G.R. No. 113412 Spouses PONCIANO ALMEDA and EUFEMIA P. ALMEDA, pettone!, "s. #$E COUR# OF APPEALS and P$ILIPPINE NA#IONAL %AN&, !espondents Ap!' 1(, 1))*
. . . increases in interest interest rates are not sub ject to any ceiling prescribed by the Usury La w, but it did not authorize the PNB, or any bank for that matter, matter, to unilaterally unilaterally and successiely successiely increase increase the agreed agreed interest interest rates from from !"# to $"# within a span of four %$& months, in iolation of P.'. P.'. !!( which limits such changes to once eery twele months. Besides iolating P.'. P.'. !!(, !!(, the unilateral action of the PNB PNB in increasing increasing the interest interest rate on the priate priate respondent)s respondent)s loan, iolated the mutuality of contracts ordained in *rticle !+" of the -iil -ode *rt. +". /he contract must bind both contracting parties0 its alidity or compliance cannot be left to the will of one of them. 1n order that obligations arising from contracts may hae the force of law between the parties, there must be mutuality between the parties based on their essential e2uality. e2uality.
FAC#S+ On various dates in 1981, the Philippine National Bank granted to herein petitioners, the spouses Ponciano L. Almeda and Euemia P. Almeda several loan!credit accommodations totaling P18." #illion pesos pa$a%le in a period period o si& $ears at an interest interest rate o '1( per per annum. )o )o secure the the loan, the spouses spouses Almeda e&ecuted a *eal Estate #ortgage +ontract covering a ,-"" suare meter parcel o land, together /ith the %uilding erected thereon 0the #arvin Plaa2 located at Pasong )amo, )amo, #akati, #etro #anila.
Bet/een 1981 and 1983, petitioners made several partial pa$ments on the loan totaling P4,4-,""3.55, a su%stantial portion o /hich /as applied to accrued interest. On #arch 1, 1983, respondent %ank, over petitioners6 protestations, protestations, raised raised the interest interest rate to '8(, '8(, allegedl$ pursuant pursuant to 7ection 7ection c 012 o its credit agreement. 7aid interest rate thereupon increased rom an initial '1( to a high o 58( %et/een #arch o 1983 to 7eptem%er, 1985. Petitioner protested the increase in interest rates, to no avail. Beore the loan /as to mature in #arch, 1988, the spouses iled on :e%ruar$ 5, 1988 a petition or declarator$ relie /ith pra$er or a /rit o preliminar$ in;unction and temporar$ restraining order /ith the *egional )rial +ourt o #akati. ISSUES+ 12
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. 8-.
$ELD+ 12 No. Petition Petitioners ers never never agreed agreed in /riting to pa$ the increas increased ed interest interest rates rates demanded demanded %$ respondent respondent %ank in contravention contravention to the tenor o their credit credit agreement.
n act, the manner o agreement is itsel e&plicitl$ stipulated stipulated %$ the +ivil +ode /hen it provides, in Article Article 19-5 that ?No interest shall %e due unless it has %een e&pressl$ stipulated in /riting.?
No. n the irst place, place, %ecause o the dispute dispute regarding the interest rate increases, increases, an issue issue /hich /as never settled on merit in the courts %elo/, the e&act amount o petitioner6s o%ligations could not %e determined. )hus, the oreclosure provisions o P.>. P.>. 8- could %e validl$ invoked %$ respondent onl$ ater settlement o the uestion involving the interest rate on the loan, and onl$ ater the spouses reused to meet their o%ligations ollo/ing such determination.
G.R. No. 131*22 LE#ICIA . MEDEL DR. RAFAEL MEDEL and SER-ANDO FRANCO, pettone!s, "s. COUR# OF APPEALS, SPOUSES -ERONICA R. GONALES and DANILO G. GONALES, /R., don0 'endn0 usness unde! te t!ade nae and st'e 5GONALES CREDI# EN#ERPRISES5, !espondents No"ee! 2(, 1))6 /he stipulated rate of interest at 3.3# per month on the P3,. loan is e4cessie, ini2uitous, unconscionable and e4orbitant. 5oweer, we can not consider the rate 6usurious6 because this -ourt has consistently held that -irculr No. 73 of the -entral Bank, adopted on 'ecember 88, !7"8, has e4pressly remoed the interest ceilings prescribed by the Usury Law and that the Usury Law is now 6legally ine4istent6. 1n 9ecurity Bank and /rust -ompany s.:egional /rial -ourt of ;akati, Branch (! the -ourt held that -B -ircular No. 73 6did not repeal nor in anyway amend the Usury Law but simply suspended the latter)s effectiity.6 1ndeed, we hae held that 6a -entral Bank -ircular can not repeal a law.
