|Ex Officio Reduction of Conventional Interest Rates in Commercial Matters as a Human Rights Protection Measure.|
|Ex Officio Reduction of Conventional Interest Rates in Commercial Matters as a Human Rights Protection Measure.|
In session of May 21, 2014, the first chamber of the Supreme Court of Justice of the Nation (in Spanish SCJN) approved the binding court precedents 1a./J. 46/2014 (10a.) and 1a./J. 47/2014 (10a.) which were published on June 27, 2014 in the Judicial Journal of the Federation. Through these binding court precedents, the obligation of the judges to revise and reduce ex officio the interest rates conventionally agreed upon in commercial matters is stated. Such decision constitutes a historic event in Mexico because it modifies the principle of strict respect to the rule of law according to the constitutional reform in Human Rights of June 10, 2011. The following is a brief analysis of the most important aspects that motivated the Court’s decisions.
The free agreement on interest rates in commercial matters has its legal basis on article 78 of the current Commercial Code (Com. C.), from which we can infer the principles of free will and freedom of contract that merchants have to celebrate commercial contracts in the terms and conditions they wish to do so. Notwithstanding the above, the recognition of such freedoms does not imply at any time the non-existence of restrictions to those principles because the legislator, who also imposes the corresponding limitations, establishes in article 77 of such legislation that those commercial agreements contrary to the law, do not produce obligation or action.
Now then, commercial acts have a lucrative purpose which consists on the profit or gain obtained through commercial speculation (MANTILLA MOLINA, 1992). In this pursuit of profit, it is a common practice that in commercial agreements the parties agree on ordinary or default interests as they wish to, situation that is expressly regulated by article 362 of the Com. C. and in the specific case of promissory notes, in the second paragraph of article 174 of the General Law of Credit Titles and Operations (in Spanish LGTOC).
In this context, the interest rates in commercial matters are fixed according to the parties’ free will even though in most cases, it was not considered as a valid defense of the debtor for having established an excessive and disproportioned interest rate taking advantage of his/her necessity since doctrinally, the unconscionable bargain has not been considered as possible in commercial matters because of the merchant’s business nature (MARTÍNEZ ALFARO, 1989). Furthermore, it was not considered that the judges before whom commercial matters where filed, had the power to revise ex officio the agreed interest rates by the parties. In this respect, the judicial resolutions that addressed the excessive interest rates matter established that the parties should abide to their agreement according to articles 78 and 362 of the Com. C. (JUDICIAL JOURNAL OF THE FEDERATION, COURT PRECEDENT: VII.2O.C.42 C) and the parties’ will shall prevail over the legal interest rate (JUDICIAL JOURNAL OF THE FEDERATION, COURT PRECEDENT: VI.1O.C.139 C).
Thus, even though the rigidity of our legal system in disciplinary matters of Private Law such as Civil and Commercial Law, the principle of strict respect to the rule of law prevails, which in general terms, implies that the judges’ ruling should address solely and exclusively the actions and exceptions raised by the parties respectively without strengthening the arguments of any of them because, in that case, it would constitute a violation to the principal of procedural equality. Since the constitutional Human Rights reform in our country on June 10, 2011, the principle of strict respect to the rule of law in all matters, including civil and commercial, should be understood from a different standpoint.
As a consequence of the human rights reform, article 1 of the Constitution was modified and states as follows:
“Article 1. In the United Mexican States, all individuals shall be entitled to the human rights granted by this Constitution and the international treaties signed by the Mexican State, as well as to the guarantees for the protection of these rights. Such human rights shall not be restricted or suspended, except for the cases and under the conditions established by this Constitution itself. The provisions relating to human rights shall be interpreted according to this Constitution and the international treaties on the subject, working in favor of the protection of people at all times. All authorities, in their areas of competence, are obliged to promote, respect, protect and guarantee the human rights, in accordance with the principles of universality, interdependence, indivisibility and progressiveness. As a consequence, the State must prevent, investigate, penalize and readdress violations to the human rights, according to the law…”
From the above mentioned we can observe that the relation between international Human Rights treaties and our National Constitution is one of complementarity, more than one of hierarchy because of the broadening of the constitutional guarantees with the purpose of protecting the citizens of a human rights transgression of public or private entities, which is known as diffuse control of conventionality (JUDICIAL JOURNAL OF THE FEDERATION, COURT PRECEDENT: III Region 5o. J/8).
Under this perspective, the variation made to the principle of strict respect to the rule of law by virtue of the reform to article 1 of the Constitution can be understood as the obligation of all judges in the country to limit their scope of analysis solely to the arguments presented by the parties when resolving a case filed before them as long as, when ruling, the human rights of each and every party is respected. Because of this, in case the judges, when ruling, notice that their judgement is contrary to human rights protected nationally and internationally, they should avoid such contravention and are compelled to protect and apply said fundamental right in his/her resolution, whether it was or was not claimed by the parties, throughout the diffuse control of conventionality.
Accordingly, all judges have the obligation to disregard those rules of national law that contravene national or international human rights dispositions, being one of the most important ones the American Convention on Human Rights, also known as the Pact of San José, (in Spanish CADH) which in its article 21 section 3º states the following: “3. Usury and any other form of exploitation of man by man shall be prohibited by law.” In this context, we understand usury as that act in which one person, taking advantage of the ignorance, inexperience, poor economic conditions or any other adverse condition of another person, obtains economic disproportionate or excessive benefits.
