Credit Full Text (Feb 1, 2016)

8/20/2019 Credit Full Text (Feb 1, 2016)

1/60

Republic of the PhilippinesSUPREME COURT

Manila

FIRST DIVISION

G.R. No. L-48349 December 29, 1986

FR NC!SCO "ERRER , plainti -appellant, vs.PETROP"!L CORPOR T!ON, efen ant-appellee.

Paterno R. Canlas Law Ofices or plaintif-appellant.

CRU#, J.:

This is an appeal b! the plainti -appellant f"o# a ecision "en e"e b! thethen $ou"t of Fi"st Instance of Ri%al on a pu"e &uestion of l a'. 1

The (u )#ent appeale f"o# 'as "en e"e on the plea in)s, the pa"tieshavin) a)"ee u"in) the p"et"ial confe"ence on the factual antece ents.

The facts a"e as follo's* On Dece#be" +, , the plainti -appellant an/SSO Stan a" /aste"n. Inc., 0late" substitute b! Pet"ophil $o"po"ation1ente"e into a 23ease 4)"ee#ent2 'he"eb! the fo"#e" lease to the latte"a po"tion of his p"ope"t! fo" a pe"io of t'ent! 0561 !ea"s f"o# sai ate,sub(ect inter alia to the follo'in) con itions*

7. Rental* The 3/SS// shall pa! the 3/SSOR a "ental of Pl.86s. pe" #onth on 866 s. an a"e to be e9p"op"iate late" on0sic1 o" P+ 6 pe" #onth an Fl.86 pe" s. pe" #onth on , 7s. o" P5,7:6.5 pe" #onth o" a total of P5, 76.56 pe" #onth5,6 7 s. #o"e o" less, pa!able !ea"l! in a vance 'ithin the stt'ent! a!s of each !ea"; p"ovi e , a !ea"s a vance"ental base on P5, 76.:6 pe" #onth iscounte at 5? inte"est

pe" annu# o" a total net a#ount of P 76,5>>.8: befo"e"e)ist"ation of lease. 3ease p"e#ises shall be elive"e 'ithin 76

a!s afte" st pa"tial pa!#ent of 5.:6, the"eb! "e ucin) the

e ucte a#ount to onl! P >,>5>.67. 3

On Octobe" 8, :8, the plainti -appellant sue the efen ant-appelleefo" the su# of P >,>5>.67, 'ith inte"est, clai#in) this ha been ille)all!

e ucte f"o# hi# in violation of the Asu"! 3a'. 4 Be also p"a!e fo"#o"al a#a)es an atto"ne!Cs fees. In its ans'e", the efen ant-appelleea #itte the factual alle)ations of the co#plaint but a")ue that thea#ount e ucte 'as not usu"ious inte"est but a )iven to it fo" pa!in) the

"entals in a vance fo" ei)ht !ea"s.$

u )#ent on the plea in)s 'as"en e"e fo" the efen ant. 6

Plainti -appellant no' p"a!s fo" a "eve"sal of that (u )#ent, insistin) thatthe lo'e" cou"t e""e in the co#putation of the inte"est collecte out ofthe "entals pai fo" the


2/60

The efen ant #aintains that the co""ect a#ount of the iscount isP >,>5>.67 an that the sa#e is not e9cessive an above that allo'e b!la'.

4s its title plainl! in icates, the cont"act bet'een the pa"ties is one oflease an not of loan. It is clea"l! eno#inate a 23/4S/ 4ER//M/NT.2No'he"e in the cont"act is the"e an! sho'in) that the pa"ties inten e aloan "athe" than a lease. The p"ovision fo" the pa!#ent of "entals in

a vance cannot be const"ue as a "epa!#ent of a loan because the"e 'asno )"ant o" fo"bea"ance of #one! as to constitute an in ebte ness on thepa"t of the lesso". On the cont"a"!, the efen ant-appellee 'as

ischa")in) its obli)ation in a vance b! pa!in) the ei)ht !ea"s "entals,an it 'as fo" this a vance pa!#ent that it 'as )ettin) a "ebate o"

iscount.

The p"ovision fo" a iscount is not unusual in lease cont"acts. 4s to its vali it!, it is settle that the pa"ties #a! establish such stipulations,clauses, te"#s an con ition as the! #a! 'ant to inclu e; an as lon) assuch a)"ee#ents a"e not cont"a"! to la', #o"als, )oo custo#s, public

polic! o" public o" e", the! shall have the fo"ce of la' bet'een the#.8

The"e is no usu"! in this case because no #one! 'as )iven b! theefen ant-appellee to the plainti -appellant, no" i it allo' hi# to use its

#one! al"ea ! in his possession. 9 The"e 'as neithe" loan no" fo"bea"ancebut a #e"e iscount 'hich the plainti -appellant allo'e the efen ant-appellee to e uct f"o# the total pa!#ents because the! 'e"e bein) #a ein a vance fo" ei)ht !ea"s. The iscount 'as in e ect a "e uction of the"entals 'hich the lesso" ha the "i)ht to ete"#ine, an an! "e uctionthe"eof, b! an! a#ount, 'oul not cont"avene the Asu"! 3a'.

