Case Digest (G.R. No. L-25704)
Facts:
Angel Jose Warehousing Co., Inc. v. Chelda Enterprises and David Syjueco, G.R. No. L-25704, April 24, 1968, the Supreme Court En Banc, Bengzon, J., writing for the Court.On May 29, 1964, Angel Jose Warehousing Co., Inc. (plaintiff-appellee) sued the partnership Chelda Enterprises and David Syjueco (defendants-appellants) in the Court of First Instance (CFI) of Manila for recovery of alleged unpaid loans totaling P20,880.00, legal interest from filing, and attorney’s fees of P5,000.00; preliminary attachment was also sought on grounds that post-dated checks were dishonored, a capital partner had left the country, and defendants were disposing of assets to defraud creditors.
Defendants admitted receiving four loans totaling P26,500.00 and alleged payments of P5,620.00 leaving P20,880.00 due, but pleaded that plaintiff had deducted usurious interest at rates of 2% and 2.5% per month and consequently had no cause of action; they counterclaimed P2,000.00 as attorney’s fees. Plaintiff answered the counterclaim under oath denying usury.
After trial, the CFI rendered judgment on November 10, 1965 finding an unpaid principal of P20,287.50, that plaintiff had actually deducted P1,048.15 as usurious interest in advance, and therefore deducted that from the unpaid principal to arrive at P19,247.35 (a clerical error later corrected by the Court). The trial court held that despite the usurious interest charge, plaintiff could still recover the principal balance; it awarded P19,247.35 with legal interest from May 29, 1964, attorney’s fees of P2,000, and costs, and ordered David Syjueco liable for one-half of any unsatisfied portion.
Defendants appealed directly to the Supreme Court raising two questions of law: (1) whether, in a loan tai...(Subscriber-Only)
Issues:
- In a loan agreement that contains usurious interest, may the creditor recover the principal of the loan?
- Should attorney’s fees be awarded to the plaintiff under the circumstances of ...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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