- Petitioner
- Philippine Rabbit Bus Line
- Respondent
- Hon. Leonardo I. Cruz
- Citation
- G.R. No. 71017
- Court
- Supreme Court
- Division
- First Division
- Ponente
- Narvasa, J.
- Decided
- July 28, 1986
Summary
Philippine Rabbit Bus Lines challenged the 12% interest rate applied during execution of a civil damages judgment, arguing that Central Bank Circular No. 416 should not apply to non-loan cases. The Supreme Court agreed, ruling that the Monetary Board's authority under the Usury Law extends only to loans and forbearances, not general civil damages judgments. The Court applied Civil Code Article 2209 requiring 6% interest for monetary obligations, distinguishing this from the 12% rate for loan transactions. The decision clarified the scope of Central Bank authority over interest rates and affirmed that civil damages judgments are governed by Civil Code provisions, not banking regulations. Philippine Rabbit was entitled to refund of excess interest totaling P41,325.