GROUP 8: Collection of sum of money

Facts:
Claire B. Florcy is a businesswoman, married, and a resident of Barangay
Bulawan, Guihulngan City. For a few years, she managed to put up her own
junk shop from being a garbage picker. The junk shop was located behind her
house and was about to be filled with the scrap materials she bought and
collected from other garbage pickers. Claire took a risk and decided to
expand her junk shop to increase profit and sales.
Upon looking for investors and lending institutions to finance her business
venture, she came to know Mr. Randy C. Sao, a Filipino-Chinese
businessman. He was into small time lending and operated throughout
Guihulngan City.
On March 20, 2014, they met at the BBQ restaurant to discuss Claire Florcys
business proposal. They agreed to the principal loan amount, terms payable,
interest based on the principal amount and additional fines, in case of failure
to pay on time. As security for the said loan, Claire Florcy handed her RUSI
motorcycle and its necessary documents as collateral.
The next day, March 21, 2014, Claire received and signed a memorandum of
agreement from Mr. Sao stating the prior details discussed. On the same
instance, she obtained the cash loan in the amount of One Hundred Sixty
Five Thousand Six Hundred Pesos (165,600), payable for a period of Forty
Two (42) months, to be paid in monthly installments of P 3,943.00 plus
interest on unpaid balance at the rate of 1.3% per month based on the
principal amount of loan. The first payment is to be made on April 20, 2014.
An additional fine of 2% of the accumulated unpaid amortization due shall be
imposed for failure to pay on time. After receiving the cash and signing the
contract, she gave the RUSI motorcycle and its pertinent documents to Mr.
Sao.
Months passed and Claire was diligent in paying her dues to Mr. Sao until an
unfortunate incident happened. She invested most of her money in OxGlobal,
a networking/marketing company, hoping that it would double her
investment. Little did Claire know that OxGlobal is a fraudulent company and
a scam. The company soon closed and all her money gone.
From then on, Claire struggled on her loan payments until such time that she
stopped due to financial constraints.
Mr. Sao, kind-hearted as he is, provided Claire B. Florcy a promissory note of
3 months to give her ample time to recover from her unfortunate fate. After
six months and numerous verbal and written demands, there was still no
payment from Claire Florcy. This prompted Mr. Randy C. Sao to seek legal
advice and file a case in court.

Issue:

Ordering defendant Claire B. Florcy to pay Mr. Randy C. Sao the Cash Loan in
the amount of ONE HUNDRED SIXTY FIVE THOUSAND SIX HUNDRED
(P165,600.00) in Philippine currency and further interest of 1.3% and 2%
penalty per month on the balance from the date of the execution of the
Promissory Note until the obligation is fully paid.