Case Digest (G.R. No. L-1743)
Facts:
Dominador Nicolas and Olimpia Matias v. Vicenta Matias and Amado Cornejo, Jr., G.R. No. L-1743, May 29, 1951, the Supreme Court En Banc, Bengzon, J., writing for the Court.
On June 29, 1944 Vicenta Matias, a widow, and her son Amado Cornejo Jr. executed in favor of Dominador Nicolas and his wife Olimpia Matias a promissory note for P30,000, payable "within the sixth year" from that date, with 6% interest stipulated to be due annually in advance. On the same day a mortgage over four parcels of land in Nueva Ecija was notarized to secure the loan. The loan proceeds were in Japanese military notes.
On July 15, 1944 the debtors offered to liquidate the indebtedness by tendering the principal plus interest computed for five years, but the creditors refused to accept payment. In August 1944 the debtors deposited P39,000 in court (the principal and the interest they claimed was due for five years) and filed an action to compel the defendants to accept the money and to discharge the mortgage.
The principal defense was that the note and mortgage were not payable until the "sixth year" and therefore payment could not be made earlier. The Court of Appeals found the term to be for the benefit of both parties but nevertheless held that, because interest for the full five-year period had been offered, the creditors could not refuse payment; it declared the consignation valid and the debt discharged.
The present case is a review by certiorari of that decision of...(Subscriber-Only)
Issues:
- Was the tender and consignation of P39,000 by the debtors valid to discharge the promissory note and mortgage that were payable "within the sixth year"?
- Could the creditors lawfully refuse the early payment, including on the ground that acceptance would violate the Usury Law's prohibition against taking interest in advan...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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