G.R. No. 44612 ; September 30, 1938
THE PEOPLE OF THE PHILIPPINES, plaintiff-appellee, vs. C. N. HODGES, defendant-appellant.

FACTS

The spouses Maximo Positos and Paulina Sombilla, owners of two parcels of land, executed a general power of attorney in favor of their son Demetrio Positos to obtain a loan using the lots as security. Demetrio applied for a loan from the accused, C.N. Hodges. Hodges agreed but structured the transaction as a sale of the two lots from the Positos spouses to him, followed by his resale of those lots plus an additional small lot of his own to Demetrio for a higher price (P3,500 vs. the original P2,500 loan). From the P2,500, Hodges deducted P420 as advance annual interest on the P3,500 and P280 for realty taxes (though the actual tax was only P213.64). Demetrio received only P1,800. Hodges later collected additional interest payments in 1931 and 1932. The prosecution alleged these interest collections were usurious. The criminal case for violation of the Usury Law was initiated on May 4, 1935.

ISSUE

Whether the criminal liability of the accused for violations of the Usury Law, based on the collection of usurious interest in 1930 and 1931, had already prescribed.

RULING

Yes, the violations had prescribed. The Court applied Act No. 3326 , as amended, which provides the prescriptive periods for violations penalized by special acts. Violations of the Usury Law, penalized by imprisonment of not less than ten days nor more than six months (or fine, or both), fall under clause (b) of the law, prescribing after four years. The usurious interest collections occurred on February 12, 1930, February 9, 1931, and March 31, 1931. From the last date (March 31, 1931) to the filing of the information on May 4, 1935, more than four years had elapsed. Therefore, the criminal action had prescribed. The appealed judgment was reversed and the accused-appellant was acquitted.

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