PEOPLE VS CONCEPCION

44 Phil 126, Gr. No. L-19190, November 29, 1922

Facts:
Venancio Concepcion, Pres. of he PN! an" a
member of he boar" hereof, a#hori$e" an e%ension
of cre"i in favor of P#no Concepcion, b& ele'rams an"
a leer of con(rmaion o he mana'er of )parri
branch of he PN!.
P#no *as a co-parnership *here Concepcion *as a
parner.
P#no Concepcion + ,00-
)nacleo Concepcion + .-
Clara Concepcion + .-
/i'#el Concepcion + 20- 0a"minisraor1
Clemene P#no + 20-
C23 Ca'a&an "eclare" him '#il& of violain' 4ec. ,.
of )c. 2545 01& 6 6m imprisonmen, ,- (ne *7
s#bsi"iar& imprisonmen coss1
)c 2545 089ecive 2eb. 20, 191:1
4ec ,.; <he Naional !an- shall no, "irecl& or
in"irecl&, 'ran loans o an& of he members of he
boar" of "irecors of he ban- nor o a'ens of he
branch ban-s.
4ec. 49; )n& person *ho shall violae an& of he
provisions of his )c shall be p#nishe" b& a (ne no o
e%cee" en ho#san" pesos, or b& imprisonmen no o
e%cee" (ve &ears, or b& boh s#ch (ne an"
imprisonmen.
<hese *o secions *ere in e9ec in 1919 *hen he
alle'e" #nla*f#l acs oo- place, b# *ere repeale" b&
)c No. 29,:, approve" on =an#ar& ,0, 1921.
Issue #1
>as he 'ranin' of cre"i o he coparnership a
loan *ihin he meanin' of he provision?
Defense's Contention: @oc#mens on he recor" "o
no prove ha a#hiri& o ma-e a loan *as 'iven, b#
onl& he concession of cre"i.
Held:
No. @efense is correc, for he e%hibis in A#esion
spea- of a BcreditoB 0cre"i1 an" no of a BprestamoB
0loan1.
<he Bcre"iB of an in"ivi"#al means his abili&
o borro* mone& b& vir#e of he con("ence or r#s
repose" b& a len"er ha he *ill pa& *ha he ma&
promise.
) BloanB means he "eliver& b& one par& an"
he receip b& he oher par& of a 'iven s#m of mone&,
#pon an a'reemen, e%press or implie", o repa& he
s#m loane", *ih or *iho# ineres.
<he concession of a Bcre"iB necessaril&
involves he 'ranin' of BloansB #p o he limi of he
amo#n (%e" in he Bcre"i,B
Issue #2:
>as he 'ranin' of cre"i o he co-parnership a
loan or "isco#n?
Defense: <he provision prohibis 'ranin' of a loan,
no a "isco#n.
Bac!"ound Facts:
C. Par-er >illis, Presi"en of he Naional
!an-, inA#ire" of he 3ns#lar )#"ior *heher secion
,5 of )c No. 2612 *as inen"e" o appl& o "isco#ns
as *ell as o loans.
<he r#lin' of he )cin' 3ns#lar )#"ior *as o
he e9ec ha sai" secion referre" o loans alone, an"
place" no resricion #pon "isco#n ransacions.
@34CDEN< LD)N
3neres "e"#ce" in
a"vance
3neres "e"#ce" a
e%piraion of cre"i
@o#ble-name paper 4in'le-name paper
Held:
Loan. 3n he las anal&sis, o "isco#n a paper is
onl& a mo"e of loanin' mone&. 3neres on he "eman"
noes si'ne" b& he coparnership *as pai" *hen
noes fell "#e, an" sin'le-name paper.
Issue ##:
>as he 'ranin' of cre"i o co-parnership an
in"irec loan *ihin meanin' of he provision?
Held:
Fes. ) loan o a parnership of *hich a *ife of a
ban- "irecor is a member, is an in"irec loan o he
"irecor "#e o conG#'al parnership.
P#rpose of Provision; 8rec a *all of safe& a'ains
empaion for a ban- "irecor 0proecion of
soc-hol"ers, "eposiors an" cre"iors of he ban-1
Issues #$: >as he 'ranin' of a cre"i of P,00,000 o
he coparnership BP#no & Concepcion, 4. en C.B b&
Venancio Concepcion, Presi"en of he Philippine
Naional !an-, in violaion of secion ,. of )c No.
2545, penali$e" b& his la*? Held: Fes. <he ans*er
is ha *hen he corporaion iself is forbi""en o "o an
ac, he prohibiion e%en"s o he boar" of "irecors,
an" o each "irecor separael& an" in"ivi"#all&.
Issue #%: @oes he alle'e" 'oo" faih of Venancio
Concepcion, Presi"en of he Philippine Naional !an-,
in e%en"in' he cre"i of P,00,000 o he
coparnership BP#no & Concepcion, 4. en C.B consi#e
a le'al "efense? Held: No
&'(CI' VS )HIO
Gr. No. 1.4:5:, /arch 16, 2005
Facts:
4omeime in 2ebr#ar& 199., respon"en Hica /arie
4.<hio receive" from peiioner Carol&n /. Garccia a
crosse" chec- in he amo#n of I100,000.00 pa&able
o he or"er of /arilo# 4ania'o.
<hereafer, Carol&n receive" from Hica pa&mens of
he s#m "#e. 3n =#ne 199., Hica receive" anoher
chec- in he amo#n of P.00,000.00 from Carol&n an"
pa&able o he or"er of /arilo#.
Pa&mens *ere ma"e b& Hica represenin'
ineress. <here *as fail#re o pa& he principal amo#n
hence a complain for s#m of mone& *ih "ama'es
*as (le" b& Carol&n.
Hica conen"e" ha she ha" no obli'aion o
peiioner as i *as /arilo# *ho *as in"ebe" as she
*as merel& as-e" o "eliver he chec-s o he laer
an" ha he chec- pa&mens she iss#e" *ere merel&
inen"e" o accommo"ae /arilo#.
<he H<C r#le" in favor of Carol&n b# he C)
reverse" on he 'ro#n" ha here *as no conrac
be*een Hica an" Carol&n as here is nohin' in he
recor" ha sho*s ha respon"en receive" mone&
from peiioner an" ha he chec-s receive" b&
respon"en, bein' crosse", ma& no be encashe" b#
onl& "eposie" in he ban- b& he pa&ee hereof, ha
is, b& /arilo# 4ania'o herself.
Issue:
>heher or no here *as a conrac of loan
be*een peiioner an" respon"en.
Held:
<he Co#r r#le" in he aJrmaive.
) loan is a real conrac, no consens#al, an" as
s#ch is perfece" onl& #pon he "eliver& of he obGec
of he conrac.
)r. 19,4 of he Civil Co"e provi"es ha Kan
acce*ted *"o+ise to deli,e" so+et-in! ./ 0a/ of
co++odatu+ o" si+*le loan is .indin! u*on t-e
*a"ties1 .ut t-e co++odatu+ o" si+*le loan
itself s-all not .e *e"fected until t-e deli,e"/ of
t-e o.2ect of t-e cont"act3L
Epon "eliver& of he obGec of he conrac of loan
0in his case he mone& receive" b& he "ebor *hen
he chec-s *ere encashe" he "ebor acA#ires
o*nership of s#ch mone& or loan procee"s an" is
bo#n" o pa& he cre"ior an eA#al amo#n.
3 is #n"isp#e" ha he chec-s *ere "elivere" o
respon"en. Co*ever, hese chec-s *ere crosse" an"
pa&able no o he or"er of respon"en b# o he or"er
of a cerain /arilo# 4ania'o.
<he 4#preme Co#r a'rees *ih peiioner ha
"eliver& is he ac b& *hich he res or s#bsance
hereof is place" *ihin he ac#al or consr#cive
possession or conrol of anoher.
)lho#'h respon"en "i" no ph&sicall& receive he
procee"s of he chec-s, hese insr#mens *ere place"
in her conrol an" possession #n"er an arran'emen
*hereb& she ac#all& re-len he amo#ns o 4ania'o.
Cence, Hica is he "ebor an" no /arilo#.
S'4(' I5PO() 6 E7PO() VS DBP
Gr. No. L-2496:, )pril 25, 1952
Facts:
3n =#l& 19.2, 4a#ra, 3nc., applie" o Hehabiliaion
2inance Corp., no* @!P, for an in"#srial loan of
P.00,000 o be #se" for he consr#cion of a facor&
b#il"in', o pa& he balance of he G#e mill machiner&
an" eA#ipmen an" as a""iional *or-in' capial. 3n
Hesol#ion No.14., he loan applicaion *as approve"
o be sec#re" (rs b& mor'a'e on he facor&
b#il"in's, he lan" sie, an" machiner& an" eA#ipmen
o be insalle".
<he mor'a'e *as re'isere" an" "oc#mens for he
promissor& noe *ere e%ec#e". !# hen, laer on, *as
cancelle" o ma-e *a& for he re'israion of a
mor'a'e conrac over he same proper& in favor of
Pr#"enial !an- an" <r#s Co., he laer havin' iss#e"
4a#ra leer of cre"i for he release of he G#e
machiner&. )s sec#ri&, 4a#ra e%ec#e a r#s receip in
favor of he Pr#"enial. 2or fail#re of 4a#ra o pa& sai"
obli'aion, Pr#"enial s#e" 4a#ra.
)fer almos 9 &ears, 4a#ra 3nc, commence" an
acion a'ains H2C, alle'in' fail#re on he laer o
compl& *ih is obli'aions o release he loan applie"
for an" approve", hereb& prevenin' he plaini9 from
complein' or pa&in' conrac#al commimens i ha"
enere" ino, in connecion *ih is G#e mill proGec.
<he rial co#r r#le" in favor of 4a#ra, r#lin' ha
here *as a perfece" conrac be*een he paries
an" ha he H2C *as '#il& of breach hereof.
Issue;
>heher or no here *as a perfece" conrac
be*een he paries.
Held:
8ES3 )-e"e 0as indeed a *e"fected
consensual cont"act3
)ricle 19,4 provi"es; An accepted promise to
deliver something by way of commodatum or simple
loan is binding upon the parties, but the commodatum
or simple loan itself shall not be perfected until
delivery of the object of the contract.
<here *as #n"o#be"l& o9er an" accepance in
he case. <he applicaion of 4a#ra, 3nc. for a loan of
P.00,000.00 *as approve" b& resol#ion of he
"efen"an, an" he correspon"in' mor'a'e *as
e%ec#e" an" re'isere". <he "efen"an faile" o f#l(ll
is obli'aion an" he plaini9 is herefore enile" o
recover "ama'es.
>hen an applicaion for a loan of mone& *as
approve" b& resol#ion of he respon"en corporaion
an" he respon"in' mor'a'e *as e%ec#e" an"
re'isere", here arises a perfece" consens#al
conrac.
Co*ever, i sho#l" be noe" ha H2C impose"
*o con"iions 0availabili& of ra* maerials an"
increase" pro"#cion1 *hen i resore" he loan o he
ori'inal amo#n of P.00,000.00.
4a#ra, 3nc. obvio#sl& *as in no posiion o
compl& *ih H2CMs con"iions. 4o insea" of "oin' so
an" insisin' ha he loan be release" as a'ree" #pon,
4a#ra, 3nc. as-e" ha he mor'a'e be cancelle".
)-e action t-us taen ./ .ot- *a"ties 0as
in t-e natu"e of +utual desistance 0-ic- is a
+ode of e9tin!uis-in! o.li!ations3 It is a conce*t
t-at de"i,es f"o+ t-e *"inci*le t-at since +utual
a!"ee+ent can c"eate a cont"act1 +utual
disa!"ee+ent ./ t-e *a"ties can cause its
e9tin!uis-+ent3
>C8H82DH8, he G#"'men appeale" from is
reverse" an" he complain "ismisse".
