THE PEOPLE OF THE PHILIPPINES, PLAINTIFF AND APPELLEE, VS. C. N. HODGES, DEFENDANT AND APPELLANT.

As a result of the second motion for reconsideration filed
by the attorneys for the accused-appellant, the decision rendered in the case was set aside by resolution of August 25,
1938 and a rehearing was had in conformity with Rule
39 of the Rules.

The proven facts are not altered. We narrated them
in the original decision in this wise:

The spouses Maximo Positos and Paulina Sombilla were the owners of two
parcels of land identified as lots 2114 and 2837 of the cadastre of
Bago, Province of Occidental Negros, and covered respectively by
certificates of title Nos. 6173 and 6105, which lots had been sold with
right of repurchase to Vicente Tampingco. As the period of redemption
was to expire and they did not want to lose the lots, said spouses
executed in favor of their son Demetrio Positos a general power of
attorney in order that the latter might obtain a loan in his name
secured by said lots. Possessed of said power, Demetrio Positos went to
the City of Iloilo and, with the help of the broker Adolfo Abaya,
applied to the accused for a loan of P2,500, offering the aforesaid two
lots as security. The accused agreed to grant the loan, but suggested
that the owners of the lots should first sell the same to him and that
thereafter he would resell it to them together with another small lot
of the accused having an area of 180 square meters and identified in
the Jaro cadastre as lot 960-C and in the subdivision plan as lot
960-C-17. In the power of attorney, Exhibit C, executed by the Positos
spouses in favor of their son Demetrio the proposed transaction was not
specifically included, and the latter was not otherwise authorized to
agree to it; but as his parents needed the money because the redemption
had to be effected, Demetrio acceded and gave his conformity to the
proposal of the accused. On February 12, 1930 the deeds of sale,
Exhibits A and B, were therefore executed. Under the first deed,
Demetrio Positos, as attorney-in-fact of his parents, sold lots 2114
and 2837 to the accused for the sum of P2,500; under the second, the
accused in turn sold to Demetrio Positos, personally, the said two lots
and lot 960-C of the Jaro cadastre, otherwise known as lot 960-C-17 of
the subdivision, for the sum of P3,500. After the execution and signing
of both instruments, the accused “deducted from the loan of P2,500 the
following amounts; P420 as advance annual interest on the amount of
P3,500, and P280 in payment of the realty tax then owing. The balance
of P1,800 was delivered by the accused to Demetrio Positos. On February
9, 1931 the accused received the sum of P184.44 as part of the unpaid
interest (Exhibit D); on March 31 of the same year, the sum of P220
also in payment of interest (Exhibit E); and on August 10, 1932, the
sum of P300 likewise upon account of unpaid interest (Exhibit F).

In view of the foregoing facts, the provincial fiscal of
Iloilo filed in the justice of the peace court of said city an
information charging the appellant with a violation of
the Usury Law in that he had collected illegal interest.
After the preliminary investigation, the case was forwarded to the Court of First Instance of the province, and
the fiscal filed a similar information. The usurious character of the interest collected by the accused and concealed
in the documents Exhibits A and B is shown by the following circumstances: Upon the signing of the instruments,
the accused collected P420 in advance as interest on the
loan of P3,500 at 12 per cent per annum, or from February 12, 1930 to February 12, 1931. He also deducted
P250 in payment of the land tax owed by the Positos, but
as this tax was in fact only P213.64, he consequently collected an excess of P66.36. Adding the latter sum to
P420, there is a total of P486.36. This sum represents
interest at the annual rate of 19.45 per cent with reference to the loan of P2,500, and interest at 13.6 per cent
per annum with reference to the amount of P3,500, the
resale price of the three parcels of land.

As yearly interest from February 12, 1931 to February
12, 1932, the accused collected the following sums: P184.44
on February 9, 1931 (Exhibit D), and P220 on March 31
of the same year (Exhibit E). The two amounts give
a total of P404.44. This sum represents annual interest
at 16.17 per cent on P2,500 and 11.55 per cent on P3,500.

