What happened:
On December 30, 1915, Bartolome Oliveros and Engracia Lianco accomplished
and delivered to the defendants a contract (named ‘Exhibit B’) which stated that the
Oliveros and Lianco had borrowed from the latter a sum of three hundred pesos (Php
300), and by virtue of the terms of said contract, Oliveros and Lianco obligated
themselves to pay to the defendants interest at the rate of five percent (5%) per
month, payable within the first ten days of each and every month, the first payment
to be made on the January 10, 1916.
On May 1, 1916, Act no. 2655 or the Usury Law came into effect. The law stated
that that the legal rate of interest for the loan or forbearance of any money, goods or
credits, […] shall be 12% per annum. Any amount of interest paid or to be paid in
excess of that fixed by law is considered usurious, therefore unlawful.
A complaint was filed in the Court of First Instance of the city of Manila on May 6,
1921, charging the defendants with a violation of the Usury Law (Act No. 2655).
Upon said complaint they were arrested, charged, and pleaded not guilty. On
September 1, 1921, the case was finally brought on for trial. At the end of the trial,
with consideration to the evidences cited in court, Hon. M. V. del Rosario, judge,
found that the defendants were guilty of the crime charged in the complaint and
sentenced each of them to pay a fine of P120 and, if they cannot meet their debt
obligations, the defendants would suffer subsidiary imprisonment in accordance with
the provisions of the law. From that sentence each of the defendants made an
Contention of the State:
The lower court, in the course of its opinion, stated that at the time of the execution
and delivery of said contract, there was no law in force in the Philippine Islands that
punishes usury. However, the defendants had collected a usurious rate of interest
after the adoption of the Usury Law in the Philippine Islands (Act No. 2655),
Therefore, they were guilty in the violation of that law and should be punished in
accordance with its provisions.
(a) The contract upon which the alleged usurious interest was collected was
executed before Act No. 2655 was adopted.
(b) The time that the said contract was made (December 30, 1915), there was no
usury law in force in the Philippine Islands.
(c) Act No. 2655 did not become effective until the May 1, 1916, or four months and
a half after the contract was executed.
(d) The said law could have no retroactive effect or operation
(e) The said law impairs the obligation of a contract.
For all of said reasons the judgment imposed by the lower court should be revoked;
that the complaint should be dismissed, and that they should each be discharged

providing it is curative in character. L18208). done before the passage of the law. The complaint was therefore dismissed. are prohibited in this jurisdiction. Laws must be construed prospectively and not retrospectively.from the custody of the law. 2655. but ex post facto laws are absolutely prohibited unless its retroactive effect is favorable to the defendant. If a contract is legal at its commencement. The court has decided that the acts complained of by the defendants did not constitute a crime at the time they were committed. or giving a new right of action. liability or disability. It is an elementary rule of contract that the laws in force at the time of the contract was made must govern its interpretation and application. If that were permitted. unless they are favorable to the defendant.R. De Conde (G. must not be construed as having a retroactive effect. No. A law imposing a new penalty. as in the case of Act No. Every law that makes an action. A law may be given a retroactive effect in civil action. and punishes such action. The Legislature is prohibited from adopting a law which will make an act done before its adoption a crime. Ruling of the Supreme Court: The Supreme Court en banc promulgated on February 14. and the defendants were discharged from the custody of the law with costs. 1922 its ruling on the case of The United States vs Vicente Diaz Conde and Apolinaria R. then the obligations of a contract might be impaired. . and which was innocent when done. which is prohibited by Philippine law. Ex post facto laws. is an ex post facto law. criminal. it cannot be rendered illegal by any subsequent legislation.