Issue: >as here a real conrac of loan *hich *o#l"
*arran recover& of "ama'es arisin' o# of breach of
s#ch conrac?
Held: <here *as #n"o#be"l& o9er an" accepance in
his case; he applicaion of 4a#ra, 3nc. for a loan of
P.00,000.00 *as approve" b& resol#ion of he
"efen"an, an" he correspon"in' mor'a'e *as
e%ec#e" an" re'isere". !# his fac alone falls shor
of resolvin' he secon" iss#e an" he basic claim ha
he "efen"an faile" o f#l(ll is obli'aion an" he
plaini9 is herefore enile" o recover "ama'es. <he
acion h#s a-en b& boh pariesN4a#raOs reA#es for
cancellaion an" H2COs s#bseA#en approval of s#ch
cancellaionN*as in he na#re of m##al "esisance N
*ha /anresa erms Bm##o "isensoBN *hich is a
mo"e of e%in'#ishin' obli'aions. 3 is a concep
"erive" from he principle ha since m##al a'reemen
can creae a conrac, m##al "isa'reemen b& he
paries can ca#se is e%in'#ishmen. 3n vie* of s#ch
e%in'#ishmen, sai" perfece" consens#al conrac o
"eliver "i" no consi#e a real conrac of loan.
BPI VS C'
Gr. No. 1,,6,2, 2ebr#ar& 1., 2002
Facts:
2ran- Hoa obaine" a loan from )&ala 3nvesmen
an" @evelopmen Corporaion 0)3@C1, for he
consr#cion of his ho#se.
4ai" ho#se an" lo *ere mor'a'e" o )3@C o
sec#re he loan. Hoa sol" he properies o )L4 an"
LionG#a, he laer pai" in cash an" ass#me" he
balance of HoaMs in"ebe"ness *i )3@C.
)3@C *as no *illin' o e%en" he ol" ineres o
privae respon"ens an" propose" a 'ran of ne* loan
of P.00,000 *ih hi'her ineres o be applie" o HoaMs
"eb, sec#re" b& he same proper&. Privae
respon"ens e%ec#e" a mor'a'e "ee" conainin' he
sip#laion.
<he loan conrac *as si'ne" on ,1 /arch 19:1 an"
*as perfece" on 1, 4epember 19:2, *hen he f#ll
loan *as release" o privae respon"ens.
!P33C, )3@CMs pre"ecessor, release" o privae
respon"ens P5,146.:5, p#rporin' o be *ha *as lef
of heir loan afer f#ll pa&men of HoaMs loan.
!P33C (le" for foreclos#re procee"in's on he 'ro#n"
ha privae respon"ens faile" o pa& he mor'a'e
in"ebe"ness.
Privae respon"ens mainaine" ha he& sho#l" no
be ma"e o pa& amori$aion before he ac#al release
of he P.00,000 loan. <he s#i *as "ismisse" an"
aJrme" b& he C).
Peiioner conen"s ha he Co#r of )ppeals erre"
in r#lin' ha beca#se a simple loan is perfece" #pon
he "eliver& of he obGec of he conrac, he loan
conrac in his case *as perfece" onl& on 4epember
1,, 19:2. Peiioner claims ha a conrac of loan is a
consens#al conrac, an" a loan conrac is perfece"
a he ime he conrac of mor'a'e is e%ec#e"
conformabl& *ih o#r r#lin' in !onnevie v. Co#r of )ppeals,
12. 4CH) 122. 3n he presen case, he loan conrac
*as perfece" on /arch ,1, 19:1, he "ae *hen he
mor'a'e "ee" *as e%ec#e", hence, he amori$aion
an" ineress on he loan sho#l" be comp#e" from
sai" "ae.
Privae respon"ens asser ha base" on )ricle
19,4 of he Civil Co"e, a simple loan is perfece" #pon
he "eliver& of he obGec of he conrac, hence a real
conrac. 3n his case, even ho#'h he loan conrac
*as si'ne" on /arch ,1, 19:1, i *as perfece" onl& on
4epember 1,, 19:2, *hen he f#ll loan *as release"
o privae respon"ens. <he& s#bmi ha peiioner
misrea" !onnevie. <o 'ive meanin' o )ricle 19,4,
accor"in' o privae respon"ens, !onnevie m#s be
consr#e" o mean ha he conrac o e%en" he loan
*as perfece" on /arch ,1, 19:1 b# he conrac of
loan iself *as onl& perfece" #pon he "eliver& of he
f#ll loan o privae respon"ens on 4epember 1,,
19:2.
Issue:
>heher or no a conrac of loan is a consens#al
conrac.
Held:
<he Co#r hel" in he ne'aive. ) loan conrac is
no a consens#al conrac b# a real conrac. 3 is
perfece" onl& #pon "eliver& of he obGec of he
conrac. ) conrac of loan involves a reciprocal
obli'aion, *herein he obli'aion or promise of each
par& is he consi"eraion for ha of he oherP i is a
basic principle in reciprocal obli'aions ha neiher
par& inc#rs in "ela&, if he oher "oes no compl& or is
no rea"& o compl& is a proper manner *ih *ha is
inc#mben #pon him.
P'N)'LEON VS '5E(IC'N E7P(ESS IN)'L
Gr. No. 154269, )#'#s 2., 2014
Facts:
)/8Q is a resi"en forei'n corporaion en'a'e" in
he b#siness of provi"in' cre"i services hro#'h he
operaion of a char'e car" s&sem. Panaleon has been
an )/8Q car"hol"er since 19:0.
Panaleon *en on a '#i"e" 8#ropean o#r . <he
o#r 'ro#p arrive" in )mser"am an" planne" o leave
Coser b& 9;,0 a.m. a he laes.
>hile a Coser, /rs. Panaleon "eci"e" o p#rchase
some "iamon" pieces *orh a oal of E4I1,,:26.00
#sin' heir )merica 8%press cre"i car".
3 oo- )/8Q a oal of 5: min#es o approve
PanaleonMs p#rchase an" o ransmi he approval o
he Ge*elr& sore.
>hen he Panaleons (nall& re#rne" o he o#r
b#s, he& fo#n" heir ravel companions visibl&
irriae". <his irriaion inensi(e" *hen he o#r '#i"e
anno#nce" ha he& *o#l" have o cancel he o#r
beca#se of lac- of ime as he& all ha" o be in
!el'i#m.
Epon re#rn o /anila, Panaleon sen )/8Q a leer
"eman"in' an apolo'& for he h#miliaion an"
inconvenience he an" his famil& e%perience" "#e o
he "ela&s in obainin' approval for his cre"i car"
p#rchases. )/8Q respon"e" b& e%plainin' ha he
"ela& in )mser"am *as "#e o he amo#n involve".
@issais(e" *ih his e%planaion, Panaleon (le" an
acion for "ama'es a'ains he cre"i car" compan&
*ih he /a-ai Ci& H<C.
H<C fo#n" )/8Q '#il& of "ela&. C) reverse" he
a*ar"s.
Issue:s:
>heher or no )/8Q ha" le'al obli'aion o ac
#pon PanaleonMs p#rchases *ihin a speci(c perio" of
ime.
>heher or no )/8Q has a ri'h o revie* a
car"hol"erMs cre"i car" hisor&.
Held;
Na#re of Cre"i Car" <ransacions
3n he case of Harris Trust & Savings Ban v.
!c"ray,
<he ban- cre"i car" s&sem involves a riparie
relaionship be*een he iss#er ban-, he car"hol"er,
an" merchans paricipain' in he s&sem.
<he iss#er ban- esablishes an acco#n on behalf of
he person o *hom he car" is iss#e", an" he *o
paries ener ino an a'reemen *hich 'overns heir
relaionship.
<his a'reemen provi"es ha he ban- *ill pa& for
car"hol"erMs acco#n he amo#n of merchan"ise or
services p#rchase" hro#'h he #se of he cre"i car"
an" *ill also ma-e cash loans available o he
car"hol"er.
3 also saes ha he car"hol"er shall be liable o
he ban- for a"vances an" pa&mens ma"e b& he
ban- an" ha he car"hol"erMs obli'aion o pa& he
ban- shall no be a9ece" or impaire" b& an& "isp#e,
claim, or "eman" b& he car"hol"er *ih respec o an&
merchan"ise or service p#rchase".
<he merchans paricipain' in he s&sem a'ree o
honor he ban-Ms cre"i car"s. <he ban- irrevocabl&
a'rees o honor an" pa& he sales slips presene" b&
he merchan if he merchan performs his
#n"era-in's s#ch as chec-in' he lis of revo-e" car"s
before accepin' he car".
<hese slips are for*ar"e" o he member ban-
*hich ori'inall& iss#e" he car". <he car"hol"er
receives a saemen from he ban- perio"icall& an"
ma& hen "eci"e *heher o ma-e pa&men o he
ban- in f#ll *ihin a speci(e" perio", free of ineres, or
o "efer pa&men an" #limael& inc#r an ineres
char'e.
4impl& p#, ever& cre"i car"
ransacion involves hree conracs, namel&; 0a1 he
sales cont"act be*een he cre"i car" hol"er an" he
merchan or he b#siness esablishmen *hich
accepe" he cre"i car"P 0b1 he loan a!"ee+ent
be*een he cre"i car" iss#er an" he cre"i car"
hol"erP an" lasl&, 0c1 he *"o+ise to *a/ be*een he
cre"i car" iss#er an" he merchan or b#siness
esablishmen.
Cre"i car" iss#er + car"hol"er relaionship
<he relaionship be*een he cre"i car" iss#er
an" hol"er is a conrac#al one ha is 'overne" b& he
erms an" con"iions fo#n" in he car" membership
a'reemen. <his conrac provi"es he ri'hs an"
liabiliies of a cre"i car" compan& o is car"hol"ers
an" vice versa.
) car" membership a'reemen is a conrac of
a"hesion as is erms are prepare" solel& b& he cre"i
car" iss#er, *ih he car"hol"er merel& aJ%in' his
si'na#re si'nif&in' his a"hesion o hese erms.
<his circ#msance, ho*ever, "oes no ren"er he
a'reemen voi"P *e have #niforml& hel" ha conracs
of a"hesion are Kas bin"in' as or"inar& conracs, he
reason bein' ha he par& *ho a"heres o he
conrac is free o reGec i enirel&.L <he onl& e9ec is
ha he erms of he conrac are consr#e" sricl&
a'ains he par& *ho "rafe" i.
Ese of cre"i car" a mere o9er o ener ino loan
a'reemens
)lho#'h *e reco'ni$e he e%isence of a
relaionship be*een he cre"i car" iss#er an" he
cre"i car" hol"er #pon he accepance b& he
car"hol"er of he erms of he car" membership
a'reemen, 0e -a,e to distin!uis- t-is
cont"actual "elations-i* f"o+ t-e c"edito";de.to"
"elations-i* 0-ic- onl/ a"ises after t-e c"edit
ca"d issue" -as a**"o,ed t-e ca"d-olde"<s
*u"c-ase "e=uest3
<he (rs relaes merel& o an a'reemen
provi"in' for cre"i facili& o he car"hol"er. <he laer
involves he ac#al cre"i on loan a'reemen involvin'
hree conracs, namel&; he sales conrac be*een
he cre"i car" hol"er an" he merchan or he
b#siness esablishmen *hich accepe" he cre"i car"P
he loan a'reemen be*een he cre"i car" iss#er an"
he cre"i car" hol"erP an" he promise o pa& be*een
he cre"i car" iss#er an" he merchan or b#siness
esablishmen.