FAC#S+ On Novem%er 4, 198-, 7ervando :ranco and Leticia #edel 0hereater 7ervando and Leticia2 o%tained a loan rom @eronica *. onales 0hereater @eronica2, /ho /as engaged in the mone$ lending %usiness under the name ?onales +redit Enterprises?, in the amount o P-","""."", pa$a%le in t/o months. @eronica gave onl$ the amount o P34,"""."", to the %orro/ers, as she retained P,"""."", as advance interest or one month at 5( per month. 7ervado and Leticia e&ecuted a promissor$ note or P-","""."", to evidence the loan, pa$a%le on anuar$ 4, 1985.
On Novem%er 19, 198-, 7ervando and Leticia o%tained rom @eronica another loan in the amount o P9","""."", pa$a%le in t/o months, at 5( interest per month. )he$ e&ecuted a promissor$ note to evidence the loan, maturing on anuar$ 19, 1985. )he$ received onl$ P83,"""."", out o the proceeds o the loan. On maturit$ o the t/o promissor$ notes, the %orro/ers ailed to pa$ the inde%tedness. On une 11, 1985, 7ervando and Leticia secured rom @eronica still another loan in the amount o P"","""."", maturing in one month, secured %$ a real estate mortgage over a propert$ %elonging to Leticia #akalintal Captincha$, /ho issued a special po/er o attorne$ in avor o Leticia #edel, authoriing her to e&ecute the mortgage. 7ervando and Leticia e&ecuted a promissor$ note in avor o @eronica to pa$ the sum o P"","""."", ater a month, or on ul$ 11, 1985.Do/ever, onl$ the sum o P'4-,"""."", /as given to them out o the proceeds o the loan. Like the previous loans, 7ervando and #edel ailed to pa$ the third loan on maturit$. On ul$ ', 1985, 7ervando and Leticia /ith the latter6s hus%and, >r. *aael #edel, consolidated all their previous unpaid loans totaling P33","""."", and sought rom @eronica another loan in the amount o P5","""."", %ringing their inde%tedness to a total o P-"","""."", pa$a%le on August ', 1985. ISSUES+ 12
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s the Fsur$ La/ still eective, or has it %een repealed %$ +entral Bank +ircular No. 9"-
$ELD+ 12 No. ecem%er '', 198', has e&pressl$ removed the interest ceilings prescri%ed %$ the Fsur$ La/ and that the Fsur$ La/ is no/ ?legall$ ine&istent?.
Nevertheless, /e ind the interest at -.-( per month, or 55( per annum, stipulated upon %$ the parties in the promissor$ note iniuitous or unconsciona%le, and, hence, contrar$ to morals 0?contra %onos mores?2, i not against the la/. )he stipulation is void. '2
No. )he +B +ircular No. 9"- ?did not repeal nor in an$/a$ amend the Fsur$ La/ %ut simpl$ suspended the latter6s eectivit$.? ndeed, /e have held that ?a +entral Bank +ircular can not repeal a la/. Onl$ a la/ can repeal another la/.?
G.R. No. 127)44 SPOUSES DANILO SOLANGON and URSULA SOLANGON, pettone!s, "s. /OSE A-ELINO SALAAR, !espondent /une 2), 2881
/he interest at 3.3 # per month, or ((# per annum, stipulated upon by the parties in the promissory note is ini2uitous or unconscionable, and hence, contrary to morals %=contra bonos mores>&, if not against the law. /he stipulation is oid.
FAC#S+ On August '', 1985, the plaintisappellants e&ecuted a deed or real estate mortgage in /hich the$ mortgaged a parcel o land situated in 7ta. #aria, Bulacan, in avor o the deendantappellee, to secure pa$ment o a loan o P5","""."" pa$a%le /ithin a period o our 032 months, /ith interest thereon at the rate o 5( per month.
On #a$ '4, 1984, the plaintisappellants e&ecuted a deed o real estate mortgage in /hich the$ mortgaged the same parcel o land to the deendantappellee, to secure pa$ment o a loan o P15,-1'."", pa$a%le /ithin a period o one 012 $ear, /ith interest thereon at the legal rate. On >ecem%er '9, 199", the plaintisappellants e&ecuted a deed o real estate mortgage in /hich the$ mortgaged the same parcel o land in avor o deendantappellee, to secure pa$ment o a loan in the amount o P'","""."" pa$a%le /ithin a period o our 032 months, /ith interest thereon at the legal rate. ISSUE+
$ELD+ ecem%er '', 198', has e&pressl$ removed the interest ceilings prescri%ed %$ the Fsur$ La/ and that the Fsur$ La/ is no/ Glegall$ ine&istent.H +B +ircular No. 9"- did not repeal nor in an$ /a$ amend the Fsur$ La/ %ut simpl$ suspended the latterHs eectivit$. ndeed, /e have held that Ga +entral Bank +ircular can not repeal a la/. Onl$ a la/ can repeal another la/.
G.R. No. 14*)42 CORAON G. RUI, pettone!, "s. COUR# OF APPEALS and CONSUELO #ORRES, !espondents Ap!' 22, 2883
/he !# surcharge on the principal loan for eery month of default is alid. /his surcharge or penalty stipulated in a loan agreement in case of default partakes of the nature of li2uidated damages under *rt. 888? of the New -iil -ode, and is separate and distinct from interest payment. *lso referred to as a penalty clause, it is e4pressly recognized by law. 1t is an accessory undertaking to assume greater liability on the part of an o bligor in case of breach of an obligation. /he obligor would then be bound to pay the stipulated amount of indemnity without the necessity of proof on the e4istence and on the measure of damages caused by the breach.
FAC#S+ Petitioner +oraon . *ui is engaged in the %usiness o %u$ing and selling ;e/elr$.3 7he o%tained loans rom private respondent +onsuelo )orres on dierent occasions, in the ollo/ing amountsI P1"",""".""= P'"",""".""= P"",""".""= and P1-","""."".- Prior to their maturit$, the loans /ere consolidated under one 012 promissor$ note. )he consolidated loan o P4-","""."" /as secured %$ a real estate mortgage and the lot /as registered in the name o petitioner.
)hereater, petitioner o%tained three 02 more loans rom private respondent, and it /as secured %$ three promissor$ notes in the amount o 1"",""" each. )hese com%ined loans o P"","""."" /ere secured %$ P-41,"""."" /orth o ;e/elr$ pledged %$ petitioner to private respondent. Petitioner paid the stipulated ( monthl$ interest on the P4-","""."" loan, amounting to P'4","""."". Ater that, petitioner /as una%le to make interest pa$ments as she had diiculties collecting rom her clients in her ;e/elr$ %usiness. >ue to petitionerHs ailure to pa$ the principal loan o P4-","""."", as /ell as the interest pa$ment, private respondent demanded pa$ment not onl$ o the P4-","""."" loan, %ut also o the P"","""."" loan. eput$ 7heri n+harge *olando . Acal and 7upervising 7heri 7ilverio P. Bernas issued a Notice o 7heriHs 7ale o su%;ect lot. One 012 da$ %eore the scheduled auction sale, petitioner iled a complaint /ith the *)+, /ith a pra$er or the issuance o a )*O to en;oin the sheri rom proceeding /ith the oreclosure sale and to i& her inde%tedness to private respondent to P4"5,"""."". )he computed amount o P4"5,"""."" /as %ased on the aggregate loan o P4-","""."", plus the other loans o P"","""."", covered %$ separate promissor$ notes, plus interest, minus P-41,"""."" representing the amount o ;e/elr$ pledged in avor o private respondent. ISSUES+ 12
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$ELD+ 12 Ces, the real propert$ covered %$ the su%;ect deed o mortgage is paraphernal propert$. )he propert$ su%;ect o the mortgage is registered in the name o J+oraon . *ui, o legal age, married to *ogelio *ui, :ilipinos.K )hus, title is registered in the name o +oraon alone %ecause the phrase Jmarried to *ogelio *uiK is merel$ descriptive o the civil status o +oraon and should not %e construed to mean that her hus%and is also a registered o/ner.
