Frank Roa obtained a loan from Ayala Investment and Development Corporation

(AIDC), the predecessor of petitioner BPIIC, for the construction of a house on his lot
in New Alabang Village, Muntinlupa. Said house and lot were mortgaged to AIDC to
secure the loan. Sometime in 1980, Roa sold the house and lot to private
respondents ALS and Antonio Litonjua for P850, 000. They paid P350, 000 in cash
and assumed the P500, 000 balance of Roas indebtedness with AIDC. AIDC was not
willing to extend the old interest rate to private respondents and proposed to grant
them a new loan of P500, 000 with higher interest to apply to Roas debt.
In March 1981, private respondents executed a mortgage deed.
On September 13, 1982, BPIIC released to private respondents P7, 146.87,
purporting to be what was left of their loan after full payment of Roas loan.
BPIIC instituted foreclosure proceedings against private respondents on the ground
that they failed to pay the mortgage indebtedness.
On Feb. 28, 1985, ALS and Litonjua filed a case against BPIIC alleging that they were
not in arrears in their payment, but they in fact made an overpayment as of June
30, 1984. They contend that they should not be made to pay amortization before
the actual release of the P500, 000 loan in Aug. and Sept. 1982.
The Trial Court ruled in favor of the private respondent and dismissed the
foreclosure. Court of Appeals affirmed the decision.
Issue:
Whether or not the contract of loan is a consensual contract
Held:
No. A loan contract is not a consensual contract but a real contract. It is perfected
only upon the delivery of the object of the contract. A perfected consensual contract
can give rise to an action for damages. However, said contract does not constitute
the real contract of loan which requires the delivery of the object of the contract for
its perfection and which gives rise to obligations only on the part of the borrower.
In this case, the loan contract was only perfected on Sept. 13, 1982, which was the
second release of the loan. The payment of amortization should accrue from the
time BPIIC released the loan amount to ALS and Litonjua because it was only at that
moment the loan contract was perfected.
A contract of loan involves a reciprocal obligation, wherein the obligation or promise
of each party is the consideration for that of the other. In reciprocal obligations
neither party incurs in delay, if the other does not comply or is not ready to comply
in a proper manner with what is incumbent upon him. There is default when the one
party fulfill his obligation and demand for the obligation of the other party and fails.
Thus, BPIIC could only demand payment of amortization after Sept. 13, 1982 for it
was only then that it complied with its obligation under the loan contract. The
starting date for computing the amount is Oct. 13, 1982 and not May 1, 1981.

Facts:
David invested with the Nation Savings and Loan Association, (NSLA) .David was
induced into making investments by Robert Marshall an Australian national who was
allegedly a close associate of the petitioners who are NSLA officials. March 21, 1981
NSLA was placed under receivership by the Central Bank.
Petitioners Guingona and Martin, upon the request of private respondent
David, assumed the obligation of the bank to private respondent David by executing
on June 17, 1981 a joint promissory note in favor of private respondent. David
received a report that only a portion of his investments was entered in the NSLA
records.
On December 1981, David charged petitioners with estafa and violation of Central
Bank Circular No. 364 and related regulations on foreign exchange transactions.
Petitioners moved to dismiss the charges against them for lack of jurisdiction
because Davids claims allegedly comprised a purely civil obligation.
Issue:
Whether or not the contract between David and NLSA is a contract of loan and not a
contract of deposit
Held:
Yes. It must be pointed out that when private respondent David invested his money
deposits with the aforesaid bank, the contract that was perfected was a contract of
simple loan or mutuum and not a contract of deposit. Thus, Article 1980 of the New
Civil Code provides that:
Article 1980. Fixed, savings, and current deposits of-money in banks and similar
institutions shall be governed by the provisions concerning simple loan.
Hence, the relationship between the private respondent and the Nation Savings and
Loan Association is that of creditor and debtor; consequently, the ownership of the
amount deposited was transmitted to the Bank upon the perfection of the contract
and it can make use of the amount deposited for its banking operations, such as to
pay interests on deposits and to pay withdrawals. While the Bank has the obligation
to return the amount deposited, it has, however, no obligation to return or deliver
the same money that was deposited.

