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ARTHUR F. MENCHAVEZ v. MARLYN M. BERMUDEZ

This case has been cited 7 times or more.

	GR No. 201264 2016-01-11	FLORANTE VITUG v. EVANGELINE A. ABUDA LEONEN, J.
Voluntariness of stipulations on interest rates is not sufficient to make the interest rates valid.[109] In Castro v. Tan:[110]
	GR No. 201264 2016-01-11	FLORANTE VITUG v. EVANGELINE A. ABUDA LEONEN, J.
Thus, even if the parties voluntarily agree to an interest rate, courts are given the discretionary power to equitably reduce it if it is later found to be iniquitous or unconscionable.[112] Courts approximate what the prevailing market rate would have been under the circumstances had the parties had equal bargaining power.
	GR No. 180144 2014-09-24	LEONARDO BOGNOT v. RRI LENDING CORPORATION BRION, J.
Although parties to a loan agreement have wide latitude to stipulate on the applicable interest rate under Central Bank Circular No. 905 s. 1982 (which suspended the Usury Law ceiling on interest effective January 1, 1983), we stress that unconscionable interest rates may still be declared illegal.[49]
	GR No. 183360 2014-09-08	ROLANDO C. DE LA PAZ v. L & J DEVELOPMENT COMPANY DEL CASTILLO, J.
The situation that it was the debtor who insisted on the interest rate will not exempt Rolando from a ruling that the rate is void. As this Court cited in Asian Cathay Finance and Leasing Corporation v. Gravador,[32] "[t]he imposition of an unconscionable rate of interest on a money debt, even if knowingly and voluntarily assumed, is immoral and unjust. It is tantamount to a repugnant spoliation and an iniquitous deprivation of property, repulsive to the common sense of man."[33] Indeed, "voluntariness does not make the stipulation on [an unconscionable] interest valid."[34]
	GR No. 173331 2013-12-11	FLORPINA BENAVIDEZ v. NESTOR SALVADOR MENDOZA, J.
This Court is not unmindful of the fact that parties to a loan contract have wide latitude to stipulate on any interest rate in view of the Central Bank Circular No. 905 s. 1982 which suspended the Usury Law ceiling on interest effective January 1, 1983. It is, however, worth stressing that interest rates whenever unconscionable may still be declared illegal. There is 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.[31] In Menchavez v. Bermudez,[32] the interest rate of 5% per month, which when summed up would reach 60% per annum, is null and void for being excessive, iniquitous, unconscionable and exorbitant, contrary to morals, and the law.[33]
	GR No. 182963 2013-06-03	SPS. DEO AGNER AND MARICON AGNER v. BPI FAMILY SAVINGS BANK PERALTA, J.
Settled is the principle which this Court has affirmed in a number of cases that stipulated interest rates of three percent (3%) per month and higher are excessive, iniquitous, unconscionable, and exorbitant.[31] While Central Bank 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, 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.[32] Since the stipulation on the interest rate is void for being contrary to morals, if not against the law, it is as if there was no express contract on said interest rate; thus, the interest rate may be reduced as reason and equity demand.[33]
	GR No. 182963 2013-06-03	SPS. DEO AGNER AND MARICON AGNER v. BPI FAMILY SAVINGS BANK PERALTA, J.
Settled is the principle which this Court has affirmed in a number of cases that stipulated interest rates of three percent (3%) per month and higher are excessive, iniquitous, unconscionable, and exorbitant.[31] While Central Bank 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, 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.[32] Since the stipulation on the interest rate is void for being contrary to morals, if not against the law, it is as if there was no express contract on said interest rate; thus, the interest rate may be reduced as reason and equity demand.[33]