Philippine Free Press Inc. V. CA (G.R. No.

132864, October 24, 2005)

GARCIA, J.

FACTS:
Petitioner is a domestic corporation engaged in the publication of the Philippine Free Press Magazine. Petitioner purchased a land at Pasong Tamo St, Makati. Upon
taking possession of the land, petitioner constructed an office building thereon, which is their main office, to house its various machineries, equipment, office furniture
and fixture. Petitioner supported late President Diosdado Macapagal against late President Ferdinand Marcos. Upon the election of late Marcos, petitioner printed
numerous articles highly critical of the Marcos administration. September 1972, soldiers forced out its employees at gunpoint and padlocked the said establishment.
Informed Teodoro Locsin Jr, son of Teodoro Locsin, Sr., President of Phil. Free Press, Inc., that Martial Law had been declared and they were instructed by Marcos to
take over the building and close the printing press. Locsin Sr. was arrested and brought to Camp Crame and transferred at Fort Bonifacio. No charges were to be filed
against Locsin Sr. and be released if he remained under city arrest and not to publish Phil Free Press nor say and write critical of Marcos administration. Publication was
ceased and building remained padlocked and military guard. Cessation led to financial ruin of petitioner. Locsin Sr. was approached by Atty. Baizas offered from marcos
acquisition of petitioner. He refused. Approached by Sec. De Vega offered from marcos to buy the name and assets of petitioner. He refused. Approached by Brig.
Menzi also offered him from marcos to buy both name and assets of petitioner. He refused but Menzi insisted he had no choice but to sell. Locsin Sr. made a
counteroffer, he will sell the land, building and all machineries and equipment but he will keep its name. Menzi informed him the marcos accepted his counteroffer and
offered 5.750 M. 1m for downpayment. Accepted check on the condition that he will refund same if sale will not push through. BOD of petitioner passed a resolution
to sell assets of petitioner to menzi minus the name. Oct 23 1973, executed 2 notarized deeds of sale. Menzi paid the balance of 4.750. Locsin sr. used the proceeds to
pay separation pay of employees, buy out shares of minority shareholders and settle all its obligations.

Feb 26 1987, petitioner filed a complaint for ANNULMENT OF SALE on its building, lot and all it machineries during martial law, against Liwayway and PCGG in RTC
Makati on the ground of vitiated consent and gross inadequacy of purchase price. RTC Makati dismissed it. Petitioner appealed to CA. CA affirmed with modification
the decision of RTC Makati. Argued that that Martial Law has the effects of a force majeure, which, in turn, works to suspend the running of the prescriptive period.
Petitioner Philippine Free Press, Inc. seeks the reversal, in the SC, of the decision of CA affirming the decision of RTC, in an action for annulment the deeds of sale
instituted by petitioner against Presidential Commission for Good Government (PCGG) and the herein private respondent, Liwayway Publishing, Inc. Respondents
Argued that the action of Petitioner had prescribed- CA promulgated a decision in its favor.

ISSUE: W/N action for annulment has already prescribed.

HELD:
YES. The Supreme Court held that action for annulment has already prescribed. Hence, petitioner cannot validly annul such sale.

According to Article 391, the action for annulment shall be brought within four years. This period shall begin, from the time the defect of the consent ceases, in
cases of intimidation, violence or undue influence.

The Supreme Court cannot accept the petitioners’ contention that the period during which authoritarian rule was in force had interrupted prescription and that the
same began to run only on February 25, 1986, when the Aquino government took power. It is true that under Article 1154 [of the Civil Code] xxx fortuitous events have
the effect of tolling the period of prescription. However, the Supreme Court cannot say, as a universal rule, that the period from September 21, 1972 through February
25, 1986 involves a force majeure. Plainly, the Supreme Court cannot box in the “dictatorial” period within the term without distinction, and without, by necessity,
suspending all liabilities, however demandable, incurred during that period, including perhaps those ordered by this Court to be paid.

