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GR No. 210831

2014-11-26

SPS. TAGUMPAY N. ALBOS AND AIDA C. ALBOS v. SPS. NESTOR M. EMBISAN AND ILUMINADA A. EMBISAN

VELASCO JR., J.

In several cases, we have ruled that stipulations authorizing iniquitous or unconscionable interests are contrary to morals, if not against the law. In Medel v. Court of Appeals,[19] we annulled a stipulated 5.5% per month or 66% per annum interest on a P500,000.00 loan and a 6% per month or 72% per annum interest on a P60,000.00 loan, respectively, for being excessive, iniquitous, unconscionable and exorbitant. In Ruiz v. Court of Appeals,[20] we declared a 3% monthly interest imposed on four separate loans to be excessive. In both cases, the interest rates were reduced to 12% per annum.

GR No. 180144

2014-09-24

LEONARDO BOGNOT v. RRI LENDING CORPORATION

BRION, J.

In several cases, we have ruled that stipulations authorizing iniquitous or unconscionable interests are contrary to morals and are illegal. In Medel v. Court of Appeals,[50] we annulled a stipulated 5.5% per month or 66% per annum interest on a P500,000.00 loan, and a 6% per month or 72% per annum interest on a P60,000.00 loan, respectively, for being excessive, iniquitous, unconscionable and exorbitant.

GR No. 173036

2012-09-26

AGOO RICE MILL CORPORATION v. LAND BANK OF PHILIPPINES

BRION, J.

Neither did the CA find the stipulated interest rates on the promissory notes and the imposed penalty charges excessive, unconscionable and unwarranted, as the interest on the promissory notes ranged from 15.50% to 18.25% per annum and was last fixed at the "prevailing bank rate," while the penalty charge was imposed at 12% per annum. The CA found these rates reasonable and cannot be compared with the 5.5% per month, or 66% per annum, interest that this Court found to be excessive, illegal, iniquitous and unconscionable in Medel v. Court of Appeals.[44]

GR No. 170452

2008-08-13

SALVADOR CHUA v. RODRIGO TIMAN

QUISUMBING, J.

Respondents, invoking Medel v. Court of Appeals, [7] counter that the stipulated interest rates of 7% and 5% per month are iniquitous, unconscionable and exorbitant, thus, they are entitled to the return of the excessive interest paid. They also contend that petitioners cannot raise the defense of in pari delicto for the first time on appeal. They further contend that the defense of good faith is a factual issue which cannot be raised by petitioners in a petition for review under Rule 45 of the Rules of Civil Procedure.

GR NO. 160026

2007-12-10

EDMERITO ANG GOBONSENG v. UNIBANCARD CORPORATION

AZCUNA, J.

First, the baseless and exorbitant interest of 3% per month which is shocking to the conscience of man and the court is contrary to the 12% interest per annum set by the Supreme Court in Medel v. Court of Appeals[10] and Eastern Assurance and Surety, Corporation (EASCO) v. Court of Appeals;[11]

GR NO. 148325

2007-09-03

REYNALDO P. FLOIRENDO v. METROPOLITAN BANK

SANDOVAL-GUTIERREZ, J.

Article 1310. The determination shall not be obligatory if it is evidently inequitable. In such case, the courts shall decide what is equitable under the circumstances. In the other Philippine National Bank v. Court of Appeals[12] case, we disauthorized petitioner bank from unilaterally raising the interest rate on the loan of private respondent from 18% to 32%, 41% and 48%. In Almeda v. Court of Appeals,[13] where the interest rate was increased from 21% to as high as 68% per annum, we declared arbitrary "the galloping increases in interest rate imposed by respondent bank on petitioners' loan, over the latter's vehement protests." In Medel v. Court of Appeals,[14] the stipulated interest of 5.5% per month or 66% per annum on a loan amounting to P500,000.00 was equitably reduced for being iniquitous, unconscionable and exorbitant. In Solangon v. Salazar,[15] the stipulated interest rate of 6% per month or 72% per annum was found to be "definitely outrageous and inordinate" and was reduced to 12% per annum which we deemed fair and reasonable. In Imperial v. Jaucian,[16] we ruled that the trial court was justified in reducing the stipulated interest rate from 16% to 1.167% or 14% per annum and the stipulated penalty charge from 5% to 1.167% per month or 14% per annum.

GR NO. 148491

2007-02-08

SPS. ZACARIAS BACOLOR AND CATHERINE BACOLOR v. BANCO FILIPINO SAVINGS

SANDOVAL-GUTIERREZ, J.

