BASIC RULES OF RAMADHAN UNDER SHARI’AH LAW

What does Ramadhan mean?

The term Ramadhan was taken from its root word “ramad”, it is an Arabic term, which means “be burnt or scorched”. Technically, Ramadhan refers to (29) Twenty-Nine or (30) Thirty days of fasting by which, it is attributed to the burning of sins, or forgiveness of all sins upon perseverance and repentance to Allah. 

Ramadhan is the 9^th month of Hijri Calendar, while fasting during this month is called Sawm.  

 Is Sawm or fasting during Ramadhan mandatory?

Under the law (Surah Al Baqara: 183), Fasting was prescribed upon all Muslims. “O believers, fasting is prescribed for you, as it was prescribed those before you…” Hence, fasting during the month of Ramadhan is wajib; it means obligatory.

 Who is required to observe Sawm or fasting?

·       All competent Muslims of either gender, male or female;

·       Children upon reaching at the age of puberty;

·       Insane person upon recovery of his sound mind.

 Is there an exception to not observe fasting?

Under the law, (Surah Al Baqara: 185), the principle of Rukhsa as an exception to the rule may be applied. A Rukhsa principle is when the Lawgiver has enjoined His servant, He corollary grants the facility of bringing easiness out of difficulties, “Allah intends for you ease and does not intend for you hardship…”

 Exception to the exception

Under the law, the applicability of the principle of Rukhsa is valid only in times of adversities, and when it ceases to exist, the obligatory duties must be complied with. Thus, a traveler is only allowed to break his fasting while on journey, but the concessionary principle ceases upon reaching his destination, and those days he missed up by him during the month of Ramadhan must be fulfilled in any days after the month of Ramadhan, except during Fridays.  

 Who may exercise the Rukhsa Principle?

Among the recognized exceptions under the law are the following:

·       Insane;

·       Pregnant or Breastfeeding woman;

·       Menstruation;

·       Illness or sick person;

·       Travelers;

·       Elderly person;

·       Individuals who are experiencing extreme hunger or thirst that could harm his health.

 What are prohibited acts while fasting?

Under the law, among others, the prohibited acts are as follows:

·       Intentional eating or drinking of any kinds of consumable items before sunset;

·       Sexual Intercourse at daytimes;

·       Gossips, and all other forms of slander;

·       Adult talks and lewd conversation;

·       Fighting or Grudges;

·       Unnecessary and excessive arguments;

·       and others

 What is the penalty of having sexual intercourse at daytimes during Ramadhan?

Under the law, (Hadith Sahih Bukhari, No. 1835), the following are the penalties, either of these may compensate such offense:

·       Freeing a slave (Muslim slave);

·       Fasting for two consecutive months, if he does not own a slave or incapable of getting one;

·       Feeding sixty (60) indigent people.

 Is declaration of intention at evening or dawn required?

Under the law (Hadith: Mutafaqun Alayhi; Sahih Bukhari and Sahih Muslim), the declaration of Niyyah or Intention is important. “Indeed, deeds are (judged) by intentions. Every man will be rewarded only for what they intended”.

 The intention or niyyah is an action by heart. No need to utter something to that effect.

 Is sohoor or eating at dawn mandatory?

Under the law (Hadith: Mutafaqun Alayhi; Sahih Bukhari and Sahih Muslim),

The sohoor or eating before dawn is Sunnah. This is not mandatory for fasting, but the sohoor or eating before dawn, there is a blessing in it.

 What is the best time to break fasting?

Taking an Iftar (break-fast) should be immediate after sunset, or as soon as the Adhan for Maghrib was pronounced in the locality.

 

 

 

 

FIRST METRO INVESTMENT CORP., petitioner, vs. ESTE DEL SOL MOUNTAIN RESERVE, INC., et al, respondents, GR No. 141811, Nov. 15, 2001

 

Doctrine:      When a contract between two (2) parties is evidenced by a written instrument, such document is ordinarily the best evidence of the terms of the contract. Courts only need to rely on the face of written contracts to determine the intention of the parties. However, this rule is not without exception. The form of the contract is not conclusive for the law will not permit a usurious loan to hide itself behind a legal form. Parol evidence is admissible to show that a written document though legal in form was in fact a device to cover usury. If from a construction of the whole transaction it becomes apparent that there exists a corrupt intention to violate the Usury Law, the courts should and will permit no scheme, however ingenious, to becloud the crime of usury.

Facts:          

The petitioner FMIC granted respondent Este del Sol a loan of Seven Million Three Hundred Eighty-Five Thousand Five Hundred Pesos (P7,385,500.00) to finance the construction of its sports/resort complex project. Under the terms of the Loan Agreement, the proceeds of the loan were to be released on installment basis with an interest of sixteen (16%) percent per annum based on the diminishing balance.

The loan was payable in thirty-six (36) equal and consecutive monthly and Iin case of default, an acceleration clause shall apply and the amount due was made subject to a twenty (20%) percent one-time penalty on the amount due and such amount shall bear interest at the highest rate permitted by law from the date of default until full payment thereof plus liquidated damages at the rate of two (2%) percent per month compounded quarterly on the unpaid balance and accrued interests together with all the penalties, fees, expenses or charges thereon until the unpaid balance is fully paid.

However, the respondent failed to repay its obligation, it appeared to have incurred a total obligation of Twelve Million Six Hundred Seventy-Nine Thousand Six Hundred Thirty Pesos and Ninety-Eight Centavos (P12,679,630.98).