The i e"ence bet'een a iscount an a loan o" fo"bea"ance is that thefo"#e" oes not have to be "epai . The loan o" fo"bea"ance is sub(ect to"epa!#ent an is the"efo"e )ove"ne b! the la's on usu"!. 1&

To constitute usu"!, 2the"e #ust be loan o" fo"bea"ance; the loan #ust beof #one! o" so#ethin) ci"culatin) as #one!; it #ust be "epa!ableabsolutel! an in all events; an so#ethin) #ust be e9acte fo" the use of the #one! in e9cess of an in a ition to inte"est allo'e b! la'.2 11

It has been hel that the ele#ents of usu"! a"e 0 1 a loan, e9p"ess o"i#plie ; 051 an un e"stan in) bet'een the pa"ties that the #one! lentshall o" #a! be "etu"ne ; that fo" such loan a )"eate" "ate o" inte"est thatis allo'e b! la' shall be pai , o" a)"ee to be pai , as the case #a! be;

an 081 a co""upt intent to ta@e #o"e than the l e)al "ate fo" the use of#one! loane . Anless these fou" thin)s concu" in eve"! t"ansaction, it issafe to a i"# that no case of usu"! can be ecla"e . 12

$once"nin) the co#putation of the e uctible iscount, the t"ial cou"tecla"e *

4s above-&uote , the C3ease 4)"ee#entC e9p"essl! p"ovi es thatthe lessee 0 efen ant1 sha) pa! the lesso" 0plainti 1 ei)ht 0>1

!ea"s in a vance "entals base on P5, 76.56 pe" #onthiscounte at 5? inte"est pe" annu#. Thus, the total "ental fo"

one-!ea" pe"io is P7+, 5.86 0P5, 76.56 #ultiplie b! 5#onths1 an that the inte"est the"ef"o# is P8,5 .8>>60P7+, 5.86 #ultiplie b! 5?1. So, the"efo"e, the total inte"estfo" the >6 #ultiplie b! ei)ht 0>1 !ea"s an not P >,>5>.67 asthe efen ant clai#e it to be.

The afo"e-&uote #anne" of co#putation #a e b! plainti is

patentl! e""oneous. It is #ost se"iousl! #islea in). Be (ustco#pute the annual iscount to be at P8, 5 .8>>6 an thensi#pl! #ultiplie it b! ei)ht 0>1 !ea"s. Be i not ta@e intoconsi e"ation the na@e fact that the "entals ue on the ei)ht !ea"'e"e pai in a vance b! seven 0:1 !ea"s, the "entals ue on theseventh !ea" 'e"e pai in a vance b! si9 0 1 !ea"s, those ue onthe si9th !ea" b! , 8+.88 0P8, 5 .8> #ultiplie b! 5> !ea"s1 as the iscount.Bo'eve", efen ant 'as #ost fai" to plainti . It i not si#pl!#ultipl! the annual "ental iscount b! 5> !ea"s. It co#pute thetotal iscount 'ith the p"incipal i#inishin) #onth to #onth assho'n b! 4nne9 C4C of its #e#o"an u#. This is 'h! the total

iscount a#ount to onl! P >,>5>.67.

The alle)ation of plainti that efen ant #a e the co#putation ina co#poun e #anne" is e""oneous. 4lso afte" #a@in) i ts o'nco#putations an afte" e9a#inin) closel! efen antCs 4nne9 C4C of its #e#o"an u#, the cou"t


3/60

4)"ee#ent to the e ect that the "entals shall be Cpa!able !ea"l! ina vance 'ithin the st 56 a!s of each !ea". C

e o not a)"ee. The above co#putation appea"s to be too #uchtechnical #u#bo-(u#bo an coul not have been the intention of thepa"ties to the t"ansaction. Ba it been so, then it shoul have been clea"l!stipulate in the cont"act. $ont"acts shoul be inte"p"ete acco" in) tothei" lite"al #eanin) an shoul not be inte"p"ete be!on thei" obvious

inten #ent. 13

The plaint f-appellant si#pl! un e"stoo that fo" eve"! !ea" of a vancepa!#ent the"e 'oul be a e uction of 5? an this a#ount 'oul be thesa#e fo" each of the ei)ht !ea"s. The"e is no sho'in) that the int"icateco#putation applie b! the t"ial cou"t 'as e9plaine to hi# b! the

efen ant-appellee o" that he @no'in)l! accepte it.

The lo'e" cou"t, follo'in) the efen ant-appelleeCs fo"#ula, ecla"e thatthe plainti -appellant ha actuall! a)"ee to a 5? "e uction fo" a vance"entals fo" all of twenty eight !ea"s. That is absu" . It is not no"#al fo" a

pe"son to a)"ee to a "e uction co""espon in) to t'ent! ei)ht !ea"sa vance "entals 'hen all he is "eceivin) in a vance "entals is fo" onl!ei)ht !ea"s.

