Lawyerly

GR No. 201264

2016-01-11

LEONEN, J.

This court also ruled that the interest rates of 3%, 5%, and 10% per month were unconscionable, thus justifying the need to reduce the interest rates to 12% per annum.[115]

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. 172139

2010-12-08

JOCELYN M. TOLEDO v. MARILOU M. HYDEN

DEL CASTILLO, J.

In view of Central Bank Circular No. 905 s. 1982, which suspended the Usury Law ceiling on interest effective January 1, 1983, parties to a loan agreement have wide latitude to stipulate interest rates. Nevertheless, such stipulated interest rates may be declared as illegal if the same is unconscionable.[14] There is certainly nothing in said circular which grants lenders carte blanche authority to raise interest rates to levels which will either enslave their borrowers or lead to a hemorrhaging of their assets.[15] In fact, in Medel v. Court of Appeals,[16] we annulled a stipulated 5.5% per month or 66% per annum interest with additional service charge of 2% per annum and penalty charge of 1% per month on a P500,000.00 loan for being excessive, iniquitous, unconscionable and exorbitant.

GR No. 168782

2008-10-10

SPS. JOVENAL TORING AND CECILIA ESCALONA-TORING v. SPS. ROSALIE GANZON-OLAN AND GILBERT OLAN

QUISUMBING, J.

While the parties are free to stipulate on the interest to be imposed on monetary obligations, the Court will temper interest rates if they are unconscionable.[23] Even if the Usury Law has been suspended by Central Bank Circular No. 905-82, and parties to a loan agreement have been given wide latitude to agree on any interest rate, we have held that stipulated interest rates are illegal if they are unconscionable.[24] Consequently, in our view, the Court of Appeals erred in sustaining the trial court's decision upholding the stipulated interest of 3% and 3.81%. Thus, we are unanimous now in our ruling to reduce the above stipulated interest rates to 1% per month, in conformity with our ruling in Ruiz v. Court of Appeals.[25] For as well stressed in that case:... Nothing in the said circular [CB Circular No. 905, s. 1982] grants lenders carte blanche authority to raise interest rates to levels which will either enslave their borrowers or lead to a hemorrhaging of their assets.

GR No. 174899

2008-09-11

RAMON L. UY v. PEOPLE

CHICO-NAZARIO, J.

We do not agree. First, petitioner failed to specify which provision of said law was violated by private complainant. Second, the effectivity of the Usury Law has been suspended by Central Bank Circular No. 905, s. 1982 effective 1 January 1983.[59]

GR No. 170452

2008-08-13

SALVADOR CHUA v. RODRIGO TIMAN

QUISUMBING, J.

The stipulated interest rates of 7% and 5% per month imposed on respondents' loans must be equitably reduced to 1% per month or 12% per annum. [8] We need not unsettle the principle we had affirmed in a plethora of cases that stipulated interest rates of 3% [9] per month and higher [10] are excessive, iniquitous, unconscionable and exorbitant. Such stipulations are void for being contrary to morals, if not against the law. [11] While C.B. Circular No. 905-82, which took effect on January 1, 1983, effectively removed the ceiling on interest rates for both secured and unsecured loans, regardless of maturity, [12] nothing in the said circular could possibly be read as granting carte blanche authority to lenders to raise interest rates to levels which would either enslave their borrowers or lead to a hemorrhaging of their assets. [13]

GR No. 159912

2007-08-17

UNITED COCONUT PLANTERS BANK v. SPS. SAMUEL AND ODETTE BELUSO

CHICO-NAZARIO, J.

We find the penalty imposed by UCPB, ranging from 30.41% to 36%, to be iniquitous considering the fact that this penalty is already over and above the compounded interest likewise imposed in the contract. If a 36% interest in itself has been declared unconscionable by this Court,[31] what more a 30.41% to 36% penalty, over and above the payment of compounded interest? UCPB itself must have realized this, as it gave us a sample computation of the spouses Beluso's obligation if both the interest and the penalty charge are reduced to 12%.

GR NO. 163712

2006-11-30

METROPOLITAN BANK v. JOSE B. TAN

CARPIO MORALES, J.

