This case has been cited 1 times or more.
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2014-07-02 |
DEL CASTILLO, J. |
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| With regard to interest, the Court finds that since the escalation clause is annulled, the principal amount of the loan is subject to the original or stipulated rate of interest, and upon maturity, the amount due shall be subject to legal interest at the rate of 12% per annum. This is the uniform ruling adopted in previous cases, including those cited here.[96] The interests paid by petitioners should be applied first to the payment of the stipulated or legal and unpaid interest, as the case may be, and later, to the capital or principal.[97] Respondent should then refund the excess amount of interest that it has illegally imposed upon petitioners; "[t]he amount to be refunded refers to that paid by petitioners when they had no obligation to do so."[98] Thus, the parties' original agreement stipulated the payment of 19.5% interest; however, this rate was intended to apply only to the first promissory note which expired on November 21, 1989 and was paid by petitioners; it was not intended to apply to the whole duration of the loan. Subsequent higher interest rates have been declared illegal; but because only the rates are found to be improper, the obligation to pay interest subsists, the same to be fixed at the legal rate of 12% per annum. However, the 12% interest shall apply only until June 30, 2013. Starting July 1, 2013, the prevailing rate of interest shall be 6% per annum pursuant to our ruling in Nacar v. Gallery Frames[99] and Bangko Sentral ng Pilipinas-Monetary Board Circular No. 799. | |||||