Rosendo R. Llamas v. Gonzalo Abaya

Summary

This case involves a mortgage credit preference dispute between the Llamas brothers and Joaquin Eleazar over Gonzalo Abaya's debt. The Supreme Court initially limited plaintiffs' preference to P5,933.30 in G.R. No. 37824. Eleazar tendered payment in 1932 but plaintiffs ignored it. When Eleazar deposited the amount in court in 1933, plaintiffs sought execution for accumulated interest. The En Banc Supreme Court ruled that Eleazar's tender of payment did not suspend interest accumulation under Civil Code Article 1176, as no definite sum for interest and penalties was tendered. The Court affirmed that stipulated interest at 9% per annum should accrue until actual payment, computed semi-annually with compound interest, plus 10% penalty on principal and compound interest. The decision clarifies the legal effect of tender of payment on contractual interest obligations and mortgage preferences.