Pascual v. Ramos

Summary

This case involved a dispute over whether a Deed of Absolute Sale with Right to Repurchase was actually an equitable mortgage. Spouses Pascual borrowed P150,000 from Ramos in 1987, executing the deed as security with a simultaneous Sinumpaang Salaysay revealing the true loan arrangement at 7% monthly interest. When Pascuals failed to repurchase, Ramos sought title consolidation. The trial court found it was an equitable mortgage and initially miscalculated interest at 7% annually, later correcting to 5% monthly after reducing from the stipulated 7% monthly rate. The Supreme Court affirmed, emphasizing that parties are bound by stipulated interest rates absent fraud or undue influence, especially with the suspension of the Usury Law allowing contractual freedom in setting interest rates.