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[G.R. No. 32644. October 4, 1930. ]

CU UNJIENG E HIJOS, Plaintiff-Appellee, v. THE MABALACAT SUGAR CO., ET AL., Defendants. THE MABALACAT SUGAR CO., Appellant.

Romeo Mercado, for Appellant.

Araneta & Zaragoza, for Plaintiff-Appellee.

Duran & Lim for defendant-appellee Siuliong & Co.


1. INTEREST; COMPOUND INTEREST; STIPULATION FOR PAYMENT OF INTEREST AT STATED INTERVALS DURING YEAR. — A stipulation to the effect that interest shall be at the rate of 12 per centum per annum payable at the end of each month upon the unpaid capital of the loan, does not authorize the compounding of interest payments at intervals of one month.

2. USURY; INTEREST IN EXCESS OF LEGAL RATE; VOLUNTARY PAYMENT NOT BINDING ON DEBTOR. — Where interest is charged at an unlawful rate, in excess of the limit allowed by the Usury Law, the mere voluntary payment of it to the creditor by the debtor is not binding.



This action was instituted in the Court of First Instance of Pampanga by Cu Unjieng e Hijos, for the purpose of recovering from the Mabalacat Sugar Company an indebtedness amounting to more than P163,000, with interest, and to foreclose a mortgage given by the debtor to secure the same, as well as to recover stipulated attorney’s fee and the sum of P1,206, paid by the plaintiff for insurance upon the mortgaged property, with incidental relief. In the complaint Siuliong & Co., Inc., was joined as defendant, as a surety of the Mabalacat Sugar Company, and as having a third mortgage on the mortgaged property. The Philippine National Bank was also joined by reason of its interest as second mortgagee of the land covered by the mortgage to the plaintiff. After the cause had been brought to issue by the answers of the several defendants, the cause was heard and judgment rendered, the dispositive portion of the decision being as follows:jgc:chanrobles.com.ph

"Por las consideraciones expuestas, el Juzgado condena a The Mabalacat Sugar Company a pagar la demandante la suma de P163,534.73, con sus intereses de 12 por ciento al año, compuestos mensualmente desde el 1.
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