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The court looked at the conduct of the parties. Exhibit B was There was a MR filed by Central Bank regarding the Court’s
an invoice of the same 350 shoes including sales tax listed as Resolution applying the Tapia ruling reaffirmed by the court
P2,450. It was noted down in his own handwriting the in cases such as OBM vs Cordero (previous case) that the bank
different partial payments of P500, P528 and lastly the P420 is not liable for interest on the Central Bank loans and
by check. It was obvious that he accepted the outright sale advances during the period of its closure.
since in making the partial payments, he made no mention of
the number of shoes sold by him and the number of shoes Issue: Payment of interest
remaining unsold which he should have done if the sale was
The payment of interest should not be made.
on consignment.
Ratio: There was an absence of stipulation as to the rate of Lirag and SSS entered into a purchase agreement
interest so he would be paying only 6% per annum. Exhibit A wherein SSS would purchase from Lirag preferred
does not have any stipulation as to the rate of interest. shares of stock worth P1M
Exhibit B was not signed by him. If the court would hold Co SSS paid Lirag 2 amounts of P500K for which Lirag
bound by Exhibit B, it was only because of his tacit issued to SSS 5,000 preferred shares evidenced by
acceptance of the total value of 350 pairs of shoes. stock certificate no. 128 and 139 respectively
The stocks were to be repurchased at regular
The Overseas Bank of Manila vs Cordero intervals of one year beginning with the 4 th year
following the date of issue.
Facts: To guarantee the redemption of the stocks, Lirag
signed the purchase agreement not only as president
Cordero opened a one-year time deposit with of the corporation but also as a surety.
Overseas Bank of Manila in the amount of P80K with Lirag failed to redeem stock certificates
interest at the rate of 6% per annum. There were letters of demand but Lirag was not able
Due to the distressed financial condition of the bank, to make the redemption.
it was unable to pay Cordero his said time deposit Pursuant to the purchase agreement, if Lirag fail to
and its interest effect any of the redemptions stipulated, the entire
Cordero instituted an action at the CFI obligation shall immediately become due and
The bank raised as special defense its state of demandable and shall furthermore be liable to the
insolvency SSS in the amount equivalent to 12% of outstanding
CFI rules in favor of Cordero. CA affirms. liquidated damages.
There were certain supervening events regarding the Lirag moved for the dismissal of the complaint but
principal amount. It turns out that Cordero’s brother was denied.
and atty-in-fact, already received P10K from PDIC. Lirag files for counterclaim, denying the existence of
Also, the brother already received the sum of any obligation on their part to redeem the preferred
P73,840. So the principal claim of respondent was stocks on the ground that SSS became and still is a
already satisfied. The only issue remaining was the preferred stockholder of the corporation so that
interest redemption of the shares purchased depended on
the financial ability of said corporation. This was
Issue: Is the respondent entitled to the interest on his time dismissed
deposit during the period that petitioner was closed? No The lower court ruled in favor of SSS and sentenced
Lirag to pay SSS. Hence this petition
Ratio:
Issue: WON the purchase agreement a debt instrument?
A bank should pay stipulated interest on money deposited if it
was able to generate funds to cover the payment of such Held: Yes
interest. But this obligation to pay interest on the deposit
ceases from the moment the operation of the bank is Ratio:
completely suspended by the Central Bank.
The terms and conditions show that the parties intended the
Ramos vs Central Bank repurchase of the preferred shares on the respective
scheduled dates to be an absolute obligation which does not
depend upon the financial ability of petitioner corporation.
This obligation was manifested by the fact that a surety was
required to see to it that the obligation is fulfilled in the Cu Unjieng e Hijos vs Mabalacat Sugar Co.
event of the principal debtor’s inability to do so.
