Lara's Gifts & Decors v. Midtown Industrial Sales

Summary

This Supreme Court case involves a commercial debt collection dispute between two corporations over P1,263,104.22 worth of industrial materials purchased on 60-day credit terms with 24% interest per annum on overdue accounts. When the buyer's postdated checks bounced, the seller sued for payment. The buyer claimed the materials were defective and caused rejection by US customers, but failed to substantiate these claims with evidence beyond self-serving testimonies. All three court levels ruled in favor of the seller, finding the sales invoices and bounced checks sufficient proof of the debt. The Supreme Court affirmed the 24% interest rate as valid and not unconscionable for established business entities, while clarifying the proper computation of stipulated versus legal interest rates. The decision establishes important precedent on interest rate validity and the burden of proof for claims of defective goods in commercial transactions.