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Laureano vs. Kilayco and Lizares de Kilayco

Defendants took out a loan of P10,200 from Plaintiff and agreed to repay it in monthly installments of P500. The contract stipulated that overdue installments would be subject to 15% interest and Defendants would pay P2,000 if Plaintiff had to resort to legal action for recovery. The Court held that the 15% interest rate clause and P2,000 penalty were penal clauses as defined by Articles 1152, 1153 and 1154 of the Civil Code.

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134 views1 page

Laureano vs. Kilayco and Lizares de Kilayco

Defendants took out a loan of P10,200 from Plaintiff and agreed to repay it in monthly installments of P500. The contract stipulated that overdue installments would be subject to 15% interest and Defendants would pay P2,000 if Plaintiff had to resort to legal action for recovery. The Court held that the 15% interest rate clause and P2,000 penalty were penal clauses as defined by Articles 1152, 1153 and 1154 of the Civil Code.

Uploaded by

PNP Mayoyao
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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Laureano vs.

Kilayco and Lizares de Kilayco


G.R. No. 10419, November 10, 1915

Facts:

Issue:

Held:
Defendants obligated themselves to pay the sum of P10,200 in monthly instalments
of- P500, and obligated themselves, in the event of failure to pay any of the instalments on
the date on which such instalments fell due, to pay interest at the rate of 15 per cent on all
such overdue and unpaid instalments until the date of payment; and, further, in the event
that the plaintiff should be compelled to have recourse to the courts for the recovery of the
money lent, to pay to the plaintiff, by way of indemnification, the sum of P2,000. Held: That
the provisions of the contract for the payment of interest at an increased rate and for the
payment of an indemnity of P2,000 -were penal clauses, as defined by the terms of articles
1152, 1153 and 1154 of the Civil Code.

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