- Petitioner
- Salvador Rivero
- Respondent
- Inocente Rabe
- Citation
- G.R. No. 33320
- Court
- Supreme Court En Banc
- Division
- En Banc
- Ponente
- Villa-Real, J.
- Decided
- October 4, 1930
Summary
This case involves interpretation of an ambiguous mortgage contract regarding interest rates. Inocente Rabe borrowed P1,000 from Salvador Rivero in 1919, secured by mortgage on registered land, with interest 'at the rate fixed by Act No. 2655.' The Supreme Court applied Civil Code principles of contract interpretation, particularly that ambiguous terms should not favor the party causing the obscurity. Since Rabe drafted the ambiguous language, the Court construed it against him. However, the Court considered the parties' subsequent conduct, specifically Rabe's offer to pay 10% interest, as evidence of the agreed rate. The decision affirmed the lower court's award of 10% annual interest, attorney's fees, and costs, establishing important precedent on mortgage contract interpretation and the application of usury laws to secured loans.