G.R. No. 171925. July 23, 2010.

SOLIDBANK CORPORATION, (now Metropolitan Bank and Trust

Company), petitioner, vs. PERMANENT HOMES,
INCORPORATED, respondent.

Usury Law; Interest Rates; The Usury Law had been rendered legally
ineffective by Resolution No. 224 dated 3 December 1982 of the Monetary
Board of the Central Bank, and later by Central Bank Circular No. 905
which took effect on 1 January 1983; These circulars removed the ceiling on
interest rates for secured and unsecured loans regardless of maturity; the
effect of these circulars is to allow the parties to agree on any interest that
may be charged on a loan, the virtual repeal of the Usury Law is within the
range of judicial notice which courts are bound to take into account.—The
Usury Law had been rendered legally ineffective by Resolution No. 224
dated 3 December 1982 of the Monetary Board of the Central Bank, and
later by Central Bank Circular No. 905 which took effect on 1 January 1983.
These circulars removed the ceiling on interest rates for secured and
unsecured loans regardless of maturity. The effect of these circulars is to
allow the parties to agree on any interest that may be charged on a loan. The
virtual repeal of the Usury Law is within the range of judicial notice which
courts are bound to take into account. Although interest rates are no longer
subject to a ceiling, the lender still does not have an unbridled license to
impose increased interest rates. The lender and the borrower should agree
on the imposed rate, and such imposed rate should be in writing.
Civil Law; Obligations and Contracts; Obligations arising from
contracts may have the force of law between the parties, there must be a
mutuality between the parties based on their essential equality; A contract
containing a condition which makes its fulfillment dependent exclusively
upon the uncontrolled will of one of the contracting parties is void.—In
order that obligations arising from contracts may have the force of law
between the parties, there must be a mutuality between the parties based on
their essential equality. A contract containing a condition which makes its
fulfillment dependent exclusively upon the uncontrolled will of one of the
contracting parties is

_______________

* SECOND DIVISION.
 276

276 SUPREME COURT REPORTS ANNOTATED

Solid Bank Corporation vs. Permanent Homes, Incorporated

void. There was no showing that either Solidbank or Permanent coerced

each other to enter into the loan agreements. The terms of the Omnibus Line
Agreement and the promissory notes were mutually and freely agreed upon
by the parties.

PETITION for review on certiorari of the decision and resolution of

the Court of Appeals.
The facts are stated in the opinion of the Court.
Epifanio C. Sedigo for petitioner.
Alberto II Borbon Reyes for respondent.

CARPIO, J.:
G.R. No. 171925 is a petition for review1 assailing the Decision2
promulgated on 29 June 2005 by the Court of Appeals (appellate
court) as well as the Resolution3 promulgated on 14 March 2006 in
CA-G.R. CV No. 75926. The appellate court granted the petition
filed by Permanent Homes, Incorporated (Permanent) and reversed
the decision of the Regional Trial Court of Makati City, Branch 58
(trial court) dated 5 July 2002 in Civil Case No. 98-654. The
appellate court ordered Solidbank Corporation (Solidbank) and
Permanent to enter into an express agreement about the applicable
interest rates on Permanent’s loan. Solidbank was also ordered to
render an accounting of Permanent’s payments, not to impose
interest on interest upon Permanent’s loans, and to release the
remaining amount available under Permanent’s omnibus credit line.

_______________

1 Under Rule 45 of the 1997 Rules of Civil Procedure.

2 Rollo, pp. 43-65. Penned by Associate Justice Danilo B. Pine, with Associate
Justices Rodrigo V. Cosico and Arcangelita Romilla-Lontok, concurring.
3 Id., at pp. 67-68. Penned by Associate Justice Rodrigo V. Cosico, with Associate
Justices Josefina Guevara-Salonga and Arcangelita Romilla-Lontok, concurring.

