- Petitioner
- China Banking Corporation
- Respondent
- Faustino Lichauco
- Citation
- G.R. No. 22001
- Court
- Supreme Court
- Division
- Second Division
- Ponente
- Avanceña, J.
- Decided
- November 4, 1924
Summary
China Banking Corporation sued to collect loan obligations from Faustino Lichauco and others, secured by mortgage. The Supreme Court affirmed the trial court's award of P21,500 plus 12% annual interest and P1,935 in accrued interest with 6% legal interest from complaint filing, applying Civil Code Article 1109. For the P50,000 mortgage obligation, the Court upheld the validity of the mortgage despite appellants' argument of lack of consideration, ruling that mortgage contracts derive consideration from the principal obligation under Article 1857. However, the Court corrected the interest calculation, holding that 9% interest should apply from September 5, 1921, and 12% from December 20, 1922, rejecting the trial court's application of 12% from September 5, 1921. The case demonstrates key Civil Code principles on interest calculations and mortgage contract validity.