As annual interest from February 12, 1932 to February 12, 1933, the
accused received P300, it being stated in the receipt Exhibit F that it
is part of the interest corresponding to said year. The sum of P300
represents interest at 12 per cent on P2,500 and 8.57 per cent on
P3,500, but inasmuch as, according to the accused, said sum was only a
part of the unpaid interest, he accordingly expected from the offended
parties another amount for the same purpose.

It is inferred from what has been said that
the accused had collected usurious interest from the Positos spouses or
their attorney-in-fact, and said usurious interest having been
stipulated in Exhibit B which together with Exhibit A shows the
transactions designed by the accused as a means of violating the law,
it is clear that both documents are illegal since they cover
transactions prohibited by law and considered usurious.

In passing upon the first motion for reconsideration we
stated that the accused could not be guilty of usury for
having collected from the offended parties P300 as interest,
because this sum does not exceed the limit fixed by law if
P2,500 should be considered as the capital. We also held
that the accused did not infringe the Usury Law by
the fact that it was recited in exhibit F that the sum
of P300 was part of the agreed usurious interest, because
what is penalized by section 2 of Act No. 2655, as amended
by section 3 of Act No. 3291, is the act of receiving
directly or indirectly interest exceeding the fixed rate.
The accused now contends that he cannot likewise be convicted as a result of his act in collecting interest for the
years 1930-1931 and 1931-1932, because the violations
nave prescribed.

Section 1 of Act No. 3326, as later amended by section
1 of Act No. 3763, reads as follows:

“Section
1. Violations penalized by special acts shall, unless otherwise
provided m such acts, prescribe in accordance with the following rules:
(a) after a year for offences
punished only by a tine or by imprisonment for not more
than one month, or both; (b) after four years for those
punished by imprisonment for more than one month,
but less than two years; (c) after eight years for those
punished by imprisonment for two years or more, but less
than six years; and (d) after twelve years, for any other
offence punished by imprisonment for six years or more,
except the crime of treason, watch shall prescribe after
twenty years: Provided, however, That all offences against
any law or part of law administered by the Bureau of Internal Revenue shall prescribe after five years. Violations
penalized by municipal ordinances shall prescribe after
two months.

“Violations of the regulations or conditions of certificates of public convenience issued by the Public Service
Commission, shall prescribe after two months.”

In accordance with clause (b)
of this section, violations penalized by imprisonment for more than one
month but less than two years prescribe after four years from their
commission. The violations of the Usury Law committed by the accused
for having collected usurious interest are punished by section 10 of
Act No. 2655, as amended by section 2 of Act No. 2992, by a fine of not
less than P50 nor more than P200, or by imprisonment of not less than
ten days nor more than six months, or by both at the same time, in the
discretion of the court, the amounts received as interest from the
offended parties being ordered returned, with subsidiary imprisonment
in case of insolvency at the rate of P2 per day. Considering the extent
of the penalty of imprisonment provided by law, the violations
committed by the accused fall within the prescriptive period indicated
in clause (b). According to the facts,
the accused received the usurious interest on February 12,
1930, February 9, 1931 and March 31, 1931. Inasmuch as
from the latter date until May 4, 1935, when the criminal
case against the accused was commenced by the filing of the
information in the justice of the peace court of Iloilo, four
years, one month and three days had elapsed, it is clear that
the said violations have prescribed in conformity with
clause (6) of section 1 of Act No. 3326, as lastly amended
by Act No. 3763 (People vs. Fuentes and Noroña, G. R.
No. 42449 [62 Phil., 957]).

At the rehearing the prosecution has not advanced any
reason for not applying the rule of prescription; on the
contrary, it is admitted in the Solicitor-General’s brief
(page 21) that the aforesaid violations have prescribed,
the ruling of this court in the case of People vs. Edesan
and Edesan (G. R. No. 38888 [59 Phil., 906]), being cited.

For the reasons given, the appealed judgment is reversed
and the accused-appellant acquitted, without any pronouncement as to costs of both instances. So ordered.

Avanceña, C. J., Villa-Real, Abad Santos, Diaz, Laurel,
and Concepcion, JJ., concur.