People v.

Concepcion
G.R. No. 19190 (November 29, 1922)

FACTS:
Defendant authorized an extension of credit in favor of Concepcion, a co-
partnership. Defendant’s wife was a director of this co-partnership. Defendant was found guilty of
violating Sec. 35 of Act No. 2747 which says that “The National Bank shall not, directly or indirectly, grant
loans to any of the members of the Board of Directors of the bank nor to agents of the branch banks.” This
Section was in effect in 1919 but was repealed in Act No. 2938 approved on January 30, 1921.

ISSUE:
W/N Defendant can be convicted of violating Sections of Act No. 2747, which were repealed by Act
No. 2938.

HELD:
In the interpretation and construction, the primary rule is to ascertain and give effect to the intention of
the Legislature. Section 49 in relation to Sec. 25 of Act No. 2747 provides a punishment for any person who
shall violate any provisions of the Act. Defendant contends that the repeal of these Sections by Act No.
2938 has served to take away basis for criminal prosecution. The Court holds that where an act of
the Legislature which penalizes an offense repeals a former act which penalized the same offense, such
repeal does not have the effect of thereafter depriving the Courts of jurisdiction to try, convict and
sentence offenders charged with violations of the old law.

Carolyn M. Garcia
-vs-
Rica Marie S. Thio
GR No. 154878

FACTS
Respondent Thio received from petitioner Garcia two crossed checks which amount to
US$100,000 and US$500,000, respectively, payable to the order of Marilou Santiago. According to
petitioner, respondent failed to pay the principal amounts of the loans when they fell due and so
she filed a complaint for sum of money and damages with the RTC. Respondent denied that she
contracted the two loans and countered that it was Marilou Satiago to whom petitioner lent the
money. She claimed she was merely asked y petitioner to give the checks to Santiago. She issued
the checks for P76,000 and P20,000 not as payment of interest but to accommodate petitioner’s
request that respondent use her own checks instead of Santiago’s.

RTC ruled in favor of petitioner. CA reversed RTC and ruled that there was no contract of
loan between the parties.

ISSUE
(1) Whether or not there was a contract of loan between petitioner and respondent.
(2) Who borrowed money from petitioner, the respondent or Marilou Santiago?

HELD
 (1) The Court held in the affirmative. A loan is a real contract, not consensual, and as
such I perfected only upon the delivery of the object of the contract. Upon delivery of the contract
of loan (in this case the money received by the debtor when the checks were encashed) the
debtor acquires ownership of such money or loan proceeds and is bound to pay the creditor an
equal amount. It is undisputed that the checks were delivered to respondent.

(2) However, the checks were crossed and payable not to the order of the respondent
but to the order of a certain Marilou Santiago. Delivery is the act by which the res or substance is
thereof placed within the actual or constructive possession or control of another. Although
respondent 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 amount to
Santiago.

Petition granted; judgment and resolution reversed and set aside.

Bank of the Philippines vs C.A GR no. 115324

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’s time. With this, Mrs. Vivies, Sanchez
and a certain Estrella Dumagpi, secretary of Doronilla, went to the bank to open an account
with Mrs. Vives and Sanchez as signatories. A passbook was then issued to Mrs. Vives.
Subsequently, private respondent learned that part of the money was withdrawn without
presentment of the passbook as it was his wife got hold of such. Mrs. Vives could not also
withdraw said remaining amount because it had to answer for some postdated checks issued by
Doronilla who opened a current account for Sterela and authorized the bank to debit savings.
Private respondent referred the matter to a lawyer, who made a written demand upon Doronilla
for the return of his client’s money. Doronilla issued another check for P212,000.00 in private
respondent’s favor but the check was again dishonored for insufficiency of funds.
Private respondent instituted an action for recovery of sum of money in the Regional Trial Court
(RTC) in Pasig, Metro Manila against Doronilla, Sanchez, Dumagpi and petitioner. The RTC ruled
in favor of the private respondent which was also affirmed in toto by the CA. Hence this
petition.

ISSUE: WON THE TRANSACTION BETWEEN THE DORONILLA AND RESPONDENT VIVES WAS ONE OF
SIMPLE LOAN.
HELD: NO.
A circumspect examination of the records reveals that the transaction between them was a
commodatum. Article 1933 of the Civil Code distinguishes between the two kinds of loans in
this wise:
By the contract of loan, one of the parties delivers to another, either something not consumable
so that the latter may use the same for a certain time and return it, in which case the contract
is called a commodatum; or money or other consumable thing, upon the condition that the same
amount of the same kind and quality shall be paid, in which case the contract is simply called a
loan or mutuum.
Commodatum is essentially gratuitous.
Simple loan may be gratuitous or with a stipulation to pay interest.
In commodatum, the bailor retains the ownership of the thing loaned, while in simple loan,
ownership passes to the borrower.
The foregoing provision seems 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 some instances where a
commodatum may have for its object a consumable thing. Article 1936 of the Civil Code
provides:
Consumable goods may be the subject of commodatum if the purpose of the contract is not the
consumption of the object, as when it is merely for exhibition.
Thus, if consumable goods are loaned only for purposes of exhibition, or when the intention of
the parties is to lend consumable goods and to have the very same goods returned at the end of
the period agreed upon, the loan is a commodatum and not a mutuum.
The rule is that the intention of the parties thereto shall be accorded primordial consideration
in determining the actual character of a contract. In case of doubt, the contemporaneous and
subsequent acts of the parties shall be considered in such determination.