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No. ecem%er 1, 199-, and the 1( compounded monthl$ interest stipulated in the promissor$ note dated April '1, 199-. )he legal rate o interest o 1'( per annum shall appl$ ater the maturit$ dates o the notes until ull pa$ment o the entire amount due. Also, the onl$ permissi%le rate o surcharge is 1( per month, /ithout compounding. G.R. No. 176362
MANSUE#O CUA#ON, pettone!, "s. RE%ECCA SALUD and COUR# OF APPEALS 9Spe:a' Fou!teent D"son;, !espondents /anua! 2(, 2884
/he !# and "# interest rates per month on the one@million@peso loan of petitioner are een higher than those preiously inalidated by the -ourt in the aboe cases. *ccordingly, the reduction of said rates to !8# per annum is fair and reasonable. 9tipulations authorizing ini2uitous or unconscionable interests are contrary to morals %=contra bonos mores>&, if not a gainst the law. Under *rticle !$7 of the -iil -ode, these contracts are ine4istent and oid from the beginning
FAC#S+ On anuar$ -, 199, respondent *e%ecca 7alud, ;oined % $ her hus%and *olando 7alud, instituted a suit or oreclosure o real estate mortgage /ith damages against petitioner #ansueto +uaton and his mother, +onchita +uaton, /ith the *egional )rial +ourt o eneral 7antos +it$, Branch -, docketed as 7PL. +ivil +ase No. -9. )he trial court rendered a decision declaring the mortgage constituted on Octo%er 1, 1991 as void, %ecause it /as e&ecuted %$ #ansueto +uaton in avor o *e%ecca 7alud /ithout e&pressl$ stating that he /as merel$ acting as a representative o +onchita +uaton, in /hose name the mortgaged lot /as titled. )he court ordered petitioner to pa$ *e%ecca 7alud, inter alia, the loan secured %$ the mortgage in the amount o One #illion Pesos plus a total P51","""."" representing interests o 1"( and 8( per month or the period :e%ruar$ 199' to August 199'. ISSUE+
7tipulations authoriing iniuitous or unconsciona%le interests are contrar$ to morals 0Gcontra %onos moresH2, i not against the la/.
G.R. No. 14)884
RES#I#U#A M. IMPERIAL, pettone!, "s. ALE< A. /AUCIAN, !espondent Ap!' 14, 2884
/he judge shall e2uitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor. Aen if there has been no performance, the penalty may also be reduced by the courts if it is ini2uitous or unconscionable. 1n e4ercising this power to determine what is ini2uitous and unconscionable, courts must consider the circumstances of each case. Chat may be ini2uitous and unconscionable in one may be totally just and e2uitable in another.
FAC#S+ )he present controvers$ arose rom a case or collection o mone$, iled %$ Ale& A. aucian against *estituta mperial, on Octo%er '5, 1989. )he complaint alleges, inter alia, that deendant o%tained rom plainti si& 052 separate loans or /hich the ormer e&ecuted in avor o the latter si& 052 separate promissor$ notes and issued several checks as guarantee or pa$ment.
)he loans /ere covered %$ si& 052 separate promissor$ notes e&ecuted %$ deendant. )he ace value o each promissor$ notes is %igger thanM the amount released to deendant %ecause said ace value alread$ includedM the interest rom date o note to date o maturit$. 7aid promissor$ notes, /hich indicate the interest o 15( per month, date o issue, due date, the corresponding guarantee checks issued %$ deendant, penalties and attorne$Hs ees. Although, admittedl$, deendant made several pa$ments, the same /ere not enough and she al/a$s deaulted /henever her loans maturedM. As o August 15, 1991, the total unpaid amount, including accrued interest, penalties and attorne$Hs ees, /asM P',8"4,483.'". )he loan on Novem%er 1, 1984 and anuar$ 5, 1988 had %een ull$ paid including the usurious interests o 15( per month, this is the reason /h$ these /ere not included in the complaint. >eendant alleges that all the a%ove amounts /ere released respectivel$ %$ checks dra/n % $ the plainti, and the latter must produce these checks as these /ere returned to him %eing the dra/er i onl$ to serve the truth. )he a%ove amount are the real amount released to the deendant %ut the plainti %$ masterul machinations made it appear that the total amount released /as P35',5""."". Because in his computation he made it appear that the true amounts released /as not the original amount, since it includedM the unconsciona%le interest or our months. >eendant contends that rom all perspectives the a%ove e&cess pa$ment o P1'1,48"."" is more than the interest that could %e legall$ charged, and in act as o anuar$ '-, 1989, the total releases have %een ull$ paid. ISSUES+ 12
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$ELD+ 12 )he records sho/ that there /as a /ritten agreement %et/een the parties or the pa$ment o interest on the su%;ect loans at the rate o 15 percent per month. As decreed %$ the lo/er courts, this rate must %e euita%l$ reduced or %eing iniuitous, unconsciona%le and e&or%itant. J
n the present case, the rate is even more iniuitous and unconsciona%le, as it amounts to 19' percent per annum.