In respect to the above mentioned, the SCJN expressed its opinion in the binding court precedent entitled “PROMISSORY NOTE. ARTICLE 174, SECOND PARAGRAPH, OF THE GENERAL LAW OF CREDIT TITLES AND OPERATIONS, ALLOWS THE PARTIES TO FREELY AGREE ON INTEREST RATES WITH THE LIMIT THAT THOSE CANNOT CONSTITUTE USURY. INTERPRETATION ACCORDING TO THE CONSTITUTION. [WITHDRAWL OF THE BINDING COURT PRECEDENT 1a./J. 132/2012 (10a.) AND THE COURT PRECEDENT 1a. CCLXIV/2012 (10a.)”, in the sense that the judges must reduce ex officio and prudentially, the interest rates agreed upon by the parties according to articles 362 of the Com. C. and 174 of the LGTOC that they consider excessive, because in the contrary, they would be violating article 21 section 3º of the CADH.
The foregoing does not imply that articles 362 of the Com. C. and 174 of the LGTOC are unconstitutional or unconventional by themselves because the faculty of the parties to agree upon interest rates does not contravene any legal disposition. However, it is necessary that when analyzing the origin of such interest collection, the judge examines if those do not result in being disproportionate or excessive. Because of this, the SCJN issued the following binding court precedent: “PROMISSORY NOTE. IF THE JUDGE NOTES THAT THE INTEREST RATE AGREED UPON IN REFERENCE TO ARTICLE 174, SECOND PARAGRAPH, OF THE GENERAL LAW OF CREDIT TITLES AND OPERATIONS NOTORIOUSLY CONSTITUTES USURY HE/SHE CAN, EX OFFICIO, PRUDENTIALLY REDUCE IT”, through which it established the parameters that guide the objective evaluation of the notoriously excessive character of an interest rate as follows: a) the type of relation that exists between the parties; b) the personality of the subjects that intervene in the borrower’s note’s subscription and if the creditor’s activity is regulated; c) the object or intended purpose of the credit; d) the amount of the credit; e) the term of the credit; f) the existence of guarantees for the payment of the credit; g) the bank interest rates for similar operations to those analyzed, whose appreciation constitutes solely a reference parameter; i) the market conditions; and, j) other matters that create conviction in the judge. All of the above, under the basis that such circumstances can be noted by the judge (only if in the record of the proceedings there is sufficient proof of them) to increase or decrease the strict qualification of an interest rate as notoriously excessive; analysis that, besides the latter, has to be complemented with the evaluation of the subjective element from the appreciation of the existence or not of any situation of vulnerability or disadvantage of the debtor in relation to the creditor.” (JUDICIAL JOURNAL OF THE FEDERATION, BINDING COURT PRECEDENT: 1ª/J. 47/2014).
In conclusion, the binding court precedents 1a./J. 46/2014 (10a.) and 1a./J. 47/2014 (10a.), mandatory as of June 30, 2014, constitute a significant progress in what respects to Human Rights because they discourage the agreements in commercial instruments with interest rates that can be considered as excessive and disproportionate, safeguarding Human Rights not just from authority abuses, but also against acts committed by individuals and corporations, such as usury, and even though before traditionally applied principles such as the strict respect to the rule of law, free will and freedom of contract, since Human Rights cannot be waived nor violated by any national law disposition.
1. Mantilla Molina, Roberto. “Derecho Mercantil”. México. Editorial Porrúa. 1992.
2. Martínez Alfaro, Joaquín. “Teoría de las Obligaciones”. México. Editorial Porrúa. 1989.
3. Tesis VII.2O.C.42 C. INTERESES EXCESIVOS, NO ES EXCEPCION QUE PUEDA OPONERSE A UN TITULO DE CREDITO, POR NO CONTEMPLARLO EL ARTICULO 8o. DE LA LEY GENERAL DE TITULOS Y OPERACIONES DE CREDITO. Semanario Judicial de la Federación Tomo XV-2, February 1995.
4. Tesis: VI.1O.C.139 C. INTERESES MORATORIOS EN MATERIA MERCANTIL. CONFORME AL PRINCIPIO DE LIBERTAD DE CONTRATACIÓN DE LAS PARTES, EL INTERÉS CONVENCIONAL DEBE PREVALECER SOBRE EL LEGAL. Semanario Judicial de la Federación Tomo XXXI, January 2010.
5. Jurisprudencia: 1a./J. 46/2014 (10a.) PAGARÉ. EL ARTÍCULO 174, PÁRRAFO SEGUNDO, DE LA LEY GENERAL DE TÍTULOS Y OPERACIONES DE CRÉDITO, PERMITE A LAS PARTES LA LIBRE CONVENCIÓN DE INTERESES CON LA LIMITANTE DE QUE LOS MISMOS NO SEAN USURARIOS. INTERPRETACIÓN CONFORME CON LA CONSTITUCIÓN [ABANDONO DE LA JURISPRUDENCIA 1a./J. 132/2012 (10a.) Y DE LA TESIS AISLADA 1a. CCLXIV/2012 (10a.). Semanario Judicial de la Federación Libro 7, June 2014, Tomo I.
6. Jurisprudencia: 1a./J. 47/2014 (10a.) PAGARÉ. SI EL JUZGADOR ADVIERTE QUE LA TASA DE INTERESES PACTADA CON BASE EN EL ARTÍCULO 174, PÁRRAFO SEGUNDO, DE LA LEY GENERAL DE TÍTULOS Y OPERACIONES DE CRÉDITO ES NOTORIAMENTE USURARIA PUEDE, DE OFICIO, REDUCIRLA PRUDENCIALMENTE. Semanario Judicial de la Federación Libro 7, June 2014, Tomo I.