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CD23 - Marquez v. Elisan Credit G.R. No. 194642 April 6, 2015

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Christy Canete
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12 views1 page

CD23 - Marquez v. Elisan Credit G.R. No. 194642 April 6, 2015

case

Uploaded by

Christy Canete
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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CAÑETE, Christy Mae, B.

/ Obligations and Contracts June 01, 2023

MARQUEZ V. ELISAN CREDIT


(G.R. No. 194642, April 6, 2015)

Facts:
On December 16, 1991, Nunelon R. Marquez, the petitioner, obtained a first loan from
Elisan Credit Corporation, the respondent, for P53,000.00 payable in 180 days. The
petitioner signed a promissory note which if it is payable in weekly installments and
subject to 26% annual interest. In case of non-payment, the petitioner agreed to pay
10% monthly penalty based on the total amount unpaid and another 25% of such
amount for attorney’s fees exclusive of costs, and judicial and extrajudicial expenses.
On December 15, 1992 the second loan matured and the petitioner had only paid
P29,960.00 leaving an unpaid balance of P25,040.00. The petitioner asked the
respondent if he could pay in daily payments until the second loan is paid, the
respondent granted it. As of September 1994, or 21 months after the second loan’s
maturity, the petitioner had already paid a total of P56,440.00, an amount greater than
the principal.

The respondent filed an action in court to recover the unpaid balance. The petitioner
argues that he has fully paid his obligation and that his daily payments should be
deemed to have been credited against the principal, as the official receipts issued by
the respondent were silent with respect to the payment of interest and penalties. The
respondent claims that the daily payments were properly credited against the interest
and not against the principal because the petitioner incurred delay in the full payment
of the second law.

Issue:
Did the respondent act lawfully when it credited the daily payments against the interest
instead of the principal?

Rulings:
Yes. The rule under Article 1253 that payments shall first be applied to the interest
and not to the principal shall govern. The respondent properly credited the daily
payments to the interest and not to the principal because the debt produces interest,
the promissory note securing the second load provided for payment of interest, a
portion of the second loan remained unpaid upon maturity, and the respondent did not
waive the payment of interest. Accordingly, the petitioner Marquez is ordered to pay:
the P25,040, the unpaid balance of the second loan; interest of 2% per annum and
penalty of 2% per annum on the unpaid balance from December 15, 1992 until full
payment; attorney’s fees of 2% of the total amount to be recovered. While, respondent
Elisan Credit Corporation is ordered to return the seized motor vehicle, subject of the
chattel mortgage, to the possession of the petitioner No pronouncement as to costs.
So ordered.

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