G.R. Nos. 158622, 169441, 172958, 173194, 196958, 197120, 205463. January 27, 2016

**G.R. Nos. 158622, 169441, 172958, 173194, 196958, 197120, 205463. January 27, 2016** is a decisions 2016 made by the Supreme Court.

There is no mutuality of contract when the interest rate in a loan agreement is set at the sole discretion of one party. Nor is there any mutuality when there is no reasonable means by which the other party can determine the applicable interest rate. These types of interest rates stipulated in the loan agreement are null and void. However, the nullity of the stipulated interest rate does not automatically nullify the provision requiring payment of interest. Certainly, it does not nullify the obligation to pay the principal loan obligation.

## Case Details

* Sps. Robert Alan L. Nancy Lee Limso Vs. Philippine National Bank and the Register of Deeds of Davao City/Davao Sunrise Investment and Development Corp., et al. Vs. Hon. Jesus V. Quitain, etc. and Philippines National Bank/Davao Sunrise Investment and Development Corp., and Sps. Robert Alan and Nancy Lee Limso Vs. Hon. Jesus V. Quitain, etc. and Philippines National Bank/Philippine National Bank Vs. Davao Sunrise Investment and Development Corp., and Sps. Robert Alan and Nancy Lee Limso/ Philippine National Bank Vs. Davao Sunrise Investment and Development Corp., and Sps. Robert Alan and Nancy Lee Limso/Davao Sunrise Investment and Development Corp., et al. Vs. Philippine National Bank/In the matter of the petition ex-parte for the issuance of the Writ of Possesion under LRC Record No. 12973, 18031 and LRC Record No. 317, Philippine National Bank
* G.R. Nos. 158622, 169441, 172958, 173194, 196958, 197120, 205463. January 27, 2016
* Justice xxx
* http://elibrary.judiciary.gov.ph/thebookshelf/showdocs/1/61731
* xxx

## Decision

**WHEREFORE**, the assailed Decision dated June 19, 2002 and Order dated August 13, 2002 of the Regional Trial Court of Davao City, Branch 17 in Civil Case No. 28,170-2000 declaring the unilateral imposition of interest rates by defendant-appellant PNB as null and void appealed from are **AFFIRMED with the MODIFICATION** that the obligation of plaintiffs-appellees arising from the Loan and Revolving Credit Line and subsequent *Conversion, Restructuring and Extension Agreement* as Loan I and Loan II shall earn interest at the legal rate of twelve percent (12%) per annum computed from September 1, 1993, until fully paid and satisfied.

Accordingly, for reason stated, the petition is **DISMISSED**. With the dismissal of the petition, PNB's Motion for Reception and Admission of PNB's Ex-parte Testimonial and Documentary Evidence is **DENIED**.

**WHEREFORE**, the Petition for Review on Certiorari in G.R. No. 173194 is **DENIED.**

The Petition docketed as G.R. No. 196958 is **PARTIALLY GRANTED**, while the Petition docketed as G.R. No. 197120 is **DENIED**. The Decision of the Court of Appeals in CA-G.R. CV No. 79732-MIN is **AFFIRMED with MODIFICATION**.

The Petition docketed as G.R. No. 205463 is **PARTIALLY GRANTED**. The Sheriffs Provisional Certificate of Sale is deemed to have been registered. In view of the facts of this case, the applicable period of redemption shall be three (3) months as provided under Republic Act No. 8791.