Case Summary (G.R. No. 19209)

Contract Construction and Usury

• The original written instrument, executed in Spanish and translated into English, was analyzed to determine its validity under the Usury Law.
• The majority opinion concluded that the contract was not usurious, despite dissenting opinions from four justices.
• The court emphasized the importance of the written terms of the contract, which clearly outlined the obligations of the parties involved.

Terms of the Contract

• The contract acknowledged the receipt of P330 by Rosario Alburo de Mercado from Cayetano Alburo for the purchase of 300 sacks of corn.
• It stipulated that the corn was to be delivered by October 1916, and failure to deliver would result in the obligation to pay P330 plus double that amount as interest.
• The court noted that the plaintiff was responsible for delivering the corn, and any failure to do so would not impose liability on the defendants.

Payment and Claims

• The plaintiff claimed a total of P549.60, which included the unpaid balance and the value of empty sacks delivered.
• The defendants denied the allegations and claimed the contract was void due to its usurious nature.
• The trial court ruled in favor of the plaintiff, awarding him the claimed amount with interest.

Analysis of Liability

• The court analyzed the contract's terms, concluding that the defendants only acknowledged receipt of P330 and did not agree to return the corn.
• The court found that the plaintiff's obligations were misrepresented in the contract, as he was liable for the payment of interest to himself in case of non-delivery.
• The court held that the contract's terms could not be enforced as they would result in an unconscionable penalty.

Usury Law Implications

• The court discussed the implications of the Usury Law, which voids contracts that impose excessive interest rates.
• It was suggested that if the contract was intended to impose a penalty for non-delivery, it would still be considered usurious.
• The court indicated that enforcing such a contract would contradict principles of justice and fairness.

Final Judgment

• The court ultimately reversed the lower court's judgment, ruling in favor of the plaintiff for P219.60 with interest at 6% per annum.
• The defendants were ordered to pay the costs of the appeal.
• The decisio...continue reading

Case Syllabus (G.R. No. 19209)

Case Overview

• The case involves a dispute between plaintiff Cayetano Alburo and defendants Alfredo R. Mercado and Rosario Alburo de Mercado regarding a contract for the sale of corn.
• The contract, executed by Rosario Alburo de Mercado on August 15, 1916, acknowledges receipt of P330 for 300 sacks of corn to be delivered within October 1916.
• The defendants raised a defense claiming the contract was void under the Usury Law, and the plaintiff sought a judgment for the total amount owed, including damages and interest.

Factual Background

• On August 15, 1916, Rosario Alburo de Mercado signed a document acknowledging receipt of P330 from Cayetano Alburo as payment for 300 sacks of corn.
• The agreement stipulated that the corn would be delivered by October 1916, and if not delivered, the plaintiff would be liable for P330 plus double this amount in interest.
• The plaintiff delivered additional empty sacks valued at P39.60 on August 25, 1916.
• By October 14, 1917, only P150 had been paid towards the original sum, prompting the plaintiff to file a suit for the remaining amount.

Legal Proceedings

• The defendants denied the material allegations and claimed the contract was void due to usu...continue reading