against the la/. 7uchM stipulation is void.K '2
7trictl$ speaking, this covenant on attorne$Hs ees is dierent rom that mentioned in and regulated %$ the *ules o +ourt. J*ather, the attorne$Hs ees here are in the nature o liuidated damages and the stipulation thereor is aptl$ called a penal clause.K 7o long as the stipulation does not contravene the la/, morals, pu%lic order or pu%lic polic$, it is %inding upon the o%ligor. t is the litigant, not the counsel, /ho is the ;udgment creditor entitled to enorce the ;udgment %$ e&ecution.
G.R 17412) #ERESI#A DIO, pettone!, "s.
SPOUSES -IRGILIO and LU ROCES /APOR and MAR#A=1> /APOR, !espondents /u' 6, 2887 -entral Bank -ircular No. 73, which took effect on Danuary !, !7"+, effectiely remoed the ceiling on interest rates for both secured and unsecured loans, regardless of maturity. 5oweer, nothing in said -ircular grants lenders carte blanche authority to impose interest rates which would result in the enslaement of their borrowers or to the hemorrhaging of their assets. Chile a stipulated rate of interest may not technically and necessarily be usurious under -ircular No. 73, usury now being legally non@e4istent in our jurisdiction, nonetheless, said rate may be e2uitably reduced should the same be found to be ini2uitous, unconscionable, and e4orbitant, and h ence, contrary to morals %contra bonos mores&, if not against the law.
FAC#S+ Derein respondents 7pouses @irgilio apor and Lu *oces apor /ere the o/ners o an 83-.- suaremeter residential lot including its improvements, situated in Baranga$ %a%ang #a$ao, Lucena +it$, as sho/n %$ )ranser +ertiicate o )itle 0)+)2 No. )9-13. Ad;acent to the aporHs lot is another lot o/ned %$ respondent #arta apor, /hich consisted o '-.- suare meters and titled under )+) No. )1-"18.
On August ', 198', the respondents o%tained a loan o P9",""" rom the ueon >evelopment Bank 0>B2, and as securit$ thereor, the$ mortgaged the lots covered %$ )+) Nos. )9-13 and )1-"18 to >B, as evidenced %$ a >eed o *eal Estate #ortgage dul$ e&ecuted %$ and %et/een the respondents and >B. On >ecem%er 5, 198, respondents and >B amended the >eed o *eal Estate #ortgage increasing respondentsH loan to P1'8,""". )he respondents ailed to pa$ their aoresaid loans. Do/ever, %eore the %ank could oreclose on the mortgage, respondents, thru their %roker, one Lucia . Orian, oered to mortgage their properties to petitioner )eresita >io. Petitioner prepared a >eed o *eal Estate #ortgage, /here%$ respondents mortgaged ane/ the t/o properties alread$ mortgaged /ith >B to secure the timel$ pa$ment o a P-",""" loan that respondents had rom petitioner >io. )he >eed o *eal Estate #ortgage, though dated anuar$ 1989, /as actuall$ e&ecuted on :e%ruar$ 1, 1989 and notaried on :e%ruar$ 14, 1989. Fnder the terms o the deed, respondents agreed to pa$ the petitioner interest at the rate o ive percent 0-(2 a month, /ithin a period o t/o months or until April 13, 1989. n the event o deault, an additional interest euivalent to ive percent 0-(2 o the amount then due, or ever$ month o dela$, /ould %e charged on them. )he respondents ailed to settle their o%ligation to petitioner on April 13, 1989, the agreed deadline or settlement. On August '4, 1991, petitioner made /ritten demands upon the respondents to pa$ their de%t. >espite repeated demands, respondents did not pa$, hence petitioner applied or e&tra;udicial oreclosure o the mortgage. )he auction o the unredeemed properties /as set or :e%ruar$ '5, 199'. ISSUE+
)he evidence sho/s that it /as indeed the respondents /ho proposed the -( interest rate per month or t/o 0'2 months. Daving agreed to said rate, the parties are no/ estopped rom claiming other/ise. :or the succeeding period ater the t/o months, ho/ever, the +ourt o Appeals correctl$ reduced the interest rate to 1'( per annum and the penalt$ rate to 1( per month, in accordance /ith Article '''4 o the +ivil +ode. G.R. No. 1476(1 Leondes C. D?o, Pettone!, "s. Lna /a!dnes, Respondent
/anua! 31, 288*
Pursuant to the freedom of contract principle embodied in *rticle !+( of the -iil -ode, contracting parties may establish such stipulations, clauses, terms and conditions as they may deem conenient, proided they are not contrary to law, morals, good customs, public order, or public policy. 1n the ordinary course, the codal proision may be inoked to annul the e4cessie stipulated interest.