Facts:
With regard to the payment of interest, such was also
stipulated on the instrument that in case the petitioner fails Cu Unjieng instituted an action for the recovery of
to repurchase the shares on scheduled due dates, it renders P163,000 with interest from the Mabalacat Sugar and
the entire obligation due and demandable with petitioner to to foreclose a mortgage.
pay 12% of the then outstanding obligation as liquidated The mortgage executed by Mabalacat Sugar contains
damages. a provision to the effect that non-compliance on
their part will cause the entire debt to become due
and give occasion for the foreclosure of the
mortgage. Also, there was a stipulation placing the
Angel Jose Warehousing vs Chelda Enterprises interest at 12% per annum and that it is “to be
computed upon the still unpaid capital of the loan,
Plaintiff filed a case in the CFI against partnership shall be paid monthly, at the end of each month”
Chelda and David Syjueco for the recovery of unpaid
loans in the total amount of P20,880 with legal Issue:
interest from the filing of the complaint.
Defendants averred that they obtained four loans 1. Should the interest be compounded? Generally the
totaling P26,500. Out of this 5,620 had been paid interest can be compounded but not in this case
leaving a balance of P20,880 and that plaintiff 2. Does the voluntary payment of the interest bind the
charged and deducted from the loan usurious debtor? No
interest at rates of 2% and 2.5% per month, hence
the plaintiff had no cause of action and should not Ratio:
be permitted to recover.
1. The provision merely requires the debtor to pay
Plaintiff denies the usury.
interest monthly at the end of each month, such
CFI finds that the unpaid principal amount was
interest to be computed upon the capital of the loan
P20,287.50 and that P1,048.15 had been deducted in
already paid. It does not justify the charging of
advance by plaintiff. Thus it should be deducted
compound interest accruing upon the capital
from the principal leaving a balance of P19,247.35
monthly.
still payable to the plaintiff. It also ruled that
2. The interest is improperly charged at an unlawful
notwithstanding the usurious interest rate, such does
rate. The voluntary payment is not binding since it is
not bar the payment of the principal amount.
usurious
Respondents’ contentions:
David vs CA
A usurious loan is void due to illegality of cause or object, the
Facts:
rule of pari delicto bars the action that can be brought about
by both parties based on Article 1411.
RTC Judge Diaz issued a writ of attachment over real
properties of private respondents.
Issue: In a loan with usurious interest, may the creditor
Judge Diaz ordered respondent Afable to pay
recover the principal of the loan?
petitioner P66,000 plus interest from July 24,1975.
Held: Yes After some time, the interest was amended and
should be computed from January 4, 1966.
Ratio: Afable appealed to CA and SC. Both instances, the
decision of the RTC was affirmed
A contract of loan with a usurious interest consists of The record of the case was remanded to Branch 27,
principal and accessory stipulations. The principal is to pay presided by respondent Judge Cruz for the final
the debt and the accessory is to pay interest. execution of the decision by the RTC
Upon petitioner’s motion, Judge Cruz issued an Alias
The stipulations are divisible in the sense that the former can
Writ of Execution, respondent Sheriff Pena
still stand without the latter. In case of a divisible contract,
conducted a public auction.
if the illegal terms can be separated from the legal ones, the
Sheriff Pena informed the petitioner that the total
latter may be enforced. The illegality lies only as to the
amount of the judgment is P270,940.52. It included
prestation to pay the stipulated interest; hence being
a computation of interest. Petitioner claimed that
separable, the latter only should be deemed void since it is
the judgment award should be P3,027,238.50
the only one that is illegal.
Although the properties were sold to the petitioner, Issue: WON the payment should be intended as rents or for
Sheriff Pena did not issue the Certificate of Sale the payment of the principal.
because there was an excess in the bid price in the
amount of P2,941,524.47. The excess was computed Held: It must be intended as payment of the principal.
by the Sheriff based on the petitioner’s bid price of
The payments could not have been intended as rents since
P3,027,238.50 less P270,940.62 computed in the
Neri took possession of the lands and collected the fruits.
judgment award.
None of the contracts were offered in evidence to say that
Petitioner files motion for Judge Cruz to issue an
there is any promise made by defendants to pay rents.
order directing respondent Sheriff to prepare and
execute a certificate of sale in favor of the
petitioner the amount of judgment as P3,027,238.50
the reason is the compound interest. This was
denied.
MR – denied
CA dismissed
Held: No
Facts: