Saura Import &Export Co., Inc v.

DBP
G.R. No. L-24968 April 27, 1972
Facts:
Saura Inc. applied to the Rehabilitation Finance Corp (before its conversion to DBP) for a loan of 500k
secured by a first mortgage of the factory building to finance for the construction of a jute mill factory
and purchase of factory implements. RFC accepted and approved the loan application subject to some
conditions which Saura admitted it could not comply with. Without having received the amount being
loaned, and sensing that it could not at anyway obtain the full amount of loan, Saura Inc. then asked
for cancellation of the mortgage which RFC also approved. Nine years after the cancellation of the
mortgage, Saura sued RFC for damages for its non-fulfillment of obligations arguing that there was
indeed a perfected consensual contract between them.
Issue:
Was there a perfected consensual contract? Was there a real contract of loan which would warrant
recovery of damages arising out of breach of such contract?
Held:
On the first issue, yes, there was indeed a perfected consensual contract, as recognized in Article
1934 of the Civil Code. There was undoubtedly offer and acceptance in this case: the application of
Saura, Inc. for a loan of P500,000.00 was approved by resolution of the defendant, and the
corresponding mortgage was executed and registered. But this fact alone falls short of resolving the
second issue and the basic claim that the defendant failed to fulfill its obligation and the plaintiff is
therefore entitled to recover damages. The action thus taken by both partiesSaura's request for
cancellation and RFC's subsequent approval of such cancellationwas in the nature of mutual
desistance what Manresa terms "mutuodisenso" which is a mode of extinguishing obligations. It is
a concept derived from the principle that since mutual agreement can create a contract, mutual
disagreement by the parties can cause its extinguishment. In view of such extinguishment, said
perfected consensual contract to deliver did not constitute a real contract of loan.

Pajuyo v. CA
G.R. No. 146364 June 3, 2004

Facts:
Pajuyo entrusted a house to Guevara for the latter's use provided he should return the same upon
demand and with the condition that Guevara should be responsible of the maintenance of the property.
Upon demand Guevara refused to return the property to Pajuyo. The petitioner then filed an ejectment
case against Guevara with the MTC who ruled in favor of the petitioner. On appeal with the CA, the
appellate court reversed the judgment of the lower court on the ground that both parties are illegal
settlers on the property thus have no legal right so that the Court should leave the present situation
with respect to possession of the property as it is, and ruling further that the contractual relationship of
Pajuyo and Guevara was that of a commodatum.
Issue:
Is the contractual relationship of Pajuyo and Guevara that of a commodatum?
Held:
No. The Court of Appeals theory that the Kasunduan is one of commodatum is devoid of merit. In a
contract of commodatum, one of the parties delivers to another something not consumable so that the
latter may use the same for a certain time and return it. An essential feature of commodatum is that it
is gratuitous. Another feature of commodatum is that the use of the thing belonging to another is for a
certain period. Thus, the bailor cannot demand the return of the thing loaned until after expiration of
the period stipulated, or after accomplishment of the use for which the commodatum is constituted. If
the bailor should have urgent need of the thing, he may demand its return for temporary use. If the
use of the thing is merely tolerated by the bailor, he can demand the return of the thing at will, in
which case the contractual relation is called a precarium. Under the Civil Code, precarium is a kind of
commodatum. The Kasunduan reveals that the accommodation accorded by Pajuyo to Guevarra was
not essentially gratuitous. While the Kasunduan did not require Guevarra to pay rent, it obligated him
to maintain the property in good condition. The imposition of this obligation makes the Kasunduan a
contract different from a commodatum. The effects of the Kasunduan are also different from that of a
commodatum. Case law on ejectment has treated relationship based on tolerance as one that is akin
to a landlord-tenant relationship where the withdrawal of permission would result in the termination of
the lease. The tenants withholding of the property would then be unlawful.
Since Pajuyo has in his favor priority in time in holding the property, he is entitled to remain on the
property until a person who has title or a better right lawfully ejects him. Guevarra is certainly not that
person.

Garcia v. Thio,
G.R. No. 154878, March 16, 2007
Facts:
Rica Marie Thio received from CarolynGarcia a crossed check in the amount of $100,000.00 payable to
the order of Marilou Santiago. Thereafter, Carolyn received from Rica payments. Again, Rica received a
check in the amount of P500,000.00 from Carolyn and payable to the order of Marilou and payments
were again made by her representing interests. There was failure to pay the principal amounts hence,
a complaint for sum of money with damages was filed. Rica contended that she had no obligation to
her as it was Marilou who was indebted as she was merely asked to deliver the checks to Marilou and
that the check payments she issued were merely intended to accommodate Marilou. The RTC ruled in
favor of Carolyn but the CA reversed on the ground that there was no contract between Rica and
Carolyn. On appeal, the SC
ISSUE:
1.
2.