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

Pajuyo purchased the rights over a property from Pedro Perez. Thereafter, he constructed
a house and he and his family lived there. Later, Pajuyo agreed to let Guevarra live in the
house for free provided that Guevarra maintain cleanliness and orderliness of the house.
They also agreed that Guevarra should leave upon demand. But when Pajuyo later told
Guevarra that he needed the house, Guevarra refused, hence an ejectment case was filed.

Supreme Court held that the contract is not a commodatum. “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.”

Frias v. San Diego-Sison

On 7 Dec 1990, Bobie Rose Frias and Dr. Flora San-Diego Sison entered into a MOA over Frias’property

 MOA consideration is 3M
 Sison has 6 months from the date of contract’s execution to notify Frias of her intention to purchase the property with the
improvements at 6.4M
 Prior to this 6 month period, Frias may still offer the property to other persons, provided that 3M shall be paid to Sison
including interest based on prevailing compounded bank interest + amount of sale in excess of 7M [should the property
be sold at a price greater than 7M]
 In case Frias has no other buyer within 6 months from the contract’s execution, no interest shall be charged by Sison on
the 3M
 In the event that on the 6th month, Sison would decide not to purchase the property, Frias has 6 months to pay 3M
(amount shall earn compounded bank interest for the last 6 months only)
 3M treated as a loan and the property considered as the security for the mortgage
 Upon notice of intention to purchase, Sison has 6 months to pay the balance of 3.4M (6.4M less 3M MOA consideration)
Frias received from Sison 3M (2M in cash; 1M post-dated check dated February 28, 1990, instead of 1991, which rendered
the check stale). Frias gave Sison the TCT and the Deed of Absolute Sale over the property. Sison decided not to purchase
the property, so shenotified Frias through a letter dated March 20, 1991 [Frias received it only on June 11, 1991],and Sison
reminded Frias of their agreement that the 2M Sison paid should be considered as a loan payable within 6 months. Frias
failed to pay this amount.

Sison filed a complaintfor sum of money with preliminary attachment. Sison averred that Frias tried to deprive her of the
security for the loan by making a false report of the loss of her owner’s copy of TCT, executing an affidavit of loss and by
filing a petition[1] for the issuance of a new owner’s duplicate copy. RTC issued a writ of preliminary attachment upon the
filing of a 2M bond.

RTC found that Frias was under obligation to pay Sison 2M with compounded interest pursuant to their MOA. RTC ordered
Frias to pay Sison:

 2M + 32% annual interest beginning December 7, 1991 until fully paid

 70k representing premiums paid by Sison on the attachment bond with legal interest counted from the date of this
decision until fully paid
 100k moral, corrective, exemplary damages [liable for moral damages because of Frias’ fraudulent scheme]
 100k attorney’s fees + cost of litigation
CA affirmed RTC with modification—32% reduced to 25%. CA said that there was no basis for Frias to say that the interest
should be charged for 6 months only. It said that a loan always bears interest; otherwise, it is not a loan. The interest should
commence on June 7, 1991 until fully paid, with compounded bank interest prevailing at the time [June 1991] the 2M was
considered as a loan (as certified by the bank).

ISSUES & HOLDING – Ratio only discusses topic of INTEREST (as per syllabus)
 WON compounded bank interest should be limited to 6 months as contained in the MOA. NO
 WON Sison is entitled to moral damages. YES
 WON the grant of attorney’s fees is proper, even if not mentioned in the body of the decision. NO
CA committed no error in awarding an annual 25% interest on the 2M even beyond the 6-month stipulated period. In this
case, the phrase “for the last six months only” should be taken in the context of the entire agreement.

SC notes that the agreement speaks of two (2) periods of 6 months each (see FACTS—words in bold & underline). No
interest will be charged for the 1st 6-month period [while Sison was making up her mind], but only for the 2nd 6-month period
after Sison decided not to buy the property. There is nothing in the MOA that suggests that interest will be charged for 6
months only even if it takes forever for Frias to pay the loan.

The payment of regular interest constitutes the price or cost of the use of money, and until the principal sum due is returned
to the creditor, regular interest continues to accrue since the debtor continues to use such principal amount. For a debtor to
continue in possession of the principal of the loan and to continue to use the same after maturity of the loan without payment
of the monetary interest constitutes unjust enrichment on the part of the debtor at the expense of the creditor.