2rom he loan a'reemen perspecive, t-e
cont"actual "elations-i* .e!ins to e9ist onl/
u*on t-e +eetin! of t-e o>e" and acce*tance of
t-e *a"ties in,ol,ed3 3n more concree erms, *hen
car"hol"ers #se heir cre"i car"s o pa& for heir
p#rchases, t-e/ +e"el/ o>e" to ente" into loan
a!"ee+ents 0it- t-e c"edit ca"d co+*an/3
Dnl& afer he laer approves he p#rchase reA#ess
ha he paries ener ino bin"in' loan conracs.
3n -eepin' *ih )ricle 1,19 of he Civil Co"e, *hich
provi"es; )rticle #$#%. "onsent is manifested by the
meeting of the o&er and the acceptance upon the
thing and the cause which are to constitute the
contract. The o&er must be certain and the acceptance
absolute. A 'uali(ed acceptance constitutes a counter)
o&er.
)/8Q K"ese",e?s@ t-e "i!-t to den/
aut-o"iAation fo" an/ "e=uested C-a"!e3L !& so
provi"in', )/8Q ma"e is posiion clear ha i has no
obli'aion o approve an& an" all char'e reA#ess
ma"e b& is car" hol"ers.
)/8Q no '#il& of c#lpable "ela&
4ince )/8Q has no obli'aion o approve he
p#rchase reA#ess of is cre"i car"hol"ers, Panaleon
canno claim ha )/8Q "efa#le" in is obli'aion.
)ricle 1169 of he Civil Co"e, *hich provi"es
he reA#isies o hol" a "ebor '#il& of c#lpable "ela&,
saes; Article ##*%. Those obliged to deliver or to do
something incur in delay from the time the obligee
judicially or e+trajudicially demands from them the
ful(llment of their obligation. +++ The three
re'uisites for a (nding of default are, -a. that the
obligation is demandable and li'uidated/ -b. the debtor
delays performance/ and -c. the creditor judicially or
e+trajudicially re'uires the debtor0s performance.
!ase" on he above, he (rs reA#isie is no
lon'er me beca#se )/8Q, b& he e%press erms of he
cre"i car" a'reemen, is no obli'ae" o approve
PanaleonMs p#rchase reA#es. >iho# a "eman"able
obli'aion, here can be no (n"in' of "efa#l.
<he #se of a cre"i car" o pa& for a p#rchase is
onl& an o9er o he cre"i car" compan& o ener a loan
a'reemen *ih he cre"i car" hol"er. Befo"e t-e
c"edit ca"d issue" acce*ts t-is o>e"1 no
o.li!ation "elatin! to t-e loan a!"ee+ent e9ists
.et0een t-e+3 Dn he oher han", a "eman" is
"e(ne" as he Kasserion of a le'al ri'hP %%% an as-in'
*ih a#hori&, claimin' or challen'in' as "#e.L '
de+and *"esu**oses t-e e9istence of an
o.li!ation .et0een t-e *a"ties.
)/8QMs obli'aion o ac on he o9er *ihin a speci(c
perio" of ime
8ver& ime Panaleon char'es a p#rchase on his
cre"i car", he cre"i car" compan& sill has o
"eermine *heher i *ill allo* his char'e, base" on
his pas cre"i hisor&.
<his ri'h o revie* a car" hol"erMs cre"i
hisor&, alho#'h no speci(call& se o# in he car"
membership a'reemen, is a necessar& implicaion of
)/8QMs ri'h o "en& a#hori$aion for an& reA#ese"
char'e.
<here is no provision in his a'reemen ha
obli'aes )/8Q o ac on all car"hol"er p#rchase
reA#ess *ihin a speci(call& "e(ne" perio" of ime.
<h#s, re'ar"less of *heher he obli'aion is *or"e"
*as o Kac in a maer of secon"sL or o Kac in imel&
"ispach,L he fac remains ha no obli'aion e%iss on
he par of )/8Q o ac *ihin a speci(c perio" of ime.
)/8Q is neiher conrac#all& bo#n" nor le'all&
obli'ae" o ac on is car"hol"ersM p#rchase reA#ess
*ihin an& speci(c perio" of ime, m#ch less a perio"
of a Kmaer of secon"sL ha Panaleon #ses as his
san"ar". <he san"ar" herefore is implici an", as in
all conracs, m#s be base" on fairness an"
reasonableness
)/8Q ace" *ih 'oo" faih
)ricle 19. 8ver& person m#s, in he e%ercise of his
ri'hs an" in he performance of his "#ies, ac *ih
G#sice, 'ive ever&one his "#e an" observe hones&
an" 'oo" faih.
)ricle 21. )n& person *ho *illf#ll& ca#ses loss or
inG#r& o anoher in a manner ha is conrar& o
morals, 'oo" c#soms or p#blic polic& shall
compensae he laer for he "ama'e.
)ricle 19 perva"es he enire le'al s&sem an"
ens#res ha a person s#9erin' "ama'e in he co#rse
of anoherMs e%ercise of ri'h or performance of "#&,
sho#l" (n" himself *iho# relief. 3 ses he san"ar"
for he con"#c of all persons, *heher ari(cial or
na#ral, an" reA#ires ha ever&one, in he e%ercise of
ri'hs an" he performance of obli'aions, m#s; 0a1 ac
*ih G#sice, 0b1 'ive ever&one his "#e, an" 0c1 observe
hones& an" 'oo" faih. 3 is no beca#se a person
invo-es his ri'hs ha he can "o an&hin', even o he
preG#"ice an" "isa"vana'e of anoher.
>e 'ive cre"ence o )/8QMs claim ha is revie*
proce"#re *as "one o ens#re PanaleonMs o*n
proecion as a car"hol"er an" o preven he
possibili& ha he cre"i car" *as bein' fra#"#lenl&
#se" b& a hir" person.
Panaleon is no enile" o "ama'es
!eca#se )/8Q neiher breache" is conrac *ih
Panaleon, nor ace" *ih c#lpable "ela& or he *illf#l
inen o ca#se harm, *e (n" he a*ar" of moral
"ama'es o Panaleon #n*arrane".
P(OD4CE(S B'NB OF )HE PHILIPPINES VS C'
Gr. No. 11.,24, 2ebr#ar& 19, 200,
Facts:
2ran-lin Vives, #pon he reA#es of )n'eles
4anche$ an" rel&in' on he ass#rance ha he co#l"
*ih"ra* his mone& *ihin a monhOs ime, iss#e" a
chec- in he amo#n of 200- in favor of 4erela
mar-ein' o*e" b& @oronilla.
Vives fo#n" o# ha 4erela can be fo#n" on he
a""ress 'iven o hem so he& *en o P!P o verif& if
he mone& *as sill inac.
<he& *ere informe" ha par of he amo#n ha"
been *ih"ra*n b& @oronilla an" ha he laer
insr#ce" he ban- o "ebi from he savin's acco#n
he amo#n an" "eposi i in his c#rren acco#n.
Vives (le" an acion for recover& of s#m of
mone& a'ains @oronilla an" P!P.
H<C r#le" in favor of Vives an" C) aJrme".
Peiioner conen"s ha he ransacion be*een
privae respon"en an" @oronilla is a simple loan
0m###m1 since all he elemens of a m###m are
presen; (rs, *ha *as "elivere" b& privae
respon"en o @oronilla *as mone&, a cons#mable
hin'P an" secon", he ransacion *as onero#s as
@oronilla *as obli'e" o pa& ineres. Cence, peiioner
ar'#es ha i canno be hel" liable beca#se i is no
priv& o he ransacion be*een he laer an"
@oronilla.
Privae respon"en, on he oher han", ar'#es
ha he ransacion be*een him an" @oronilla is no a
m###m b# an accommo"aion, since he "i" no
ac#all& par *ih he o*nership of his P200,000.00 b#
reaine" some "e'ree of conrol over his mone&
hro#'h his *ife *ho *as ma"e a si'naor& o he
savin's acco#n an" in *hose possession he savin's
acco#n passboo- *as 'iven.
Issue:s:
1. >heher or no he conrac be*een 4anche$
an" @oronilla an" Vives is a conrac of commo"a#m.
2. >heher or no he fac ha here is an a""iional
P 12,000 0alle'e"l& represenin' ineres1 in he
amo#n o be re#rne" o Vives convers he
ransacion from commo"a#m o m###m.
,. >heher or no Pro"#cerMs !an- is soli"aril& liable
o Vives, consi"erin' ha i *as no priv& o he
ransacion be*een Vives an" @oronilla.
Held:
1. 4#preme Co#r hel" ha he conrac is
commo"a#m.
CC 19,, 0he provision "isin'#ishin' be*een he
*o -in"s of loans1 seem o impl& ha if he s#bGec of
he conrac is a cons#mmable hin', s#ch as mone&,
he conrac *o#l" be a m###m. Co*ever, here are
insances *hen a commo"a#m ma& have for is obGec
a cons#mmable hin'. 4#ch can be fo#n" in CC 19,6
*hich saes ha Kcons#mmable 'oo"s ma& be he
s#bGec of commo"a#m if he p#rpose of he conrac
is no he cons#mpion of he obGec, as *hen i is
merel& for e%hibiionL.
<h#s, if cons#mable 'oo"s are loane" onl& for
p#rposes of e%hibiion or *hen he inenion of he
paries is o len" cons#mable 'oo"s an" o have he
ver& same 'oo"s re#rne" a he en" of he perio"
a'ree" #pon, he loan is commo"a#m an" no a
m###m.
3n his case, he inenion of he paries *as merel&
for e%hibiion. Vives a'ree" o "eposi his mone& in
4relaMs acco#n speci(call& for p#rpose of ma-in' i
appear ha 4rela ha" s#Jcien capiali$aion for
incorporaion, *ih he promise ha he amo#n sho#l"
be re#rne" *ihin' ,0 "a&s.
2. No. CC 19,. saes ha Khe bailee in
commo"a#m acA#ires he #se of he hin' loane" b#
no is fr#isL. 3n his case, he a""iional P 12,000
correspon"s o he fr#is of he len"in' of he P
200,000.
,. Fes. )ien$a, he !ranch /ana'er of Pro"#cerMs
!an-, allo*e" he *ih"ra*als on he acco#n of 4rela
"espie he r#le *rien in he passboo- ha neiher a
"eposi, nor a *ih"ra*al *ill be permie" e%cep
#pon he pro"#cion of he passboo- 0recall in his case
ha he passboo- *as in he possession of he *ife of
Vives all alon'1. Cence, his onl& proves o sho* ha
)ien$a allo*e" he *ih"ra*als beca#se he *as par&
o @oronillaMs scheme of "efra#"in' Vives. !& vir#e of
CC 21:0, PN!, as emplo&er, is hel" primaril& an"
soli"aril& liable for "ama'es ca#se" b& heir emplo&ees
acin' *ihin he scope of heir assi'ne" as-s.
)ien$aMs acs, in helpon' @oronilla, a c#somer of he
ban-, *ere obvio#sl& "one in f#rherance of he
b#siness of he ban-, even ho#'h in he process,
)ien$a violae" some r#les.
P'C48O VS C'
Gr. No. 146,64, =#ne ,, 2004
Facts:
PaG#&o consr#ce" a ho#se ma"e of li'h
maerials afer pa&in' 400php o Pere$ for he ri'hs
over a lo . Cis famil& live" in he ho#se.
Dn 19:., PG#&o an" privae respon"en G#evarra
e%ec#e" a Ras#n"#an or a'reemen.
PaG#&o as he o*ner of he ho#se, allo*e"
G#evarra o live in he ho#se for free provi"e" ha he
laer *o#l" mainain he cleanliness an" or"erliness of
he ho#se.
G#evarra promise" h he *o#l" vol#naril&
vacae he premises on PaG#&oOs "eman".
