TEODORO SANCHEZ, PETITIONER, VS. HON. CARLOS R. BUENVIAJE, PRESIDING JUDGE, BRANCH VII, COURT OF FIRST INSTANCE OF CAMA­RINES SUR, IRIGA CITY, AND ALEJO SANCHEZ, RESPONDENTS.

This is a petition to review a decision rendered by the defunct
Court of First Instance of Camarines Sur, Branch VII, with following factual background.

On August 25, 1976,
Alejo Sanchez sued Teodoro
Sanchez and Leonor Santilles
in the Municipal Court of Bato, Camarines
Sur, for the recovery of P2,000.00
which the latter had promised to pay in two notes.  Said notes also contained stipulations for
interest at the rate of 10% per month. 
The Municipal Court rendered judgment order­ing Teodoro
Sanchez only to pay to Alejo Sanchez P2,000.00 plus interest thereon at the legal rate from the
filing of the complaint.

Teodoro appealed to the Court of First
Instance of Camarines Sur
which rendered the following judgment:

“WHEREFORE, the judgment rendered by the lower court is hereby
AFFIRMED with modification as to costs. 
Judgment is hereby rendered, ordering the defendant to pay his
indebtedness to plaintiff in the total sum of P2,000.00,
plus interest thereon at the legal rate from the filing of the complaint in
this case to actual payment.  Defendant to pay double the costs of this suit.” (Rollo, p. 30.)

In his petition for review, Teodoro
claims that in a loan with usurious interest both the loan and the usurious
interest are void.

Alejo was required to comment on the
petition but it appears that he died sometime in the latter part of 1980 and
the early part of 1981.  (Rollo, p. 42.) Accordingly, his
children were impleaded as respondents and required
to file comment which they failed to do despite notice to them.

The absence of comment on the part of the private respondents
notwithstanding, We resolve the petition without any difficulty.

It is now well-settled that: 
“the Usury Law (Act No. 2655), by its letter and spirit, does not
deprive the lender of his right to recover of the borrower the money actually
loaned – this only in the case that the interest collected is usurious.  The law, as it is now, does not provide for
the forfeiture of the capital in favor of the debtor in usurious contract x x x.” (Lopez
and Javelona vs. El Hogar
Filipino, 47 Phil. 249, 275 [1925].)

True it is that in Briones vs. Cammayo, L-23559, Oct.
4, 1971; 41 SCRA 404, Chief Justice Concepcion
and now Chief Justice Fernando concurred with Justice Castro who opined that
both loan and usurious interest are void. 
However, it must be emphasized that eight other justices maintained that
only the usurious interest is void but not the principal obligation.

WHEREFORE, finding the judgment sought to be reviewed to
be in accordance with law, the petition is hereby dismissed for lack of merit
with costs against the petitioner.

SO ORDERED.

Concepcion, Jr., Guerrero, De Castro,
and Escolin, JJ., concur.

Makasiar, J., (Chairman), I dissent. 
Judgment of the trial court should be reversed.  Private respondent committed a crime in violation
of the Usury Law and should be penalized by denying him recovery sum of his
capital, to stamp out usurers exploiting the needy.

Aquino, J., see
concurring opinion.