U.S. vs. Tan Quingco Chua

G.R. No. L-13708

U.S. vs. Tan Quingco Chua

January 29, 1919

Facts:

An appeal from a judgment of the Court of First Instance of Nueva Ecija, finding the accused Francisco Constantino Tan Quingco Chua guilty and sentenced him to pay a fine of P225, or to suffer subsidiary imprisonment in case of insolvency, and to pay the costs.

On April 29, 1911, Pedro Andres, borrowing of Francisco Constantino Tan Quingco Chua, the instant defendant, the sum of P100, with interest of 24 cavanes of palay. In less than three months, or, to be exact, on the 9th of July of the same year, the debt was raised to P125, with interest of 30 cavanes of palay. Two years pass, and on June 28, 1913, it has become P226.70, secured by a pacto de retro, with the interest at 44 cavanes of palay annually. The day of reckoning came on October 17, 1915, when the debt was liquidated with the result that Andres had an obligation of P474.20, which he promised to pay on the 25th of the same month.

One year later action was brought to recover this sum and the corresponding judgment rendered therefore.

On October 25, 1916, Andres and Tan Quingco Chua executed a documentary by which Andres sold to Tan Quingco Chua under pacto de retro a certain parcel of land and a female carabao for the amount of P684.20; the period of redemption was to be five months; Andres was to hold the land during this time as lessee and as such lessee to pay a rent of 90 cavanes of palay, each cavan to weigh 44 kilos, in the month of February, 1917, and all charges during the existence of the lease. Execution on the judgment of October 25, 1916, resulted in Andres paying to the Chinaman P474, and turning over to him 98 cavanes of palay.

The outcome of these various transactions was the filing of an information by the provincial fiscal of Nueva Ecija, charging Francisco Constantino Tan Quingco Chua with the crime of usury, predicated specially on the document of October 25, 1916, above described.

Issues:

1. Did the trial court commit an error in admitting evidence relating to facts which occurred prior to the going into effect of the Usury Law, and has this court followed in the same treacherous path in its narration of the evidence?

2. Did the accused violate the Usury Law by the accomplishment of what purports to be a pacto de retro (a document to be legal in form). – accomplished on Oct. 25, 1916, found to be sham document to cover usurious financial manipulation.

Held:

            Usury laws, ordinarily, are to be construed prospectively and not retrospectively. Nevertheless, the courts may look into prior occurrence in order to understand the particular fact which iks claimed to be a violation of the law, and in order to ascertain the criminal intent.

A corrupt intent is likewise of the essence of usurious transactions. “To constitute usury, within the prohibition of the law, there must be an intention knowingly to contract for or take usurious interest; for if neither party intend it, but act bona fide and innocently, the law will not infer a corrupt agreement. Where, indeed, the contract, upon its very face, imports usury, as by an express reservation of more than legal interest, there is no room fro the presumption; for the intent is apparent, res ipsa loquitur. But where the contract on its face is for legal interest only, there it must be proved that there was some corrupt agreement, or devise or shift, to cover usury; and that it was in the full contemplation of the parties.” (United States Bank vs. Waggener [1835], 9 Pet., 378.)

Disposition:

          No doubt and uncertainty exists in this case. The penalty imposed being in accordance with the law, no other recourse exists but to affirm the judgment, with costs against appellant, “without prejudice to the proper civil action.”