The e uction shall be fo" onl! ei)ht !ea"s because that 'as plainl! 'hatthe pa"ties inten e at the ti#e the! si)ne the lease a)"ee#ent.2Si#plistic2 it #a! be, as the Solicito" Eene"al esc"ibes it, but that isho' the lesso" un e"stoo the a""an)e#ent. In fact, the $ou"t 'ill "e(ecthis subse&uent #o i>.8:.

B/R/FOR/, the ecision of the t"ial cou"t is he"eb! #o i


4/60

0c1 Bol in) the po"tion of the #o"t)a)e ee /9hibit 58 "efe""in)to the estate in Supan), #unicipalit! of Huenavista, 'ith an a"eaof 776.>:77 hecta"es to be null an voi ;

0d 1 Sentencin) the plainti spouses to pa! the efen ant spousesthe a#ount of ei)hteen thousan pesos 0P >,6661 'hich is thep"incipal loane , plus t'o thousan one hun "e si9t! pesos0P5, 61, one !ea"Cs inte"est the"eon at t'elve pe" centu# 0 5?1;

0e 1 Sentencin) the plainti s to pa! the efen ants uan D.Salva o" an Re#i)ia uJi)a the su# of th"ee hun "e ei)ht!th"ee pesos an fo"t!-si9 centavos 0P7>7.8 1;

0 1 The #o"t)a)e evi ence b! /9hibit 58 bein) hel null an voi in so fa" at it "efe"s to the estate of 776.>:77 hecta"es inSupan), the efen ant spouses uan D. Salva o" an Re#i)ia

uJi)a a"e he"eb! sentence to pa! the Philippine National Han@the su# of t'ent! thousan pesos 0P56,6661 'ith inte"est the"eonat nine pe" centu# 0 ?1 f"o# the ate of the cont"act, Nove#be"

5, 5>, until full! pai ;

0g 1 4bsolvin) the plainti s f"o# the counte"clai# an the c"oss-co#plaint set up b! efen ants uan D. Salva o" an Re#i)ia

uJi)a.

ithout e9p"ess p"onounce#ent of costs. So o" e"e .0Pa)es +:an +>, Hill of /9ceptions.1

F"o# this (u )#ent an appeal 'as ta@en b! the Philippine National Han@,an b! the spouses uan D. Salva o" an Re#i)ia uJi)a.

The appellants uan D. Salva o" an 'ife #a e the follo'in) assi)n#entsof e""o"*

. In not hol in) that /9hibit D of the plainti s, o" /9hibit ofthe efen ants, is a "eal cont"act of ,666 onl!, 'ith

inte"est at t'elve pe" cent pe" annu#.

:. In not sentencin) the plainti s to pa! the efen ant spouses uan D. Salva o" an Re#i)ia uJi)a the su# of P ,586 as "entalfo" the lan lease b! sai plainti s f"o# sai efen ants, u"in)the , b! the spouses Seve"ino a!#e an 3eona" aRa#os in favo" of the spouses uan D .Salva o" an Re#i)ia

uJi)a is null an voi on account of f"au .

5. In hol in) that the #o"t)a)e ee upon the Supan) estatee9ecute on Nove#be" 5, 5>, b! the spouses uan D. Salva o"an Re#i)ia uJi)a in favo" of the Philippine National Han@ is

null an voi ; an .


5/60

7. In not absolvin) the Phil ippine National Han@ f"o# theco#plaint, 'ith costs a)ainst the plainti s.

The facts of the case as sho'n b! the evi ence a"e as follo's*

The plainti spouses o'e P"esentacion Bo . 7, 'ith inte"est at 5 pe" cent pe" annu#, pa!#ent of 'hi ch'as secu"e b! a #o"t)a)e upon the "ealt! cove"e b! t"ansfe" ce"ti0/9hibit 441, "ep"esentin) the "ental fo" t'o !ea"s.

To p"ove the 6 hecta"es of lan in pa!#ent of the "ental of

the Supan) estate lease to the#; that on Septe#be" , 5>, theefen ants to)ethe" 'ith the plainti s #a e a onation to the

#unicipalit! of Huenavista of 5+,666 s&ua"e #ete"s of the lan in Supan),evi ence b! /9hibit :; that the efen ants conve!e to sai #unicipalit!the use of the house locate the"eon, an that the plainti s ac&uiescethe"ein, an that the efen ant Salva o" pai the lan ta9 upon the estatein Supan) fo" the !ea"s 5> an 5 .

