US vs.

Diaz Conde
Supreme Court of the Philippines
G.R. No. L-18208
February 14, 1922
Plaintiff-Appellee: United States
Defendants-Appellants: Vicente Diaz Conde and Apolinaria Conde
Ponente: Justice Johnson

Facts:

The defendant-appellants entered into a contract with Oliveros and Engracia Lianco to lend the latter
parties a sum of P300, subject to an interest rate of 5% per month. During the execution of the contract,
there was no existing Usury Law that prohibited any individual to charge any interest rate they deemed
appropriate.

Four months and a half after the contract in question was executed, the Usury Law, which set the
maximum interest rate to 12% per annum, was passed, rendering any amount of interest paid or
stipulated to be paid in excess of such rate usurious, and therefore unlawful. On this basis, the
defendant-appellants were found guilty for violating the Usury Law for having imposed an excessive
interest rate.

Issues:
WON the defendants can be punished for violating a law that did not exist when they executed the
contract in question.

Ruling:
Acts by the defendants did not constitute a crime, hence the sentence of conviction was revoked and
the complaint dismissed, with the defendants granted discharge from custody.

Ratio Decidendi:
Ex post facto laws, or retroactive laws, are prohibited unless they are favourable to the defendant. Since
the Usury Law was passed after the execution of the contract between the defendants and their obligee,
they cannot, therefore, be punished for having stipulated an interest rate, which at the time they
executed said contract, was legal. A law imposing a new penalty or a new liability or disability, or a new
right to action, must not be construed as having a retroactive effect, otherwise, it would impair
obligation of a contract, which is prohibited in legislation.