposed 36% per annum, equivalent to 3% per month effective interest rate (EIR) on respondents’ outstanding balance upon delay. The EIR was charged on top of the 1/10 of 1% of interest for each day it remains overdue, 1.5% per month penalty charge, and Php 100.00 collection fee, in addition to the stipulated 23.36% interest per annum on the principal amount. In total, MCC charged 77.46% interest per annum, which must be equitably reduced for being exorbitant and unconscionable. Issue Whether the stipulated interests, penalty charges, and the compounding of interests are valid as these were clearly expressed in the contract, which has the force of law between the parties. Ruling The Court cannot sustain the imposition of the compounded 3% monthly ElR. The evidence shows that the EIR was not indicated in PN No. 7155. MCC unilaterally imposed the EIR by simply inserting it in the disclosure statement. This is not valid and does not bind the respondents as it violates the mutuality of contracts under Article 1308 of the Civil Code, which states that the validity or compliance to the contract cannot be left to the will of one of the parties. Reiterating its 2021 ruling in Megalopolis Properties, Inc. v. D’Nhew Lending Corporation, the Court held that while there is no “numerical limit on conscionability, the rate of 3% per month or 36% per annum is three times more than the 12% legal interest rate, and therefore excessive and unconscionable.” The Court added that the “willingness of the debtor in assuming an unconscionable rate of interest is inconsequential to its validity.” When MCC and the respondents executed PN No. 7155 in September 2009, the legal interest rate was fixed at l2% per annum. This rate was considered the reasonable compensation for forbearance of money. As held in Spouses Abella v. Spouses Abella, while the contracting parties may depart from the legal interest rate, any deviation therefrom must be reasonable and fair. If the stipulated interest for a loan is more than twice the prevailing legal rate of interest, it is for the creditor to prove that this rate is justified under the prevailing market conditions. No justification was offered by MCC in this case. Further, under Article 1409 of the Civil Code, such contracts contrary to morals are inexistent and void from the beginning. In loan agreements, in particular, while the contracting parties may depart from the legal interest rate, any deviation therefrom must be reasonable and fair. “If the stipulated interest for a loan is more than twice the prevailing legal rate of interest, it is for the creditor to prove that this rate is justified under the prevailing market conditions,” held the Court. Note however that only the EIR and stipulated interest rates and penalties are declared void for being unconscionable. The very nature of the parties’ contract of loan entitles MCC to recover not only the principal amount, but also the payment of monetary interest from the respondents, as compensation for the use of the borrowed amount. Based on Article 1420 of the Civil Code, respondents’ obligation to pay the principal and the interest subsists as this can be separated from the void interests rates and charges. For PN No. 7155, respondents have a total overpayment of Php 203,532.47. For PN

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How to Properly Close a Business

Sometimes, the best business move you can make is to close it entirely. This can be for a variety of reasons, such as low profits, health issues, or retirement. A business can also close due to entirely unforeseen circumstances. For example, many businesses in the Philippines closed down due to the Coronavirus pandemic. Whatever your reasons may be for wanting to close a business, it’s important to follow the proper procedure for doing so. Otherwise, you could face tax penalties or illegal dismissal cases. Properly closing a business doesn’t just mean stopping all operations; you have to make sure that said business is closed in the eyes of the law as well. Here’s what you need to do, one step at a time. totoagung restoslot4d totoagung2 slotgacor4d totoagung cantiktoto cantiktoto situs toto toto slot restoslot4d cantiktoto cantiktoto restoslot totoagung amintoto sakuratoto totoagung slot totoagung2 totoagung2 totoagung amintoto situs toto sakuratoto slotgacor4d amintoto amintoto cantiktoto situs pay4d slotgacor4d totoagung slotgacor4d restoslot4d restoslot4d restoslot4d idn slot totoagung restoslot4d restoslot4d slotgacor4d slotgacor4d slotgacor4d qdal88 restoslot4d amintoto amintoto sakuratoto3 restoslot4d restoslot4d cantiktoto totoagung2 sakuratoto sakuratoto sakuratoto2 daftar slot gacor amintoto amintoto amintoto amintoto slot gacor 4d slot thailand slotgacor4d sakuratoto3 qdal88 Employee Termination While this may seem obvious at first glance, it’s crucial to remember that you have to properly terminate all employees you may have before doing anything else. If you don’t, there’s a chance that you’ll one day have to face an illegal dismissal lawsuit. Be sure to inform all employees and the Department of Labor and Employment (DOLE) at least thirty (30) days before the date of termination. All terminated employees would also be entitled to separation pay, unless the reason for closure is due to serious business losses. Once DOLE has been informed and your employees have been properly terminated, you can start the process of closing your business with the following key offices. Notice to Barangay First, you will need to inform your barangay to get a Barangay Certificate of Closure. This will be one of your requirements when finalizing the closure with the Mayor’s Office later on. To do this, you’ll first need to write a letter of request for retirement or closure of business. When writing this letter, make sure to include important information such as the registered business name, the date of registration with the government, and your business permit number. Then, state your reasons for closing your business and your proposed date of closure. Finally, include a declaration saying that your business has no outstanding obligation or liability with the barangay. Once your letter has been processed, you will receive your Barangay Certificate of Closure. Notice to the City Hall / Mayor’s Office Once you’ve received your Barangay Certificate, you can move onto completing your requirements with the City Hall, or whichever Local Government Unit (LGU) that has authority over the business. Here, you will obtain your City Hall closure certificate, which is necessary later on with the Bureau of Internal Revenue. However, note that some requirements may differ depending on whether your business is a sole proprietorship, partnership, or corporation. Requirements can vary depending on which LGU you have to go to, so it’s best to double check with the appropriate authorities first. The requirements you must prepare include, but are not limited to: Once the City Hall has processed your closure, you will receive a City / Municipal Hall Certificate of Closure. Notice to the Bureau of Internal Revenue Closing your business without canceling your BIR registration means you will have to continue paying taxes for a business that is no longer active. You might even have to deal with penalties and interests, draining your money even further. Thus, it’s important to cancel your BIR registration as soon as you receive your City / Municipal Hall Certificate of Closure. The documents you must submit include: You will receive a BIR Tax Clearance Certificate once your BIR registration has been officially canceled. This document will prove that you have closed your business at the BIR and have settled all liabilities. Notice to the Securities and Exchange Commission Next, you’ll need a Certificate of Dissolution from the Securities and Exchange Commission. However, this is only applicable if your business is a partnership or a corporation. If your business is a sole proprietorship, you can skip this step. To secure a Certificate of Dissolution, be sure to prepare the following documents: Notice to the Department of Trade or Industry On the other hand, if your business is a sole proprietorship, you don’t have to go to the SEC. Instead, you need to cancel your business registration with the Department of Trade or Industry. Luckily, you do not have to prepare as many documents when canceling your business registration with the DTI. You only need to submit the following: SSS, Philhealth, and Pag-Ibig Finally, be sure to inform SSS, Philhealth, and Pag-IBIG of your business closure so that your business is cleared of any government regulatory obligations. Otherwise, these three agencies will assume that the business is still active and that it has stopped paying its remittances. This could lead to unnecessary fees years down the line. Once all of your obligations with the government are taken care of, it’s time to announce the closure of your business so that your consumer base knows what’s going on. After that, it’s only a matter of tying up loose ends and being able to say a proper farewell to your company before its official date of closure.

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February 2024

MANILA CREDIT CORPORATION vs VIROOMAL

How to Properly Close a Business