The prevailing rule, therefore, is that on a case-to-case basis, the Martial Law regime may be treated as force majeure that suspends the running of the applicable
prescriptive period provided that it is established that the party invoking the imposition of Martial Law as a force majeure are true oppositionists during the Martial
Law regime and that said party was so circumstanced that is was impossible for said party to commence, continue or to even resist an action during the dictatorial
regime.
[G.R. No. 141811. November 15, 2001]
FIRST METRO INVESTMENT CORPORATION, petitioner, vs. ESTE DEL SOL MOUNTAIN RESERVE, INC.,
DE LEON, JR., J.:

FACTS:
Petitioner FMIC granted respondent Este del Sol a loan of 7385.5M to finance the construction and development of Este del Sol Mountain Reserve, sports/resort
complex project at Montalban Rizal. Under the Loan Agreement, interest in 16% per annum based in the diminishing balance. Loan was payable in 36 monthly
amortization commence at the beginning of the 13th month from the date of the first release according to Schedule of Amortization. In case of default, acceleration
clause was provided and amount shall bear interest at highest rate permitted by law from date of default until payment plus liquidated damages of 2% per month
compounded quarterly on unpaid balance and accrued interests with all penalties until balance fully paid, PLUS atty. fees 25% of sum recovered which not less than
20K if serves of lawyered were hired.

Respondent executed several documents as security for payment: Real Estate Mortgage and Individual Continuing Suretyship agreements.

Respondent also executed an Underwriting Agreement where petitioner FMIC shall underwrite the public offering of 120K common shares of respondent’s share for
one time underwriting fee of 200k, annual supervision fee for 200k for a period of 4 consecutive years, and consultancy fee of 332.5K per annum for 4 consecutive
years. Consultancy Agreement was executed on 1/31/1978 where respond engaged services of petitioner.

2/22/1978, petitioner billed respondent for amounts of 200k underwriting fee, 1330k consultancy fee for 4 yrs, and 200k supervision fee for yr beginning Feb 1978.
Amount fees were deemed paid by respondent which is deducted from 1st release of loan.

Respondent failed to meet the revised schedule of repayment. They have incurred a total obligation of 12,679,630.98.

Petitioner caused extrajudicial foreclosure of real estate mortgage on 6/23/1980. At public auction, FMIC was the highest bidder of the mortgaged properties for 9M.
A leaving balance of 6,863,297.73 was the principal amount of the loan after deducting corresponding fees, interest and charges.

Petitioner instituted instant collection suit on the allegedly deficiency balance plus interest 21% per annum from 6/24/1980 until fully paid and 25% for fees and costs,
against respondents when they failed to secure payment.

Respondent sought dismissal of case and set up defenses that Underwriting and Consultancy Agreements executed simultaneously and which provide for payment of
Underwriting, Consultancy and Supervision Fees were in reality resorted to by petitioner and imposed upon respondent to camouflage usurios interest charged by
petitioner.

RTC ruled in favour of petitioner. Defendants’ counterclaims are dismissed. Respondents appealed to CA. CA reversed the decision of RTC, and declared that
Underwriting and Consultancy Agreements were mere subterfuges to camouflage excessively usurious interest on the loan. CA dismissed complaint against
respondents.

ISSUE: W/N UNDERWRITING AND CONSULTANCY AGREEMENTS ARE MERE SUBTERFUGES TO CAMOUFLAGE THE USURIOUS INTEREST CHARGED BY THE PETITIONER.

HELD:
YES. THE SUPREME COURT HELD THAT THE HELD THAT THE UNDERWRITING AND CONSULTANCY AGREEMENTS ARE MERE SUBTERFUGES TO CAMOUFLAGE THE
USURIOUS INTEREST CHARGED BY THE PETITIONER because several facts and circumstances show that the Underwriting and Consultancy Agreements were simply
cloaks or devices to cover an illegal scheme employed by petitioner to conceal and collect excessively usurious interest. Such agreements which were executed
concurrently with Loan Agreement were exacted by petitioner as essential conditions for the grant of loan.

An apparently lawful loan is usurious when it is intended that additional compensation for the loan be disguised by an ostensibly unrelated contract providing for
payment by the borrower for the lenders services which are of little value or which are not in fact to be rendered.