277

VOL. 625, JULY 23, 2010 277

Solid Bank Corporation vs. Permanent Homes, Incorporated

The Facts

The appellate court narrated the facts as follows:

 “The records disclose that PERMANENT HOMES is a real estate
development company, and to finance its housing project known as the
“Buena Vida Townhomes” located within Merville Subdivision, Parañaque
City, it applied and was subsequently granted by SOLIDBANK with an
“Omnibus Line” credit facility in the total amount of SIXTY MILLION
PESOS. Of the entire loan, FIFTY NINE MILLION as [sic] time loan for a
term of up to three hundred sixty (360) days, with interest thereon at
prevailing market rates, and subject to monthly repricing. The remaining
ONE MILLION was available for domestic bills purchase.
To secure the aforesaid loan, PERMANENT HOMES initially
mortgaged three (3) townhouse units within the Buena Vida project in
Parañaque. At the time, however, the instant complaint was filed against
SOLIDBANK, a total of thirty six (36) townhouse units were mortgaged
with said bank.
Of the 60 million available to PERMANENT HOMES, it availed of a
total of 41.5 million pesos, covered by three (3) promissory notes, which
contain the following provisions, thus:
“xxx
5.  We/I irrevocably authorize Solidbank to increase or decrease
at any time the interest rate agreed in this Note or Loan on the basis
of, among others, prevailing rates in the local or international capital
markets. For this purpose, We/I authorize Solidbank to debit any
deposit or placement account with Solidbank belonging to any one of
us. The adjustment of the interest rate shall be effective from the date
indicated in the written notice sent to us by the bank, or if no date is
indicated, from the time the notice was sent.
6.  Should We/I disagree to the interest rate adjustment, We/I
shall prepay all amounts due under this Note or Loan within thirty
(30) days from the receipt by anyone of us of the written notice.
Otherwise, We/I shall be deemed to have given our consent to the
interest rate adjustment.”
Contrary, however, to the specific provisions as afore-quoted, there was a
standing agreement by the parties that any increase or

278

278 SUPREME COURT REPORTS ANNOTATED

Solid Bank Corporation vs. Permanent Homes, Incorporated

decrease in interest rates shall be subject to the mutual agreement of the

parties.
For the first loan availment of PERMANENT HOMES on March 20,
1997, in the amount of 19.6 MILLION, from the initial interest rate of
14.25% per annum (p.a.), the same was increased 15% p.a. effective May
19, 1997; it was again increased to 26% p.a. effective July 18, 1997. It was
thereafter reduced to 20% p.a. effective August 18, 1997, and then
increased to 24% p.a. effective September 17, 1997. The rate was increased
further to 30% p.a. effective October 17, 1997, then decreased to 27% p.a.
on November 17, 1997, and again increased to 34% p.a. effective
December 17, 1997. The rate then decreased to 30% p.a. on January 16,
1998.
For the second loan availment in the amount of 18 million, the rate was
initially pegged at 15.75% p.a. on June 24, 1997. A month later, the rate
increased to 23.5% p.a. It thereafter decreased to 20% p.a. effective August
24, 1997, but again increased to 22.5% p.a. effective September 24, 1997.
For the next month, the rate surged to 30% p.a., and decreased to 27% p.a.
for the month of November. The rate again surged to 34% p.a. for the
month of December, and was decreased to 30% p.a. from January 22, 1998
to February 20, 1998.
For the third loan availment on July 15, 1997, in the amount of 3.9
million, the interest rate was initially pegged at 35% p.a., but this was
decreased to 21% p.a. from August 14 until September 11, 1997. The rate
increased slightly to 23% p.a. on September 12, 1997, and surged to 27%
p.a. on October 13, 1997. The rate went down slightly to 27% p.a. for the
month of November, and to 26% p.a. for the month of December. The rate,
however, again surged to 30% p.a. on January 12, 1998 before settling at
29% p.a. for the month of February.
It is [Permanent’s] stand that SOLIDBANK unilaterally and arbitrarily
accelerated the interest rates without any declared basis of such increases, of
which PERMANENT HOMES had not agreed to, or at the very least, been
informed of. This is contrary to their earlier agreement that any interest rate
changes will be subject to mutual agreement of the parties. PERMANENT
HOMES further admits that it was not able to protest such arbitrary
increases at the time they were imposed by SOLIDBANK, for fear that
SOLIDBANK might cut off the credit facility it extended to PERMANENT
HOMES. Permanent was then in the midst of the construction of its

279

VOL. 625, JULY 23, 2010 279

Solid Bank Corporation vs. Permanent Homes, Incorporated

project in Merville, Parañaque City, and SOLIDBANK knew that it was

relying substantially on the credit facility the latter extended to it.
[Permanent] thus filed a case before the trial court seeking the following:
(1) the annulment of the increases in interest rates on the loans it obtained
from SOLIDBANK, on the ground that it was violative of the principle of
mutuality of agreement of the parties, as enunciated in Article 1409 of the
New Civil Code, (2) the fixing of the interest rates at the applicable interest
rate, and (3) for the trial court to order SOLIDBANK to make an accounting
of the payments it made, so as to determine the amount of refund
PERMANENT is entitled to, as well as to order SOLIDBANK to release the
remaining available balance of the loan it extended to PERMANENT. In
addition, [Permanent] prays for the payment of compensatory, moral and
exemplary damages.
 SOLIDBANK, on the other hand, avers that PERMANENT HOMES has
no cause of action against it, in view of the pertinent provisions of the
Omnibus Credit Line and the promissory notes agreed to and signed by
PERMANENT HOMES. Thus, in accordance with said provisions,
SOLIDBANK was authorized to, upon due notice, periodically adjust the
interest rates on PERMANENT HOMES’ loan availments during the
monthly interest repricing dates, depending on the changes in prevailing
interest rates in the local and international capital markets. In fact,
SOLIDBANK avers that four (4) days before July 15, 1997, the Bangko
Sentral ng Pilipinas (BSP) declared that it could no longer support the
Philippine currency from external speculative forces, hence, the local
currency was allowed to seek its own exchange rate level. As a result of the
volatile exchange rate ratio, banks were then hesitant to extend loans, and in
some instances that it granted loans, they had to ensure that they will not be
at the losing end of the deal, so to speak, by the repricing of the interest
rates every month. SOLIDBANK insists that PERMANENT HOMES
should not be allowed to renege on its contractual obligations, as it freely
and voluntarily bound itself to the provisions of the Omnibus Credit Line
and the promissory notes.
PERMANENT HOMES presented as witnesses Jacqueline S. Lim, its
Vice President and Chief Financial Officer, Engr. Rey A. Romasanta, its
Executive Vice President and Chief Operating Officer, and Martha Julia
Flores, its Treasury Officer.

380

380 SUPREME COURT REPORTS ANNOTATED

Solid Bank Corporation vs. Permanent Homes, Incorporated

On March 24, 1998, the trial court issued a temporary restraining order
(TRO), after a summary hearing, which enjoined SOLIDBANK from
implementing and collecting the increases in interest rates and from
initiating any action, including the foreclosure of the mortgaged properties.
Ms. Lim’s testimony centered on PERMANENT HOMES’ allegations
that the repricing of the interest rates was done by SOLIDBANK without
any written agreement entered into between the parties. In fact, Ms. Lim
accounted that SOLIDBANK will merely advise them of the interest rate for
the period, after said period had already commenced, and at times very late
in the period, by fax messages. When PERMANENT HOMES called
SOLIDBANK’s attention to the seemingly surging rates it imposed on its
loan, SOLIDBANK will merely answer that it was the bank’s policy,
without offering any basis for such increase. Furthermore, Ms. Lim also
mentioned SOLIDBANK’s alleged practice of imposing interest on unpaid
interest, at the highest rate of 30% p.a. Ms. Lim also presented a tabulation,
which presents the number of days their billing statements were sent late,
from the time the interest period started. It is PERMANENT HOMES’ stand
that since the purpose of the billing statements was to inform them
beforehand of the applicable interest rate for the period, the late billings
will clearly show SOLIDBANK’s arbitrary imposition of the repriced
interest rates, as well as its indifference to PERMANENT HOMES’ plight.
To illustrate, for the first loan availment in the amount of P19.6 million,
the billing statements which should have notified PERMANENT HOMES
of the repriced interest rates were faxed to PERMANENT HOMES between
eighteen (18) to thirty-three (33) days late. For the second loan availment in
the amount of P18 million, the faxed billings were late between six (6) to
twenty-one (21) days, and one instance where PERMANENT HOMES
received no billing at all. For the third loan availment in the amount of P3.9
million, the faxed billings were late between seven (7) to twenty-nine (29)
days, and also an instance where PERMANENT HOMES received no
billing at all.
This practice, according to Ms. Lim, clearly affected its operations, as
the completion of its construction project was unnecessarily delayed, to its
prejudice and its buyers. This was the import of the testimony of
PERMANENT HOMES’ second witness, Engr. Rey A. Romasanta.
According to Engr. Rey, the target date of completion

281

VOL. 625, JULY 23, 2010 281

Solid Bank Corporation vs. Permanent Homes, Incorporated

was August 1997, but in view of the shortage of funds by reason of

SOLIDBANK’s refusal for PERMANENT HOMES to make further
availments on its omnibus credit line, the project was completed only on
February 1998.
PERMANENT HOMES’ third and final witness was Martha Julia
Flores, its Treasury Officer, who explained that as such, it was her who
received the late billings from SOLIDBANK. She would also call up
SOLIDBANK to ask what the repriced interest rate for the coming interest
period, to no avail, as SOLIDBANK will merely fax its billings almost
always, as abovementioned, late in the period. Ms. Flores admitted that she
prepared the tabulation presented before the court, which showed how late
SOLIDBANK’s billings were sent to PERMANENT HOMES, as well as
the computation of interest rates that SOLIDBANK had allegedly
overcharged on its loan, vis-a-vis the average of the high and the low
published lending rates of SOLIDBANK.
SOLIDBANK, to establish its defense, presented its lone witness, Mr.
Cesar Lugtu, who testified to the effect that, contrary to PERMANENT
HOMES’ assertions that it was not promptly informed of the repriced
interest rates, SOLIDBANK’s officers verbally advised PERMANENT
HOMES of the repriced rates at the start of the period, and even added that
their transaction[s] were based on trust. Aside from these allegations,
however, no written memorandum or note was presented by SOLIDBANK
to support their assertion that PERMANENT HOMES was timely advised
of the repriced interests.”4

The Trial Court’s Ruling

 On 5 July 2002, the trial court promulgated its Decision in favor
of Solidbank. The trial court ratiocinated and ruled thus:

“It becomes crystal clear that there is sufficient proof to show that the
instant case was instituted by [Permanent] as an after-thought and as an
obvious subterfuge intended to completely lay on the defendant the blame
for the debacle of its Buena Vida project. An afterthought because the
records of the case show that the complaint

_______________

4 Id., at pp. 43-49.

282

282 SUPREME COURT REPORTS ANNOTATED

Solid Bank Corporation vs. Permanent Homes, Incorporated

was filed in March 16, 1998, already after it was having difficulty
making the amortization payments, the last of which being in February
1998. A subterfuge because plaintiff, instead of blaming itself and its own
business judgment that went sour, would rather put the blame on
[Solidbank], taking advantage of every conceivable gray area of its contract
with [Solidbank] to avoid its own liabilities. In fact, this complaint was
made the very basis for [Permanent] to altogether stop the payment of its
loan from [Solidbank] including the interest payment (TSN, May 07, 1998,
p. 60).
xxxx
WHEREFORE, finding the complaint not impressed with merit,
judgment is hereby rendered dismissing the said complaint. The
Counterclaim is likewise dismissed for lack of evidence to support the same.
SO ORDERED.”5

Permanent filed an appeal before the appellate court.

