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    Liam Law v. Olympic Sawmill Co., G.R. L-30771 (Usury Law Is For Some Time Now

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    avelim44
    Liam Law loaned PHP 10,000 to Olympic Sawmill Co. and Elino Lee Chi without interest. When the loan was not repaid, the parties agreed to extend the due date in exchange for PHP 6,000 for attorney fees, interest, and costs. Sawmill and Elino claimed the additional PHP 6,000 was usurious interest. The court ruled the additional PHP 6,000 was not usurious because the defendants did not prove the agreement for it was illegal. Additionally, usury laws have been repealed and interest rates are now set by agreement of the parties.

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    Liam Law v. Olympic Sawmill Co., G.R. L-30771 (Usury Law Is For Some Time Now

    Uploaded by

    avelim44
    16 views2 pages
    Liam Law loaned PHP 10,000 to Olympic Sawmill Co. and Elino Lee Chi without interest. When the loan was not repaid, the parties agreed to extend the due date in exchange for PHP 6,000 for attorney fees, interest, and costs. Sawmill and Elino claimed the additional PHP 6,000 was usurious interest. The court ruled the additional PHP 6,000 was not usurious because the defendants did not prove the agreement for it was illegal. Additionally, usury laws have been repealed and interest rates are now set by agreement of the parties.

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    Liam Law loaned PHP 10,000 to Olympic Sawmill Co. and Elino Lee Chi without interest. When the loan was not repaid, the parties agreed to extend the due date in exchange for PHP 6,000 for attorney fees, interest, and costs. Sawmill and Elino claimed the additional PHP 6,000 was usurious interest. The court ruled the additional PHP 6,000 was not usurious because the defendants did not prove the agreement for it was illegal. Additionally, usury laws have been repealed and interest rates are now set by agreement of the parties.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    16 views2 pages

    Liam Law v. Olympic Sawmill Co., G.R. L-30771 (Usury Law Is For Some Time Now

    Uploaded by

    avelim44
    Liam Law loaned PHP 10,000 to Olympic Sawmill Co. and Elino Lee Chi without interest. When the loan was not repaid, the parties agreed to extend the due date in exchange for PHP 6,000 for attorney fees, interest, and costs. Sawmill and Elino claimed the additional PHP 6,000 was usurious interest. The court ruled the additional PHP 6,000 was not usurious because the defendants did not prove the agreement for it was illegal. Additionally, usury laws have been repealed and interest rates are now set by agreement of the parties.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    of 2

    1. Liam Law v. Olympic Sawmill Co., G.R.

    L-30771 (Usury Law is for some time now


    legally inexistent).

    FACTS:

    On or about September 7, 1957, plaintiff loaned P10, 000.00, without interest, to


    defendant Sawmill and defendant Elino Lee Chi, as the managing partner. The loan
    became ultimately due on January 31, 1960, but was not paid on that date, with the
    debtors asking for an extension up to April 30, 1960.

    On March 17, 1960, the parties executed another loan document. Payment of
    the P10, 000.00 was extended to April 30, 1960, but the principal obligation was
    increased by P6, 000.00 to answer for attorney's fees, legal interest, and other cost
    incident thereto to be paid unto the creditor and his successors in interest upon the
    termination of this agreement.

    Sawmill and Elino again failed to pay their obligation by April 30, 1960 and, on
    September 23, 1960, Liam instituted this collection case. Sawmill and Elino admitted the
    P10, 000.00 principal obligation, but claimed that the additional P6,000.00 constituted
    usurious interest. The properties of defendant were attached and the RTC ordered the
    payment of the obligation plus the 6, 000 additional with legal rate of interest from April
    30, 1960.

    ISSUE:

    Whether the additional 6, 000 is usurious.

    RULING: NO

    Under Article 1354 of the Civil Code, in regards to the agreement of the parties
    relative to the P6,000.00 obligation, "it is presumed that it exists and is lawful, unless the
    debtor proves the contrary". No evidentiary hearing having been held, it has to be
    concluded that defendants had not proven that the P6,000.00 obligation was illegal.

    Sawmill and Elino insist the claim of usury should have been deemed admitted
    by plaintiff Liam as it was "not denied specifically and under oath".

    Section 9 of the Usury Law (Act 2655) provided:

    SEC. 9. The person or corporation sued shall file its answer in writing under
    oath to any complaint brought or filed against said person or corporation before
    a competent court to recover the money or other personal or real property,
    seeds or agricultural products, charged or received in violation of the provisions
    of this Act. The lack of taking an oath to an answer to a complaint will mean the
    admission of the facts contained in the latter.
    The foregoing provision envisages a complaint filed against an entity which has
    committed usury, for the recovery of the usurious interest paid. In that case, if the entity
    sued shall not file its answer under oath denying the allegation of usury, the defendant
    shall be deemed to have admitted the usury. The provision does not apply to a case, as
    in the present, where it is the defendant, not the plaintiff, who is alleging usury.

    Moreover, for some time now, usury has been legally non-existent. Interest can
    now be charged as lender and borrower may agree upon. The Rules of Court in
    regards to allegations of usury, procedural in nature, should be considered repealed
    with retroactive effect.

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