* G. R.No.173227. January20,2009 .
v s . SEBASTI AN SIGAAN,pet i t i oner , ALICI AVILLANUEVA, A,r es po ndent .
Facts: Respondent filed a complaint for sum of money against petitioner. Respondent claimed that petitioner approached her inside the PNO and offered to loan her the amount of P540,000.00 of which the loan agreement was not reduced in writing and there was no stipulation as to the payment of interest for the loan. Respondent issued a check worth P500,000.00 to petitioner as partial payment of the loan. he then issued another check in the amount of P!00,000.00 to petitioner as payment of the remaining "alance of the loan of which the e#cess amount of P$%0,000.0 P$%0,000.00 0 would "e applied applied as interest interest for the loan. Not satisfied satisfied with the amount applied as interest, petitioner pestered her to pay additional interest and threatened to "lock or disappro&e disappro&e her transactions transactions with the PNO if she would not comply with his demand. demand. 'hus, 'hus, she paid additional additional amounts in cash and checks as interests interests for the loan. he asked petitioner petitioner for receipt for the payments "ut was told that it was not necessary as there was mutual trust and confidence "etween them. (ccording to her computation, the total amount she paid to petitioner for the loan and interest accumulated to P$,!00,000.00.
'he R') rendered a *ecision holding that respondent made an o&erpayment of her loan o"ligation to petitioner and that the latter should refund the e#cess e#cess amount to the former. +t ratiocinated that respondents o"ligation was only to pay the loaned amount of P540,000.00, and that the alleged interests due should not "e included in the computation computation of respondents respondents total monetary de"t "ecause there was no agreement "etween them regarding payment of interest. +t concluded that since respondent made an e#cess payment to petitioner in the amount of P%%0,000.00 %%0,000.00 through mistake, mistake, petitioner should return the said amount to respondent respondent pursuant to the principle ofsolutio indebiti . (lso, petitioner should pay moral damages for the sleepless nights and wounded feelings e#perienced "y respondent. -urther, petitioner should pay e#emplary damages "y way of e#ample or correction for the pu"lic good, plus attorneys fees and costs of suit. Issue: $/ hether or not interest interest was due to petitioner1 petitioner1 and !/ whether whether the principle of solutio inde"iti inde"iti applies to the case at "ar. Ruling: $/ No. $/ No. )ompensatory interest is not chargea"le in the instant case "ecause it was not duly pro&en that respondent defaulted in paying the loan and no interest was due on the loan "ecause there was no written agreement as regards payment of interest. (rticle $25% of the )i&il )ode, which refers to monetary interest, specifically mandates that no interest shall "e due unless it has "een e#pressly stipulated in writing. (s can "e gleaned from the foregoing pro&ision, payment of monetary interest is allowed only if: $/ there was an e#press stipulation for the payment of interest1 and !/ the agreement for the payment of interest was reduced in writing. 'he concurrence of the two conditions is re3uired for the payment of monetary interest. 'hus, we ha&e held that collection of interest without any stipulation therefor in writing is prohi"ited "y law.
!/ Petitioner cannot "e compelled to return the alleged e#cess amount paid "y respondent as interest. nder (rticle $2%0 of the )i&il )ode, if the "orrower of loan pays interest when there has "een no stipulation therefor, the pro&isions of the )i&il )ode concerningsolutio indebiti shall "e applied. (rticle !$54 of the )i&il )ode e#plains the principle of solutio indebiti . aid pro&ision pro&ides that if something is recei&ed when there is no right to demand it, and it was unduly deli&ered through mistake, the o"ligation to return it arises. +n such a case, a creditorde"tor relationship is created under a 3uasicontract where"y the payor "ecomes the creditor who then has the right to demand the return of payment made "y mistake, and the person who has no right to recei&e such payment "ecomes o"ligated to return the same. 'he 3uasicontract ofsolutio indebiti harks "ack to the ancient principle that no one shall enrich himself un6ustly at the e#pense of another. 'he principle of solutio indebiti applies applies where $/ a payment is made when there e#ists no "inding relation "etween the payor, who has no duty to pay, and the person who recei&ed the payment1 and !/ the payment is made through mistake, and and not through li"erality or some other cause. e ha&e held that the princip principle le of solutio solutio indebiti indebiti a pp pp lili es es i n c as as e o f e rr rr on on eo eo us us p ay ay me me nt nt o f u nd nd ue ue i nt nt er er es es t.t. (rticle !!7! of the )i&il )ode states tha t in a 3uasicontract, su ch assolutio indebiti , e#emplary damages
may "e imposed if the defendant acted in an oppressi&e manner. Petitioner acted oppressi&ely when he pestered respondent to pay interest and threatened to "lock her transactions with the PNO if she would not pay interest. 'his forced respondent to pay interest despite lack of agreement thereto. 'hus, the award of e#emplary damages is appropriate so as to deter petitioner and other lenders from committing similar and other serious wrongdoings.