The efen ants conten that inas#uch as the plainti s "ea all saicont"acts an 'ill full @no'le )e of the contents an con itions the"eofsi)ne /9hibit D an /, 'hich a"e ee s of 1. ith "espect to the "eal intention of the pa"ties in e9ecutin) sai cont"acts, the efen ants invo@e thetesti#on! of b"o@e" 4ba!a, 'itness fo" the plainti s. The efen ants onot en! that the plainti sC


6/60

to sho' the vali it! of sai cont"acts b! the plainti sC subse&uent acts inpa!in) the lan ta9 of the Tansa lot bou)ht b! the# f"o# the efen ants;an in #o"t)a)in) sai lot seve"al ti#es in favo" of Eo ulian. The

efen ants a")ue that these acts pe"fo"#e at the ti#e of the cont"actan subse&uent the"eto in icate, acco" in) to a"ticle 5>5 of the $ivil$o e, the intention of the plainti s. 4#on) the acts pe"fo"#e b! theplainti s subse&uent to the cont"act, the efen ants point out thoseevi ence b! /9hibits 7, 8, +, , : an >, 'hich the efen ants conten

a#ount to a "ati,666 )"ante b! the latte" to the fo"#e" 'ithinte"est at 5 pe" cent pe" annu# . e a)"ee 'ith the cou"t belo', that theplainti s i not inten to sell thei" Supan) estate. It is t"ue that theplainti s 'e"e a'a"e of the contents of the cont"acts, but thep"epon e"ance of the evi ence sho's that the! si)ne the# @no'in) thatsai cont"acts i not e9p"ess thei" "eal intention, an if the! i sonot'ithstan in) this, it 'as ue to the u")ent necessit! of obtainin)fun s. The"efo"e a"ticle 5>5 of the $ivi l $o e an those co)nate the"etocannot be applie to the case befo"e us, 'he"e it su icientl! appea"s that'hat the pa"ties "eall! inten e 'as i e"ent f"o# 'hat appea"s in saicont"acts.

Plainti Seve"ino a!#e pai the lan ta9 upon the Tansa lot, acco" in) tohi#, 'ith #one! fu"nishe hi#, b! the efen ant uan D. Salva o".

4s to the #o"t)a)e of the Tansa lot, 'e he"e &uote an a opt the an 7 , Hill of /9ceptions.1

ith "espect to the onation of the 5+,666 s&ua"e #ete"s of lan inSupan) in favo" of the #unicipalit! of Huenavis ta, the evi ence sho'sthat sai )ift 'as an o e" #a e b! the plainti s in e9chan)e of thecon ition that the "esi ential pa"t of the #unicipalit! of Huenavista shoulbe t"ansfe""e to the ba""io of Supan), 'he"e sai estate of the plainti s

is situate ; the latte" havin) p"o#ise sai #unicipalit! befo"e Ma! 55,5>, that 'hen sai t"ansactions too@ place 'ith the efen ants, the!

'oul conve! a pa"t of sai estate )"atis, as also the use of the buil in) of st"on) #ate"ials locate the"eon; an this onation an cession 'as"especte b! the efen ants, bein) the ones 'ho e9ecute /9hibits : an>, in co#pliance 'ith a p"o#ise not #a e b! the#, but b! the plainti s,this act of thei"s constitutin) an open ac@no'le )#ent of the fact thatsai estate belon)e to sai plainti s.

This latte" is one of the #ost salient facts sho'in) that the "eal intentionof both pa"ties in e9ecutin) the p"incipal cont"acts "efe""e to he"etofo"e,

'as that of a loan )"ante b! the efen ants to the plainti s in thea#ount of P >,666 'ith inte"est the"eon at 5 pe" cent pe" annu#,secu"e b! a #o"t)a)e on sai estate situate in Supan) .4#on) theseci"cu#stances #a! be #entione the assesse value of the lan , 'hich,even ta@in) that of P , 56 in Ma!, 5>, is al"ea ! )"eate" than theP >,666 "eceive b! the plainti s. The fact that upon the sa#e ate 'e"ee9ecute the sale of the sai Supan) /state 0/9hibit D1, the option infavo" of the plainti s to "epu"chase sai estate 0/9hibit E1, the lease ofsai estate in favo" of sai plainti s 0/9hibit F1, an the t"ansfe" of the lotin Tansa 0/9hibit /1, in e9chan)e of the en o"se#ent o" "etu"n to the

efen ant Salva o" of his chec@ fo" P>,666 0/9hibit 51, ta@en to)ethe"'ith the "e#ain e" of the ci"cu#stances of the case, co""obo"ate an

st"en)then the conclusion set fo"th above.

The Philippine National Han@ i#pu)ns the (u )#ent appeale f"o# in sofa" as it hol s that the ee of sale of the Supan) estate is null an voion account of f"au . H! vi"tue of the fo"e)oin), it is hel that the cou"tbelo' co##itte no such e""o".

In its secon assi)n#ent of e""o" the ban@ "efe"s to the #o"t)a)e eeupon the sai estate, e9ecute in its favo".

The"e is so#e #e"it in this alle)ation of the ban@Cs althou)h sai

#o"t)a)e ou)ht not to appea" in the t"ansfe" ce"ti


7/60

the efen ants 0'hich ce"ti


8/60

T e C* e

This Petition fo" Revie' on $e"tio"a"i un e" Rule 8+ see@s to"eve"se the $ou"t of 4ppeals 0$4s1 Decision p"o#ul)ate on Ma"ch >,

> in $4-E.R. $V No. 8 5 6 entitle Lim io ,an !. llied Ban&ingCorporation et al . The $4 Decision #o i7, 7 as evi ence b! P"ovisionalReceipt No. 7+ ate Nove#be" 8, >7. 8

On Dece#be" +, >7, a pe"son clai#in) to be 3i# Sio an calle up$"istina So, an o ice" of 4llie , an inst"ucte the latte" to p"e-te"#inate3i# Sio ans #one! #a"@et place#ent, to issue a #ana)e"s chec@ "ep"esentin) the p"ocee s of the place#ent, an to )ive the chec@ to oneDebo"ah Dee Santos 'ho 'oul pic@ up the chec@. + 3i# Sio an

esc"ibe the appea"ance of Santos so that So coul easil! i entif! he". 3ate", Santos a""ive at the ban@ an si)ne the application fo"# fo" a#ana)e"s chec@ to be issue . : The ban@ issue Mana)e"s $hec@ No.67+ fo" PhP , +>, 8>.8 , "ep"esentin) the p"ocee s of 3i# Sio ans#one! #a"@et place#ent in the na#e of 3i# Sio an, as pa!ee. > Thechec@ 'as c"oss-chec@e Fo" Pa!ees 4ccount Onl! an )iven to Santos .

The"eafte", the #ana)e"s chec@ 'as eposite in the account of Filipinas$e#ent $o"po"ation 0F$$1 at "espon ent Met"opolitan Han@ an T"ust$o. 0Met"oban@1 , 6 'ith the fo")e si)natu"e of 3i# Sio an as in o"se".

/a"lie", on Septe#be" 5 , >7, F$$ ha eposite a #one! #a"@etplace#ent fo" PhP 5 #illion 'ith "espon ent P"o uce"s Han@. Santos 'asthe #one! #a"@et t"a e" assi)ne to han le F$$s account. 5 Such

eposit is evi ence b! O icial Receipt No. 7 :+ > 7 an a 3ette"ate Septe#be" 5 , >7 of Santos a "esse to 4n)ie 3a%o of F$$,

ac@no'le )in) "eceipt of the place#ent. 8 The place#ent #atu"eon Octobe" 5+, >7 an 'as "olle -ove" until Dece#be" +, >7 asevi ence b! a 3ette" ate Octobe" 5+, >7. + hen the place#ent

#atu"e , F$$ e#an e the pa!#ent of the p"ocee s of the place#ent. On Dece#be" +, >7, the sa#e ate that So "eceive the phone call

inst"uctin) he" to p"e-te"#inate 3i# Sio ans place#ent, the #ana)e"schec@ in the na#e of 3i# Sio an 'as eposite in the account of F$$,pu"po"te l! "ep"esentin) the p"ocee s of F$$s #one! #a"@et place#ent'ith P"o uce"s Han@. : In othe" 'o" s, the 4llie chec@ 'as eposite'ith Met"oban@ in the account of F$$ as P"o uce"s Han@s pa!#ent of itsobli)ation to F$$.

To clea" the chec@ an in co#pliance 'ith the "e&ui"e#ents of thePhilippine $lea"in) Bouse $o"po"ation 0P$B$1 Rules an Re)ulations,Met"oban@ sta#pe a )ua"ant! on the chec@, 'hich "ea s* 4ll p"io"en o"se#ents an o" lac@ of en o"se#ent )ua"antee . >

The chec@ 'as sent to 4llie th"ou)h the P$B$. Apon the p"esent#ent of the chec@, 4llie fun e the chec@ even 'ithout chec@in) the authenticit!of 3i# Sio ans pu"po"te in o"se#ent. Thus, the a#ount on the face of the chec@ 'as c"e ite to the account of F$$. On Dece#be" , >7, 3i# Sio an eposite 'ith 4llie a secon #one!#a"@et place#ent to #atu"e on anua"! , >8. 56 On Dece#be" 8, >7, upon the #atu"it! ate of the 8 5 oc@ete as $ivil $ase No. :+: a)ainst 4llie to "ecove" thep"ocee s of he" 8, she 'ith "e' he" secon place#ent f"o# 4llie .

http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn14http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn15http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn16http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn20http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn21http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn27http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn4http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn5http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn6http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn7http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn8http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn9http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn10http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn11http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn12http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn13http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn14http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn15http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn16http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn20http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn21http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn27


9/60

4llie 8, o" #o"e than si9 0 1 #onths afte" fun in) the chec@,

4llie info"#e Met"oban@ that the si)natu"e on the chec@ 'as fo")e .7

Thus, Met"oban@ 'ithhel the a#ount "ep"esente b! the chec@ f"o#F$$. 3ate" on, Met"oban@ a)"ee to "elease the a#ount to F$$ afte" thelatte" e9ecute an An e"ta@in), p"o#isin) to in e#nif! Met"oban@ incase it 'as #a e to "ei#bu"se the a#ount . 75