The Appellate Court’s Ruling

The appellate court granted Permanent’s appeal, and set aside the
trial court’s ruling. The appellate court not only recognized the
validity of escalation clauses, but also underscored the necessity of a
basis for the increase in interest rates and of the principle of
mutuality of contracts.
The dispositive portion of the appellate court’s decision reads,
thus:

“THE FOREGOING CONSIDERED, the instant appeal is hereby

GRANTED, the assailed decision dated July 5, 2002 is REVERSED and
SET ASIDE, and a new one is hereby entered as follows:
(1) Unless the parties herein subsequently enter into an express
agreement regarding the applicable interest rates on PERMANENT
HOMES’ loan availments subsequent to the initial thirty-

_______________

5 Id., at pp. 164, 171.

283

VOL. 625, JULY 23, 2010 283

Solid Bank Corporation vs. Permanent Homes, Incorporated

day (30) period, the legal rate of twelve percent (12%) per annum is hereby
FIXED, to be applied on the outstanding balance of the loan;
(2)  SOLIDBANK is ordered to render an accounting of all the
payments made by PERMANENT HOMES, and in case there is excess
payment by reason of the wrongful imposition of the repriced interest rates,
to apply such amount to the interest payment at the legal rate, and thereafter
to the outstanding principal amount;
(3)  SOLIDBANK is directed not to impose penalties, particularly
interest on interest, upon PERMANENT HOMES’ loan, there being no
evidence that the latter was in default on its payments;
(4)  SOLIDBANK is hereby ordered to release the remaining amount
available under the omnibus credit line, subject, however, to availability of
funds on the part of SOLIDBANK.
No pronouncement as to costs.
SO ORDERED.”6

The appellate court resolved to deny Solidbank’s Motion for

Reconsideration for lack of merit.7

The Issues

Solidbank raised the following issues in their petition:

“(A) Whether the Honorable Court of Appeals was correct in ruling that the
increases in the interest rates on [Permanent’s] loans are void for having
been unilaterally imposed without basis.
(B) Whether the Honorable Court of Appeals was correct in ordering the
parties to enter into an express agreement regarding the applicable interest
rates on Permanent’s loan availments subsequent to the initial thirty-day (30)
period.
(C) Whether the Honorable Court of Appeals was correct in ruling that
[Permanent] is entitled to attorney’s fees not-

_______________

6 Id., at pp. 63-64.

7 Id., at pp. 67-68.

284
284 SUPREME COURT REPORTS ANNOTATED
Solid Bank Corporation vs. Permanent Homes, Incorporated

withstanding the absence of bad faith or malice on the part of

[Solidbank].”8

The Court’s Ruling

The petition has merit.

The Usury Law had been rendered legally ineffective by
Resolution No. 224 dated 3 December 1982 of the Monetary Board
of the Central Bank, and later by Central Bank Circular No. 905
which took effect on 1 January 1983. These circulars removed the
ceiling on interest rates for secured and unsecured loans regardless
of maturity. The effect of these circulars is to allow the parties to
agree on any interest that may be charged on a loan. The virtual
repeal of the Usury Law is within the range of judicial notice which
courts are bound to take into account.9 Although interest rates are no
longer subject to a ceiling, the lender still does not have an unbridled
license to impose increased interest rates. The lender and the
borrower should agree on the imposed rate, and such imposed rate
should be in writing.
The three promissory notes between Solidbank and Permanent all
contain the following provisions:

“5. We/I irrevocably authorize Solidbank to increase or decrease at

any time the interest rate agreed in this Note or Loan on the basis of,
among others, prevailing rates in the local or international capital
markets. For this purpose, We/I authorize Solidbank to debit any
deposit or placement account with Solidbank belonging to any one of
us. The adjustment of the interest rate shall be effective from the date
indicated in the written notice sent to us by the bank, or if no date is
indicated, from the time the notice was sent.
6. Should We/I disagree to the interest rate adjustment, We/I shall
prepay all amounts due under this Note or Loan within

_______________

8 Id., at p. 18.
9 Philippine National Bank v. Spouses Encina, G.R. No. 174055, 12 February 2008, 544
SCRA 608.

285

VOL. 625, JULY 23, 2010 285

Solid Bank Corporation vs. Permanent Homes, Incorporated

thirty (30) days from the receipt by anyone of us of the written

notice. Otherwise, We/I shall be deemed to have given our consent to
 the interest rate adjustment.”