According to Art. 1957. Contracts and stipulations, under any cloak or device whatever, intended to circumvent the laws against usury shall be void. The borrower may
recover in accordance with the laws on usury.

In usurious loans, the entire obligation does not become void because of an agreement for usurious interest; the unpaid principal debt still stands and remains valid
but the stipulation as to the usurious interest is void, consequently, the debt is to be considered without stipulation as to the interest.

In simple loan with stipulation of usurious interest, the prestation of the debtor to pay the principal debt, which is the cause of the contract (Article 1350, Civil Code),
is not illegal. The illegality lies only as to the prestation to pay the stipulated interest; hence, being separable, the latter only should be deemed void, since it is the only
one that is illegal.

Thus, the nullity of the stipulation on the usurious interest does not affect the lenders right to receive back the principal amount of the loan. With respect to the
debtor, the amount paid as interest under a usurious agreement is recoverable by him, since the payment is deemed to have been made under restraint, rather
than voluntarily.
Spouses FERDINAND AGUILAR and JOSEPHINE C. AGUILAR v. CITYTRUST FINANCE CORPORATION (G.R. No. 159592, October 25, 2005) CARPIO MORALES, J.:

FACTS:
Petitioners purchased a car from World Cars, Inc. at an agreed price of payable in 90 days and were being made to sign a promissory note, chattel mortgage, disclosures
and other documents the dates of which were left blank and which showed that they would still be obliged to pay on installment in 12 months for the car if checks
were not cleared. The chattel mortgage was executed in favor of World Cars which embodied a deed of assignment in favor of the respondent. Petitioner issued checks
payable to a certain Joselito Perez, representative of World Cars, Inc. and World Cars, Inc. After some time, respondent contacted the petitioner about the latter’s
overdue accounts. Petitioner filed a complaint for annulment of chattel mortgage plus damages against respondent and World Cars, Inc. in Quezon City RTC which ruled
in favor of herein petitioner. The appellate court modified that of trial court giving effect to the promissory note and its derivative instruments.

ISSUE: Whether or not World Cars, Inc. is liable to pay the unpaid obligations of petitioners if the latter will be able to prove that they already fully paid the price of the
subject car.

RULING:
YES. Since the condition for the instruments to become effective was fulfilled, the obligation on the part of the [petitioners] to be bound thereby did not arise and
World Cars did not thus acquire rights thereunder following Art. 1181 of the Civil Code.

ARTICLE 1181. In conditional obligations, the acquisition of rights, as well as the extinguishment or loss of those already acquired, shall depend upon the happening of
the event which constitutes the condition. As no right against the [petitioner] was acquired by World Cars under the promissory note and chattel mortgage, it had
nothing to assign to [respondent]. Consequently, [respondent] cannot enforce the instruments against the [petitioner], for an assignee cannot acquire greater rights
than those pertaining to the assignor. World Cars, Inc. was ordered to pay the petitioner and the respondent relevant fees, damages and litigation expenses.

Spouses Aguilar having fully paid the car before they became aware of the assignment of the instruments to Citytrust when they received notice thereof by Citytrust,
they were released of their obligation thereunder. The Civil Code so provides that the debtor who, before having knowledge of the assignment, pays his creditor, shall
be released from the obligation.

While Citytrust cannot enforce the instruments against the Spouses Aguilar, since under the RFA, specifically paragraph 5(a) thereof, World Cars guaranteed that as
further warranties, [World Cars] hereby agrees and shall be bound by the following: a. World Cars guarantees to [Citytrust] its successors, and assigns, that it has full
right and legal authority to make the assignment or discounting; that the installment papers so discounted by virtue of this agreement, are subsisting, valid, enforceable
and in all respects what they purport to be; that the papers contain the entire agreement between the customers and [World Cars]; x x x that it has absolute and good
title to such contracts and the personalties covered thereby and the right to sell and transfer the same in favor of [Citytrust].
[G.R. No. 108346. July 11, 2001]
Spouses MARIANO Z. VELARDE and AVELINA D. VELARDE, petitioners, vs. COURT OF APPEALS,
PANGANIBAN, J.:

FACTS: