Case Digest (G.R. No. 146708)
Facts:
This case involves Joel B. Bortikey (hereinafter "petitioner") as the plaintiff and the Armed Forces of the Philippines Retirement and Separation Benefits System (hereinafter "respondent") as the defendant. The events that led to the dispute began on May 13, 1992, when the petitioner entered into a contract to sell a parcel of land covered by Transfer Certificate of Title No. 221416 from the respondent. The contract stipulated a total purchase price of Three Hundred Ten Thousand One Hundred Pesos (P310,100.00), with a down payment of Thirty-One Thousand Ten Pesos (P31,010.00) to be made upon signing and the remaining balance of Two Hundred Seventy-Nine Thousand Ninety Pesos (P279,090.00) payable in sixty installments of Eight Thousand Twenty-Eight Pesos and 85/100 (P8,028.85), including a 24% annual interest rate.
The contract also included a provision for a seven-day grace period for payment, after which a penalty at the same interest rate would apply. On J
Case Digest (G.R. No. 146708)
Facts:
- Parties Involved
- Petitioner: Joel B. Bortikey
- Respondent: Armed Forces of the Philippines Retirement and Separation Benefits System (AFPRSBS)
- Transaction and Agreement
- On May 13, 1992, petitioner entered into a contract to purchase a parcel of land (covered by TCT No. 221416) from respondent.
- The contract to sell stipulated the following terms:
- Payment of a down payment of ₱31,010.00 upon signing of the agreement.
- The remaining balance of ₱279,090.00 to be paid in sixty (60) consecutive monthly installments of ₱8,028.85 each, which included an interest rate of 24% per annum.
- Provision for a seven-day grace period in case of failure to pay the monthly installment on time, after which a penalty interest of 24% per annum is applicable from the first day of default.
- Dispute and Initial Challenges
- On June 28, 1996, petitioner filed a complaint with the Housing and Land Use Regulatory Board (HLURB), contending that the stipulated annual interest rate of 24% was contrary to law and public morals.
- HLURB dismissed the complaint, holding that the stipulated interest was valid since no ceiling on interest rates existed at the time the contract was perfected.
- The motion for reconsideration before the HLURB was subsequently denied.
- Further Judicial and Administrative Reviews
- Petitioner elevated the issue to the Office of the President, which similarly ruled in favor of the legality of the stipulated interest, emphasizing that contracts have the force of law between the contracting parties and must be observed in good faith.
- On appeal, the Court of Appeals confirmed that the interest rate of 24% per annum was valid and binding, agreed upon mutually by the parties.
- Petitioner, having been in possession of the property and paying the installments over several years, continued to challenge the validity of the stipulated interest, thereby prompting the present petition for review on certiorari before this Court.
Issues:
- Whether the stipulated interest rate of 24% per annum is contrary to law and public morals.
- Whether petitioner may repudiate the contractual interest stipulation after having freely entered into the agreement on installment basis.
- Whether the imposition of interest in an installment contract, as provided in the contract, is enforceable considering the constitutional and legal principles governing the obligation of contracts.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)