W/N there was a contract of loan between Carolyn and Rica.

Whether the debtor is liable to pay interest since there was no written agreement to pay
interest?

HELD:
1.

A loan is a real contract, not consensual, and as such is perfected only upon the delivery of the
object of the contract. This is evident in Art. 1934 of the Civil Code which provides:

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 the delivery of the object
of the contract. (Emphasis supplied)
Upon delivery of the object of the contract of loan (in this case the money received by the debtor when
the checks were encashed) the debtor acquired ownership of such money or loan proceeds and is
bound to pay the creditor an equal amount. (Naguiat v. CA, G.R. No. 118375, October 3, 2003, 412
SCRA 591).
It is undisputed that the checks were delivered to Rica. However, these checks were crossed and
payable not to the order of Rica but to the order of a certain Marilou Santiago.
The Court agrees with petitioner. Delivery is the act by which the res or substance thereof is placed
within the actual or constructive possession or control of another. (Buenaflor v. CA, G.R. No. 142021,
November 29, 2000, 346 SCRA 563). Although Rica did not physically receive the proceeds of the
checks, these instruments were placed in her control and possession under an arrangement whereby
she actually re-lent the amounts to Marilou.

2. No, because no interest shall be due unless it has been expressly stipulated in writing. (Art.
1956, NCC).

Be that as it may, while there can be no stipulated interest, there can be legal interest pursuant to
Article 2209 of the Civil Code. It is well-settled:
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. (Eusebio-Calderon v. People, G.R. No. 158495, October 21, 2004, 441 SCRA 137; Eastern
Shipping Lines, Inc. v. CA, G.R. No. 97412, July 12, 1994, 234 SCRA 78; Garcia v. Thio, G.R. No. 154878,
March 16, 2007).
Hence, Rica is liable for the payment of legal interest per annum to be computed from the date
when she received the demand letter. From the finality of the decision until it is fully paid, the amount
due shall earn interest at 12% per annum, the interim period being deemed equivalent to a
forbearance of credit. (Cabrera v. People, G.R. 150618, July 24, 2003, 407 SCRA 247).

Annabel L. Yanela

ATTY. REYNANTE VIBAL

Bachelor of Laws- CNSL

2nd Year Student

Professor
CREDIT TRANSACTION

PEOPLE vs. CONCEPCION,

44 Phil. 126, November 22, 1922
FACTS:
Venancio Concepcion, President of the Philippine National Bank and a member of the Board thereof,
authorized an extension of credit in favor of "Puno y Concepcion, S. en C. to the m anager of the
A parri bran ch of the Phi l i p pi ne Nation al B ank. "Puno y C oncep cion, S. en C. " was a copartnership where Concepcion is a partner. Subsequently, Concepcion was charged andf ound guilt y
i n the C ourt of Fi rs t I ns tanc e of C agayan with violation of s ectio n 35 of Act
N o. 2 7 4 7 . S e c t i o n 3 5 o f A c t N o . 2 7 4 7 p r o v i d e s t h a t t h e N a t i o n a l B a
n k s h a l l n o t , d i r e c t l y o r indirectly; grant loans to any of the members of the board of
directors of the bank nor to agents of the bran ch banks . Couns el f or the def ens e a rgue that
the docum ents of record do not prov e that authority to make a loan was given, but only show
the concession of a credit. They averred that the gran ting of a cre dit to the c o - partners hip
" Puno y C once pci on, S. en C . " by Venancio C once pcion, Pres id ent of the Philippine
Na ti onal B ank, i s not a "l o an" w i thin the m eaning of section 35 of Act No. 2747.
ISSUE:
Whether or not the granting of a credit of P300,000 to the co-partnership
" P u n o y C onc epci on, S. en C . " by Venancio C onc epcion, Pres ident of the Philippin e
Na ti onal B ank, a loan" within the meaning of section 35 of Act No. 2747.

