MIGUEL MULET, PETITIONER, VS. THE PEOPLE OF THE PHILIPPINES, RESPONDENT.

On July 25,  1929,  Alexandra Rubillos and Espectacion Rubillos secured from petitioner Miguel Mulet a loan of P550, payable within 5 years at 30 per cent interest per annum.   In the deed of mortgage executed by the Rubillos as a security, the sum of P1,375 was made to appear as the capital of  the  loan.  This  amount  obviously represented the actual loan of P550  and  the total interest  of  P825 computed at 30 per cent per annum for 5 years.  Within four years  following the execution  of the mortgage, the debtors made  partial payments agregating  P278.27, on account of interest.   Thereafter, the debtors paid the whole capital of P550, due to petitioner’s promise to condone the unpaid interest upon payment of such capital.  But to their surprise,  petitioner  informed  them  that  they were still indebted in the sum  of  P546.73 which represented the balance of the  usurious interest.  And in consideration of this amount, petitioner pressed upon the debtors to execute in October, 1933, in his favor, a deed of sale with pacto de retro of  a parcel  of  land,  in substitution of the original mortgage which was cancelled.  From the date of the execution of the new deed up to 1936, petitioner received, as his share of the products of  the land, the total sum of P480. Prosecuted on November  18, 1936, for the violation of the Usury Law, petitioner was convicted by the trial court, and on  appeal,  the  judgment was affirmed by  the Court of Appeals.  The  instant petition for certiorari is directed at that portion of the decision of the appellate court ordering petitioner  to return  to the offended parties the  sum of P373.27, representing interests received by him in excess of that allowed by law.

Petitioner claims that as the amount in question has been paid more than two years prior to the filing of the complaint for usury, its return can no longer be ordered, as the prescriptive period provided therefor by section 6 of the Usury Law has expired.  The amount of P373.27 appears to have been arrived at by adding the usurious interest of P278.27, which was paid in cash, and that of P480, which was paid in kind,  and deducting from the agregate the 14  per cent interest allowed by law amounting to P385.  Regardless of this conclusion, we are of the opinion that petitioner should be  ordered  to  return, not the amount of P373.27,  but of P480.  This last amount is not usurious interest on the capital of the  loan  but the value of the produce  of the land sold to petitioner under pacto de retro, with the unpaid balance  of  the usurious interest (P546.73) as the  consideration of the transaction.  This  consideration, because contrary to law, is  illicit, and the contract which  result  therefrom, null and  void.  (Art. 1275, Civil Code.) And, under  the provisions of  article  1305, in  connection with article 1303, of the Civil Code, when the nullity of a contract arises  from the  illegality  of  the consideration which in itself constitutes a felony, the  guilty party shall be subject to criminal  proceeding while the innocent party may recover whatever he has given, including the fruits thereof.

With the modification that petitioner be ordered  to pay the sum of  P480, instead of P373.27, judgment is affirmed, with costs against said petitioner.

Avanceña, C. J., Abad  Santos, Diaz, and Laurel, JJ., concur.

Horrilleno, J., did not take part.