GR 93109; (June, 1993) (Digest)
G.R. No. 93109 June 25, 1993
MILAGROS LLAMANZARES, petitioner, vs. THE HON. COURT OF APPEALS, ASSISTANT CITY FISCAL OF QUEZON CITY, ALFREDO ENRIQUEZ and ELOISA ORTEGA, respondents.
FACTS
Petitioner Milagros Llamanzares borrowed money from private respondent Eloisa Ortega. Between September 24, 1981, and December 14, 1981, Ortega extended nine loans totaling P560,000.00 to Llamanzares. Each loan was for 100 days with an interest of 20% for the period, to be paid via daily deposits. Llamanzares made payments but left an unpaid balance. She acknowledged an indebtedness of P151,620.00, while Ortega claimed the balance was P185,300.00, arguing that Llamanzares had deducted P33,680.00 (corresponding to three days of installments) as commissions for her collectors per their agreement, and this amount should be added to the P151,620.00. Llamanzares contended the agreed 20% interest per 100 days was usurious and sought the return of all interest paid, including the P33,680.00. She also filed a civil case to enjoin the preliminary investigation of a bouncing check complaint filed by Ortega against her and to declare the usurious interest agreement void. The trial court dismissed her complaint, ordered her to pay P151,620.00 with “money market” interest and attorney’s fees. The Court of Appeals affirmed but deleted the “money market” interest.
ISSUE
The primary issues were: (1) whether petitioner was entitled to a refund of the P33,680.00 as usurious interest paid; (2) whether legal interest should be charged on any refund; (3) whether the award of attorney’s fees to private respondent was proper; and (4) whether petitioner was entitled to attorney’s fees.
RULING
The Supreme Court affirmed the Court of Appeals’ decision with modification. It held that the 20% interest per 100 days was usurious, as the allowable rate for unsecured loans at the time was only 14% per annum. However, it sustained the factual finding of both lower courts that the petitioner had not actually paid the P33,680.00 to Ortega; it was deducted and set aside for petitioner’s collectors per their agreement. Therefore, petitioner was not entitled to a refund of that amount. The Court also eliminated the award of P25,000.00 as attorney’s fees to private respondent, finding no justification for it since private respondent had charged usurious interest. Petitioner was likewise not entitled to an award of attorney’s fees. The unpaid balance of petitioner’s indebtedness was P151,620.00.