3n 1994, PaG#&o informe" G#evarra of his nee" of
he ho#se an" "eman"e" ha G#evarra vacae he
ho#se. G#evarra ref#se".
Issue:
>heher or no he conrac enere" ino b&
PaG#&o an" G#evarra is a commo"a#m.
Held:
No. 3 *as a conrac of Lease.
3n a conrac of commodatum, one of he paries
"elivers o anoher somehin' no cons#mable so ha
he laer ma& #se he same for a cerain ime an"
re#rn i.
)n essenial fea#re of commodatum is ha i is
'ra#io#s. )noher fea#re of commodatum is ha he
#se of he hin' belon'in' o anoher is for a cerain
perio".
<h#s, he bailor canno "eman" he re#rn of he
hin' loane" #nil afer e%piraion of he perio"
sip#lae", or afer accomplishmen of he #se for
*hich he commodatum is consi#e".
3f he bailor sho#l" have #r'en nee" of he hin',
he ma& "eman" is re#rn for emporar& #se. 3f he #se
of he hin' is merel& olerae" b& he bailor, he can
"eman" he re#rn of he hin' a *ill, in *hich case
he conrac#al relaion is calle" a precari#m. En"er
he Civil Co"e, precarium is a -in" of commo"a#m.
<he 1asunduan reveals ha he accommo"aion
accor"e" b& PaG#&o o G#evarra *as no esseniall&
'ra#io#s. >hile he 1asunduan "i" no reA#ire
G#evarra o pa& ren, i obli'ae" him o mainain he
proper& in 'oo" con"iion. <he imposiion of his
obli'aion ma-es he 1asunduan a conrac "i9eren
from a commodatum.
<he e9ecs of he 1asunduan are also "i9eren
from ha of a commodatum. Case la* on eGecmen
has reae" relaionship base" on olerance as one ha
is a-in o a lan"lor"-enan relaionship *here he
*ih"ra*al of permission *o#l" res#l in he
erminaion of he lease. <he enanMs *ihhol"in' of
he proper& *o#l" hen be #nla*f#l. <his is sele"
G#rispr#"ence.
8ven ass#min' ha he relaionship be*een
PaG#&o an" G#evarra is one of commodatum, G#evarra
as bailee *o#l" sill have he "#& o #rn over
possession of he proper& o PaG#&o, he bailor. <he
obli'aion o "eliver or o re#rn he hin' receive"
aaches o conracs for safe-eepin', or conracs of
commission, a"minisraion an" commo"a#m. <hese
conracs cerainl& involve he obli'aion o "eliver or
re#rn he hin' receive".
<he1asunduan is no voi" for p#rposes of
"eerminin' *ho be*een PaG#&o an" G#evarra has a
ri'h o ph&sical possession of he conese" proper&.
<he 1asunduan is he #n"eniable evi"ence of
G#evarraMs reco'niion of PaG#&oMs beer ri'h of
ph&sical possession. G#evarra is clearl& a possessor in
ba" faih. <he absence of a conrac *o#l" no &iel" a
"i9eren res#l, as here *o#l" sill be an implie"
promise o vacae.
(EP4BLIC VS B'&)'S
Gr. No. L-15454, Dcober 2., 1962
Facts:
Dn 194:, =ose !a'as borro*e" from he !#rea#
of )nimal 3n"#sr& hree b#lls for one &ear for bree"in'
p#rposes #pon pa&men of a bree"in' fee of 10S of
he boo- val#e of he b#lls.
)fer one &ear, he conrac *as rene*e" b#
onl& for one b#ll. !a'as o9ere" o b#& he b#lls a
boo- val#e less "epreciaion, b# he !#rea# ol" him
ha he sho#l" eiher re#rn he b#lls or pa& for heir
boo- val#e.
!a'as faile" o pa& he boo- val#e, so he
Hep#blic (le" an acion *ih he C23 /anila o or"er he
re#rn of he b#lls or he pa&men of he boo- val#e.
2elici"a" !a'as, he s#rvivin' spo#se an"
a"minisrari% of he "ece"enMs esae, sai" ha he
*o b#lls have alrea"& been re#rne" in 19.2, an" ha
he remainin' one "ie" of '#nsho "#rin' a C#- rai".
3 *as esablishe" ha he *o b#lls *ere
re#rne", h#s, here is no more obli'aion on he par
of !a'as. >ih re'ar"s he b#ll no re#rne", 2elici"a"
mainaine" ha he obli'aion is e%in'#ishe" since
he conrac is ha of a commo"a#m an" ha he loss
hro#'h for#io#s even sho#l" be borne b& he o*ner.
Issue:
>heher or no he conrac enere" ino
be*een !a'as an" he Hep#blic is ha of
commo"a#m ma-in' !a'as no liable for he "eah of
he b#ll.
Held:
) conrac of commo"a#m is esseniall&
'ra#io#s. 3f he bree"in' fee be consi"ere"
compensaion, hen he conrac *o#l" be a lease of
he b#ll.
En"er aricle 1651 of he Civil Co"e he lessee
*o#l" be s#bGec o he responsibiliies of a possessor
in ba" faih beca#se she ha" conin#e" possession of
he b#ll afer he e%pir& of he conrac.
8ven if he conrac be commo"a#m, sill
!a'as is liable beca#se aricle 1942 of he Civil Co"e
provi"es ha a bailee in a conrac of commo"a#m is
liable for loss of he hin's even if i sho#l" be hro#'h
a for#io#s even if he -eeps i lon'er han he perio"
sip#lae" or if he hin' loane" has been "elivere"
*ih appraisal of is val#e, #nless here is a sip#laion
e%empin' he bailee from responsibili& in case of a
for#io#s even.
<he loan of one b#ll *as rene*e" for anoher
perio" of one &ear b# !a'as -ep an" #se" he b#ll
more han one &ear *here "#rin' a C#- rai" i *as
-ille" b& sra& b#lles.
2#rhermore, *hen len an" "elivere" o he
"ecease" h#sban" of !a'as, he b#lls ha" each an
appraise" boo- val#e. 3 *as no sip#lae" ha in case
of loss of he b#ll "#e o for#io#s even he lae
h#sban" of he appellan *o#l" be e%emp from
liabili&.
PEOPLE VS P4I& 'ND PO(('S
Gr. No. 15,6.4-56., )#'#s 2:, 200:
Facts:
Privae complainan H#ral !an- of Po-oan (le"
a cases of A#ali(e" hef before he H<C a'ains P#i'
an" Porras *ho *ere he cashier an" boo--eeper of he
privae complainan.
<he respon"ens conspire" an" helpe" one
anoher o seal an" carr& a*a& he s#m of 1.- php of
he ban- *iho# he consen of he o*ner.
H<C "ismisse" he case "#e o ins#Jcienc& of
he informaion.
<he elemen of Ttain! 0it-out t-e consent
of t-e o0ne"sM *as missin' on he 'ro#n" ha i is
he "eposiors-cliens, an" no he !an-, *hich (le"
he complain in hese cases, *ho are he o*ners of
he mone& alle'e"l& a-en b& respon"ens an" hence,
are he real paries-in-ineres .
Issue:
>DN he 112 informaion for A#ali(e" hef s#Jcienl&
alle'e he elemen of a-in' *iho# he consen of he
o*ner an" he A#alif&in' circ#msance of 'rave ab#se
of "iscreion.
Held:
Fes.
<he Co#r has hel" in a line of cases ha
*here he informaions merel& alle'e" he posiions of
he respon"ensP ha he crime *as commie" *ih
'rave ab#se of con("ence, *ih inen o 'ain an"
*iho# he -no*le"'e an" consen of he !an-,
*iho# necessaril& sain' he phrase bein'
assi"#o#sl& insise" #pon b& respon"ens, Kof a
relaions b& reason of "epen"ence, '#ar"ianship, or
vi'ilance, be*een he respon"ens an" he o9en"e"
par& ha has creae" a hi'h "e'ree of con("ence
be*een hem, *hich respon"ens ab#se",L an"
*iho# emplo&in' he *or" Ko*nerL in lie# of he
K!an-L *ere consi"ere" o have sais(e" he es of
s#Jcienc& of alle'aions.
)lle'aions in he informaion ha s#ch
emplo&ees ace" *ih 'rave ab#se of con("ence o he
"ama'e of he !an-, *iho# paric#larl& re9erin' o i
as o*ner of he mone& "eposis, as s#Jcien o ma-e
o# a case of A#ali(e" hef.
@eposiors *ho place heir mone& *ih he
ban- are consi"ere" cre"iors of he ban-.
<ellers, cashiers, boo--eepers an" oher
emplo&ees of he ban- *ho come ino possession of
he monies "eposie" herein enGo& he con("ence
repose" in hem b& heir emplo&er. !an-s *here
monies are "eposie", are consi"ere" he o*ners
hereof.
<he relaionship be*een he ban-s an"
"eposiors has been hel" o be ha of cre"ior an"
"ebor b& vir#e of )r. 19:0 CC *hich provi"es ha
K(+ed, savings and current deposits of money in bans
and similar institutions shall be governed by the
provisions concerning simple loans,L an" )r. 19., CC
provi"es ha Ka person who receives a loan of money
or any other fungible thing ac'uires the ownership
thereof and is bound to pay to the creditor an e'ual
amount of the same ind and 'uality.2
BPI VS F('NCO
Gr. No. 12,49:, November 2,, 2005
Facts:
Dn )#'#s 1., 19:9, <eveseco )rrasre-
4eve"orin' Co., 3nc. 0<eveseco1 opene" a savin's an"
c#rren acco#n *ih !P3-2!. 2irs /ero 3nvesmen
Corporaion 02/3C1 also opene" a ime "eposi acco#n
*ih he same branch of !P3-2!3 4#bseA#enl&, on
)#'#s ,1, 19:9, 2ranco opene" hree acco#ns,
namel&, a c#rren, savin's, an" ime "eposi, *ih !P3-
2!.
<he oal amo#n of 2m #se" o open hese
acco#ns is raceable o a chec- iss#e" b& <eveseco
alle'e"l& in consi"eraion of 2rancoMs inro"#cion of
8la"io <eves, *ho *as loo-in' for a con"#i ban- o
faciliae <evesecoMs b#siness ransacions, o =aime
4ebasian, *ho *as hen !P3-2! 42@/Ms !ranch
/ana'er.
3 appears, ho*ever, ha he si'na#res of
2/3CMs oJcers on he )#hori& o @ebi *ere for'e".
Enfor#nael&, <eveseco ha" alrea"& e9ece" several
*ih"ra*als from is c#rren acco#n amo#nin' o ,5m
pai" o 2ranco.
Impelle" b& he nee" o proec is ineress in
li'h of 2/3CMs for'er& claim, !P3-2! insr#ce" =es#s
)ran'orin o "ebi 2rancoMs savin's an" c#rren
acco#ns for he amo#ns remainin' herein.Co*ever,
2rancoMs ime "eposi acco#n co#l" no be "ebie" "#e
o he capaci& limiaions of !P3-2!Ms comp#er 3
2 chec-s "ra*n b& 2ranco a'ains his !P3-2!
c#rren acco#n *ere "ishonore" #pon presenmen for
pa&men, an" sampe" *ih a noaion Bacco#n #n"er
'arnishmen.B
<he "ishonore" chec-s *ere iss#e" b& 2ranco
an" presene" for pa&men a !P3-2! prior o 2rancoMs
receip of noice ha his acco#ns *ere #n"er
'arnishmen.
2ranco pre-erminae" his ime "eposi
acco#n. !P3-2! "e"#ce" he amo#n of 6,R from he
remainin' balance of he ime "eposi acco#n
represenin' a"vance ineres pai" o him.