The stipulations on interest rate repricing are valid because (1)

the parties mutually agreed on said stipulations; (2) repricing takes
effect only upon Solidbank’s written notice to Permanent of the new
interest rate; and (3) Permanent has the option to prepay its loan if
Permanent and Solidbank do not agree on the new interest rate. The
phrases “irrevocably authorize,” “at any time” and “adjustment of
the interest rate shall be effective from the date indicated in the
written notice sent to us by the bank, or if no date is indicated, from
the time the notice was sent,” emphasize that Permanent should
receive a written notice from Solidbank as a condition for the
adjustment of the interest rates.
In order that obligations arising from contracts may have the
force of law between the parties, there must be a mutuality between
the parties based on their essential equality.10 A contract containing
a condition which makes its fulfillment dependent exclusively upon
the uncontrolled will of one of the contracting parties is void.11
There was no showing that either Solidbank or Permanent coerced
each other to enter into the loan agreements. The terms of the
Omnibus Line Agreement and the promissory notes were mutually
and freely agreed upon by the parties.
Moreover, Solidbank’s range of lending rates were consistent
with “prevailing rates in the local or international capital markets.”
Permanent presented a tabulation12 of the range of Solidbank’s
lending rates, as reported to Bangko Sentral ng

_______________

10 Philippine National Bank v. Court of Appeals, G.R. No. 88880, 30 April 1991,
196 SCRA 536, 545.
11 See Garcia, et al. v. Rita Legarda, Inc., 128 Phil. 590; 21 SCRA 555 (1967).
12 Records, Vol. II, p. 95.

286

286 SUPREME COURT REPORTS ANNOTATED

Solid Bank Corporation vs. Permanent Homes, Incorporated

Pilipinas and compared the lending rates with the interest rates
charged by Solidbank on Permanent’s loans, thus:

Solidbank’s range
of lending rates as
per BSP records
High Low Interest rates Excess Interest Rate
charged by Over the Average of
Solidbank on High and Low Rates
Permanent’s loans
Sept. 25.0% 22.0% 23.0%
 12,
1997
Sept. 27.0% 24.0% 24.0%
17,
1997
Sept. 26.0% 23.0% 22.5%
22,
1997
Oct. 29.0% 26.0% 28.0%
13,
1997
Oct. 30.0% 27.0% 30.0%
17,
1997
Oct. 32.0% 29.0% 30.0%
22,
1997
Nov. 28.0% 25.0% 27.0%
12,
1997
Nov. 28.0% 25.0% 27.0%
17,
1997
Nov. 27.0% 24.0% 27.0%
21,
1997
Dec. 25.0% 23.0% 26.0% 2.0%
12,
1997
Dec. 25.0% 23.0% 34.0% 10.0%
17,
1997
Dec. 25.0% 23.0% 32.0% 8.0%
22,
1997
Jan. 26.0% 24.0% 30.0% 5.0%
12,
1998
Jan. 28.0% 25.0% 30.0% 3.5%
16,
1998
Jan. 28.0% 25.0% 30.0% 3.5%
22,
1998
Feb. 27.0% 24.0% 30.0% 3.5%
9,
1998
Feb. 27.0% 24.0% 29.0% 4.5%
11,
1998
Feb. 27.0% 24.0% 30.0% 4.5%
12,
1998

The repriced interest rates from 12 September to 21 November

1997 conformed to the range of Solidbank’s lending rates to other
borrowers. The 12 December 1997 to 12 Febru-
 287

