G.R. No.

L-18208             February 14, 1922

THE UNITED STATES, plaintiff-appellee,
vs.
VICENTE DIAZ CONDE and APOLINARIA R. DE CONDE, defendants-
appellants.
Araneta & Zaragoza for appellants.
Attorney-General Villareal for appellee.
FACTS

On 30 December 1915, Bartolome Oliveros and Engracio Liaco borrowed

from Vicente Diaz-Conde and Apolinaria R. De Conde the sum of P300. By
virtue of the terms of the contract, they obligated themselves to pay an
interest of five per cent (5%) per month, payable within the first ten days of
each and every month, the first payment to be made on the 10th day of
January, 1916. On 1 May 1916, Act No. 2655 (Usury Law) took effect

The lower court, in the course of its opinion, stated that at the time of the
execution and delivery of said contract (Exhibit B), there was no law in
force in the Philippine Islands punishing usury; but, inasmuch as the
defendants had collected a usurious rate of interest after the adoption of
the Usury Law in the Philippine Islands (Act No. 2655), they were guilty of
a violation of that law and should be punished in accordance with its
provisions.

ISSUE

Whether or not the defendants violated Act no. 2655?

RULING

No. If a contract is legal at its inception, it cannot be rendered illegal by any

subsequent legislation. The obligation of the contract is the law which
binds the parties to perform their agreement if it is not contrary to the law
of the land, morals or public order. That law must govern and control the
contract in every aspect in which it is intended to bear upon it, whether it
affect its validity, construction, or discharge.
In the present case Act No. 2655 made an act which had been done before
the law was adopted, a criminal act, and to make said Act applicable to the
act complained of would be to give it an ex post facto operation. An ex post
facto law, is a law that makes an action, done before the passage of the law,
and which was innocent when done, criminal. Ex post facto laws are
absolutely prohibited unless its retroactive effect is favorable to the
defendant.

The decision of the lower court is revoked and the complaint

dismissed.