3n li'h of !P3-2!Ms ref#sal o hee" 2rancoMs
"eman"s o #nfree$e his acco#ns an" release his
"eposis herein, he laer (le" *ih he /anila H<C he
s#bGec s#i 3
!P3-2! raverse" his complain, insisin' ha i
*as correc in free$in' he acco#ns of 2ranco an"
ref#sin' o release his "eposis, claimin' ha i ha" a
beer ri'h o he amo#ns *hich consise" of par of
he mone& alle'e"l& fra#"#lenl& *ih"ra*n from i b&
<eveseco an" en"in' #p in 2rancoMs acco#ns.
H<C G#"'emen *as ren"re" in favor of 2ranco.
Issue:
>DN !P3-2! can #nilaerall& free$e 2rancoOs acco#ns
an" precl#"e him from *ih"ra*in' his "eposis.
Held:
No. <he co#r r#le" ha !P3-2! canno
#nilaerall& free$e 2rancoMs acco#ns an" precl#"e him
from *ih"ra*in' his "eposis.
2ranco is no enile" o #nearne" ineres on
he ime "eposi as *ell as o moral an" e%emplar&
"ama'es.
<he "eposi of mone& in ban-s is 'overnme"
b& he CC provisions on simple loan or m###m. )s
here is a "ebor-cre"ior relaionship be*een a ban-
an" is "eposior, !P3-2! #limael& acA#ire" o*nership
of 2rancoOs "eposis, b# s#ch o*nership is co#ple"
*ih a correspon"in' obli'aion o pa& him an eA#al
amo#n on "eman".
Although BPI-FB owns the deposits in Francos accounts,
it cannot prevent him from demanding payment of BPI-FBs
obligation by drawing checks against his current account, or asking
for the release of the funds in his savings account !hus, when Franco
issued checks drawn against his current account, he had every right as
creditor to e"pect that those checks would be honored by BPI-FB as
debtor
Furthermore, BPI-FB does not have a unilateral right to
free#e the accounts of Franco based on its mere suspicion that the
funds therein were proceeds of the multi-million peso scam Franco
was allegedly involved in !o grant BPI-FB, or any bank for that
matter, the right to take whatever action it pleases on deposits which
it supposes are derived from shady transactions, would open the
floodgates of public distrust in the banking industry
F(I'S VS S'N DIE&O;SISON
Gr. No. 1..22,, )pril 4, 2005
Facts:
Dn 1990, 2rias an" 4an-@ie'o 4ison enere" ino a
5O' over 2riasMproper&. /D) consi"eraion is ,/.
4ison has D +ont-s from he "ae of
conracMs e%ec#ion o noif& 2rias of her inenion o
p#rchase he proper& *ih he improvemens a 6.4/.
Prior o his 6 monh perio", 2rias ma& sill o9er
he proper& o oher persons, provi"e" ha ,/ shall
be pai" o 4ison incl#"in' inte"est .ased on
*"e,ailin! co+*ounded .an inte"est U amo#n of
sale in e%cess of 5/ Vsho#l" he proper& be sol" a a
price 'reaer han 5/W.
3n case 2rias has no ot-e" .u/e" 0it-in D
+ont-s from he conracMs e%ec#ion, no inte"est
s-all .e c-a"!ed ./ Sison on t-e #53
3n he even ha on t-e D
t-
+ont-, Sison
0ould decide not to *u"c-ase t-e *"o*e"t/, 2rias
has D +ont-s o pa& ,/ 0amo#n shall
earnco+*ounded .an inte"est fo" t-e last D
+ont-s onl/1
#5 t"eated as a loan an" he proper&
consi"ere" as he sec#ri& for he mor'a'e.
Epon noice of inenion o p#rchase, 4ison has
6 monhs o pa& he balance of ,.4/ 06.4/ less ,/
/D) consi"eraion1
F"ias "ecei,ed f"o+ Sison ,5 02/ in cashP
1/ pos-"ae" chec- "ae" 2ebr#ar& 2:, 1990, insea"
of 1991, *hich ren"ere" he chec- sale1.
F"ias !a,e Sison t-e )C) and t-e Deed of
'.solute Sale over he proper&. Sison decided not
to *u"c-ase t-e *"o*e"t/, so she noi(e" 2rias
hro#'h a leer "ae" /arch 20, 1991 V2rias receive" i
onl& on =#ne 11, 1991W,

an" 4ison remin"e" 2rias of
heir a!"ee+ent ha he 25 4ison pai" s-ould .e
conside"ed as a loan *a/a.le 0it-in D +ont-s.
F"ias failed to *a/ his amo#n.
4ison (le" a co+*laint

fo" su+ of +one/ 0it-
*"eli+ina"/ attac-+ent. 4ison averre" ha 2rias
rie" o "eprive her of he sec#ri& for he loan b&
ma-in' a false repor of he loss of her o*nerMs cop& of
<C<, e%ec#in' an aJ"avi of loss an" b& (lin' a
peiion for he iss#ance of a ne* o*nerMs "#plicae
cop&. H<C iss#e" a *ri of preliminar& aachmen #pon
he (lin' of a 2/ bon".
()C fo#n" ha F"ias 0as unde" o.li!ation
to *a/ Sison 25 0it- co+*ounded
inte"estp#rs#an o heir 5O'3 H<C or"ere" 2rias o
pa& 4ison; 25 E #2F annual inte"est be'innin'
Dece+.e" G1 1HH1 #nil f#ll& pai"
50- represenin' premi#ms pai" b& 4ison on
he aachmen bon" *ih le'al ineres co#ne" from
he "ae of his "ecision #nil f#ll& pai"
100- moral, correcive, e%emplar& "ama'es
Vliable for moral "ama'es beca#se of 2riasM fra#"#len
schemeW
100- aorne&Ms fees U cos of lii'aion
C' aI"+ed ()C 0it- +odiJcationN#2F
"educed to 2%F3 C) sai" ha here *as no basis for
2rias o sa& ha he ineres sho#l" be char'e" for 6
monhs onl&. 3 sai" ha a loan al*a&s bears ineresP
oher*ise, i is no a loan. )-e inte"est s-ould
co++ence on Cune G1 1HH1 #nil f#ll& pai", *ih
compo#n"e" ban- ineres prevailin' a he ime V=#ne
1991W he 2/ *as consi"ere" as a loan 0as ceri(e" b&
he ban-1.
Issue:
>DN compo#n"e" ban- ineres sho#l" be
limie" o 6 monhs as conaine" in he /D).
Held:
C' co++itted no e""o" in a*ar"in' an
ann#al 2.S ineres on he 2/ even be&on" he 6-
monh sip#lae" perio". 3n his case, he phrase Bfo"
t-e last si9 +ont-s onl/B sho#l" be taen in t-e
conte9t of t-e enti"e a!"ee+ent.
4C noes ha he a'reemen spea-s of t0o K2L
*e"iods of D +ont-s eac-.
No ineres *ill be char'e" for he 1
s
6-monh
perio" V*hile 4ison *as ma-in' #p her min"W, b# onl/
fo" t-e 2
nd
D;+ont- *e"iod afte" Sison decided
not to .u/ t-e *"o*e"t/.
<here is not-in! in t-e 5O' ha s#''ess
ha inte"est 0ill .e c-a"!ed fo" D +ont-s onl/
e,en if it taes fo"e,e" fo" F"ias to *a/ t-e loan.
<he *a/+ent of "e!ula" inte"est consi#es
he *"ice o" cost of t-e use of +one/, an" #nil he
principal s#m "#e is re#rne" o he cre"ior, "e!ula"
inte"est continues to acc"ue since he "ebor
conin#es o #se s#ch principal amo#n. 2or a "ebor o
continue in *ossession of t-e *"inci*al of t-e
loan an" o continue to use he same afer ma#ri&
of he loan 0it-out *a/+ent of t-e +oneta"/
inte"est consi#es un2ust en"ic-+ent on he par
of he "ebor a he e%pense of he cre"ior.
<he a'reemen sip#lae" in he /D) ha he
amo#n 'iven shall bear compo#n"e" ban- ineres for
he las si% monhs onl& 0referrin' o he secon" si%-
monh perio"1, "oes no mean ha ineres *ill no
lon'er be char'e" afer he secon" si%-monh perio"
since s#ch sip#laion *as ma"e on he lo'ical an"
reasonable e%pecaion ha s#ch amo#n *o#l" be
pai" *ihin he "ae sip#lae". Consi"erin' ha he
peiioner faile" o pa& he amo#n 'iven *hich #n"er
he /D) shall be consi"ere" as a loan, he monear&
ineres for he las si% monhs conin#e" o accr#e
#nil he ac#al pa&men of he loane" amo#n. <he
pa&men of re'#lar ineres consi#es he price or
cos of he mone& #se an" h#s, #nil he principal s#m
"#e is re#rne" o he cre"ior, re'#lar ineres
conin#es o accr#e since he "ebor conin#es o #se
s#ch principal amo#n.
<he co#r (n"s no error commie" b& he C) in
a*ar"in' a 2.S ineres per ann#m on he *o-million
peso loan even be&on" he secon" si% monhs
sip#lae" perio".
<heir a'reemen spea-s of *o 021 perio"s of
si% monhs each. <he (rs si%-monh perio" *as 'iven
o plaini9-appellee 0respon"en1 o ma-e #p her min"
*heher or no o p#rchase "efen"an-appellanOs
0peiionerOs1 proper&. <he secon" si%-monh perio"
*as 'iven o "efen"an-appellan o pa& he P2 million
loan in he even ha plaini9-appellee "eci"e" no o
b#& he s#bGec proper& in *hich case ineres *ill be
char'e" Bfor he las si% monhs onl&B, referrin' o he
secon" si%-monh perio". <his means ha no ineres
*ill be char'e" for he (rs si%-monh perio" *hile
appellee *as ma-in' #p her min" *heher o b#& he
proper&, b# onl& for he secon" perio" of si% monhs
afer appellee ha" "eci"e" no o b#& he proper&. <his
is he meanin' of he phrase Bfor he las si% monhs
onl&B. Cerainl&, here is nohin' in heir a'reemen
ha s#''ess ha ineres *ill be char'e" for si%
monhs onl& even if i a-es "efen"an-appellan an
eerni& o pa& he loan.
<he a'reemen ha he amo#n 'iven shall
bear compo#n"e" ban- ineres for he las si% monhs
onl&, i.e., referrin' o he secon" si%-monh perio",
"oes no mean ha ineres *ill no lon'er be char'e"
afer he secon" si%-monh perio" since s#ch
sip#laion *as ma"e on he lo'ical an" reasonable
e%pecaion ha s#ch amo#n *o#l" be pai" *ihin he
"ae sip#lae". Consi"erin' ha peiioner faile" o
pa& he amo#n 'iven *hich #n"er he /emoran"#m
of )'reemen shall be consi"ere" as a loan, he
monear& ineres for he las si% monhs conin#e" o
accr#e #nil ac#al pa&men of he loane" amo#n.
<he pa&men of re'#lar ineres consi#es he
price or cos of he #se of mone& an" h#s, #nil he
principal s#m "#e is re#rne" o he cre"ior, re'#lar
ineres conin#es o accr#e since he "ebor conin#es
o #se s#ch principal amo#n. 3 has been hel" ha for
a "ebor o conin#e in possession of he principal of
he loan an" o conin#e o #se he same afer ma#ri&
of he loan *iho# pa&men of he monear& ineres,
*o#l" consi#e #nG#s enrichmen on he par of he
"ebor a he e%pense of he cre"ior.
E'S)E(N SHIPPIN& LINE VS C'
Gr. No. 95412, =#l& 12, 1994
Facts:
2 (ber "r#ms of riboXavin *ere shippe" from
Fo-ohama, =apan on boar" he vessel o*ne" b& 8asern
4hippin' Lines.