In any event, lack of respondent Eliza Go Tan's consent to the mortgage covering the title in question would not render the encumbrance void under the second paragraph of Article 124 of the Family Code.[29] For proof is wanting that the property covered by the title is conjugal that it was acquired during respondents' marriage which is what would give rise to the presumption that it is conjugal property.[30] The statement in the title that the property is "registered in accordance with the provisions of Section 103 of the Property Registration Decree in the name of JOSE B. TAN, of legal age, married to Eliza Go Tan"[31] does not prove or indicate that the property is conjugal. So Ruiz v. Court of Appeals[32] instructs: The property subject of the mortgage is registered in the name of "Corazon G. Ruiz, of legal age, married to Rogelio Ruiz, Filipinos." Thus, title is registered in the name of Corazon alone because the phrase "married to Rogelio Ruiz" is merely descriptive of the civil status of Corazon and should not be construed to mean that her husband is also a registered owner. Furthermore, registration of the property in the name of "Corazon G. Ruiz, of legal age, married to Rogelio Ruiz" is not proof that such property was acquired during the marriage, and thus, is presumed to be conjugal. The property could have been acquired by Corazon while she was still single, and registered only after her marriage to Rogelio Ruiz. Acquisition of title and registration thereof are two different acts. The presumption under Article 116 of the Family Code that properties acquired during the marriage are presumed to be conjugal cannot apply in the instant case. Before such presumption can apply, it must first be established that the property was in fact acquired during the marriage. In other words, proof of acquisition during the marriage is a condition sine qua non for the operation of the presumption in favor of conjugal ownership. No such proof was offered nor presented in the case at bar.[33] (Emphasis and underscoring supplied)

GR NO. 139290

2006-05-19

TRADE v. ROBLETT INDUSTRIAL CONSTRUCTION CORPORATION

TINGA, J.

While the Court recognizes the right of the parties to enter into contracts and who are expected to comply with their terms and obligations, this rule is not absolute. Stipulated interest rates are illegal if they are unconscionable[10] and the Court is allowed to temper interest rates when necessary.[11] In exercising this vested power to determine what is iniquitous and unconscionable, the Court must consider the circumstances of each case.[12] What may be iniquitous and unconscionable in one case, may be just in another. In a number of cases,[13] this Court equitably reduced the interest rate agreed upon by the parties for being iniquitous, unconscionable, and/or exhorbitant.

GR NOS. 150773 & 153599

2005-09-30

SPS. DAVID B. CARPO AND RECHILDA S. CARPO v. ELEANOR CHUA

TINGA, J.

In a long line of cases, this Court has invalidated similar stipulations on interest rates for being excessive, iniquitous, unconscionable and exorbitant. In Solangon v. Salazar,[10] we annulled the stipulation of 6% per month or 72% per annum interest on a P60,000.00 loan. In Imperial v. Jaucian,[11] we reduced the interest rate from 16% to 1.167% per month or 14% per annum. In Ruiz v. Court of Appeals,[12] we equitably reduced the agreed 3% per month or 36% per annum interest to 1% per month or 12% per annum interest. The 10% and 8% interest rates per month on a P1,000,000.00 loan were reduced to 12% per annum in Cuaton v. Salud.[13] Recently, this Court, in Arrofo v. Quino,[14] reduced the 7% interest per month on a P15,000.00 loan amounting to 84% interest per annum to 18% per annum.

GR No. 158382

2004-01-27

MANSUETO CUATON v. REBECCA SALUD

YNARES-SATIAGO, J.

In Ruiz v. Court of Appeals,[9] we declared that the Usury Law was suspended by Central Bank Circular No. 905, s. 1982, effective on January 1, 1983, and that parties to a loan agreement have been given wide latitude to agree on any interest rate. However, nothing in the said Circular grants lenders carte blanche authority to raise interest rates to levels which will either enslave their borrowers or lead to a hemorrhaging of their assets. The stipulated interest rates are illegal if they are unconscionable.

GR No. 156879

2004-01-20

FLORDELIZA CALPATURA FLORA v. PRADO

YNARES-SATIAGO, J.

