Case Summary (G.R. No. 18500)
Facts of the Case
On August 28, 1911, the defendant loaned the plaintiffs P1,500 at an interest rate of 25% per annum for one year, secured by a collection of jewelry valued at P4,000. This loan was documented by two exhibits indicating an amount of P1,875, representing the principal and interest. Upon the loan's maturity on August 31, 1912, the plaintiffs were unable to repay and sought an extension, with the interest continuing as long as the collateral retained value. In August 1919, the plaintiffs made an attempt to redeem the jewels by offering P11,000, but the defendant claimed that the opportunity to redeem had lapsed.
Defendant's Position
The defendant asserted that after the loan's maturity, he sought payment from the plaintiffs but was later offered to purchase the jewels directly from Filomena Sarmiento for P3,000. According to him, he paid her P1,125 after deductions for the balance of the loan. The defendant’s claim relied heavily on witness testimony, including that of Jose Sison, who was purportedly present during these transactions.
Analysis of Evidence
The court scrutinized the credibility of the defendant’s testimony regarding the alleged purchase. It highlighted that the defendant still retained the loan documents, indicating that no sale occurred, as the return of these documents would be expected if a legitimate transfer of ownership had taken place. This evidence rendered the defendant’s assertions unconvincing, leading to the conclusion that the pledged jewels had not been sold.
Value of the Pledged Items
The trial court assessed the value of the pledged jewelry at P12,000, which further backed the plaintiffs' entitlement to redemption upon payment of the outstanding debt along with interest. The jewels served as collateral for the loan, which required the defendant to return them or compensate for their value if the plaintiffs cleared their debts.
Prescription of Action
In a subsequent motion for reconsideration, the defendant argued that the plaintiffs' claim for the jewelry had prescribed. However, it was emphasized that the plaintiffs' right to reclaim the pledged items hinged upon the fulfillment of the loan agreement. The court confirmed that since the contract was written and established, legal prescription would not commence until the loan term expired on August 31, 1912, thus
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Case Background
- The case involves a loan agreement dated August 28, 1911, wherein the defendant, Glicerio Javellana, lent the plaintiffs, Filomena Sarmiento and Eusebio M. Villasenor, the amount of P1,500.
- The loan was subject to an interest rate of 25% per annum and was secured by several pieces of jewelry appraised at P4,000.
- The loan documents (Exhibits A and 1) recorded a total amount of P1,875, which included the principal and interest.
Events Leading to the Dispute
- Upon the maturity of the loan on August 31, 1912, Eusebio M. Villasenor failed to repay the loan and sought an extension, which was granted under the condition that the loan would continue with interest as long as the pledged jewelry remained sufficient as collateral.
- In August 1919, Eusebio attempted to redeem the jewels by offering P11,000, but the defendant claimed that the redemption period had expired.
Plaintiffs' Claims
- The plaintiffs filed a lawsuit to compel the defendant to return the pledged jewelry or its value upon payment of the outstanding loan and interest.
- The plaintiffs supported their claims with testimonies corroborated by Carlos M. Dreyfus, who witnessed their attempts to redeem the jewels.