3i# Sio an the"eafte" , 8>.8 plus 5? inte"estpe" annu# f"o# Ma"ch , >8 until full! pai ;5. O" e"in) efen ant 4llie Han@ to pa! plainti thea#ount of P 66,666.66 b! 'a! of #o"al a#a)es;7. O" e"in) efen ant 4llie Han@ to pa! plainti thea#ount of P :7,: 5.56 b! 'a! of atto"ne!s fees; an ,

8. O" e"in) efen ant 4llie Han@ to pa! the costs of suit. Defen ant 4llie Han@s c"oss-clai# a)ainst efen antMet"oban@ is DISMISS/D. 3i@e'ise efen ant Met"oban@s thi" -pa"t! co#plaint asa)ainst Filipinas $e#ent $o"po"ation is DISMISS/D. Filipinas $e#ent $o"po"ations fou"th-pa"t! co#plainta)ainst P"o uce"s Han@ is also DISMISS/D. SO ORD/R/D . 7

T e Dec o+ o5 e Co r o5 77e*

4llie appeale to the $4, 'hich in tu"n issue the assaile Decisionon Ma"ch >, >, #o if!in) the RT$ Decision, as follo's*

B/R/FOR/, p"e#ises consi e"e , the ecision appeale

f"o# is MODIFI/D. u )#ent is "en e"e o" e"in) ansentencin) efen ant-appellant 4llie Han@in)$o"po"ation to pa! si9t! 0 6?1 pe"cent an efen ant-appellee Met"opolitan Han@ an T"ust $o#pan! fo"t!086?1 of the a#ount of P , +>, 8>.8 plus 5? inte"estpe" annu# f"o# Ma"ch , >8 until full! pai . The#o"al a#a)es, atto"ne!s fees an costs of suit a (u )eshall li@e'ise be pai b! efen ant-appellant 4llieHan@in) $o"po"ation an efen ant-appellee Met"opolitanHan@ an T"ust $o#pan! in the sa#e p"opo"tion of 6-86./9cept as thus #o i


10/60

Met"oban@ as )ua"anto" of all en o"se#ent on the chec@,it bein) the collectin) ban@. 7>

The petition is pa"tl! #e"ito"ious.

e o+ o5 F*c

4llie &uestions the


11/60

Othe" causes of e9tin)uish#ent of obli)ations,such as annul#ent, "escission, ful*?, >b? *+ >c? o5 e +e@7rece +< ec o+ ; an b1 That the inst"u#ent is at the ti#e of his

in o"se#ent vali an subsistin);

4n in a ition, he en)a)es that on uep"esent#ent, it shall be accepte o" pai , o" both, as thecase #a! be acco" in) to its teno", an that if it be

ishono"e , an the necessa"! p"ocee in)s on ishono" beul! ta@en, he 'ill pa! the a#ount the"eof to the hol e",

o" to an! subse&uent in o"se" 'ho #a! be co#pelle topa! it.

http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn46http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn47http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn48http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn48http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn46http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn47http://sc.judiciary.gov.ph/jurisprudence/2008/march2008/133179.htm#_ftn48


12/60

Section +. ,arranty where negotiation )y

deli!ery so orth ./ve"! pe"son ne)otiatin) an inst"u#entb! elive"! o" b! a &uali

Bo'eve", this )ene"al "ule is sub(ect to e9ceptions. One such e9ception is'hen the issuance of the chec@ itself 'as atten e 'ith ne)li)ence. Thus,in the cases cite above 'he"e the collectin) ban@ is )ene"all! hel liable,in t'o of the cases 'he"e the chec@s 'e"e ne)li)entl! issue , this $ou"thel the institution issuin) the chec@ (ust as liable as o" #o"e liable thanthe collectin) ban@. In isolate cases 'he"e the chec@s 'e"e eposite in an account othe"than that of the pa!ees on the st"en)th of fo")e in o"se#ents, 'e helthe collectin) ban@ solel! liable fo" the 'hole a#ount of the chec@sinvolve fo" havin) in o"se the sa#e. In Repu)lic Ban& !. ')rada , 8 the

chec@ 'as p"ope"l! issue b! the Hu"eau of T"easu"!. hile in Banco deOro a!ings and 2ortgage Ban& 0Hanco e O"o1 !. '3uita)le Ban&ingCorporation , +6 Hanco e O"o a #itte l! issue the chec@s in the na#e of the co""ect pa!ees.4n in Traders Royal Ban& !. Radio Philippines

%etwor& 1nc. , + the chec@s 'e"e issue at the "e&uest of Ra ioPhilippines Net'o"@, Inc. f"o# T"a e"s Ro!al [email protected]'eve", in Ban& o the Philippine 1slands !. Court o ppeals , 'e saithat the "a'ee ban@ is liable fo" 6? of the a#ount on the face of the

ne)otiable inst"u#ent an the collectin) ban@ is liable fo" 86?. e alsonote the "elative ne)li)ence e9hibite b! t'o ban@s, to 'it*

Hoth ban@s 'e"e ne)li)ent in the selection ansupe"vision of thei" e#plo!ees "esultin) in theencash#ent of the fo")e chec@s b! an i#posto". Hothban@s 'e"e not able to ove"co#e the p"esu#ption of ne)li)ence in the selection an supe"vision of thei"e#plo!ees. It 'as the )"oss ne)li)ence of the e#plo!eesof both ban@s 'hich "esulte in the f"au an thesubse&uent loss. hile it is t"ue that petitione" HPIsne)li)ence #a! have been the p"o9i#ate cause of the loss,"espon ent $H$s ne)li)ence contri)uted e&uall! to thesuccess of the i#posto" in encashin) the p"ocee s of thefo")e chec@s. An e" these ci"cu#stances, 'e appl!