FAC#S+ On >ecem%er 13, 199', Leonides +. >io 0petitioner2 iled a Petition or +onsolidation o O/nership /ith the *egional )rial +ourt o Baguio +it$, Branch 4 0*)+2. 7he alleged thatI on anuar$ 1, 1984, Lina ardines 0respondent2 e&ecuted in her avor a >eed o 7ale /ith Pacto de *etro over a parcel o land /ith improvements thereon covered %$ )a& >eclaration No. 33'-", the consideration or /hich amounted to P15-,""".""= it /as stipulated in the deed that the period or redemption /ould e&pire in si& months or on ul$ '9, 1984= such period e&pired %ut neither respondent nor an$ o her legal representatives /ere a%le to redeem or repurchase the su%;ect propert$= as a conseuence, a%solute o/nership over the propert$ has %een consolidated in avor o petitioner.
*espondent countered in her Ans/er thatI the >eed o 7ale /ith Pacto de *etro did not em%od$ the real intention o the parties= the transaction actuall$ entered into %$ the parties /as one o simple loan and the >eed o 7ale /ith Pacto de *etro /as e&ecuted ;ust as a securit$ or the loan= the amount %orro/ed %$ respondent during the irst /eek o anuar$ 1984 /as onl$ P-","""."" /ith monthl$ interest o 9( to %e paid /ithin a period o si& months, %ut since said amount /as insuicient to %u$ construction materials or the house she /as then %uilding, she again %orro/ed an additional amount o P",""".""= it /as never the intention o respondent to sell her propert$ to petitioner= the value o respondentHs residential house alone is over a million pesos and i the value o the lot is added, it /ould %e around one and a hal million pesos= it is unthinka%le that respondent /ould sell her propert$ /orth one and a hal million pesos or onl$ P15-,""".""= respondent has even paid a total o P--,"""."" out o the amount %orro/ed and she is /illing to settle the unpaid amount, %ut petitioner insisted on appropriating the propert$ o respondent /hich she put up as collateral or the loan= respondent has %een the one pa$ing or the realt$ ta&es on the su%;ect propert$= and due to the malicious suit iled %$ petitioner, respondent suered moral damages. On 7eptem%er 13, 199, petitioner iled an Amended +omplaint adding allegations that she suered actual and moral damages. )hus, she pra$ed that she %e declared the a%solute o/ner o the propert$ and!or that respondent %e ordered to pa$ her P15-,"""."" plus the agreed monthl$ interest o 1"(= moral and e&emplar$ damages, attorne$Hs ees and e&penses o litigation. ISSUE+ 12
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$ELD+ 12 )he +A correctl$ ruled that the true nature o the contract entered into %$ herein parties /as one o euita%le mortgage. )he presence o even one o the mentioned circumstances as enumerated in Article 15"' is suicient %asis to declare a contract o sale /ith right to repurchase as one o euita%le mortgage. As stated %$ the +ode +ommission /hich drated the ne/ +ivil +ode, in practicall$ all o the socalled contracts o sale /ith right o repurchase, the real intention o the parties is that the pretended purchase price is mone$ loaned and in order to secure the pa$ment o the loan, a contract purporting to %e a sale /ith pacto de retro is dra/n up.
n the instant case, the presence o the circumstances provided or under paragraphs 0'2 and 0-2 o Article 15"' o the +ivil +ode, and the act that petitioner hersel demands pa$ment o interests on the purported purchase price o the su%;ect propert$, clearl$ sho/ that the intention o the parties /as merel$ or the propert$ to stand as securit$ or a loan.
