263 SCRA 453 (1996)
In 1983, Eusebio acquired 3 separate loans from Security Bank amounting to P265k. The agreed interest rate was 23% per annum. The promissory note was freely and voluntarily signed by both parties. Leia Ventura was the co-maker. Eusebio defaulted from paying. Security Bank sued for collection. Judge Gorospe of the Makati RTC ordered Eusebio to pay but he lowered the interest rate to 12% per annum.
Whether or not the courts have liberality to reduce stipulated interest rates to the legal rate of 12% per annum.
No. From the examination of the records, it appears that indeed the agreed rate of interest as stipulated on the three (3) promissory notes is 23% per annum. The applicable provision of law is the Central Bank Circular No. 905 which took effect on December 22, 1982.The absence of stipulations will the 12% rate be applied or if the stipulated rate is grossly excessive.
Further, Eusebio never questioned the rate. He merely expressed to negotiate the terms and conditions. The promissory notes were signed by both parties voluntarily. Therefore, stipulations therein are binding between them.
* Case digest by Lea Caipang, LLB-1, Andres Bonifacio Law School, SY 2017-2018