This case has been cited 1 times or more.
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2007-12-19 |
CORONA, J. |
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| that the stipulated rate of interest will be reduced if the applicable maximum rate of interest is reduced by law or by the Monetary Board (de-escalation clause).[69] The RTC found that Equitable's promissory notes uniformly stated:If subject promissory note is extended, the interest for subsequent extensions shall be at such rate as shall be determined by the bank.[70] Equitable dictated the interest rates if the term (or period for repayment) of the loan was extended. Respondents had no choice but to accept them. This was a violation of Article 1308 of the Civil Code. Furthermore, the assailed escalation clause did not contain the necessary provisions for validity, that is, it neither provided that the rate of interest would be increased only if allowed by law or the Monetary Board, nor allowed de-escalation. For these reasons, the escalation clause was void. | |||||