VOL. 625, JULY 23, 2010 287

Solid Bank Corporation vs. Permanent Homes, Incorporated

ary 1998 repriced interest rates were not unconscionably out of line
with the upper range of lending rates to other borrowers. The interest
rate repricing happened at the height of the Asian financial crises in
late 1997, when banks clamped down on lendings because of higher
credit risks across industries, particularly the real estate industry.
We also recognize that Solidbank admitted that it did not
promptly send Permanent written repriced rates, but rather verbally
advised Permanent’s officers over the phone at the start of the
period. Solidbank did not present any written memorandum to
support its allegation that it promptly advised Permanent of the
change in interest rates.13 Solidbank advised Permanent on the
repriced interest rate applicable for the 30-day interest period only
after the period had begun. Permanent presented a tabulation which
showed that Solidbank either did not send a billing statement, or sent
a billing statement 6 to 33 days late.14 We reproduce the tabulation
below:

PN #435 – P19.6MM
Reference Interest Period Date Billing Number of days
No. Statements were Billing
faxed to Statement was
Permanent Late
1 03/20/97 04/18/97 04/17/97 28
2 04/18/97 05/19/97 05/16/97 28
05/19/97 06/19/97 no statement
received
3 06/19/97 07/18/97 07/12/97 23
4 07/18/97 08/18/97 08/05/97 18
5 08/18/97 09/17/97 09/10/97 23

_______________

13 Id., at p. 49.
14 Id., at p. 59; Records, Vol. II, p. 85.

288

288 SUPREME COURT REPORTS ANNOTATED

Solid Bank Corporation vs. Permanent Homes, Incorporated

6 09/17/97 10/17/97 10/06/97 19

7 10/17/97 11/17/97 11/11/97 25
8 11/17/97 12/17/97 12/12/97 25
9 12/17/97 01/16/98 01/09/98 23
 14 01/16/98 02/20/98 02/18/98 33

PN #969 – P18MM
Reference Interest Period Date Billing Number of days
No. Statements were Billing
faxed to Statement was
Permanent Late
3 06/24/97 07/24/97 07/12/97 18
4 07/24/97 08/22/97 08/05/97 12
5 08/22/97 09/22/97 09/10/97 19
6 09/22/97 10/22/97 10/06/97 14
7 10/22/97 11/21/97 11/11/97 20
8 11/21/97 12/22/97 12/12/97 21
9 12/22/97 01/22/98 01/09/98 18
01/22/98 02/12/97 no state-
ment re-
ceived
14 02/12/98 02/20/98 02/18/98 6

PN #1077 – P3.9MM
Reference Interest Period Date Billing Number of
No. Statements days
were faxed to Billing
Permanent Statement
was Late
10 07/15/97 08/14/97 08/14/97 30
11 08/14/97 08/26/97 08/26/97 12

289

VOL. 625, JULY 23, 2010 289

Solid Bank Corporation vs. Permanent Homes, Incorporated

5 08/26/97 09/12/97 09/10/97 15

6 09/12/97 10/13/97 10/06/97 24
7 10/13/97 11/12/97 11/11/97 29
12 11/12/97 12/12/97 12/10/97 28
9 12/12/97 01/12/98 01/09/98 28
13 01/12/98 02/09/98 02/09/98 28
02/09/98 02/11/98 no statement
received
14 02/11/98 03/13/98 02/18/98 7

We rule that Solidbank’s computation of the interest due from

Permanent should be adjusted to take effect only upon Permanent’s
receipt of the written notice from Solidbank.
 WHEREFORE, we GRANT the petition in part. We SET ASIDE
the Decision of the Court of Appeals promulgated on 29 June 2005
as well as the Resolution promulgated on 14 March 2006 in CA-
G.R. CV No. 75926 and AFFIRM the decision of the Regional Trial
Court of Makati City, Branch 58 dated 5 July 2002 in Civil Case No.
98-654 with the MODIFICATION that the repricing of the interest
rates should take effect only upon Permanent Homes, Incorporated’s
receipt of the written notice from Solidbank Corporation of the
adjustment in interest rate. The records of this case are therefore
remanded to the trial court for the computation of the proper interest
payments based on the dates of receipt of written notice.
SO ORDERED.

Nachura, Peralta, Del Castillo**and Abad, JJ., concur.

Petition granted in part, judgment and resolution set aside.

_______________

** Designated additional member per Raffle dated 7 July 2010.

© Copyright 2019 Central Book Supply, Inc. All rights reserved.