Ricardo Nolan v. Basilio Majinay

Summary

This 1909 Supreme Court case involved a mortgage loan dispute between Ricardo Nolan (assignee creditor) and Basilio Majinay (debtor) over a $5,000 sugar plantation loan secured by hacienda 'Basag.' The key legal issues centered on proper contract interpretation, specifically whether accounts were liquidated as contractually required by June 30, 1902, and whether compound interest could be charged without written agreement. The Supreme Court reversed the lower court's judgment favoring the creditor, ruling that the Compañía General de Tabacos (original creditor) violated Civil Code provisions by computing compound interest every six months without contractual authorization. The Court emphasized that interest can only be charged when expressly stipulated and that compound interest requires written agreement. The case established important precedents regarding contract interpretation, liquidation requirements, and interest calculation in mortgage agreements, ordering a new trial for proper account liquidation in accordance with the original contract terms.