>hen i arrives in /anila, i *as p# #no he
c#so"& of /ero Por 4ervice, 3nc.
<he laer e%cepe" o one "r#m *hich is sai"
o be in ba" or"er an" *hich "ama'e *as #n-no*n o
8asern 4hippin' Lines.
Laer, )llie" !ro-era'e Corporaion receive"
he shipmen from /ero Por 4ervice, 3nc.
>ih one "r#m "ama'e", )llie" !ro-era'e
Corporaion ma"e "eliveries o he consi'neeOs
*areho#se. <he laer e%cepe" o one "r#m ha is
"ama'e".
8asern 4hippin' Lines averre" ha "#e o he
one "r#m ha is "ama'e" an" "#e o he fa#l an"
ne'li'ence of /ero Por 4ervice, 3nc. an" )llie"
!ro-era'e Corporaion, he consi'nee s#9ere" losses.
<he *o faile" an" ref#se" o pa& he claims
for "ama'es.
ConseA#enl&, 8asern 4hippin' Lines *as
compelle" o pa& he consi'nee bein' s#bro'ae" o all
he ri'hs of acion of sai" consi'nee a'ains /ero
Por 4ervice, 3nc. an" )llie" !ro-era'e Corporaion.
<rial ens#e" an" on appeal of he case, he
appellae co#r aJrme" he "ecision of he rial co#r
or"erin' /ero Por 4ervice an" )llie" !ro-era'e o pa&
8asern 4hippin' Lines, Goinl& an" severall&, he
amo#n of P19,0,2.9., *ih he presen le'al ineres
of 12S per annum from he "ae of (lin' of he
complains, #nil f#ll& pai".
/ero Por 4ervice an" )llie" !ro-era'e
oppose" especiall& as o he pa&men of ineres
conen"in' ha he le'al ineres on an a*ar" for loss
or "ama'e sho#l" be 6S in vie* of )ricle 2209 of he
Civil Co"e.
Issue:
>heher or no he pa&men of le'al ineres on an
a*ar" for loss or "ama'e is *elve percen 012S1 or
si% percen 06S1.
Held:
)ricle 2209 of he Ne* Civil Co"e provi"es
ha if he obli'aion consiss in he pa&men of a s#m
of mone&, an" he "ebor inc#rs in "ela&, he
in"emni& for "ama'es, here bein' no sip#laion o
he conrar&, shall be he pa&men of ineres a'ree"
#pon, an" in he absence of sip#laion, he le'al
ineres *hich is 6 S per annum. >ih re'ar"
paric#larl& o an a*ar" of ineres in he concep of
ac#al an" compensaor& "ama'es, he rae of
ineres, as *ell as he accr#al hereof, is impose", as
follo*s;
>hen he obli'aion is breache", an" i
consiss in he pa&men of a s#m of mone&, he
ineres "#e sho#l" be ha *hich ma& have been
sip#lae" in *riin'. 2#rhermore, he ineres "#e
shall iself earn le'al ineres from he ime i is
G#"iciall& "eman"e". 3n he absence of sip#laion, he
rae of ineres shall be 12S per annum o be
comp#e" from "efa#l #n"er an" s#bGec o he
provisions of )ricle 1169 of he Civil Co"e.
>hen an obli'aion, no consi#in' a loan or
forbearance of mone&, is breache", an ineres on he
amo#n of "ama'es a*ar"e" ma& be impose" a he
discretion of the court a he rae of 6S per annum. No
ineres, ho*ever, shall be a"G#"'e" on #nliA#i"ae"
claims or "ama'es e%cep *hen or #nil he "eman"
can be esablishe" *ih reasonable cerain&.
)ccor"in'l&, *here he "eman" is esablishe" *ih
reasonable cerain&, he ineres shall be'in o r#n
from he ime he claim is ma"e G#"iciall& or
e%raG#"iciall& 0)r. 1169, Civil Co"e1 b# *hen s#ch
cerain& canno be so reasonabl& esablishe" a he
ime he "eman" is ma"e, he ineres shall be'in o
r#n onl& from he "ae he G#"'men of he co#r is
ma"e 0a *hich ime he A#ani(caion of "ama'es
ma& be "eeme" o have been reasonabl& asceraine"1.
<he ac#al base for he comp#aion of le'al ineres
shall, in an& case, be on he amo#n (nall& a"G#"'e".
>hen he G#"'men of he co#r a*ar"in' a
s#m of mone& becomes (nal an" e%ec#or&, he rae of
le'al ineres, *heher he case falls #n"er para'raph 1
or para'raph 2, above, shall be 12S per annum from
s#ch (nali& #nil is saisfacion, his inerim perio"
bein' "eeme" o be b& hen an eA#ivalen o a
forbearance of cre"i.
SI&';'N VS VILL'N4EV'
Gr. No. 15,225, =an#ar& 20, 2009
Facts:
Cerein respon"en )licia Villan#eva is en'a'e"
in s#ppl&in' oJce maerials an" eA#ipmens o he
Philippine Nav& DJce 0PND1 *here herein 4ebasian
4i'a-an *or-s as a miliar& oJcer an" comproller.
Villan#eva alle'e" ha 4i'a-an o9ere" o loan
her he amo#n of P.40,000.00. Cavin' nee"e" capial
for her b#siness ransacions *ih he PND, Villan#eva
accepe" peiionerMs proposal.
<he loan a'reemen *as no re"#ce" in *riin'
an" here *as no sip#laion as o he pa&men of
ineres for he loan.
Villan#eva iss#e" *o chec-s *orh
P.00,000.00 an" P200,000.00.
4i'a-an *ane" o appl& he pa&men of
P.40,000.00 o he principal amo#n an" he e%cess
amo#n of P160,000.00 *o#l" be applie" for he
ineres.
Ce "eman"e" from Villan#eva o pa& a""iional
ineres *ih a hrea o bloc- or "isapprove her
ransacions *ih he PND if she *o#l" no compl& *ih
his "eman" h#s respon"en pai" a""iional amo#ns
as ineress for he loan.
Villan#eva as-e" 4i'a-an for receip b#
peiioner ref#se" o 'ive as i *as no necessar& as
here *as m##al r#s an" con("ence be*een hem.
<he oal amo#n pai" b& Villan#eva oalle"
P1,200,000.00.
>hen Villan#eva *as a"vise" b& her la*&er
ha she ma"e an overpa&men, she sen a "eman"
leer o 4i'a-an as-in' for he re#rn of he e%cess
amo#n of P660,000.00.
4i'a-an G#s i'nore" Villan#evaMs claim for
reimb#rsemen. Cence, Villan#eva insi#e" a
complain for s#m of mone& a'ains herein peiioner
4ebasian 4i'a-an.
)fer rial of he case, he <rial Co#r or"ere"
peiioner 4i'a-an o ref#n" he e%cess amo#n o
Villan#eva p#rs#an o he principle of sol#io in"ebii.
Dn appeal of he case, he appellae co#r
aJrme" he "ecision of he H<C. Peiioner (le" a
moion for reconsi"eraion b# his *as "enie". Cence,
he insan peiion.
Issue:
>heher or no here *as ineres "#e o peiioner.
Held:
<here *as no ineres "#e o peiioner. )ricle
19.6 of he Civil Co"e, *hich refers o monear&
ineres, speci(call& man"aes ha no ineres shall be
"#e #nless i has been e%pressl& sip#lae" in *riin'.
Pa&men of monear& ineres is allo*e" onl& if
here *as an e%press sip#laion for he pa&men of
ineresP an" he a'reemen for he pa&men of ineres
*as re"#ce" in *riin'. <he conc#rrence of he *o
con"iions is reA#ire" for he pa&men of monear&
ineres.
<h#s, he collecion of ineres *iho# an&
sip#laion herefore in *riin' is prohibie" b& la*. 3
appears ha peiioner an" respon"en "i" no a'ree
on he pa&men of ineres for he loan.
Neiher *as here convincin' proof of *rien
a'reemen be*een he *o re'ar"in' he pa&men of
ineres. Compensaor& ineres is no char'eable in
he insan case beca#se i *as no "#l& proven ha
respon"en "efa#le" in pa&in' he loan. )lso, as
earlier fo#n", no ineres *as "#e on he loan beca#se
here *as no *rien a'reemen as re'ar"s pa&men of
ineres.
3neres is a compensaion (%e" b& he
paries for he #se or forbearance of mone&. <his is
referre" o as monear& ineres. 3neres ma& also be
impose" b& la* or b& co#rs as penal& or in"emni&
for "ama'es. <his is calle" compensaor& ineres. <he
ri'h o ineres arises onl& b& vir#e of a conrac or b&
vir#e of "ama'es for "ela& or fail#re o pa& he
principal loan on *hich ineres is "eman"e".
Article $%&' of the (ivil (ode, which refers to
monetary interest, specifically mandates that no interest shall be due
unless it has been e"pressly stipulated in writing As can be gleaned
from the foregoing provision, payment of monetary interest is
allowed only if) *$+ there was an e"press stipulation for the payment
of interest, and *-+ the agreement for the payment of interest was
reduced in writing !he concurrence of the two conditions is re.uired
for the payment of monetary interest !hus, we have held that
collection of interest without any stipulation therefor in writing is
prohibited by law
/nder Article $%'0 of the (ivil (ode, if the
borrower of loan pays interest when there has been no stipulation
therefor, the provisions of the (ivil (ode concerning solutio indebiti
shall be applied
Article -$&1 of the (ivil (ode e"plains the
principle of solutio indebiti 2aid provision provides that if something
is received when there is no right to demand it, and it was unduly
delivered through mistake, the obligation to return it arises In such a
case, a creditor-debtor relationship is created under a .uasi-contract
whereby the payor becomes the creditor who then has the right to
demand the return of payment made by mistake, and the person who
has no right to receive such payment becomes obligated to return the
same !he .uasi-contract of solutio indebiti harks back to the ancient
principle that no one shall enrich himself un3ustly at the e"pense of
another
!he principle ofsolutio indebiti applies where *$+
a payment is made when there e"ists no binding relation between the
payor, who has no duty to pay, and the person who received the
payment, and *-+ the payment is made through mistake, and not
through liberality or some other cause
4e have held that the principle of solutio indebiti
applies in case of erroneous payment of undue interest
It was duly established that respondent paid
interest to petitioner 5espondent was under no duty to make such
payment because there was no e"press stipulation in writing to that
effect !here was no binding relation between petitioner and
respondent as regards the payment of interest !he payment was
clearly a mistake 2ince petitioner received something when there
was no right to demand it, he has an obligation to return it
LI&4)'N VS C'
Gr. No. 1,:655, 2ebr#ar& 12, 2002
Facts:
Peiioners <olomeo Li'#an an" Leoni"as "ela
Llana obaine" a loan from privae respon"en 4ec#ri&
!an- an" <r#s Compan&.
Peiioners e%ec#e" a promissor& noe o pa&
he s#m loane" *ih an ineres of 1..1:9S per ann#m
#pon ma#ri& an" o pa& a penal& of .S ever& monh
on he o#san"in' principal an" ineres in case of
"efa#l.
Dn ma#ri& of he obli'aion, peiioners faile"
o sele he "eb "espie several "eman"s from he
ban-.
ConseA#enl&, he ban- (le" a complain for
recover& of he "#e amo#n.
)fer rial of he case, he <rial co#r r#le" in
favo#r of he !an-, or"erin' peiioners o pa& he
respon"en he s#m of P114,416.00 *ih ineres
hereon a he rae of 1..1:9S per ann#m an" .S per
monh penal& char'e amon' ohers.
