RAMOS, HARLENE P.
Subject: COMMERCIAL LAW 1 – UPHSL
Professor: ATTY. DARWIN R. BAWAR
CASE 8
SPOUSES SALVADOR ABELLA AND ALMA ABELLA, Petitioners
vs.
SPOUSES ROMEO ABELLA AND ANNIE ABELLA, Respondents
G.R. No. 195166 / July 8, 2015
Ponente: Justice Leonen
FALLO:
WHEREFORE, the assailed September 30, 2010 Decision and the January 4,
2011 Resolution of the Court of Appeals Nineteenth Division in CA-G.R. CV No.
01388 are SET ASIDE. Petitioners Spouses Salvador and Alma Abella
are DIRECTED to jointly and severally reimburse respondents Spouses Romeo and
Annie Abella the amount of P3,379.17, which respondents have overpaid.
A legal interest of 6% per annum shall likewise be imposed on the total
judgment award from the finality of this Decision until its full satisfaction.
SO ORDERED.
FACTS OF THE CASE:
On July 31, 2002, petitioners Spouses Salvador and Alma Abella filed a
Complaint for sum of money and damages with prayer for preliminary attachment
against respondents Spouses Romeo and Annie Abella before the Regional Trial
Court, Branch 8, Kalibo, Aklan.
Petitioners alleged that respondents obtained a loan from them in the amount
of P500,000.00. The loan was evidenced by an acknowledgment receipt dated
March 22, 1999 and was payable within one (1) year. Petitioners added that
respondents were able to pay a total of P200,000.00—P100,000.00 paid on two
separate occasions—leaving an unpaid balance of P300,000.00.
Respondents alleged that the amount involved did not pertain to a loan they
obtained from petitioners but was part of the capital for a joint venture involving the
lending of money. Specifically, respondents claimed that they were approached by
petitioners, who proposed that if respondents were to “undertake the management of
whatever money [petitioners] would give them, [petitioners] would get 2.5% a month
with a 2.5% service fee to [respondents].”The 2.5% that each party would be
receiving represented their sharing of the 5% interest that the joint venture was
supposedly going to charge against its debtors. Respondents further alleged that the
one year averred by petitioners was not a deadline for payment but the term within
which they were to return the money placed by petitioners should the joint venture
prove to be not lucrative. Moreover, they claimed that the entire amount of
P500,000.00 was disposed of in accordance with their agreed terms and conditions
and that petitioners terminated the joint venture, prompting them to collect from the
1
RAMOS, HARLENE P.
Subject: COMMERCIAL LAW 1 – UPHSL
Professor: ATTY. DARWIN R. BAWAR
joint venture’s borrowers. They were, however, able to collect only to the extent of
P200,000.00; hence, the P300,000.00 balance remained unpaid.
ISSUE:
Whether or not the Court of Appeals erred in completely striking off interest
despite the parties’ written agreement stipulating it, as well as in ordering them to
reimburse and pay interest to respondents.
HELD:
Yes. The CA and RTC decisions, respondents entered into a simple loan
or mutuum, rather than a joint venture, with petitioners. Respondents’ claims cannot
prevail over the clear terms of the document attesting to the relation of the parties. “If
the terms of a contract are clear and leave no doubt upon the intention of the
contracting parties, the literal meaning of its stipulations shall control.”
The nature of the contractual relation between petitioners and respondents,
controversy persists over respondents’ duty to pay conventional interest, i.e., interest
as the cost of borrowing money. Article 1956 of the Civil Code spells out the basic
rule that “no interest shall be due unless it has been expressly stipulated in writing.”
Jurisprudence is clear about the applicable interest rate if a written instrument fails to
specify a rate. Applying this, the loan obtained by respondents from petitioners is
deemed subjected to conventional interest at the rate of 12% per annum, the legal
rate of interest at the time the parties executed their agreement. Moreover, should
conventional interest still be due as of July 1, 2013, the rate of 12% per annum shall
persist as the rate of conventional interest.
AGREE or DISAGREE:
I agree with the court’s decision that the amount involved between the parties
was a simple loan or mutuum, and not a joint venture. Further, the interest due must
be in writing and in the absence, the rate shall be 12% per annum where the rate of
legal interest for loans, goods or credits and the rate allowed in judgments shall no
longer be 12% per annum but now be 6% per annum effective July 1, 2013.