Article 160 of the Civil Code, which was in effect at the time the sale was entered into, provides that all property of the marriage is presumed to belong to the conjugal partnership unless it is proved that it pertains exclusively to the husband or to the wife. Proof of acquisition during the marriage is a condition sine qua non in order for the presumption in favor of conjugal ownership to operate.[16]

	GR No. 201264 2016-01-11	FLORANTE VITUG v. EVANGELINE A. ABUDA LEONEN, J.
This court also ruled that the interest rates of 3%, 5%, and 10% per month were unconscionable, thus justifying the need to reduce the interest rates to 12% per annum.[115]
	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. 172139 2010-12-08	JOCELYN M. TOLEDO v. MARILOU M. HYDEN DEL CASTILLO, J.
In view of Central Bank Circular No. 905 s. 1982, which suspended the Usury Law ceiling on interest effective January 1, 1983, parties to a loan agreement have wide latitude to stipulate interest rates. Nevertheless, such stipulated interest rates may be declared as illegal if the same is unconscionable.[14] There is certainly nothing in said circular which grants lenders carte blanche authority to raise interest rates to levels which will either enslave their borrowers or lead to a hemorrhaging of their assets.[15] In fact, in Medel v. Court of Appeals,[16] we annulled a stipulated 5.5% per month or 66% per annum interest with additional service charge of 2% per annum and penalty charge of 1% per month on a P500,000.00 loan for being excessive, iniquitous, unconscionable and exorbitant.
	GR No. 168782 2008-10-10	SPS. JOVENAL TORING AND CECILIA ESCALONA-TORING v. SPS. ROSALIE GANZON-OLAN AND GILBERT OLAN QUISUMBING, J.
While the parties are free to stipulate on the interest to be imposed on monetary obligations, the Court will temper interest rates if they are unconscionable.[23] Even if the Usury Law has been suspended by Central Bank Circular No. 905-82, and parties to a loan agreement have been given wide latitude to agree on any interest rate, we have held that stipulated interest rates are illegal if they are unconscionable.[24] Consequently, in our view, the Court of Appeals erred in sustaining the trial court's decision upholding the stipulated interest of 3% and 3.81%. Thus, we are unanimous now in our ruling to reduce the above stipulated interest rates to 1% per month, in conformity with our ruling in Ruiz v. Court of Appeals.[25] For as well stressed in that case:... Nothing in the said circular [CB Circular No. 905, s. 1982] grants lenders carte blanche authority to raise interest rates to levels which will either enslave their borrowers or lead to a hemorrhaging of their assets.
	GR No. 174899 2008-09-11	RAMON L. UY v. PEOPLE CHICO-NAZARIO, J.
We do not agree. First, petitioner failed to specify which provision of said law was violated by private complainant. Second, the effectivity of the Usury Law has been suspended by Central Bank Circular No. 905, s. 1982 effective 1 January 1983.[59]
	GR No. 170452 2008-08-13	SALVADOR CHUA v. RODRIGO TIMAN QUISUMBING, J.
The stipulated interest rates of 7% and 5% per month imposed on respondents' loans must be equitably reduced to 1% per month or 12% per annum. [8] We need not unsettle the principle we had affirmed in a plethora of cases that stipulated interest rates of 3% [9] per month and higher [10] are excessive, iniquitous, unconscionable and exorbitant. Such stipulations are void for being contrary to morals, if not against the law. [11] While C.B. Circular No. 905-82, which took effect on January 1, 1983, effectively removed the ceiling on interest rates for both secured and unsecured loans, regardless of maturity, [12] nothing in the said circular could possibly be read as granting carte blanche authority to lenders to raise interest rates to levels which would either enslave their borrowers or lead to a hemorrhaging of their assets. [13]
	GR No. 159912 2007-08-17	UNITED COCONUT PLANTERS BANK v. SPS. SAMUEL AND ODETTE BELUSO CHICO-NAZARIO, J.
We find the penalty imposed by UCPB, ranging from 30.41% to 36%, to be iniquitous considering the fact that this penalty is already over and above the compounded interest likewise imposed in the contract. If a 36% interest in itself has been declared unconscionable by this Court,[31] what more a 30.41% to 36% penalty, over and above the payment of compounded interest? UCPB itself must have realized this, as it gave us a sample computation of the spouses Beluso's obligation if both the interest and the penalty charge are reduced to 12%.
	GR NO. 163712 2006-11-30	METROPOLITAN BANK v. JOSE B. TAN CARPIO MORALES, J.
In any event, lack of respondent Eliza Go Tan's consent to the mortgage covering the title in question would not render the encumbrance void under the second paragraph of Article 124 of the Family Code.[29] For proof is wanting that the property covered by the title is conjugal that it was acquired during respondents' marriage which is what would give rise to the presumption that it is conjugal property.[30] The statement in the title that the property is "registered in accordance with the provisions of Section 103 of the Property Registration Decree in the name of JOSE B. TAN, of legal age, married to Eliza Go Tan"[31] does not prove or indicate that the property is conjugal. So Ruiz v. Court of Appeals[32] instructs: The property subject of the mortgage is registered in the name of "Corazon G. Ruiz, of legal age, married to Rogelio Ruiz, Filipinos." Thus, title is registered in the name of Corazon alone because the phrase "married to Rogelio Ruiz" is merely descriptive of the civil status of Corazon and should not be construed to mean that her husband is also a registered owner. Furthermore, registration of the property in the name of "Corazon G. Ruiz, of legal age, married to Rogelio Ruiz" is not proof that such property was acquired during the marriage, and thus, is presumed to be conjugal. The property could have been acquired by Corazon while she was still single, and registered only after her marriage to Rogelio Ruiz. Acquisition of title and registration thereof are two different acts. The presumption under Article 116 of the Family Code that properties acquired during the marriage are presumed to be conjugal cannot apply in the instant case. Before such presumption can apply, it must first be established that the property was in fact acquired during the marriage. In other words, proof of acquisition during the marriage is a condition sine qua non for the operation of the presumption in favor of conjugal ownership. No such proof was offered nor presented in the case at bar.[33] (Emphasis and underscoring supplied)
	GR NO. 139290 2006-05-19	TRADE v. ROBLETT INDUSTRIAL CONSTRUCTION CORPORATION TINGA, J.
While the Court recognizes the right of the parties to enter into contracts and who are expected to comply with their terms and obligations, this rule is not absolute. Stipulated interest rates are illegal if they are unconscionable[10] and the Court is allowed to temper interest rates when necessary.[11] In exercising this vested power to determine what is iniquitous and unconscionable, the Court must consider the circumstances of each case.[12] What may be iniquitous and unconscionable in one case, may be just in another. In a number of cases,[13] this Court equitably reduced the interest rate agreed upon by the parties for being iniquitous, unconscionable, and/or exhorbitant.
	GR NOS. 150773 & 153599 2005-09-30	SPS. DAVID B. CARPO AND RECHILDA S. CARPO v. ELEANOR CHUA TINGA, J.
In a long line of cases, this Court has invalidated similar stipulations on interest rates for being excessive, iniquitous, unconscionable and exorbitant. In Solangon v. Salazar,[10] we annulled the stipulation of 6% per month or 72% per annum interest on a P60,000.00 loan. In Imperial v. Jaucian,[11] we reduced the interest rate from 16% to 1.167% per month or 14% per annum. In Ruiz v. Court of Appeals,[12] we equitably reduced the agreed 3% per month or 36% per annum interest to 1% per month or 12% per annum interest. The 10% and 8% interest rates per month on a P1,000,000.00 loan were reduced to 12% per annum in Cuaton v. Salud.[13] Recently, this Court, in Arrofo v. Quino,[14] reduced the 7% interest per month on a P15,000.00 loan amounting to 84% interest per annum to 18% per annum.
	GR No. 158382 2004-01-27	MANSUETO CUATON v. REBECCA SALUD YNARES-SATIAGO, J.
In Ruiz v. Court of Appeals,[9] we declared that the Usury Law was suspended by Central Bank Circular No. 905, s. 1982, effective on January 1, 1983, and that parties to a loan agreement have been given wide latitude to agree on any interest rate. However, nothing in the said Circular grants lenders carte blanche authority to raise interest rates to levels which will either enslave their borrowers or lead to a hemorrhaging of their assets. The stipulated interest rates are illegal if they are unconscionable.
	GR No. 156879 2004-01-20	FLORDELIZA CALPATURA FLORA v. PRADO YNARES-SATIAGO, J.
Article 160 of the Civil Code, which was in effect at the time the sale was entered into, provides that all property of the marriage is presumed to belong to the conjugal partnership unless it is proved that it pertains exclusively to the husband or to the wife. Proof of acquisition during the marriage is a condition sine qua non in order for the presumption in favor of conjugal ownership to operate.[16]

CORAZON G. RUIZ v. CA