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    Bortikey V AFP

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    Rom
    1) Joel Bortikey purchased land from AFP Retirement through a contract that stipulated payments in installments with a 24% annual interest rate on the outstanding balance. 2) Bortikey later argued that the 24% interest rate was illegal but HLURB, the Office of the President, and the Court of Appeals all upheld the contract terms as valid. 3) The Supreme Court also ruled that the 24% interest rate was legal and binding, as installment contracts commonly include interest to compensate vendors for not receiving full payment up front, and Bortikey willingly entered into this agreement.

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    Bortikey V AFP

    Uploaded by

    Rom
    218 views2 pages
    1) Joel Bortikey purchased land from AFP Retirement through a contract that stipulated payments in installments with a 24% annual interest rate on the outstanding balance. 2) Bortikey later argued that the 24% interest rate was illegal but HLURB, the Office of the President, and the Court of Appeals all upheld the contract terms as valid. 3) The Supreme Court also ruled that the 24% interest rate was legal and binding, as installment contracts commonly include interest to compensate vendors for not receiving full payment up front, and Bortikey willingly entered into this agreement.

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    Bortikey v AFP

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    Bortikey v AFP

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    1) Joel Bortikey purchased land from AFP Retirement through a contract that stipulated payments in installments with a 24% annual interest rate on the outstanding balance. 2) Bortikey later argued that the 24% interest rate was illegal but HLURB, the Office of the President, and the Court of Appeals all upheld the contract terms as valid. 3) The Supreme Court also ruled that the 24% interest rate was legal and binding, as installment contracts commonly include interest to compensate vendors for not receiving full payment up front, and Bortikey willingly entered into this agreement.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    218 views2 pages

    Bortikey V AFP

    Uploaded by

    Rom
    1) Joel Bortikey purchased land from AFP Retirement through a contract that stipulated payments in installments with a 24% annual interest rate on the outstanding balance. 2) Bortikey later argued that the 24% interest rate was illegal but HLURB, the Office of the President, and the Court of Appeals all upheld the contract terms as valid. 3) The Supreme Court also ruled that the 24% interest rate was legal and binding, as installment contracts commonly include interest to compensate vendors for not receiving full payment up front, and Bortikey willingly entered into this agreement.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 2

    Bortikey v AFP Retirement perfection of the contract.

    Bortikey was therefore


    under the legal and contractual obligation to
    FACTS: comply with the stipulation. MR denied.
    Joel Bortikey (petitioner) bought from respondent
    Armed Forces of the Philippines Retirement and OFFICE OF THE PRESIDENT
    Separation Benefits System (AFPRSBS) a parcel Bortikey raised the matter to the Office of the
    of land covered by TCT No. 221416 of the Register President which, however, ruled for the legality
    of Deeds of Caloocan City. The transaction was of the stipulated interest. According to OP,
    embodied in a contract to sell, the pertinent portion contracts have the force of law between the
    of which read: contracting parties and should be complied with in
    good faith.
    THIRD xxx BUYER hereby agrees and obliges
    himself/herself to pay the SELLER the sum of COURT OF APPEALS:
    THREE HUNDRED TEN THOUSAND ONE Court of Appeals ruled that the stipulated 24%
    HUNDRED (P310,100.00) Pesos, Philippine annual interest was not contrary to law and public
    Currency as follows: morals, having been mutually agreed upon by the
    parties. The motion for reconsideration was
    a) The amount of THIRTY ONE THOUSAND denied.
    TEN (P31,010.00) Pesos, Philippine Currency
    upon signing of this agreement and the same shall ISSUE:
    be considered as Down Payment xxx; WON the stipulated interest of 24% per annum was
    legal?
    b) The balance/total contract price of TWO
    HUNDRED SEVENTY-NINE THOUSAND HELD:
    NINETY (P279,090.00) Pesos, Philippine YES. Petitioner was free to decide on the manner
    Currency shall be paid in sixty (60) consecutive of payment, either in cash or installment. Since he
    monthly installments xxx amounting to EIGHT opted to purchase the land on installment basis, he
    THOUSAND TWENTY-EIGHT Pesos and 85/100 consented to the imposition of interest on the
    (8,028.85) including interest at the rate of 24% per contract price. He cannot now unilaterally withdraw
    annum xxx from it by disavowing the obligation created by the
    stipulation in the contract.
    In case of failure on the part of the BUYER to pay
    the amortization due on the specified maturity date,
    the Buyer shall be given a seven-day grace period The rationale behind having to pay a higher sum
    xxx. However, in the event that the BUYER fails to on the installment is to compensate the vendor for
    pay within the seven-day grace period, he shall be waiting a number of years before receiving the total
    charged a penalty of 24% per annum to be amount due. The amount of the stated contract
    reckoned from the first day of default.[4] price paid in full today is worth much more than a
    series of small payments totaling the same
    HLURB amount. Respondent vendor, had it received the
    Bortikey filed a complaint in the Housing and Land full cash price, could have deposited the same in a
    Use Regulatory Board[5] (HLURB) alleging that the bank, for instance, and earned interest income
    24% annual interest stipulated in the contract was therefrom. To assert that mere prompt payment of
    contrary to law and public morals. HLURB ruled the monthly installments should obviate imposition
    that the stipulated interest was valid because there of the stipulated interest is to ignore an economic
    was no ceiling on interest rates at the time of the
    fact and negate one of the most important
    principles on which commerce operates.

    The contract for the purchase of a piece of land on


    installment basis is not only lawful; it is also of
    widespread usage or custom in our economic
    system. Moreover, the contract was entered into by
    the parties freely and voluntarily. Petitioner had in
    fact been in possession of the property for several
    years already, paying the installments as they fell
    due, when he attacked the legality of the stipulated
    interest. If he eventually found the interest
    stipulation in the contract financially
    disadvantageous to him, he cannot now turn to this
    Court for succor without impairing the
    constitutional right to the obligation of
    contracts.[16] This Court will not relieve petitioner of
    the necessary consequences of his free and
    voluntary, and otherwise lawful, act.

    Therefore, the stipulated 24% annual interest on


    the price of the parcel of land purchased by
    petitioner from respondent on installment basis is
    hereby declared valid and binding.

    WHEREFORE, premises considered, the instant


    petition is hereby DENIED.

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