'2
)he inescapa%le conclusion is that the agreed interest rate o 9( per month or 1"8( per annum, as claimed %$ respondent= or 1"( per month or 1'"( per annum, as claimed %$ petitioner, is clearl$ e&cessive, iniuitous, unconsciona%le and e&or%itant. Although respondent admitted that she agreed to the interest rate o 9(, /hich she %elieved /as e&or%itant, she e&plained that she /as constrained to do so as she /as %adl$ in need o mone$ at that time.
7ince the agreed interest rate is void, the parties are considered to have no stipulation regarding the interest rate. )hus, the rate o interest should %e 1'( per annum to %e computed rom ;udicial or e&tra;udicial demand, su%;ect to the provisions o Article 1159 o the +ivil +ode.
G.R. No. 1*4376 #$ERESA MACALALAG, pettone!, "s. PEOPLE OF #$E P$ILIPPINES, !espondent
De:ee! 28, 288* Batas Pambansa Blg. 88 was not intended to shelter or faor nor encourage users of the banking system to enrich themseles through the manipulation and circumention of the noble purpo se and objecties of the law.!!9uch manipulation is manifest when payees of checks issued as security for loans present such checks for payment een after the payment of such loans. 9ubse2uent payments can only affect her ciil, not criminal, liability. * subse2uent payment by the accused would not obliterate the criminal liability theretofore already incurred. 1t is well to note that the graamen of Batas Pambansa Blg. 88 is the issuance of a check, not the nonpayment of an obligation. /he law has made the act of issuing a bum check a malum prohibitum.
FAC#S+ On t/o separate occasions, particularl$ on " ul$ 199- and 15 Octo%er 199-, petitioner )heresa #acalalag o%tained loans rom race Estrella 0Estrella2, each in the amount o P1"","""."", each %earing an interest o 1"( per month. #acalalag consistentl$ paid the interests starting " August 199-. :inding the interest rates so %urdensome, #acalalag reuested Estrella or a reduction o the same to /hich the latter agreed. On 15 April 1995 and 1 #a$ 1995, #acalalag e&ecuted Ackno/ledgment!Airmation *eceipts promising to pa$ Estrella the ace value o the loans in the total amount o P'"","""."" /ithin t/o months rom the date o its e&ecution plus 5( interest per month or each loan. Fnder the t/o Ackno/ledgment!Airmation *eceipts, she urther o%ligated hersel to pa$ or the t/o 0'2 loans the total sum o P1"","""."" as liuidated damages and attorne$6s ees in the total sum o P3","""."" as stipulated %$ the parties the moment she %reaches the terms and conditions thereo.
As securit$ or the pa$ment o the aoresaid loans, #acalalag issued t/o Philippine National Bank 0PNB2 +hecks 0+heck No. +8898- and No. 889852 on " une 1995, each in the amount o P1"","""."", in avor o Estrella. Do/ever, /hen Estrella presented said checks or pa$ment /ith the dra/ee %ank, the same /ere dishonored or the reason that the account against /hich the same /as dra/n /as alread$ closed. Estrella sent a notice o dishonor and demand to make good the said checks to #acalalag, %ut the latter ailed to do so. ISSUES+ 12
'2
$ELD+ 12 )he stipulated interest o 1"( per month, and even the reduced rate o 5( per month, are higher than the interest rates declared unconsciona%le in #edel case and in several other cases /ith allegations o unconsciona%le interests.
'2
)here is no dou%t that #acalalag is lia%le under B.P. Blg. ''. #acalalag admitted having issued the said check and that said check, /hen presented or pa$ment or pa$ment /ith the dra/ee %ank %ounced or the reason ?account closed?. >espite notice o dishonor, #acalalag ailed to make good the said check. All the elements o violation o B.P. Blg. '', viI a2 the making, dra/ing or issuance o an$ check to appl$ to account or or value= %2 the kno/ledge o the maker,M dra/er, or issuer that at the time o the issue he does not have suicient unds in, or credit /ith, the dra/ee %ank or the pa$ment o the check in ull upon its presentment= and, c2 the su%seuent dishonor o the check %$ the dra/ee %ank or insuicienc$ o unds or credit, or dishonor or the same reason had not the dra/er, /ithout an$ valid cause, ordered the %ank to stop pa$ment are, thereore, present.