CA DECISION AND RESOLUTION AFFIRMED WITH MODIFICATION—Award of attorney’s fees deleted

Facts
:1. In Oct. 1993, Hermojina Estores and Spouses Supangan entered into a Conditional Deed ofSale where
Estores offered to sell, and Spouses offered to buy a parcel of land in Cavite forP4.7M.2.
After almost 7 years and despite the payment of P3.5M by the Spouses, Estores still failedto comply with
her obligation to handle the peaceful transfer of ownership as stated in 5provisions in the contract.
3. In a letter in 2000, Spouses demanded the return of the amount within 15 days from receipt
4. In reply, Estores promised to return the same within 120 days
5. Spouses agreed but imposed an interest of 12% annually
6. Estores still failed despite demands
7. Spouses filed a complaint with the RTC against Estores and Roberto Arias (allegedly acted as Estores’
agent)
8. In Answer, Estores said they were willing to pay the principal amount but without theinterest as it was
not agreed upona.
That since the Conditional Deed of Sale provided only for the return of thedownpayment in case of breach,
they cant be liable for legal interest as well
9. RTC ruled saying that the Spouses are entitled to the interest but only at 6% per annum andalso e
ntitled to atty’s fees
10. On appeal, CA said that the issue to resolve isa.
whether it is proper to impose interest for an obligation that does not involve a loanor forbearance of
money in the absence of stipulation of the parties
11. CA affirmed RTCa. That interest should start on date of formal demand by Spouses to return the money
not when contract was executed as stated by the RTCb.
That Arias not be solidarily liable as he acted as agent only and did not expresslybind himself or exceeded
his authority
12. Estores contends.
Not bound to pay interest because the deed only provided for the return of thedownpayment in case of
failure to comply with her obligationsb.
That atty fees not proper because both RTC and CA sustained her contention that12% interest was
uncalled for so it showed that Spouses did not win13.
Spouses contend:a.
It is only fair that interest be imposed because Estores failed to return the amountupon demand and used
the money for her benefitb.
Estores failed to relocate the house outside the perimeter of the subject lot andcomplete the necessary
documentsc.
As to the fees, they claim that they were forced to litigate when Estores unjustlyheld the amount

Issue
:Is the
impositionofinterestandattorney’sfeesisproper?YES
InterestbasedonArt2209ofCC(6%)orunderCentralBankCricular416(12%)?12%
Held
:
Interest may be imposed even in the absence of stipulation in the contract.

Article2210oftheCivilCodeexpresslyprovidesthat“[i]nterest
may,inthediscretionofthecourt,
be allowed upon damages awarded for breach of contract.”

Estoresfailedonherobligationsdespitedemand.
o
She admitted that the conditions were not fulfilled and was willing to return the fullamount of P3.5M but
hasn
’t done so

She is now in default

The interest at the rate of 12% is applicable in the instant case.

Gen Rule: the applicable interest rate shall be computed in accordance with the stipulation ofthe parties

Exc: if no stipulation, applicable rate of interest shall be 12% per annum

o

When obligation arises out of a loan or forbearance of money, goods or credits

In other cases, it shall be 6%

In this case, no stipulation was made

Contract involved in this case is not a loan but a Conditional Deed of Sale.
o

No question that the obligations were not met and the return of money not made

Even if transaction was a Conditional Deed of Sale, the stipulation governing the returnof the money can be
considered as a forbearance of money which requires 12% interest

In
CrisminaGarments,Inc.v.CourtofAppeasl
,Forbearance
--
“contractualobligationoflenderor
creditortorefrainduringagivenperiodoftime,fromrequiringtheborrowerordebtortorepayaloanordebt
thendueandpayable.”

Insuchcase,“forbearanceofmoney,goodsorcredits”wlihavenodsitinctdefn
i ito
i nfroma
loan.
o

however,thephrase“forbearanceofmoney,goodsorcredits”ismeanttohaveaseparate
meaningfromaloan,otherwisetherewoud
l havebeennoneedtoaddthatphraseasaloanisalreadysuficientlydefinedintheCivilCode

Forbearanceofmoney,goodsorcreditsshoud l thereforerefertoarrangementsotherthanloanagreements,whereapersonacquiescestothetemporaryuseofhismoney,goodsorcreditspendinghappening
ofcertaineventsorfulfilmentofcertainconditions.
Estores’unwarrantedwithholdingofthemoneyamountstoforbearanceofmoneywhichcanbe
consideredasaninvoluntaryloansoratesi 12%startinginSept.2000

The award of attorney’s fees is warran

ted.

nodoubtthattheSpouseswereforcedtoiltigatetoprotecttheirinterest,
i.e
.,torecovertheirmoney.TheamountofP50,000.00moreappropriate