GR 57576; (June, 1989) (Digest)
G.R. No. 57576 June 6, 1989
NATIONAL ONION GROWERS COOPERATIVE MARKETING ASSOCIATION, INC., petitioner, vs. THE HONORABLE COURT OF APPEALS, VICENTE F. GOQUIOLAY, and SALUD CHONG, respondents.
FACTS
Petitioner NOGROCOMA obtained a loan of P300,000.00 from respondent Vicente Goquiolay, secured by a real estate mortgage. The loan was payable within one year with 12% interest per annum, payable in advance. Upon maturity, the loan remained unpaid. After a written demand, Goquiolay initiated extrajudicial foreclosure. NOGROCOMA then filed a suit seeking to declare the mortgage void for usury, to recover alleged usurious interest, and to enjoin the foreclosure.
NOGROCOMA alleged that it received only P195,000.00 of the loan, as P105,000.00 was withheld as advance interest, constituting a usurious 35% charge. Goquiolay countered that the full P300,000.00 was released, except for P36,000.00 legitimately applied as advance interest at the stipulated 12% rate. The trial court found that the evidence, including various receipts, established that NOGROCOMA received the full loan amount. It also noted that in NOGROCOMA’s reply to the demand letter, it promised to pay the P300,000.00 plus interest without mentioning any usurious charge.
ISSUE
Whether the Court of Appeals erred in affirming the trial court’s finding that the loan was not usurious because the petitioner received the full loan principal.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals. The ruling is anchored on the conclusive nature of factual findings by lower courts and the substantive inapplicability of the Usury Law to the case. The Court emphasized that its jurisdiction is limited to reviewing errors of law, not re-examining factual conclusions. Both the trial court and the Court of Appeals found, based on documentary evidence, that NOGROCOMA received the entire P300,000.00 loan proceeds. This factual finding is binding and conclusive absent any showing of grave abuse of discretion.
Since the full principal was delivered, the stipulated 12% interest cannot be deemed usurious. The Court further noted that the factual finding negates the application of the Usury Law. Moreover, the decision cited the prevailing jurisprudential principle that the Usury Law had been rendered legally non-existent, and interest rates are now a matter of contractual agreement. Consequently, with the principal obligation and valid interest established, the order for petitioner to pay the debt or face foreclosure of the mortgage was upheld. The petition was denied for lack of merit.