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COURT OF APPEALS and SECURITY BANK AND TRUST COMPANY, respondents. G.R. Nos. 82282-83 November 24, 1988

FACTS: In a summary judgment rendered by the Regional Trial Court of Makati in Civil Case
No. 10398, the complaint was dismissed for lack of merit and the petitioners were ordered to pay the private respondent the following: (a) the unpaid principal sum of P15 million remaining unpaid out of Chemark's availment of the P20 million credit line, plus 18% interest per annum and 36% as penalty per annum for Promissory Note No. DLS/74/540/83 from March 23, 1984 until fully paid; and plus 24% interest per annum and 36% as penalty per annum for Promissory Note No. DLS/74/1358/83 from August 9, 1983 until fully paid; (b) attorney's fees equivalent to 10% of the total amount of plaintiffs' obligations and (c) costs of suit. The summary judgment was affirmed by the Court of Appeals. The appellate court's decision and the resolution denying a motion for reconsideration are now challenged by the petitioners in the instant petition. ISSUE: WON THE APPELLATE COURT COMMITTED REVERSIBLE ERROR WHEN IT SUSTAINED THE TRIAL COURTS SUMMART JUDGMENT. HELD: No. A Summary Judgment may be rendered by a court upon motion of a party before trial and after submission of pleadings, admissions, documents and/or affidavits and counter affidavits when it is clear that "except as to the amount of damages, there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law. The lower court committed no reversible error in awarding the questioned interests. We cannot, however, agree with the appellate court as regards the award of penalty charges at 36% per annum. We agree with the petitioner that the penalty charges are excessive and unconscionable. The interest charges are enough punishment for the petitioners' failure to comply with their obligations. Hence, The instant petition is DISMISSED. The questioned decision and resolution of the Court of Appeals are AFFIRMED except for the award of penalty charges which is stricken from the judgment. The Temporary Restraining Order issued on March 30, 1988 is LIFTED.