G.R. No. 48621 ; February 26, 1943
MARCELO G. VAZQUEZ, plaintiff-appellee, vs. AGATA TACSAGON VDA. DE ABKILAN, as judicial administratrix of the intestate estate of Atanasio Abkilan, defendant-appellant.

FACTS

Atanasio Abkilan was indebted to Marcelo G. Vazquez and Andrea Olea, secured by a mortgage on certain lots. This debt, bearing 10% annual interest, became due on July 31, 1925. On April 26, 1926, the parties executed a new “Deed of Mortgage” wherein Abkilan acknowledged a debt of P34,812.46, payable on or before July 31, 1935, without interest until that date but with 12% annual interest thereafter. As security, he mortgaged lots Nos. 711 and 1528. Key stipulations included: (1) creditors would have the usufruct of a seven-hectare portion of lot No. 711 for four agricultural years (up to 1930-1931) without rent; (2) Abkilan was obligated to raise sugar cane on the rest of lot No. 711, with creditors receiving a percentage of the sugar produced (50% if milled at Olea’s hacienda, or 15% for crop years 1927-1928 to 1930-1931 and 17% thereafter if milled at Binalbagan central), and Abkilan’s net share was to be sold by the creditors and applied to the debt; (3) creditors would furnish Abkilan a yearly credit of P2,000 without interest for planting expenses, with any excess bearing 12% interest; and (4) in case of suit, the debtor would pay a 10% penalty for judicial expenses and attorney’s fees. Vazquez later acquired Olea’s interest. The trial court found a balance due of P29,351.69 and ordered its payment with 12% interest from July 31, 1935, plus the 10% penalty and costs, and the sale of the mortgaged property.

ISSUE

Whether the contract is an antichresis, usurious, and whether the plaintiff should be required to account for the sugar obtained from the usufruct and his percentage participation.

RULING

The Supreme Court affirmed the trial court’s judgment. The contract is not an antichresis, as the debtor never demanded an accounting of the usufruct’s proceeds or the sugar received by the creditors on the theory they should be applied to the debt. It is not usurious. The cession of usufruct and the creditors’ sugar participation were not mere cloaks for usury but were part of the consideration for the condonation of interest on the principal for over nine years and the provision of additional interest-free credit. The creditors’ participation involved services and expenses, not just interest. There was no allegation or proof that the rental value of the usufruct plus the creditors’ net profit from the sugar exceeded the equivalent of 12% annual interest, which would be necessary to declare it an equitable antichresis to circumvent the Anti-Usury Law. The appellant’s pretensions are devoid of merit.