Atty. Charlton Lee

30/03/2025

𝐓𝐀𝐆𝐀𝐋𝐈-𝐎𝐆 𝐨 𝐓𝐀𝐆-𝐀𝐒 𝐍𝐆𝐀 𝐈𝐍𝐓𝐄𝐑𝐄𝐒𝐓 𝐒𝐀 𝐏𝐀-𝐔𝐓𝐀𝐍𝐆 ⁉️⚠️

Ingon ang Supreme Court:

“A contract that is freely executed has the force of law between the parties. This time-honored principle of autonomy in contracts is, however, not absolute. It is balanced by the governing rule in Article 1306 of the Civil Code which declares that parties may not stipulate on matters which are contrary to law, morals, good customs, public order, or public policy.

Guided by this premise, the parties' principal loan of PHP467,600.00, payable for five years at PHP16,895.77 per month, inclusive of interests, which, later on condemned the debtors to pay the sum of PHP1,175,638.12, yet still leaving more unpaid balance, cannot be upheld. The interests and penalties charged by the creditor are patently exorbitant and unconscionable; hence void.

Reiterating its 2021 ruling in Megalopolis Properties, Inc. v. D’Nhew Lending Corporation, the Court held that “𝙬𝙝𝙞𝙡𝙚 𝙩𝙝𝙚𝙧𝙚 𝙞𝙨 𝙣𝙤 𝒏𝒖𝒎𝒆𝒓𝒊𝒄𝒂𝒍 𝒍𝒊𝒎𝒊𝒕 𝒐𝒏 𝒄𝒐𝒏𝒔𝒄𝒊𝒐𝒏𝒂𝒃𝒊𝒍𝒊𝒕𝒚, 𝒕𝒉𝒆 𝒓𝒂𝒕𝒆 𝒐𝒇 3% 𝒑𝒆𝒓 𝒎𝒐𝒏𝒕𝒉 𝒐𝒓 36% 𝒑𝒆𝒓 𝒂𝒏𝒏𝒖𝒎 𝒊𝒔 𝒕𝒉𝒓𝒆𝒆 𝒕𝒊𝒎𝒆𝒔 𝒎𝒐𝒓𝒆 𝒕𝒉𝒂𝒏 𝒕𝒉𝒆 12% 𝒍𝒆𝒈𝒂𝒍 𝒊𝒏𝒕𝒆𝒓𝒆𝒔𝒕 𝒓𝒂𝒕𝒆, 𝒂𝒏𝒅 𝒕𝒉𝒆𝒓𝒆𝒇𝒐𝒓𝒆 𝒆𝒙𝒄𝒆𝒔𝒔𝒊𝒗𝒆 𝒂𝒏𝒅 𝒖𝒏𝒄𝒐𝒏𝒔𝒄𝒊𝒐𝒏𝒂𝒃𝒍𝒆.”

The Court added that the “𝒘𝒊𝒍𝒍𝒊𝒏𝒈𝒏𝒆𝒔𝒔 𝒐𝒇 𝒕𝒉𝒆 𝒅𝒆𝒃𝒕𝒐𝒓 𝒊𝒏 𝒂𝒔𝒔𝒖𝒎𝒊𝒏𝒈 𝒂𝒏 𝒖𝒏𝒄𝒐𝒏𝒔𝒄𝒊𝒐𝒏𝒂𝒃𝒍𝒆 𝒓𝒂𝒕𝒆 𝒐𝒇 𝒊𝒏𝒕𝒆𝒓𝒆𝒔𝒕 𝒊𝒔 𝒊𝒏𝒄𝒐𝒏𝒔𝒆𝒒𝒖𝒆𝒏𝒕𝒊𝒂𝒍 𝒕𝒐 𝒊𝒕𝒔 𝒗𝒂𝒍𝒊𝒅𝒊𝒕𝒚.””

SC Nullifies Exorbitant, Unconscionable Loan Interest Rate |

While the parties to a loan agreement may depart from the legal interest rate, any deviation therefrom must be reasonable and fair.

This was the ruling of the Supreme Court’s Second Division, through Associate Justice Mario V. Lopez, denying the petition for review on certiorari filed by Manila Credit Corporation (MCC). The petition challenged the rulings of the Court of Appeals (CA) which had affirmed the judgment of the Regional Trial Court (RTC) declaring the interest rates imposed by MCC on Ramon S. Viroomal (Ramon) and Anita S. Viroomal (collectively, Spouses Viroomal) void for being patently exorbitant and unconscionable.

In resolving MCC’s petition, the Court stressed that while parties to a contract are free to agree on stipulations, clauses, terms, and conditions as they may deem convenient, these must not be contrary to law, morals, good customs, public order, or public policy.

Further, under Article 1409 of the Civil Code, such contracts contrary to morals are inexistent and void from the beginning.

In loan agreements, in particular, while the contracting parties may depart from the legal interest rate, any deviation therefrom must be reasonable and fair. “If the stipulated interest for a loan is more than twice the prevailing legal rate of interest, it is for the creditor to prove that this rate is justified under the prevailing market conditions,” held the Court.

The Court added that while Central Bank of the Philippines Circular No. 905-82 has effectively removed the interest ceilings prescribed under the Usury Law, lenders may not impose interest rates that would “enslave borrowers or hemorrhage their assets.”

Reiterating its 2021 ruling in Megalopolis Properties, Inc. v. D’Nhew Lending Corporation, the Court held that while there is no “numerical limit on conscionability, the rate of 3% per month or 36% per annum is three times more than the 12% legal interest rate, and therefore excessive and unconscionable.”

The Court added that the “willingness of the debtor in assuming an unconscionable rate of interest is inconsequential to its validity.”

