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Article 1958

In the determination of interest payable in To do


kind, its value shall be appraised at the currentsomething
(illegal/wron
price of the products/goods at the time and g)

place of payment.

PURPOSE: TO MAKE USURY HARDER TO


To practice of
PERPETRATE
lending money and
acquiring the
borrower to pay a
high amount of
interest
GENERAL RULE: Accrued Interest (interest due and
unpaid shall not earn interest

EXCEPTIONS:
1. When judicially demanded as provided for in
Article 2212
(Under Article 2212 of the Civil Code, the interest due shall itself
earn legal interest from the time it is judicially demanded, although the
obligation may be silent upon this point.)

2. When there is an express stipulations made by


parties
( COMPOUND INTEREST- that the interest due and unpaid shall be
added to principal obligations and the resulting total amount shall earn

Article 1959
interest. )
Payment of interest
without stipulation
Where unstipulated interest
(not due) is paid by mistake,
the debtor may recover as this
would be a case of solution
indebit or undue payment.

Where unstipulated interest is


paid voluntarily because the
debtor morally obliged to do
so, there can be no recovery
as in case of natural
obligations.

Article
1960
Article 1961

Usurious contracts shall be governed


by the Usury Law and Other Special
Laws, so far as they are not inconsistent
with this code.