Accordingly, petitioner FMIC caused the extrajudicial foreclosure of the real estate mortgage at the public auction, petitioner FMIC was the highest bidder of the mortgaged properties for Nine Million Pesos (P9,000,000.00).  A Five Million Eight Hundred Eleven Thousand Three Hundred Sixty-Nine Pesos and Twenty-Five Centavos (P5,811,369.25) was applied to interests and penalty charges and partly against the principal, thereby leaving a balance of Six Million Eight Hundred Sixty-Three Thousand Two Hundred Ninety-Seven Pesos and Seventy-Three Centavos (P6,863,297.73). Thus, the petitioner demands for the settlement of the obligations with the alleged deficiency balance, but despite of it no avail was obtain.

The trial court rendered its decision in favor of petitioner FMIC, against defendants, ordering them jointly and severally to pay to plaintiff the unpaid balanced.

In contrast, the Appellate court reversed the challenged decision of the trial court.

 

Issue:           Whether or not the loan agreement refers to stipulation penalties, liquidated damages are excessive, iniquitous and unconscionable?

Held: After a careful and thorough review of the record including the evidence adduced, we find no reason to depart from the findings of the appellate court.

First, there is no merit to petitioner FMIC's contention that Central Bank Circular No. 905 which took effect on January 1, 1983 and removed the ceiling on interest rates for secured and unsecured loans, regardless of maturity, should be applied retroactively to a contract executed on January 31, 1978, as in the case at bar, that is, while the Usury Law was in full force and effect. It is an elementary rule of contracts that the laws, in force at the time the contract was made and entered into, govern it. More significantly, Central Bank Circular No. 905 did not repeal nor in any way amend the Usury Law but simply suspended the latter's effectivity.

Second, when a contract between two (2) parties is evidenced by a written instrument, such document is ordinarily the best evidence of the terms of the contract. Courts only need to rely on the face of written contracts to determine the intention of the parties. However, this rule is not without exception.

In this case, this Court agrees with the conclusion of the appellate court. We find the stipulated penalties, liquidated damages and attorney's fees, excessive, iniquitous and unconscionable and revolting to the conscience as they hardly allow the borrower any chance of survival in case of default.

WHEREFORE, the instant petition is hereby DENIED, and the assailed Decision of the Court of Appeals is AFFIRMED.

 

 

 

 

 

LARA'S GIFTS & DECORS, INC., petitioner vs. MIDTOWN INDUSTRIAL SALES, INC., Respondent, GR No. 225433, August 28, 2019

 

Doctrine:      When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 6% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.      

Facts:

Petitioner purchased from respondent various industrial and construction materials, this purchased was covered by a 60 days credit with a condition of 24% interest per annum that would be charged on all accounts overdue as stated in the sales invoice. Upon maturity of the credit, the petitioner paid its obligation by two checks, but checks were dishonored due to insufficient fund.

Meanwhile, the respondent sent demand letter for the settlement of the obligation, it turned no avail. Thereafter. The respondent filed a complaint for sum of Money with prayer for the attachment against the petitioner.

In his Answer, the petitioner argued that in his counterclaim that the product of the Respondent is substandard and that the finished product of the petitioner was rejected by its client because of poor quality. However, despite of the contentions, the Trial Court rendered its decision in favor of Respondent in which the CA affirmed such decision on the ground that the 24% of interest was agreed upon by the parties and that the same had been stated in the sales invoice.

Issue:           Whether or not the 24% of interest stated in the sales invoice is valid? 

Held:            In deciding this case, the Court laydown a guideline as to the payment of interest in cases of loan, forbearance of money, good and credit.

One of those guidelines is that when there is written stipulation between the parties, such rate of interest agreed upon by them shall be applied.  The legal interest as contemplated from the Civil Code be applied only in the absence of stipulation.

In this case, according to the Court, it is clear from the sales invoice which was agreed by the parties that the 24% interest per annum would be charged for all the account overdue.

Therefore, according to the court, the stipulated interest shall be applied until full payment of the obligation because that is the law between the parties.

 

In details, the court declared that:

1.    When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts, delicts or quasi-delicts is breached, the contravenor can be held liable for damages. The provisions under Title XVIII on "Damages" of the Civil Code govern in determining the measure of recoverable damages.

2.    With regard particularly to an award of interest in the concept of actual and compensatory damages, the rate of interest, as well as the accrual thereof, is imposed, as follows:

a)    When the obligation is breached, and it consists in the payment of a sum of money, i.e., a loan or forbearance of money, the interest due should be that which may have been stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default, i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 1169 of the Civil Code.

b)    When an obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. Accordingly, where the demand is established with reasonable certainty, the interest shall begin to run from the time the claim is made judicially or extrajudicially (Art. 1169, Civil Code) but when such certainty cannot be so reasonably established at the time the demand is made, the interest shall begin to run only from the date of the judgment of the court is made (at which time the quantification of damages may be deemed to have been reasonably ascertained). The actual base for the computation of legal interest shall, in any case, be on the amount of finally adjudged.

c)    When the judgment of the court awarding a sum of money becomes final and executory, the rate of legal interest, whether the case falls under paragraph 1 or paragraph 2, above, shall be 12% per annum from such finality until its satisfaction, this interim period being deemed to be by then an equivalent to a forbearance of credit.

Paragraph 3 above failed to qualify that for loans or forbearance of money, the prevailing legal interest should only apply in the absence of stipulated interest. The stipulated interest is the law between the parties and should apply from the time of extrajudicial or judicial demand until full payment. This omission resulted in several rulings of this Court, which imposed the stipulated interest on the adjudged amount until finality of the decision BUT applied the prevailing legal interest in lieu of the stipulated interest from finality of the decision until full payment of the obligation. This is in direct contravention of the law, particularly Article 2209 of the Civil Code, which mandates that when a debtor incurs a delay in obligations to pay a sum of money, the indemnity for damages shall be the payment of the interest agreed upon. Only in the absence of a stipulated interest will the legal interest be applied.