Facts:
Petitioner Dario Nacar filed a complaint for constructive dismissal before the
Arbitration Branch of the National Labor Relations Commission (NLRC) against
respondents Gallery Frames (GF) and/or Felipe Bordey, Jr.
The Labor Arbiter rendered a Decision in favor of petitioner and found that he was
dismissed from employment without a valid or just cause. Petitioner was awarded
backwages and separation pay in lieu of reinstatement in the amount
of P158,919.92.
NLRC sustained the decision of the Labor Arbiter. Respondents filed a motion for
reconsideration, but it was denied.
Respondents then sought relief before the Supreme Court. Finding no reversible
error on the part of the CA.
After the finality of the SC decision, Nacar filed a motion before the LA for
recomputation as he alleged that his backwages should be computed from the time
of his illegal dismissal (January 24, 1997) until the finality of the SC decision (May
27, 2002) with interest. The LA denied the motion as he ruled that the reckoning
point of the computation should only be from the time Nacar was illegally dismissed
)January 24, 1997) until the decision of the LA (October 15, 1998). The LA reasoned
that the said date should be the reckoning point because Nacar did not appeal
hence as to him, that decision became final and executory.
Issue:
Whether or not the Labor Arbiter is correct
Held:
No.
There are two parts when it comes to illegal dismissal.
The first is that part of the decision that cannot now be disputed because it has
been confirmed with finality. This is the finding of the illegality of the dismissal and
the awards of separation pay in lieu of reinstatement, backwages, attorney's fees,
and legal interests.
The second part is the ruling on the award of backwages and/or separation pay. For
backwages, it will be computed from the date of illegal dismissal until the date of
the decision of the Labor Arbiter. But if the employer appeals, then the end date
shall be extended until the day when the appellate courts decision shall become
final. Hence, as a consequence, the liability of the employer, if he loses on appeal,
will increase this is just but a risk that the employer cannot avoid when it
continued to seek recourses against the Labor Arbiters decision. This is also in
accordance with Article 279 of the Labor Code.

Anent the issue of award interest in the form of actual or compensatory damages,
the Supreme Court ruled that the old case of Eastern Shipping Lines vs CA is already
modified by the promulgation of the Bangko Sentral ng Pilipinas Monetary Board
Resolution No. 796 which lowered the legal rate of interest from 12% to 6%.
Specifically, the rules on interest are now as follows:
1. Monetary Obligations ex. Loans:
a. If stipulated in writing:
a.1. shall run from date of judicial demand (filing of the case)
a.2. rate of interest shall be that amount stipulated
b. If not stipulated in writing
b.1. shall run from date of default (either failure to pay upon extra-judicial demand
or upon judicial demand whichever is appropriate and subject to the provisions of
Article 1169 of the Civil Code)
b.2. rate of interest shall be 6% per annum
2.

Non-Monetary Obligations (such as the case at bar)

a. If already liquidated, rate of interest shall be 6% per annum, demandable from

date of judicial or extra-judicial
demand (Art. 1169, Civil Code)
b. If unliquidated, no interest
Except: When later on established with certainty. Interest shall still be 6% per
annum demandable from the date of judgment because such on such date, it is
already deemed that the amount of damages is already ascertained.
3. Compounded Interest
- This is applicable to both monetary and non-monetary obligations
- 6% per annum computed against award of damages (interest) granted by the
court. To be computed from the date when the courts decision becomes final and
executory until the award is fully satisfied by the losing party.
4. The 6% per annum rate of legal interest shall be applied prospectively:
- Final and executory judgments awarding damages prior to July 1, 2013 shall apply
the 12% rate;
- Final and executory judgments awarding damages on or after July 1, 2013 shall
apply the 12% rate for unpaid obligations until June 30, 2013; unpaid obligations
with respect to said judgments on or after July 1, 2013 shall still incur the 6% rate.