Petitioners invoke this Court's rulings in Almeda vs. Court of Appeals [10] and Medel vs. Court of Appeals [11] to show that the interest rate in the subject promissory note is unconscionable. Their reliance on these cases is misplaced. In Almeda, what this Court struck down as being unconscionable and excessive was the unilateral increase in the interest rates from 18% to 68%. This Court ruled thus:It is plainly obvious, therefore, from the undisputed facts of the case that respondent bank unilaterally altered the terms of its contract by increasing the interest rates of the loan without the prior assent of the latter. In fact, the manner of agreement is itself explicitly stipulated by the Civil Code when it provides, in Article 1956, that "No interest shall be due unless it has been expressly stipulated in writing." What has been "stipulated in writing" from a perusal of the interest rate provision of the credit agreement signed between the parties is that petitioners were bound merely to pay 21% interest x x x. Petitioners also cannot find refuge in Medel. In this case, what this Court declared as unconscionable was the imposition of a 66% interest rate per annum. In the instant case, the interest rate is only 24% per annum, agreed upon by both parties. By no means can it be considered unconscionable or excessive.

GR No. 140608

2007-02-05

PERMANENT SAVINGS v. MARIANO VELARDE

AUSTRIA-MARTINEZ, J.

Attorney's fees.........................................................P50,000.00[4]

GR NO. 164358

2006-12-20

THERESA MACALALAG v. PEOPLE

CHICO-NAZARIO, J.

As she is criminally liable, she is likewise ordered to pay civil indemnity in the amount of P100,000.00 with interest at the legal rate from the time of the filing of the information until the amount is fully paid; less P195,837.98, the amount credited to the accused after paying the first loan, to be applied to the second loan."[3] In acquitting petitioner Macalalag of one count of violation of Batas Pambansa Blg. 22, the Court of Appeals reversed the RTC ruling which held that Medel v. Court of Appeals[4] is not applicable as it applies only in civil cases where the validity of the interest rate is in issue, and cannot be applied in criminal cases for violation of Batas Pambansa Blg. 22.[5] In Medel, we held that, while the Usury Law is now legally inexistent, the stipulated rate of interest at 5.5% per month is iniquitous or unconscionable, which the court could equitably reduce.

GR NO. 139290

2006-05-19

TRADE v. ROBLETT INDUSTRIAL CONSTRUCTION CORPORATION

TINGA, J.

Paramount argues that it is made liable for approximately P48 million, the bulk of which is the interest charge and not the principal amount. It then submits that the interest is clearly iniquitous, unconscionable and exorbitant, thus contrary to morals,[7] citing our ruling in Medel v. Court of Appeals.[8] In the said case, we held as void the stipulation on interest at the rate of 5.5% per month or 66% per annum, on a P500,000.00 loan, the same being "excessive, iniquitous, unconscionable and exorbitant, hence, contrary to morals ("contra bonos mores"), if not against the law."[9]

GR NO. 154129

2005-08-08

TERESITA DIO v. SPS. VIRGILIO AND LUZ ROCES JAPOR AND MARTA JAPOR

QUISUMBING, J.

On the main issue, petitioner contends that The Usury Law[10] has been rendered ineffective by Central Bank Circular No. 905, series of 1982 and accordingly, usury has become legally non-existent in this jurisdiction, thus, interest rates may accordingly be pegged at such levels or rates as the lender and the borrower may agree upon. Petitioner avers she has not violated any law considering she is not engaged in the business of money-lending. Moreover, she claims she has suffered inconveniences and incurred expenses for some 13 years now as a result of respondents' failure to pay her. Petitioner further points out that the 5% interest rate was proposed by the respondents and have only themselves to blame if the interests and penalties ballooned to its present amount due to their willful delay and default in payment. The appellate court thus erred, petitioner now insists, in applying Sps. Almeda v. Court of Appeals[11] and Medel v. Court of Appeals[12] to reduce the interest rate to 12% per annum and the penalty to 1% per month.

GR No. 154129

2005-07-08

TERESITA DIO v. SPS. VIRGILIO AND LUZ ROCES JAPOR AND MARTA JAPOR

QUISUMBING, J.

On the main issue, petitioner contends that The Usury Law[10] has been rendered ineffective by Central Bank Circular No. 905, series of 1982 and accordingly, usury has become legally non-existent in this jurisdiction, thus, interest rates may accordingly be pegged at such levels or rates as the lender and the borrower may agree upon. Petitioner avers she has not violated any law considering she is not engaged in the business of money-lending. Moreover, she claims she has suffered inconveniences and incurred expenses for some 13 years now as a result of respondents' failure to pay her. Petitioner further points out that the 5% interest rate was proposed by the respondents and have only themselves to blame if the interests and penalties ballooned to its present amount due to their willful delay and default in payment. The appellate court thus erred, petitioner now insists, in applying Sps. Almeda v. Court of Appeals[11] and Medel v. Court of Appeals[12] to reduce the interest rate to 12% per annum and the penalty to 1% per month.