Dn appeal of he case, peiioners pra&e" for
he re"#cion of he .S sip#lae" penal& for bein'
#nconscionable.
<he Co#r of )ppeals r#le" ha in he ineres
of G#sice an" p#blic polic&, a penal& of ,S per monh
or ,6S per ann#m *o#l" s#Jce. !# sill, peiioners
"isp#e he sai" "ecision.
Issue:
>heher or no he 1..1:9S ineres an" he penal& of
hree 0,S1 percen per monh or hir&-si% 0,6S1
percen per ann#m impose" b& privae respon"en
ban- on peiionersM loan obli'aion are e%orbian,
iniA#io#s an" #nconscionable.
Held:
<he A#esion of *heher a penal& is reasonable or
iniA#io#s can be parl& s#bGecive an" parl& obGecive.
3s resol#ion *o#l" "epen" on s#ch facors as, b# no
necessaril& con(ne" o, he &pe, e%en an" p#rpose
of he penal&, he na#re of he obli'aion, he mo"e
of breach an" is conseA#ences, he s#pervenin'
realiies, he san"in' an" relaionship of he paries,
an" he li-e, he applicaion of *hich, b& an" lar'e, is
a""resse" o he so#n" "iscreion of he co#r. <he
essence or raionale for he pa&men of ineres is no
e%acl& he same as ha of a s#rchar'e or a penal&. )
penal& sip#laion is no necessaril& precl#sive of
ineres. >ha ma& G#sif& a co#r in no allo*in' he
cre"ior o impose f#ll s#rchar'es an" penalies,
"espie an e%press sip#laion herefor in a vali"
a'reemen, ma& no eA#all& G#sif& he non-pa&men or
re"#cion of ineres. 3n"ee", he ineres prescribe" in
loan (nancin' arran'emens is a f#n"amenal par of
he ban-in' b#siness an" he core of a ban-Os
e%isence. <he Co#r of )ppeals, e%ercisin' is 'oo"
G#"'men in he insan case, has ri'hl& re"#ce" he
penal& ineres from .S a monh o ,S a monh.
Issue #1:
>DN he penal& cla#se #nconscionable.
Held:
No. b# re"#ce" "#e o parial performance. 4C
a'ree" *ih C) ha i ma& be re"#ce" "#e o parial
performance an" o allo* peiioners o (nall& sele
he obli'aion. 0)r. 1229 CC1
Penal& Cla#se; )ccessor& #n"era-in' o
ass#me 'reaer liabili& on he par of an obli'or in
case of breach of an obli'aion.
2#ncion of Penal& Cla#se; <o sren'hen he
coercive force of he obli'aion an" o provi"e, in
e9ec, for *ha co#l" be he liA#i"ae" "ama'es
res#lin' from s#ch a breach.
Issue #2:
>DN he 1.S per ann#m ineres
#nreasonable.
Held:
No. <he ineres on is face is no e%cessive.
<he essence or raionale for he pa&men of ineres,
A#ie ofen referre" o as cos of mone&, is no e%acl&
he same as ha of a s#rchar'e or a penal&.
) penal& sip#laion is no necessaril&
precl#sive of ineres, if here is an a'reemen o ha
e9ec, he *o bein' "isinc conceps *hich ma&
separael& be "eman"e".
>ha ma& G#sif& a co#r in no allo*in' he
cre"ior o impose f#ll s#rchar'es an" penalies,
"espie an e%press sip#laion herefor in a vali"
a'reemen, ma& no eA#all& G#sif& he non-pa&men or
re"#cion of ineres. 3n"ee", he ineres prescribe" in
loan (nancin' arran'emens is a f#n"amenal par of
he ban-in' b#siness an" he core of a ban-Os
e%isence.
Issue ##:
>DN he e%ec#ion of he mor'a'e novae he
conrac.
Held:
Peiioners ac-no*le"'e ha he real esae
mor'a'e conrac "oes no conain an& e%press
sip#laion b& he paries inen"in' i o s#perse"e he
e%isin' loan a'reemen be*een he peiioners an"
he ban-. Hespon"en ban- has correcl& pos#lae"
ha he mor'a'e is b# an accessor& conrac o
sec#re he loan in he promissor& noe.
8%incive novaion reA#ires, (rst, a previo#s
vali" obli'aionP second, he a'reemen of all he
paries o he ne* conracP third, he e%in'#ishmen
of he obli'aionP an" fourth, he vali"i& of he ne*
one. 3n or"er ha an obli'aion ma& be e%in'#ishe" b&
anoher *hich s#bsi#es he same, i is imperaive
ha i be so "eclare" in #neA#ivocal erms, or ha he
ol" an" he ne* obli'aion be on ever& poin
incompaible *ih each oher. )n obli'aion o pa& a
s#m of mone& is no e%incivel& novae" b& a ne*
insr#men *hich merel& chan'es he erms of
pa&men or a""in' compaible covenans or *here he
ol" conrac is merel& s#pplemene" b& he ne* one.
>hen no e%presse", incompaibili& is reA#ire" so as
o ens#re ha he paries have in"ee" inen"e" s#ch
novaion "espie heir fail#re o e%press i in
cae'orical erms. <he incompaibili&, o be s#re,
sho#l" a-e place in an& of he essenial elemens of
he obli'aion, i.e., 011 he G#ri"ical relaion or ie, s#ch
as from a merecommodatum o lease of hin's, or from
negotiorum gestio o a'enc&, or from a mor'a'e o
anichresis, or from a sale o one of loanP 021 he obGec
or principal con"iions, s#ch as a chan'e of he na#re
of he presaionP or 0,1 he s#bGecs, s#ch as he
s#bsi#ion of a "ebor or he s#bro'aion of he
cre"ior. 8%incive novaion "oes no necessaril& impl&
ha he ne* a'reemen sho#l" be complee b& iselfP
cerain erms an" con"iions ma& be carrie", e%pressl&
or b& implicaion, over o he ne* obli'aion.
4CPB VS S'54EL 6 BEL4SO
Gr. No. 1.9912, )#'#s 15, 2005
Fact:
Peiion for Hevie* on Ceriorari "eclarin' voi"
he ineres rae provi"e" in he promissor& noes
e%ec#e" b& he respon"ens 4po#ses 4am#el an"
D"ee !el#so 0spo#ses !el#so1 in favor of peiioner
Enie" Cocon# Planers !an- 0ECP!1.
ECP! 'rane" he spo#ses !el#so a
Promissor& Noes Line #n"er a Cre"i )'reemen
*hereb& he laer co#l" avail from he former cre"i of
#p o a ma%im#m amo#n of P1.2 /illion pesos for a
erm en"in' on 1995. <he spo#ses !el#so consi#e",
oher han heir promissor& noes, a real esae
mor'a'e over parcels of lan", as a""iional sec#ri&
for he obli'aion. <he Cre"i )'reemen *as
s#bseA#enl& amen"e" o increase he amo#n of he
Promissor& Noes Line o a ma%im#m of P2.,. /illion
pesos an" o e%en" he erm hereof o 2ebr#ar&
199:.
Dn ,0 )pril 1995, he pa&men of he principal
an" ineres of he laer *o promissor& noes *ere
"ebie" from he spo#ses !el#soMs acco#n *ih ECP!P
&e, a consoli"ae" loan for P1., /illion *as a'ain
release" o he spo#ses !el#so #n"er one promissor&
noe *ih a "#e "ae of 2: 2ebr#ar& 199:. <o
compleel& avail hemselves of he P2.,. /illion cre"i
line e%en"e" o hem b& ECP!, he spo#ses !el#so
e%ec#e" *o more promissor& noes for a oal of
P,.0,000.00. Co*ever, he spo#ses !el#so alle'e"
ha he amo#ns covere" b& hese las *o promissor&
noes *ere never release" or cre"ie" o heir acco#n
an", h#s, claime" ha he principal in"ebe"ness *as
onl& P2 /illion.
<he spo#ses !el#so, ho*ever, faile" o ma-e
an& pa&men of he fore'oin' amo#ns.
Dn 2 4epember 199:, ECP! "eman"e" ha
he spo#ses !el#so pa& heir oal obli'aion of
P2,9,2,.4,.00 pl#s 2.S aorne&Ms fees, b# he
spo#ses !el#so faile" o compl& here*ih. Dn 2:
@ecember 199:, ECP! foreclose" he properies
mor'a'e" b& he spo#ses !el#so o sec#re heir cre"i
line, *hich, b& ha ime, alrea"& balloone" o
P,,5:4,60,.00.
Dn 9 2ebr#ar& 1999, he spo#ses !el#so (le" a
Peiion for )nn#lmen, )cco#nin' an" @ama'es
a'ains ECP! *ih he H<C of /a-ai Ci&.
<rial co#r "eclare" in is G#"'men ha; he
ineres rae #se" b& VECP!W voi", he foreclos#re an"
4heri9Ms Ceri(cae of 4ale voi", ECP! is or"ere" o
re#rn o Vhe spo#ses !el#soW he properies s#bGec of
he foreclos#re, ECP! o pa& Vhe spo#ses !el#soW he
amo#n of .0R b& *a& of aorne&Ms fees,ECP! o pa&
he coss of s#i an" 4po#ses !el#soW are hereb&
or"ere" o pa& VECP!W he s#m of P1,.60,,0:.00.
Co#r of )ppeals aJrme" <rial co#rOs "ecision
s#bGec o he mo"i(caion ha "efen"an-appellan
ECP! is no liable for aorne&Ms fees or he coss of
s#i.
Issue:
>DN ineres rae sip#lae" *as voi".
Held:
Fes, sip#lae" ineres rae is voi" beca#se i
conravenes on he principle of m##ali& of conracs
an" i violaes he <r#h in len"in' )c. <he provision
sain' ha he ineres shall be a he Krae in"icaive
of @!@ reail rae or as "eermine" b& he !ranch
Cea"L is in"ee" "epen"en solel& on he *ill of
peiioner ECP!.
En"er s#ch provision, peiioner ECP! has *o
choices on *ha he ineres rae shall be; 011 a rae
in"icaive of he @!@ reail raeP or 021 a rae as
"eermine" b& he !ranch Cea". )s ECP! is 'iven his
choice, he rae sho#l" be cae'oricall& "eerminable
in boh choices. 3f eiher of hese *o choices presens
an oppor#ni& for ECP! o (% he rae a *ill, he ban-
can easil& choose s#ch an opion, h#s ma-in' he
enire ineres rae provision violaive of he principle
of m##ali& of conracs.
3n a""iion, he promissor& noes, he copies of
*hich *ere presene" o he spo#ses !el#so afer
e%ec#ion, are no s#Jcien noi(caion from ECP!. )s
earlier "isc#sse", he ineres rae provision herein
"oes no s#Jcienl& in"icae *ih paric#lari& he
ineres rae o be applie" o he loan covere" b& sai"
promissor& noes *hich is reA#ire" in <H#h in Len"in'
)c.
Issue #2:
>heher or no 4po#ses !el#so are s#bGec o 12S
ineres an" compo#n"in' ineres sip#laions even if
"eclare" amo#n b& ECP! *as e%cessive.
Held:
Fes. @efa#l commences #pon G#"icial or
e%raG#"icial "eman". <he e%cess amo#n in s#ch a
"eman" "oes no n#llif& he "eman" iself, *hich is
vali" *ih respec o he proper amo#n.