HELD:
T he Suprem e C ourt rul e d i n the affi rm ative. The "credit " of an individual m eans his
ability to borrow money by virtue of the confidence or trust reposed by a lender that he will pay w hat
he m ay prom i s e. A "l o an" m eans the deliv ery by one part y and the rec eipt by the
oth er party of a given sum of money, upon an agreement, express or implied, to repay the sum
loaned, with or without interest. The concession of a "credit" necessarily involves the granting of "loans
up to the limit of the amount fixed in the "credit,"

BPI Investment Corp v CA

G.R. No.133632 February 15, 2002

FACTS:

Frank Roa obtained a loan at an interest rate of 16 1/4% per annum 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. The latter, however, was not willing to extend the old interest rate to private
respondents and proposed to grant them a new loan of P500,000 to be applied to Roas debt and
secured by the same property, at an interest rate of 20% per annum and service fee of 1% per annum
on the outstanding principal balance payable within ten years in equal monthly amortization
of P9,996.58 and penalty interest at the rate of 21% per annum per day from the date the amortization
became due and payable.
Consequently, in March 1981, private respondents executed a mortgage deed containing the
above stipulations with the provision that payment of the monthly amortization shall commence
on May 1, 1981.
On August 13, 1982, ALS and Litonjua updated Roas arrearages by paying BPIIC the sum
of P190,601.35. This reduced Roas principal balance to P457,204.90 which, in turn, was liquidated
when BPIIC applied thereto the proceeds of private respondents loan of P500,000.
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.
In June 1984, BPIIC instituted foreclosure proceedings against private respondents on the ground
that they failed to pay the mortgage indebtedness which from May 1, 1981 to June 30, 1984,
amounted to Four Hundred Seventy Five Thousand Five Hundred Eighty Five and 31/100 Pesos
(P475,585.31). On February 28, 1985, ALS and Litonjua filed Civil Case No. 52093 against BPIIC. They
alleged, among others, that they were not in arrears in their payment, but in fact made an
overpayment as of June 30, 1984. They maintained that they should not be made to pay amortization
before the actual release of the P500,000 loan in August and September 1982.

RTC: in favor of ALS and Litonjua and against BPIIC that the loan granted by BPI to ALS and
Litonjua was only in the principal sum of P464,351.77 and awarding moral damages,
exemplary damages and attorneys fees for the publication

CA: Affirmed reasoning that a simple loan is perfected upon delivery of the object of the
contract which is on September 13, 1982

ISSUE:
W/N the contract of loan was perfected only on September 13, 1982 or the second release of the loan

HELD:
YES. AFFIRMED WITH MODIFICATION as to the award of damages.
The obligation to pay commenced only on October 13, 1982, a month after the perfection of the
contract. The contract of loan involves a reciprocal obligation, wherein the obligation or promise of

each party is the consideration for that of the other. It is a basic principle in reciprocal obligations that
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. Consequently, petitioner could only demand for the payment of the
monthly amortization after September 13, 1982 for it was only then when it complied with its
obligation under the loan contract.
BPIIC was negligent in relying merely on the entries found in the deed of mortgage, without
checking and correspondingly adjusting its records on the amount actually released and the date when
it was released. Such negligence resulted in damage for which an award of nominal damages should
be given .

Producers Bank of the Philippines vs CA

G.R. No. 115324, February 19, 2003
Facts:

Sometime in 1979, private respondent Franklin Vives was asked by his neighbor and friend Angeles
Sanchez to help her friend and townmate, Col. Arturo Doronilla, in incorporating his business, the
Sterela Marketing and Services (Sterela for brevity). Specifically, Sanchez asked private respondent to
deposit in a bank a certain amount of money in the bank account of Sterela for purposes of its
incorporation. She assured private respondent that he could withdraw his money from said account
within a month time.

Relying on the assurances and representations of Sanchez and Doronilla, Vives issued a check of
P200,000 in favor of Sterela and deposited the same into Sterelas newly-openedbank account (the
passbook was given to the wife of Vives and the passbook had an instruction that no
withdrawals/deposits will be allowed unless the passbook ispresented).
Later on, Vives learned that Sterela was no longer holding office in the address previously given to him.
He later found out that the funds had already been withdrawn leaving onlya balance of P90,000. The
Vives spouses tried to withdraw the amount, but it was unable to since the balance had to answer for certain
postdated checks issued by Doronilla.
Doronilla made various tenders of check in favor of Vives in order to pay his debt. All of which were
dishonored.
Hence, Vives filed an action for recovery of sum against Doronilla, Sanchez, Dumagpiand Producers Bank.
Issue/s:
(1)WON the transaction is a commodatum or a mutuum.
(2) WON the fact that there is an additional P 12,000 (allegedly representing interest) in the amount to
be returned to Vives converts the transaction from commodatum tomutuum. NO.
(3)WON Producers Bank is solidarily liable to Vives, considering that it was not privy tothe transaction
between Vives and Doronilla. YES.
Held/Ratio:
1.