	GR No. 210831 2014-11-26	SPS. TAGUMPAY N. ALBOS AND AIDA C. ALBOS v. SPS. NESTOR M. EMBISAN AND ILUMINADA A. EMBISAN VELASCO JR., J.
In several cases, we have ruled that stipulations authorizing iniquitous or unconscionable interests are contrary to morals, if not against the law. In Medel v. Court of Appeals,[19] we annulled a stipulated 5.5% per month or 66% per annum interest on a P500,000.00 loan and a 6% per month or 72% per annum interest on a P60,000.00 loan, respectively, for being excessive, iniquitous, unconscionable and exorbitant. In Ruiz v. Court of Appeals,[20] we declared a 3% monthly interest imposed on four separate loans to be excessive. In both cases, the interest rates were reduced to 12% per annum.
	GR No. 180144 2014-09-24	LEONARDO BOGNOT v. RRI LENDING CORPORATION BRION, J.
In several cases, we have ruled that stipulations authorizing iniquitous or unconscionable interests are contrary to morals and are illegal. In Medel v. Court of Appeals,[50] we annulled a stipulated 5.5% per month or 66% per annum interest on a P500,000.00 loan, and a 6% per month or 72% per annum interest on a P60,000.00 loan, respectively, for being excessive, iniquitous, unconscionable and exorbitant.
	GR No. 173036 2012-09-26	AGOO RICE MILL CORPORATION v. LAND BANK OF PHILIPPINES BRION, J.
Neither did the CA find the stipulated interest rates on the promissory notes and the imposed penalty charges excessive, unconscionable and unwarranted, as the interest on the promissory notes ranged from 15.50% to 18.25% per annum and was last fixed at the "prevailing bank rate," while the penalty charge was imposed at 12% per annum. The CA found these rates reasonable and cannot be compared with the 5.5% per month, or 66% per annum, interest that this Court found to be excessive, illegal, iniquitous and unconscionable in Medel v. Court of Appeals.[44]
	GR No. 170452 2008-08-13	SALVADOR CHUA v. RODRIGO TIMAN QUISUMBING, J.
Respondents, invoking Medel v. Court of Appeals, [7] counter that the stipulated interest rates of 7% and 5% per month are iniquitous, unconscionable and exorbitant, thus, they are entitled to the return of the excessive interest paid. They also contend that petitioners cannot raise the defense of in pari delicto for the first time on appeal. They further contend that the defense of good faith is a factual issue which cannot be raised by petitioners in a petition for review under Rule 45 of the Rules of Civil Procedure.
	GR NO. 160026 2007-12-10	EDMERITO ANG GOBONSENG v. UNIBANCARD CORPORATION AZCUNA, J.
First, the baseless and exorbitant interest of 3% per month which is shocking to the conscience of man and the court is contrary to the 12% interest per annum set by the Supreme Court in Medel v. Court of Appeals[10] and Eastern Assurance and Surety, Corporation (EASCO) v. Court of Appeals;[11]
	GR NO. 148325 2007-09-03	REYNALDO P. FLOIRENDO v. METROPOLITAN BANK SANDOVAL-GUTIERREZ, J.
Article 1310. The determination shall not be obligatory if it is evidently inequitable. In such case, the courts shall decide what is equitable under the circumstances. In the other Philippine National Bank v. Court of Appeals[12] case, we disauthorized petitioner bank from unilaterally raising the interest rate on the loan of private respondent from 18% to 32%, 41% and 48%. In Almeda v. Court of Appeals,[13] where the interest rate was increased from 21% to as high as 68% per annum, we declared arbitrary "the galloping increases in interest rate imposed by respondent bank on petitioners' loan, over the latter's vehement protests." In Medel v. Court of Appeals,[14] the stipulated interest of 5.5% per month or 66% per annum on a loan amounting to P500,000.00 was equitably reduced for being iniquitous, unconscionable and exorbitant. In Solangon v. Salazar,[15] the stipulated interest rate of 6% per month or 72% per annum was found to be "definitely outrageous and inordinate" and was reduced to 12% per annum which we deemed fair and reasonable. In Imperial v. Jaucian,[16] we ruled that the trial court was justified in reducing the stipulated interest rate from 16% to 1.167% or 14% per annum and the stipulated penalty charge from 5% to 1.167% per month or 14% per annum.
	GR NO. 148491 2007-02-08	SPS. ZACARIAS BACOLOR AND CATHERINE BACOLOR v. BANCO FILIPINO SAVINGS SANDOVAL-GUTIERREZ, J.
