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    47 Louh v. BPI

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    Lawdemhar Cabatos
    The Supreme Court ruled that while the spouses Louh were liable to pay their credit card debts to BPI, the interest rates imposed by BPI of 3.5% monthly finance charge and 6% monthly late payment charge were excessive and unconscionable. The Court reduced the interest rates to 12% per annum for the finance charge and late payment charge. It also reduced the attorney's fees from 25% to 5% of the total amount due, finding the original amount exorbitant. The Court affirmed the spouses' liability for payment but modified the interest rates, computation period, and attorney's fees.

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    47 Louh v. BPI

    Uploaded by

    Lawdemhar Cabatos
    315 views1 page
    The Supreme Court ruled that while the spouses Louh were liable to pay their credit card debts to BPI, the interest rates imposed by BPI of 3.5% monthly finance charge and 6% monthly late payment charge were excessive and unconscionable. The Court reduced the interest rates to 12% per annum for the finance charge and late payment charge. It also reduced the attorney's fees from 25% to 5% of the total amount due, finding the original amount exorbitant. The Court affirmed the spouses' liability for payment but modified the interest rates, computation period, and attorney's fees.

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    The Supreme Court ruled that while the spouses Louh were liable to pay their credit card debts to BPI, the interest rates imposed by BPI of 3.5% monthly finance charge and 6% monthly late payment charge were excessive and unconscionable. The Court reduced the interest rates to 12% per annum for the finance charge and late payment charge. It also reduced the attorney's fees from 25% to 5% of the total amount due, finding the original amount exorbitant. The Court affirmed the spouses' liability for payment but modified the interest rates, computation period, and attorney's fees.

    Copyright:

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

    47 Louh v. BPI

    Uploaded by

    Lawdemhar Cabatos
    The Supreme Court ruled that while the spouses Louh were liable to pay their credit card debts to BPI, the interest rates imposed by BPI of 3.5% monthly finance charge and 6% monthly late payment charge were excessive and unconscionable. The Court reduced the interest rates to 12% per annum for the finance charge and late payment charge. It also reduced the attorney's fees from 25% to 5% of the total amount due, finding the original amount exorbitant. The Court affirmed the spouses' liability for payment but modified the interest rates, computation period, and attorney's fees.

    Copyright:

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

    CASE DIGEST

    LOUH v. BPI
    Law 101 ObliCon – Usurious Transactions

    Court Supreme Court Third Division


    Citation G.R. No. 225562
    Date08 March 2017
    Petitioners William C. Louh, Jr. and Irene L. Louh
    Respondent Bank of the Philippine Islands
    Ponente Reyes, J.
    Relevant Stipulations on interest rates that are excessive and unconscionable are void for being
    topiccontrary to morals, if not against the law. Being void, it is as if there was no express
    contract thereon Hence, the courts may reduce the interest rate as reason and equity
    demand.
    Prepared by Lawdemhar Cabatos
    FACTS:
     Respondent BPI issued a credit card in William’s name, with Iren as the extension card holder. Pursuant
    to the terms and conditions of the cards’ issuance, 3.5% finance charge and 6% late payment charge
    shall be imposed monthly upon unpaid credit availments.
     Spouses Louh were remiss in their obligations starting 14 October 2009 and subsequently received
    demand letters from BPI. Upon failure to pay, BPI filed before the RTC of Makati City a complaint for
    Collection of a Sum of Money.
     The RTC declared Spouses Louh in default for failing to file an Answer despite being given granted an
    extension, and upon rendering a decision, ordered Spouses Louh to solidarily pay BPI P533,836.71 plus
    12% finance and 12% late payment annual charges, finding the 3.5% monthly finance charge and 6%
    monthly late payment charges iniquitous and unconscionable, and 25% of the amount due as attorney’s
    fees.
     The CA affirmed the RTC decision in toto, explaining that the Spouses Louh were properly declared in
    default, and that BPI offered ample evidence.

    ISSUE– HELD – RATIO:

    ISSUE HELD
    WoN the CA erred in sustaining BPI’s compliant. NO
    BPI had offered as evidence, among others, delivery receipts pertaining to the credit cards and the terms and
    conditions governing the use thereof, computer-generated authentic copies of the SOAs, and demand letters
    sent by BPI, which Spouses Louh received. The Spouses Louh slept on their rights to refute BPI’s evidence,
    including the receipt of the SOAs and demand letters. BPI cannot be made to pay for the Spouses Louh’s
    negligence, omission, or belated actions.
    Citing the ruling in Macalinao v. BPI, the Court held that the 3.5% monthly finance charge and 6% monthly
    late payment charge were excessive and unconscionable, and thus void. Accordingly, the courts may reduce
    the interest rate as reason and equity demand, and the penalty charges pursuant to Article 1229 of the Civil
    Code. In MCMP Construction Corp. v. Monark Equipment Corp., the Court also held that the 25% of the total
    amount due as attorney’s fees was exorbitant and unconscionable, and reduced the same to 5%.

    RULING:
    WHEREFORE, the Decision of the CA finding the Spouses Louh liable for the payment of credit availments,
    plus finance and late payment charges of 12% each per annum are AFFIRMED. The principal amount due,
    reckoning period of the computation and late payment charges, and attorney’s fees are MODIFIED as follows:
    (1) The principal amount due is P113,756.83 as indicated in the SOA dated October 14, 2009;
    (2) Finance and late payment charges of 12% each per annum shall be computed from October 14, 2009
    until full payment; and
    (3) five percent (5%) of the total amount due is to be paid as attorney's fees.

    SO ORDERED.
    Page 1 of 1

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