<here bein' a vali" "eman" on he par of
ECP!, albei e%cessive, he spo#ses !el#so are
consi"ere" in "efa#l *ih respec o he proper
amo#n an", herefore, he ineress an" he penalies
be'an o r#n a ha poin. )s re'ar"s he a*ar" of
12S le'al ineres in favor of peiioner, he H<C
ac#all& reco'ni$e" ha sai" le'al ineres sho#l" be
impose", h#s; K<here bein' no vali" sip#laion as o
ineres, he le'al rae of ineres shall be char'e".L
3 seems ha he H<C ina"verenl& overloo-e"
is non-incl#sion in is comp#aion. 3 m#s li-e*ise
#phol" he conrac sip#laion provi"in' he
compo#n"in' of ineres. <he provisions in he Cre"i
)'reemen an" in he promissor& noes provi"in' for
he compo#n"in' of ineres *ere neiher n#lli(e" b&
he H<C or he Co#r of )ppeals, nor assaile" b& he
spo#ses !el#so in heir peiion *ih he H<C. <he
compo#n"in' of ineress has f#rhermore been
"eclare" b& his Co#r o be le'al.
Issue ##:
>heher or no foreclos#re *as voi".
Held:
No. <he foreclos#re procee"in's are vali" since here
*as a vali" "eman" ma"e b& ECP! #pon he spo#ses
!el#so. @espie bein' e%cessive, he spo#ses !el#so
are consi"ere" in "efa#l *ih respec o he proper
amo#n of heir obli'aion o ECP! an", h#s, he
proper& he& mor'a'e" o sec#re s#ch amo#ns ma&
be foreclose".ConseA#enl&, procee"s of he
foreclos#re sale sho#l" be applie" o he e%en of he
amo#ns o *hich ECP! is ri'hf#ll& enile".
C'(PO VS CH4' 6 D8 N&
Gr. No. 1.055,, 4epember ,0, 200.
Facts:
Cerein peiioner spo#ses @avi" Carpo an"
Hechil"a Carpo conrace" a loan from 8leanor Ch#a
an" 8lma @& N' for a cerain s#m of mone& pa&able
*ihin si% 061 monhs *ih an ineres rae of si%
percen 06S1 per monh sec#re" b& a mor'a'e" of he
spo#ses Carpo of heir resi"enial ho#se an" lo.
Peiioners faile" o pa& he loan #pon "eman".
ConseA#enl&, he real esae mor'a'e *as
e%raG#"iciall& foreclose", mor'a'e" proper& sol" a a
p#blic a#cion, an" he ho#se an" lo *as a*ar"e" o
respon"ens, *ho *ere he onl& bi""ers.
Enable o e%ercise heir ri'h of re"empion b&
peiioners, a ceri(cae of sale *as iss#e" in he name
of respon"ens.
Co*ever, peiioners conin#e" o occ#p& he
sai" ho#se an" lo, h#s respon"ens (le a peiion for
*ri of possession *hich *as 'rane" b& he <rial Co#r.
Peiioners (le" a complain for ann#lmen of
real esae mor'a'e an" he conseA#en foreclos#re
procee"in's claimin' ha he rae of ineres
sip#lae" in he principal loan a'reemen is clearl& n#ll
an" voi" for bein' e%cessive, iniA#io#s,
#nconscionable an" e%orbian.
ConseA#enl&, he& also ar'#e ha he n#lli&
of he a'ree" ineres rae a9ecs he vali"i& of he
real esae mor'a'e.
Issue:
>heher or no he a'ree" rae of ineres of 6S per
monh or 52S per ann#m is so e%cessive, iniA#io#s,
#nconscionable an" e%orbian ha i sho#l" have been
"eclare" n#ll an" voi".
Held:
3n a lon' line of cases, he 4#preme Co#r has
invali"ae" similar sip#laions on ineres raes for
bein' e%cessive, iniA#io#s, #nconscionable an"
e%orbian. P#rs#an o he free"om of conrac
principle embo"ie" in )ricle 1,06 of he Civil Co"e,
conracin' paries ma& esablish s#ch sip#laions,
cla#ses, erms an" con"iions as he& ma& "eem
convenien, provi"e" he& are no conrar& o la*,
morals, 'oo" c#soms, p#blic or"er, or p#blic polic&. 3n
he or"inar& co#rse, he co"al provision ma& be
invo-e" o ann#l he e%cessive sip#lae" ineres. 3n
he case a bar, he sip#lae" ineres rae is 6S per
monh, or 52S per ann#m. !& he san"ar"s se b&
G#rispr#"ence, his sip#laion is similarl& invali".
Issue #1:
>DN he invali"i& of he sip#laion on ineres
carries *ih i he invali"i& of he principal obli'aion.
Held:
No. <he invali"aion of he ineres rae is
con'r#en *ih he r#le ha a #s#rio#s loan
ransacion is no a complee n#lli& b# "efecive onl&
*ih respec o he a'ree" ineres. )r. 1420 CC allo*s
he severance of he ille'al erms of a "ivisible
conrac, hereb& allo*in' he le'al ones o be
enforce".
3n simple loan *ih sip#laion of #s#rio#s
ineres, he presaion of he "ebor o pa& he
principal "eb, *hich is he ca#se of he conrac 0)r.
1,.0 CC1 is no ille'al. <he ille'ali& lies onl& as o he
presaion o pa& he sip#lae" ineresP hence, bein'
separable, he laer onl& sho#l" be "eeme" voi", since
i is he onl& one ha is ille'al.
Issue #2:
>DN he ancillar& mor'a'e conrac is
ren"ere" voi" b& he invali" sip#laion on ineres
rae.
Held:
No. 4ince he principal obli'aion sill san"s
an" remains vali" an" he mor'a'e conrac "erives
is vali"i& from he vali"i& of he principal obli'aion,
he invali" sip#laion on ineres rae is similarl&
ins#Jcien o ren"er voi" he ancillar& mor'a'e
conrac.
Issue ##:
>DN he peiioners can sill assail he vali"i&
of he sip#lae" ineres raes.
Held:
No. 4ince an e%cessive sip#lae" ineres rae
ma& be voi" for bein' conrar& o p#blic polic&, an
acion o ann#l sai" ineres rae "oes no prescribe.
4#ch in"ee" is he reme"&P i is no he acion for
ann#lmen of he ancillar& real esae mor'a'e.
Noe ha he 'eneral r#le is ha an acion o
ann#l an e%cessive sip#lae" 0#s#rio#s1 ineres "oes
no provi"e, for s#ch ineres rae is voi" for bein'
conrar& o p#blic polic&. Co*ever, in his case, since
he peiioners assaile" he vali"i& of he ineres rae
onl& *hen he *ri of possession *as iss#e", he Co#r
hel" ha he peiioners slep on heir ri'hs.
S4N&';CH'N VS C'
Gr. No. 164401, =#ne 2., 200:
Facts:
Ch#a an" =acino 4#n'a forme" a parnership
o en'a'e in he mar-ein' of liA#e(e" perole#m 'as.
2or convenience, he b#siness, p#rs#e" #n"er he
name, 4hellie Gas )ppliance Cener 04hellie1, *as
re'isere" as a sole proprieorship in he name of
=acino, albei he parnership arran'emen calle" for
eA#al sharin' of he ne pro(.
)fer =acinoMs "eah , his *i"o* an" marrie"
"a#'her, peiioner 4#n'a-Chan, conin#e" *ih he
b#siness *iho# Ch#aMs consen.
Ch#aMs s#bseA#en repeae" "eman"s for
acco#nin' an" *in"in' #p *en #nhee"e", prompin'
him o (le a Complain for 3inding 4p of a 5artnership
A&airs, Accounting, Appraisal and 6ecovery of Shares
and 7amages with 3rit of 5reliminary Attachment.
H<C ren"ere" G#"'emen in favor of he
peirioner. <hen, iss#e" a Hesol#ion, reGecin' he ,m
acco#nin' repor peiioners s#bmie", *hile
approvin' he :m ne* comp#aion of claims Ch#a
s#bmie".
C) aJrme" he "ecision of he H<C e%plaine"
ha he imposiion of he 12S ineres for forbearance
of cre"i or mone& *as proper.
Issue #1:
>DN he pa&men of #nreceive" pro(s is 12S
per ann#m rae #n"er C! Circ#lar No. 416 or 6S per
ann#m #n"er )r. 2209 of he Civil Co"e .
Held:
<he 12S per ann#m rae #n"er C! Circ#lar No.
416 shall appl& onl& o loans or forbearance of mone&,
'oo"s, or cre"is, as *ell as o G#"'mens involvin'
s#ch loan or forbearance of mone&, 'oo"s, or cre"i,
*hile he 6S per ann#m #n"er )r. 2209 of he Civil
Co"e applies B*hen he ransacion involves he
pa&men of in"emniies in he concep of "ama'e
arisin' from he breach or a "ela& in he performance
of obli'aions in 'eneral,B*ih he applicaion of boh
raes rec-one" Bfrom he ime he complain *as (le"
#nil he Va"G#"'e"W amo#n is f#ll& pai".B
3n eiher insance, he rec-onin' perio" for he
commencemen of he r#nnin' of he le'al ineres
shall be s#bGec o he con"iion Bha he co#rs are
vese" *ih "iscreion, "epen"in' on he eA#iies of
each case, on he a*ar" of ineres.B
G#i"e" b& he fore'oin' r#les, he a*ar" o
Ch#a of he amo#n represenin' earne" b#
#nremie" pro(s, i.e.. PhP ,.,000 monhl&, from
=an#ar& 19:: #nil /a& ,0, 1992, m#s earn ineres a
6S per ann#m rec-one" from Dcober 5, 1995, he
ren"iion "ae of he H<C "ecision, #nil @ecember 20,
2001, *hen he sai" "ecision became (nal an"
e%ec#or&.
<hereafer, he oal of he monhl& pro(s
incl#sive of he a"" on 6S ineres shall earn 12S per
ann#m rec-one" from @ecember 20, 2001 #nil f#ll&
pai", as he a*ar" for ha iem is consi"ere" o be, b&
hen, eA#ivalen o a forbearance of cre"i. Li-e*ise,
he PhP 2.0,000 a*ar", represenin' he 'oo"*ill
val#e of he b#siness, he a*ar" of PhP .0,000 for
moral an" e%emplar& "ama'es, PhP 2.,000 aorne&Ms
fee, an" PhP 2.,000 lii'aion fee shall earn 12S per
ann#m from @ecember 20, 2001 #nil f#ll& pai".
Issue #2:
>DN he obli'aion of he peiioner is soli"ar&.
Held:
Fes. <he complain of Ch#a for *in"in' #p of
parnership a9airs, acco#nin', appraisal, an" recover&
of shares an" "ama'es is clearl& a s#i o enforce a
soli"ar& or Goin an" several obli'aion on he par of
peiioners. )s i *ere, he conin#ance of he b#siness
an" mana'emen of 4hellie b& peiioners a'ains he
*ill of Ch#a 'ave rise o a soli"ar& obli'aion, he acs
complaine" of no bein' severable in na#re. 3n"ee", i
is *ell-ni'h impossible o "ra* he line be*een *hen
he liabili& of one peiioner en"s an" he liabili& of
he oher sars. 3n his -in" of si#aion, he la* iself
imposes soli"ar& obli'aion.
)r. 1205 of he Civil Co"e h#s provi"es; Art
$-06 The concurrence of two or more creditors or of
two or more debtors in one and the same obligation
does not imply that each one of the former has a right
to demand, or that each of the latter is bound to
render, entire compliance with the prestation. There is
solidary liability only when the obligation e+pressly so
states, or when the law or the nature of the obligation
re'uires solidarity.
<he "#& of peiioners o remi o Ch#a his half
ineres an" share of he oal parnership asses
procee"s from peiionersM in"ivisible obli'aion o
ren"er an acco#nin' an" invenor& of s#ch asses.
<he nee" for he imposiion of a soli"ar& liabili&
becomes all he more prono#nce" consi"erin' he
impossibili& of A#anif&in' ho* m#ch of he
parnership asses or pro(s *as misappropriae" b&
each peiioner.