Petitioners invoke this Court's rulings in Almeda vs. Court of Appeals [10] and Medel vs. Court of Appeals [11] to show that the interest rate in the subject promissory note is unconscionable. Their reliance on these cases is misplaced. In Almeda, what this Court struck down as being unconscionable and excessive was the unilateral increase in the interest rates from 18% to 68%. This Court ruled thus:It is plainly obvious, therefore, from the undisputed facts of the case that respondent bank unilaterally altered the terms of its contract by increasing the interest rates of the loan without the prior assent of the latter. In fact, the manner of agreement is itself explicitly stipulated by the Civil Code when it provides, in Article 1956, that "No interest shall be due unless it has been expressly stipulated in writing." What has been "stipulated in writing" from a perusal of the interest rate provision of the credit agreement signed between the parties is that petitioners were bound merely to pay 21% interest x x x. Petitioners also cannot find refuge in Medel. In this case, what this Court declared as unconscionable was the imposition of a 66% interest rate per annum. In the instant case, the interest rate is only 24% per annum, agreed upon by both parties. By no means can it be considered unconscionable or excessive.
	GR No. 140608 2007-02-05	PERMANENT SAVINGS v. MARIANO VELARDE AUSTRIA-MARTINEZ, J.
Attorney's fees.........................................................P50,000.00[4]
	GR NO. 164358 2006-12-20	THERESA MACALALAG v. PEOPLE CHICO-NAZARIO, J.
As she is criminally liable, she is likewise ordered to pay civil indemnity in the amount of P100,000.00 with interest at the legal rate from the time of the filing of the information until the amount is fully paid; less P195,837.98, the amount credited to the accused after paying the first loan, to be applied to the second loan."[3] In acquitting petitioner Macalalag of one count of violation of Batas Pambansa Blg. 22, the Court of Appeals reversed the RTC ruling which held that Medel v. Court of Appeals[4] is not applicable as it applies only in civil cases where the validity of the interest rate is in issue, and cannot be applied in criminal cases for violation of Batas Pambansa Blg. 22.[5] In Medel, we held that, while the Usury Law is now legally inexistent, the stipulated rate of interest at 5.5% per month is iniquitous or unconscionable, which the court could equitably reduce.
	GR NO. 139290 2006-05-19	TRADE v. ROBLETT INDUSTRIAL CONSTRUCTION CORPORATION TINGA, J.
Paramount argues that it is made liable for approximately P48 million, the bulk of which is the interest charge and not the principal amount. It then submits that the interest is clearly iniquitous, unconscionable and exorbitant, thus contrary to morals,[7] citing our ruling in Medel v. Court of Appeals.[8] In the said case, we held as void the stipulation on interest at the rate of 5.5% per month or 66% per annum, on a P500,000.00 loan, the same being "excessive, iniquitous, unconscionable and exorbitant, hence, contrary to morals ("contra bonos mores"), if not against the law."[9]
	GR NO. 154129 2005-08-08	TERESITA DIO v. SPS. VIRGILIO AND LUZ ROCES JAPOR AND MARTA JAPOR QUISUMBING, J.
On the main issue, petitioner contends that The Usury Law[10] has been rendered ineffective by Central Bank Circular No. 905, series of 1982 and accordingly, usury has become legally non-existent in this jurisdiction, thus, interest rates may accordingly be pegged at such levels or rates as the lender and the borrower may agree upon. Petitioner avers she has not violated any law considering she is not engaged in the business of money-lending. Moreover, she claims she has suffered inconveniences and incurred expenses for some 13 years now as a result of respondents' failure to pay her. Petitioner further points out that the 5% interest rate was proposed by the respondents and have only themselves to blame if the interests and penalties ballooned to its present amount due to their willful delay and default in payment. The appellate court thus erred, petitioner now insists, in applying Sps. Almeda v. Court of Appeals[11] and Medel v. Court of Appeals[12] to reduce the interest rate to 12% per annum and the penalty to 1% per month.
	GR No. 154129 2005-07-08	TERESITA DIO v. SPS. VIRGILIO AND LUZ ROCES JAPOR AND MARTA JAPOR QUISUMBING, J.
On the main issue, petitioner contends that The Usury Law[10] has been rendered ineffective by Central Bank Circular No. 905, series of 1982 and accordingly, usury has become legally non-existent in this jurisdiction, thus, interest rates may accordingly be pegged at such levels or rates as the lender and the borrower may agree upon. Petitioner avers she has not violated any law considering she is not engaged in the business of money-lending. Moreover, she claims she has suffered inconveniences and incurred expenses for some 13 years now as a result of respondents' failure to pay her. Petitioner further points out that the 5% interest rate was proposed by the respondents and have only themselves to blame if the interests and penalties ballooned to its present amount due to their willful delay and default in payment. The appellate court thus erred, petitioner now insists, in applying Sps. Almeda v. Court of Appeals[11] and Medel v. Court of Appeals[12] to reduce the interest rate to 12% per annum and the penalty to 1% per month.

LETICIA Y. MEDEL DR. RAFAEL MEDEL v. CA