Case #9

Joven de Cortes vs. Venturanza (79 SCRA 709 [1977])

FACTS:

● This case was an Appeal from the decision of the Court of First Instance of Bulacan
(Now RTC)
● Original plaintiffs in this case were Felix Cortes y Ochoa and Noel J. Cortes... original
defendants were Gregorio Venturanza, Mary E. Venturanza, Jose Oledan and Erlinda
M. Oledan.
● Gregorio Venturanza died and surviving spouse and children of the deceased were
substituted
● Plaintiff Felix Cortes y Ochoa and Noel J. Cortes filed the instant action for
foreclosure of real estate against the defendants, original owner of nine (9) parcels
of land
● Noel J. Cortes... original owner of twenty-four (24) parcels of land
● Plaintiffs sold and delivered to the defendants all the above-mentioned thirty-three
(33) parcels of land with all the improvements thereon for the total sum of
P716,573.90... defendants agreed to pay jointly and severally the plaintiffs the sum
of P100,000.00 upon the signing and execution of a deed of sale and P40,000.00 on
January 1, 1959 thereby leaving a balance of P576,573.90 which the defendants
agreed and bound themselves to pay plaintiffs jointly and severally within three (3)
years from January 1, 1959 with interest thereon at the rate of 6% per annum
● There were several happenings on this case and several issues as well such as
whether the complaint was filed prematurely and also issue on novation because
apparently there was transfer of interest and participation in the property subject to
the deed of sale. One of the defenses of the defendant was that novation took place
and therefore the obligation to the plaintiffs of one of the defendant is already
extinguished.
● But let us focus on issue that is related to our subject, Credit Transaction.
● The debtor in this case defaulted, hence the creditor filed a suit for foreclosure of
mortgage on December 12, 1962.

ISSUE:

● The issue here is how much is the interest payable?

RULING:

● The appealed judgment was modified and the defendants Venturanzas and Oledans
to pay jointly and severally the plaintiff-appellees:
● The interest at 6% per annum from Jan 1, 1959 to December 12, 1962 which is
P136,482.13.
● This is to be added to the principal amount, thus making a total of P713,056.03.
● Which shall earn legal interest at 6% per annum from December 12 1962, the date of
 filing of the complaint until fully paid.
● Because we have a provision on Art 2212 of the New Civil Code: Interest due shall
earn legal interest from the time it is judicially demanded, although the obligation
may be silent upon this point.
● Such interest is not due to stipulation; rather it is due to the mandate of the law
hereinbefore quoted.
● There are some other issues that were resolved in the case such as Failure to pay is
unjustified when cause of delay is not force majeure,
o Obligations arising from contracts have the force of law between the
contracting parties and should be complied with in good faith in which deed
of sale did not contravene limitations of freedom of contract,
o When period of payment of the mortgage on the land had become due, and
no payment had been receive, foreclosure of mortgage would be proper, and
others
● But we focus on the application that interest may still accrue from unpaid interest
even without stipulation in the contract because there is a mandate in the law
regarding this as applied in this case