4"ticle 5 : of the $ivil $o e to the e ect that 'hile"espon ent $H$ #a! "ecove" its losses, such losses a"esub(ect to #iti)ation b! the cou"ts. 0 ee Phoeni9$onst"uction Inc. v. Inte"#e iate 4ppellate $ou"ts, 8>S$R4 7+7 >: 1.

$onsi e"in) the co#pa"ative ne)li)ence of the

t'o 051 ban@s, 'e "ule that the e#an s of substantial

(ustice a"e satis


13/60

ne)li)ence of the P"ovince of Ta"lac in "eleasin) thechec@s to an unautho"i%e pe"son 0Fausto Pan)ilinan1, inallo'in) the "eti"e hospital cashie" to "eceive the chec@sfo" the pa!ee hospital fo" a pe"io close to th"ee !ea"s anin not p"ope"l! asce"tainin) 'h! the "eti"e hospitalcashie" 'as collectin) chec@s fo" the pa!ee hospital ina ition to the hospitals "eal cashie", "espon ent P"ovincecont"ibute to the loss a#ountin) to P567,766.66 an

shall be liable to the PNH fo" 6 pe"tains to the vica"ious liabilit! of ane#plo!e" fo" &uasi- elicts that an e#plo!ee has co##itte . Suchp"ovision of la' oes not appl! to civil liabilit! a"isin) f"o# elict.

One also cannot appl! the p"inciple of subsi ia"! liabilit! in 4"t.

67 of the Revise Penal $o e in the instant case. Such liabilit! on thepa"t of the e#plo!e" fo" the civil aspect of the c"i#inal act of thee#plo!ee is base on the conviction of the e#plo!ee fo" a c"i#e. Be"e,the"e has been no conviction fo" an! c"i#e.

4s to the clai# that the"e 'as un(ust en"ich#ent on the pa"t of

P"o uce"s Han@, the sa#e is co""ect. 4llie co""ectl! clai#s in its petitionthat P"o uce"s Han@ shoul "ei#bu"se 4llie fo" 'hateve" (u )#ent that#a! be "en e"e a)ainst it pu"suant to 4"t. 55 of the $ivil $o e, 'hichp"ovi es* /ve"! pe"son 'ho th"ou)h an act of pe"fo"#ance b! anothe", o"an! othe" #eans, ac&ui"es o" co#es into possession of so#ethin) at thee9pense of the latte" 'ithout (ust cause o" le)al )"oun , shall "etu"n thesa#e to hi#.

The above p"ovision of la' 'as cla"i

In Tamio !. Ticson , 'e fu"the" cla"i


14/60

In the instant case, 3i# Sio ans #one! #a"@et place#ent in 4llie Han@ 'as p"e-te"#inate an 'ith "a'n 'ithout he" consent.Mo"eove", the p"ocee s of the place#ent 'e"e eposite in P"o uce"sHan@s account in Met"oban@ 'ithout an! (usti, 8>.8 plus 5? inte"estpe" annu# f"o# Ma"ch , >8 until full! pai . The#o"al a#a)es, atto"ne!s fees an costs of suit a (u )eshall li@e'ise be pai b! efen ant-appellant 4llieHan@in) $o"po"ation an efen ant-appellee Met"opolitan

Han@ an T"ust $o#pan! in the sa#e p"opo"tion of 6-86./9cept as thus #o i


15/60

C STRO, J.:

This appeal 'as ce"ti


16/60

The Dee of Pacto e Ret"o "efe""e to in stipulation of fact no. + as24nne9 D2 0 ate 4u)ust +, ++1 'as not "e)iste"e in the Re)ist"! ofDee s, 'hile the Dee of Pacto e Ret"o "efe""e to as 24nne9 /2 0 ateMa"ch +, ++1 'as "e)iste"e .

On the basis of the stipulation of facts an the anne9es, the t"ial cou"t"en e"e (u )#ent, as follo's*

B/R/FOR/, (u )#ent is he"eb! "en e"e in favo" of theplainti *

. Decla"in) 3ucia Tan the absolute o'ne" of the p"ope"t!esc"ibe in the


17/60

An e" a"ticle >:+ of the $ivil $o e of >> , "e)ist"ation 'as a necessa"!"e&uisite fo" the vali it! of a #o"t)a)e even as bet'een the pa"ties, butun e" a"ticle 5 5+ of the ne' $ivil $o e 0in e ect since 4u)ust 76, +61,this is no lon)e" so. 4

If the inst"u#ent is not "eco" e , the #o"t)a)e isnonetheless bin in) bet'een the pa"ties. 04"ticle 5 5+,5n sentence1.

