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G.R. No. L-30771


Republic of the Philippines

G.R. No. L-30771 May 28, 1984
LIAM LAW, plaintiff-appellee,
OLYMPIC SAWMILL CO. and ELINO LEE CHI, defendants-appellants.
Felizardo S.M. de Guzman for plaintiff-appellee.
Mariano M. de Joya for defendants-appellants.
Digest: Liam Law vs. Olympic Sawmill (GR L-30771, 28 May 1984)Liam Law vs. Olympic Sawmill
GR L-30771, 28 May 1984First DivisionMelencio-Herrera (J)
On 7 September 1957, Liam Law (plaintiff) loaned P10,000.00, without interest, toOlympic Sawmill Co. and
Elino Lee
Chi, as the latter?s managing partner (defendants). The loanbecame ultimately due on 31 January 1960,
but was not paidon that date, with the debtorsasking for an extension of 3 months, or up to 30 April 1960.
On 17 March 1960, the parties executed another loan document. Payment of the P10,000.00 was extended
to 30 April 1960,but the obligation was increased by P6,000 which formed part of the principal obligation
toanswer for attorney?s fees, legal interest, and other cost incident thereto to be paid unto thecreditor and
his successors in interest upon the termination of this agreement. The defendantsagain failed to pay their
obligation.On 23 September 1960, the plaintiff instituted the collection case before the Court of
FirstInstance of Bulacan. The defendants admitted the P10,000.00 principal obligation, but claimedthat the
additional P6,000.00 constituted usurious interest. Upon the plaintiff?s application, theTrial Court issued a
writ of Attachment on real and personal properties of defendants. After theWrit of Attachment was
implemented, proceedings before the Trial Court versed principally inregards to the attachment. On 18
January 1961,an Order was issued by the Trial Court allowingboth parties to simultaneously submit a
Motion for Summary Judgment. On 26 June 1961, theTrial Court rendered decision ordering defendants to
pay the plaintiff the amount of P10,000.00plus the further sum of P6,000.00. The defendants appealed
before the then court of Appeals,which endorsed it to the Supreme Court stating that the issue involved was
one of law.
Issue [1]:
Whether the allegation of usury should be made in writing and under oath, pursuantto Section 9 of the
Usury Law.
Held [1]:
Section 9 of the Usury Law provides that the person or corporation sued shall file itsanswer in writing
under oath
to any complaint brought or filed against said person orcorporation before a competent court to recover the
money or other personal or real property,seeds or agricultural products, charged or received in violation of
the provisions of this Act. Thelack of taking an oath to an answer to a complaint will mean the admission of
the factscontained in the latter.It envisages a complaint filed against an entity which has committedusury,
for the recovery of the usurious interest paid. In that case, if the entity sued shall not fileits answer under
oath denying the allegation of usury, the defendant shall be deemed to have