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    Macalinao Vs BPI

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    Shanielle Qim Cañeda
    The Supreme Court upheld the lower court's reduction of interest rate from 9.25% to 2% imposed by BPI on credit card holder Macalinao. The Court found the stipulated 3% monthly interest rate or 36% annual interest rate to be excessive, iniquitous, and unconscionable. While the contract specified these rates, terms against morals or law are void. Where no express agreement exists on interest, courts may set reasonable rates. The Court further reduced penalty charges from 1.5% to 1% monthly, noting Macalinao made partial payments and the total 2% monthly rate was equitable.

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    Macalinao Vs BPI

    Uploaded by

    Shanielle Qim Cañeda
    290 views1 page
    The Supreme Court upheld the lower court's reduction of interest rate from 9.25% to 2% imposed by BPI on credit card holder Macalinao. The Court found the stipulated 3% monthly interest rate or 36% annual interest rate to be excessive, iniquitous, and unconscionable. While the contract specified these rates, terms against morals or law are void. Where no express agreement exists on interest, courts may set reasonable rates. The Court further reduced penalty charges from 1.5% to 1% monthly, noting Macalinao made partial payments and the total 2% monthly rate was equitable.

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    Macalinao vs BPI

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    The Supreme Court upheld the lower court's reduction of interest rate from 9.25% to 2% imposed by BPI on credit card holder Macalinao. The Court found the stipulated 3% monthly interest rate or 36% annual interest rate to be excessive, iniquitous, and unconscionable. While the contract specified these rates, terms against morals or law are void. Where no express agreement exists on interest, courts may set reasonable rates. The Court further reduced penalty charges from 1.5% to 1% monthly, noting Macalinao made partial payments and the total 2% monthly rate was equitable.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    290 views1 page

    Macalinao Vs BPI

    Uploaded by

    Shanielle Qim Cañeda
    The Supreme Court upheld the lower court's reduction of interest rate from 9.25% to 2% imposed by BPI on credit card holder Macalinao. The Court found the stipulated 3% monthly interest rate or 36% annual interest rate to be excessive, iniquitous, and unconscionable. While the contract specified these rates, terms against morals or law are void. Where no express agreement exists on interest, courts may set reasonable rates. The Court further reduced penalty charges from 1.5% to 1% monthly, noting Macalinao made partial payments and the total 2% monthly rate was equitable.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    G.R. No.

    175490 September 17, 2009

    ILEANA DR. MACALINAO vs. BANK OF THE PHILIPPINE ISLANDS

    Facts: Macalinao was an approved cardholder of BPI Mastercard. Macalinao made some purchases
    through the use of the said credit card and defaulted in paying for said purchases. She subsequently
    received a letter dated January 5, 2004 from respondent BPI, demanding payment of the amount PhP
    141,518.34. Under the Terms and Conditions Governing the Issuance and Use of the BPI Credit and BPI
    Mastercard, the charges or balance thereof remaining unpaid after the payment due date indicated on
    the monthly Statement of Accounts shall bear interest at the rate of 3% per month and an additional
    penalty fee equivalent to another 3% per month. In its Complaint, respondent BPI originally imposed the
    interest and penalty charges at the rate of 9.25% per month or 111% per annum. This was declared as
    unconscionable by the lower courts for being clearly excessive, and was thus reduced to 2% per month
    or 24% per annum. On appeal, the CA modified the rate of interest and penalty charge and increased
    them to 3% per month or 36% per annum based on the Terms and Conditions Governing the Issuance
    and Use of the BPI Credit Card, which governs the transaction between petitioner Macalinao and
    respondent BPI.

    Macalinao claims that the interest rate and penalty charge of 3% per month imposed by the CA is
    iniquitous as the same translates to 36% per annum or thrice the legal rate of interest. On the other
    hand, respondent BPI asserts that said interest rate and penalty charge are reasonable as the same are
    based on the Terms and Conditions Governing the Issuance and Use of the BPI Credit Card.

    ISSUE: Whether or not the reduction of interest rate, from 9.25% to 2%, should be upheld since the
    stipulated rate of interest was unconscionable and iniquitous, and thus illegal?

    RULING: Yes. Jurisprudence provides that interest rates of 3% per month and higher are excessive,
    iniquitous, unconscionable and exorbitant. Such stipulations are void for being contrary to morals, if not
    against the law. Since the stipulation on the interest rate is void, it is as if there was no express contract
    thereon. Hence, courts may reduce the interest rate as reason and equity demand. The same is true
    with respect to the penalty charge. Article 1229 of the Civil Code states that the judge shall equitably
    reduce the penalty when the principal obligation has been partly or irregularly complied with by the
    debtor. Even if there has been no performance, the penalty may also be reduced by the courts if it is
    iniquitous or unconscionable. In this case, the records would reveal that Macalinao made partial
    payments to BPI, as indicated in her Billing Statements. Further, the stipulated penalty charge of 3% per
    month or 36% per annum, in addition to regular interests, is indeed iniquitous and unconscionable.
    Thus, under the circumstances, the Court found it equitable to reduce the interest rate pegged by the
    CA at 1.5% monthly to 1% monthly and penalty charge fixed by the CA at 1.5% monthly to 1% monthly
    or a total of 2% per month or 24% per annum in line with the prevailing jurisprudence and in accordance
    with Art. 1229 of the Civil Code.

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