CC. 1933 (the provision distinguishing between the two kinds of loans) seem to imply that if
the subject of the contract is a consumable thing, such as money, the contract would be a
mutuum. However, there are instances when a commodatum may have for its object a
consumable thing. Such can be found in CC 1936 which states that consumable goods may
be the subject of commodatum if the purpose of the contractis not the consumption of the
object, as when it is merely for exhibition. In this case, the intention of the parties was merely
for exhibition. Vives agreed to deposit his money in Strelas account specifically for purpose of
making it appear that Streal had sufficient capitalization for incorporation, with the promise
that the amount should be returned.

2.

Doronillas attempts to return to private respondent the amount of P200,000.00 which the latter
deposited in Sterelas account together with an additional P12,000.00, allegedly representing
interest on the mutuum, did not convert the transaction from a commodatum into
a mutuum because such was not the intent of the parties and because the
additionalP12,000.00 corresponds to the fruits of the lending of the P200,000.00. Article 1935
of the Civil Code expressly states that [t]he bailee in commodatum acquires the use of the
thing loaned but not its fruits. Hence, it was only proper for Doronilla to remit to private
respondent the interest accruing to the latters money deposited with petitioner.

3.

Deposits and withdrawals must be made by the depositor personally or upon his written
authority duly authenticated, and neither a deposit nor a withdrawal will be permitted
except upon the production of the depositor savings bank book in which will be
entered by the Bank the amount deposited or withdrawn. [30]

Said rule notwithstanding, Doronilla was permitted by petitioner, through Atienza, the Assistant
Branch Manager for the Buendia Branch of petitioner, to withdraw therefrom even without presenting
the passbook (which Atienza very well knew was in the possession of Mrs. Vives), not just once, but
several times. Both the Court of Appeals and the trial court found that Atienza allowed said
withdrawals because he was party to Doronillas scheme of defrauding private respondent:

PANTALEON VS AMERICAN EXPRESS

G.R. No. 174269, May 8 2009

FACTS:

After the Amsterdam incident that happened involving the delay of American Express Card to approve
his credit card purchases worth US$13,826.00 at the Coster store, Pantaleon commenced a complaint
for moral and exemplary damages before the RTC against American Express. He said that he and his
family experienced inconvenience and humiliation due to the delays in credit authorization. RTC
rendered a decision in favor of Pantaleon. CA reversed the award of damages in favor of Pantaleon,
holding that AmEx had not breached its obligations to Pantaleon, as the purchase at Coster deviated
from Pantaleon's established charge purchase pattern.

ISSUE:
1. Whether or not AmEx had committed a breach of its obligations to Pantaleon.
2. Whether or not AmEx is liable for damages.

RULING:
Yes. Notwithstanding the popular notion that credit card purchases are approved
"within seconds," there really is no strict, legally determinative point of demarcation on how long must
it take for a credit card company to approve or disapprove a customers purchase, much less one
specifically contracted upon by the parties. Yet this is one of those instances when "youd know it when
youd see it," and one hour appears to be an awfully long, patently unreasonable length of time to
approve or disapprove a credit card purchase. It is long enough time for the customer to walk to a
bank a kilometer away, withdraw money over the counter, and return to the store.
It should be emphasized that the reason why petitioner is entitled to damages is not simply
because respondent incurred delay, but because the delay, for which culpability lies under Article
1170, led to the particular injuries under Article 2217 of the Civil Code for which moral damages are
remunerative.26 Moral damages do not avail to soothe the plaints of the simply impatient, so this
decision should not be cause for relief for those who time the length of their credit card transactions
with a stopwatch. The somewhat unusual attending circumstances to the purchase at Coster that
there was a deadline for the completion of that purchase by petitioner before any delay would redound
to the injury of his several traveling companions gave rise to the moral shock, mental anguish,
serious anxiety, wounded feelings and social humiliation sustained by the petitioner, as concluded by
the RTC.27Those circumstances are fairly unusual, and should not give rise to a general entitlement for
damages under a more mundane set of facts.