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FACTS:
1. On December 27, 2000, DELA PAZ lent P350,000.00 without any security to LJDC.
The loan had no specified maturity date and carried a 6% monthly interest, i.e.,
P21,000.00. From December 2000 to August 2003, LJDC paid DELA PAZ a total of
P576,000.00 representing interest charges.
3. LJDC argued: that their failure to pay the debt was due to a fortuitous event, financial
difficulties brought about by the economic crisis; that DELA PAZ cannot enforce the
6% monthly interest for being unconscionable and shocking to the morals; and, that
the payments already made should be applied to the P350,000.00 principal loan.
ISSUE/S:
1. Whether DELA PAZ has a valid claim over the interest.
RULING:
1. DELA PAZ IS NOT ENTITLED TO THE INTEREST.
A. Under Article 1956 of the Civil Code, no interest shall be due unless it has
been expressly stipulated in writing.
B. Interest to be due and payable when there is: (a) an express stipulation for
the payment of interest, and (b) an agreement to pay interest is reduced in
writing.