Pasay court orders UCPB to pay P1.5B to property developer

The Pasay Regional Trial Court has ordered the United Coconut Planters Bank (UCPB) to pay a real estate developer at least P1.5 billion in alleged overcharging in loan payments and damages.

In a 36-page ruling dated June 28, Pasay RTC Branch 112 Judge Jesus Mupas affirmed his default judgment issued on December 18, 2007 in favor of E. Ganzon Inc. (EGI).

The earlier decision ruled that UCPB should pay EGI a total of P1.071 billion, representing the combined value of foreclosed properties and properties subject to dacion en pago in excess of the developer's obligation.

This amount has ballooned to at least P1.5 billion because of the running interest.

Default judgment

In a default judgment, the trial court only considers the evidence presented by the prevailing party. The bank was declared in default after failing to comply with a court order to produce bank documents requested by EGI.

The Court of Appeals (CA) and the Supreme Court remanded the case back the Pasay RTC to give UCPB a "second chance" to present its own evidence.

“When the CA rendered a decision which the SC affirmed, giving defendant UCPB the chance to present its evidence, defendant was given a second chance to lay down all the documents that will explain in complete and transparent details how the multiple loan proceeds were credited to EGI, how the same loan proceeds were disbursed, who were the payees, how the interest for those loans accumulated, among many other details,” Mupas said in his June 28 ruling.

The Pasay RTC said UCPB wanted the court to "accept as conclusive facts" the amounts reflected in the promissory notes, loan documents, and statements of account.

“Sadly, defendant UCPB was only willing to present summarized numbers and has failed to present the supporting documents behind those summary of numbers," the ruling read.

The court noted that after cross examination, UCPB still failed to present crucial documents that should have cleared doubts and explained inconsistencies.

UCPB denounces decision

However, the bank asserted that "all its actions pertaining to the case have been appropriate and legal."

"When EGI failed to pay the amortization of its loans, both parties agreed to foreclosure and dacion en pago arrangements which turned out to still be insufficient to settle the total loan amount including interest, charges and transaction fees, costs and expenses," UCPB explained in an emailed statement in which it denounced the decision on the case filed by the developer as erroneous and lacking factual and legal bases.

In a decision dated December 18, 2007, the Pasay RTC ruled that EGI only owed the bank a total of P618 million in loan proceeds.

EGI, in its complaint filed on May 21, 2004,  had charged that UCPB padded the principal loan amounts, interest charges, transaction costs to reflect a bigger amount of indebtedness.

"EGI alleges that UCPB acted in violation of the General Banking Law and of the Bangko Sentral Act when it padded the amounts actually owed by EGI and when it made false representations to EGI that its loans was much higher than it actually was," the bank said.

UCPB noted that the Bangko Sentral ng Pilipinas (BSP) found the complaint bereft of merit and dismissed the case in September 2011. The CA affirmed BSP's decision.

Holding that EGI's debts were already fully settled, the Pasay court ordered UCPB to return P158.378 million in excess of foreclosure proceeds plus 12-percent interest per annum from April 13, 2000; P166.127 million in dacion en pago payments plus 12 percent interest per annum from May 8, 2001; P32.296 million repossessed furniture, plus 12-percent interest from April 13, 2000;  P87.578 million for the 28 repossessed condominium units at the EGI-Rufino Plaza, plus 12-percent interest.

UCPB was also ordered to pay EGI P30 million in moral damages, P10 million in exemplary damages, P30 million in compensatory damages, and P1.55 million in court filling fees and attorney's fees equivalent to 10 percent of all amounts due to EGI. — John Ted Cordero/BM, GMA News