Read more at https://sc.judiciary.gov.ph/sc-nullifies-exorbitant-unconscionable-loan-interest-rate/. Read G.R. No. 258526 (Manila Credit Corporation v. Viroomal) in full at https://sc.judiciary.gov.ph/258526-manila-credit-corporation-vs-ramon-s-viroomal-and-anita-s-viroomal-office-of-the-clerk-of-court-and-ex-officio-sheriff-of-the-regional-trial-court-of-paranaque-city-as-represented-by-atty/.

13/11/2024

2024 DOJ-NPS Rules on Summary Investigation and Expedited Preliminary Investigation.

⚖️

16/10/2024

Timely.

The Supreme Court emphasized that statements against public officers do not constitute oral defamation or slander when these concern their discharge of official duties —unless done maliciously.

In a Decision written by Senior Associate Justice Marvic M.V.F. Leonen, the Supreme Court’s Second Division acquitted an accused of oral defamation for remarks against a barangay kagawad.

The barangay kagawad was walking past the accused’s house, when she yelled from her house’s terrace that the barangay kagawad was uneducated, ignorant, and biased against the accused in their barangay conciliation proceedings. The remarks were heard by many people as the terrace was beside the highway.

Under Article 358 of the Revised Penal Code, there is oral defamation or slander when (1) there is an allegation of a crime, fault, or flaw; (2) made orally; (3) publicly; (4) maliciously; (5) towards a person, alive or dead; and (6) such allegation tends to cause dishonor on the person defamed.

As the law assumes that a defamatory allegation is malicious, or made with knowledge that it is false, the person who made the defamatory remarks has the burden of proving there was no malice.

However, when it comes to defamation against public officers in relation to their duties, the prosecution has the burden to prove there was actual malice in the defamatory remarks. The Court recognizes that the right to free speech empowers citizens to hold public officers accountable because public office is a public trust.

In the present case, the SC said that the prosecution failed to prove there was malice in the accused’s remarks against the barangay kagawad. It stressed that while the statements may be offensive, they are not actionable by themselves: “Being ‘sensitive’ has no place in this line of service."

Read the full press release at: https://sc.judiciary.gov.ph/sc-statements-against-public-officers-not-slanderous-when-related-to-the-performance-of-official-duties/

Read the full text of the Decision at: https://sc.judiciary.gov.ph/246824-argelyn-m-labargan-vs-people-of-the-philippines/

07/10/2024

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The Supreme Court has emphasized that simply violating ordinances and regulations is not enough to justify a valid warrantless search and seizure, especially when the penalty does not involve imprisonment.

In a Decision written by Associate Justice Mario V. Lopez, the Supreme Court's Second Division acquitted Angelito Ridon of illegal possession of a firearm. The Court found the firearm seized from him inadmissible because it was the result of an illegal search and seizure.

Searches and seizures without a warrant may be allowed if they are part of a lawful arrest under Rule 126, Section 13 of the Rules of Court. However, a lawful arrest must first be conducted before a warrantless search and seizure can be done.

In the present case, the police officers' basis for pursuing Ridon was his violation of traffic rules for entering a one-way street.

A traffic violation, however, does not call for an arrest but merely the confiscation of the driver’s license. Hence, regardless of Ridon’s guilt in entering the one-way street, he was not under arrest when the police officers pursued him.

As there was no valid arrest, the warrantless search that followed was also not valid.

Read the full press release at: https://sc.judiciary.gov.ph/sc-violation-of-ordinance-not-enough-to-justify-a-warrantless-search/

Read the full text of the Decision at: https://sc.judiciary.gov.ph/252396-angelito-ridon-y-guevarra-vs-people-of-the-philippines/

03/10/2024

Thank you Statutory Construction-D students for this Teacher’s Day token.

Padayon gyapon ato recits 😇

07/09/2024

To all Bar Takers,

The moment you’ve been preparing for is here. In just a few hours, you’ll face the first part of the ultimate test—the culmination of years of dedication, sacrifice, and perseverance in law school.

You've spent sleepless nights pouring over law books, memorizing legal provisions, digesting countless rulings, and enduring the pressure of grueling recitations. You’ve missed out on social events and passed up opportunities, all in preparation for this moment. You’ve done everything that you can to be ready for today.

As you step into the exam room, you carry more than just your Bar Bag—you carry with you the unwavering support of your family, friends, and loved ones, all praying and rooting for your success. You carry our full faith in your ability to conquer this challenge, to pass this 2024 MarveLous Bar examinations. Most importantly, bring with you the determination of that “dreamer” version of yourself—the one who chose to enter law school, knowing the road ahead would be difficult but believing that someday, you would become a lawyer. That someday begins now.

Do know that we have been in your shoes before, and we know and understand the pressure and mixed emotions you're feeling. Trust us when we say you can do this. If we made it, you can too.

Now, as members of the legal profession, we stand behind all aspiring panyeros and panyeras, especially our Hermanos from Tandu Legis Fraternitas and friends from Liceo Law and XU Law, as you take on the 2024 MarVeLous SeptemBAR Exams. We can't wait to welcome you as proud members of the Bar.

May this 🥑 bring you luck!

Godspeed, future lawyers! This is your time.

02/09/2024

Less than a week left before the 2024 SeptemBAR Exams.

Good luck to our future panyeros and panyeras! ⚖️🫡

07/08/2024

Korean Avocado is wishing our friends and colleagues taking the SeptemBAR Exams the best of luck! May the odds be in your favor! ⚖️

Fighting! 🥑🥑🇰🇷🇰🇷

06/08/2024

Asa nang mga tigbasonon nga Deed of Sale diha?

-King Lee Ming Hui
Nutaeryo Dynasty 2024 🇰🇷