Pp v Diaz Conde Digest 1922

G.R. No. L-18208 February 14, 1922

THE UNITED STATES, plaintiff-appellee,

vs.
VICENTE DIAZ CONDE and APOLINARIA R. DE CONDE, defendants-appellants.

Araneta & Zaragoza for appellants.

Attorney-General Villareal for appellee.

JOHNSON, J.:

Facts of the Case:

On December 30, 1915, Bartolome Oliveros and Engracio Liaco borrowed from Vicente Diaz-
Conde and Apolinaria R. De Conde the sum of P300. They obligated themselves to pay the defendants
5% per month, payable within the first ten days beginning on January 1916.
On May 1, 1916, Act No. 2655 (Usury Law) took effect.

Issue: Whether or not the defendants violated Act No. 2655.

Held:
No. If a contract is legal at its inception, it cannot be rendered illegal by any subsequent
legislation. The obligation of the contract is the law which binds the parties to perform their
agreement if it is not contrary to the law of the land, morals or public order. That law must govern
and control the contract in every aspect in which it is intended to bear upon it, whether it affect its
validity, construction, or discharge.
In the present case, making Act No. 2655 applicable to the act complained of which had been done
before the law was adopted, a criminal act, would give it an ex post facto operation.

An ex post facto law, is a law that makes an action, done before the passage of the law, and
which was innocent when done, criminal. Ex post facto laws are absolutely prohibited unless its
retroactive effect is favorable to the defendant.

The decision of the lower court is revoked and the complaint dismissed.

February 14, 1922                               En Banc

Johnson, J.:

Facts:                
1. On 30 December 1915, Bartolome Oliveros and Engracia Lianco borrowed
P300 from the defendants and by virtue of a contract, the former obligated
themselves with the interest rate of 5% per month, payable within the first 10
days of every month, and the first payment shall be made on 10 January 1916.

1
2. Usury Law (Act. 2655) took effect on 01 May 1916, or four months
subsequent to the execution of said contract.
3. On 21 May 1921, a complaint was filed against the defendants in violation of
the Usury Law. The Court of First Instance of Manila found the defendants guilty
and sentenced them to pay a fine of P120 and in case of insolvency, to suffer
subsidiary imprisonment in accordance with the provisions of law.
4. The appellants contend that:
 The contract upon which the alleged usurious interest was collected
was executed before Act No. 2655 was adopted;
 At the time said contract was made (December 30, 1915), there was
no usury law in force in the Philippine Islands;
 Said Act No. 2655 did not become effective until the 1st day of May,
1916, or four months and a half after the contract in question was executed;
 Said law could have no retroactive effect or operation;
 Said law impairs the obligation of a contract;
 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 from the custody of the law.
5. The lower court opined that even though the contract was established prior to
the passage of Act No. 2655, the defendants still collected a usurious amount of
interest after the adoption of said law and therefore, violated such law and must
be punished in accordance to Usury Law.
Issue:
W/N the defendants are guilty in violation of Usury Law (Act. No. 2655).

Ruling:
No. An ex post facto law is a law that makes an action, done before the
passage of the law, and which was innocent when done, criminal, and
punishes such action. In the present case, the defendants executed an act
which was legal before the Usury Law. To make said law applicable to the
defendants’ previous act would render it an ex post facto operation.
Moreover, if a contract is legal at its inception, it cannot be rendered illegal
by any subsequent legislation. Also, no law shall be passed impairing the
obligation of contracts. If a law is passed rendering the opposite effect, the
law is null and void with respect to Jones Law.

Wherefore, all premises considered, the higher court hereby decide that the
acts complained of the defendants did not constitute a crime at the time
they were committed, and therefore the sentence of the lower court should
be, and is hereby, revoked; and it is hereby ordered and decreed that the
complaint be dismissed and that the defendants be discharged from the
custody of the law, with costs de oficio.