Spouses Salvador Abella v. Spouses Romeo Abella

Summary

This case involved a loan dispute between related couples over a P500,000.00 loan made in 1999. The acknowledgment receipt stipulated interest but without specifying the rate. Petitioners claimed 30% annual interest while respondents argued it was a joint venture. The Supreme Court clarified that when parties stipulate interest in writing but fail to specify the rate, the legal rate applies (12% per annum at the time of execution). The Court rejected the 30% rate as unconscionable and conducted detailed computations showing respondents actually overpaid P3,379.17 by 2002. The decision established important precedents on interest rate application in loan agreements and the principle that legal interest rates serve as surrogates for parties' intent when specific rates are not stipulated. The Court applied solutio indebiti principles requiring reimbursement of excess payments.