The Val ehue%as havin) "e#aine in possession of the lan an the "ealt!ta9es havin) been pai b! the#, the cont"acts 'hich pu"po"te tobe pacto de retro t"ansactions a"e p"esu#e to be e&uitable#o"t)a)es, $ 'hethe" "e)iste"e o" not, the"e bein) no thi" pa"tiesinvolve .

7 . The Val ehue%as clai# that thei" ans'e" to the co#plaint of theplainti a i"#e that the! "e#aine in possession of the lan an )avethe p"ocee s of the ha"vest to the plainti ; it is thus a")ue that the!'oul su e" ouble p"e(u ice if the! a"e to pa! le)al inte"est on the

a#ounts state in the pacto de retro cont"acts, as the lo'e" cou"t hasi"ecte , an that the"efo"e the cou"t shoul have o" e"e evi ence to bea uce on the ha"vest.

The "eco" oes not suppo"t this clai#. No'he"e in the o"i)inal an thea#en e co#plaints is an alle)ation of elive"! to the plainti of theha"vest f"o# the lan involve in the secon cause of action. Bence, the

efen antsC ans'e" ha none to a i"#.

In sub#ittin) thei" stipulation of facts, the pa"ties p"a!e 2fo" its app"ovalan may)e made the )asis o the decision o this 8onora)le Court . 20e#phasis supplie 1 This, the cou"t i . It cannot the"efo"e be faulte fo"not "eceivin) evi ence on 'ho p"o

@- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -- -@

DEC!S!ON

U!SUM !NG, J. 0

This petition fo" "evie' on ce"tio"a"i assails the Decision 1 anResolution, 2 ate Ma"ch 5>, 566+ an une 76, 566+, "espectivel!, of the $ou"t of 4ppeals in $4-E.R. $V No. : >7 . The $ou"t of 4ppealsa i"#e the Resolution 3 ate une 6, 5665 of the Re)ional T"ial $ou"t,H"anch 5: , Muntinlupa $it!, in $ivil $ase No. 66- 7: 'hich ha o" e"epetitione"s to pa! "espon ents the su# of P56,666,666 "ep"esentin) thetotal a#ount of petitione"s loan an inte"est ue.

http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn3http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn1http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn2http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn3


18/60

The facts a"e as follo's*

On Septe#be" 8, >, petitione" ovenal To"in) obtaine f"o#"espon ents a loan a#ountin) to P ,666,666 at 7? inte"est pe"#onth. The loan 'as secu"e b! a #o"t)a)e on a pa"cel of lan cove"eb! T"ansfe" $e"ti, 4 as evi ence b! a Dee of Real /state Mo"t)a)e $ ate Septe#be" >, >.

On Septe#be" 57, >, the pa"ties e9ecute a Dee of 4bsoluteSale 6 conve!in) the #o"t)a)e p"ope"t! in favo" of "espon ents. Subse&uentl!, "espon ents )ave petitione"s an e9clusiveoption to "epu"chase the lan fo" P 6,666,666. This 'as e#bo ie in a

ocu#ent eno#inate as an Option to Hu! % ate Septe#be" 5>,>. On this sa#e ocu#ent, "espon ents ac@no'le )e "eceipt of a

total su# of P 6,666,666 as consi e"ation fo" the pu"chase of the lan .8 The Option to Hu! p"ovi e that if the option is e9e"cise afte"

Dece#be" +, >, the pu"chase p"ice shall inc"ease at the "ateof P766,666 o" 7? of the pu"chase p"ice eve"! #onth until Septe#be" +,

an the"eafte" at the "ate of P7> ,666 o" 7.> ? of the pu"chasep"ice eve"! #onth, 'ith the , >, be t"eate as an e&uitable #o"t)a)e instea of a sale.

4t the p"e-t"ial, the pa"ties #a e the follo'in) stipulations* 0 1 thep"incipal a#ount of P 6,666,666 has lon) beco#e ove" ue; 051 nopa!#ent has been #a e; 071 the pa"ties ha a)"ee on an e&uitable#o"t)a)e an not a sale. 11 The pa"ties li#ite the issues on the a#ountof inte"est ue an the ti#e of pa!#ent of the enti"eobli)ation.The"eafte", the cou"t o" e"e the pa"ties to sub#it thei""espective position pape"s, but onl! "espon ents co#plie . 4ll othe"clai#s fo" a#a)es 'e"e 'aive b! the pa"ties. 12

On une 6, 5665, the t"ial cou"t issue its Resolution, thepe"tinent po"tion of 'hich "ea s*

...the ocu#ent of #o"t)a)e speci


19/60

TB/ D/$ISION OF TB/ TRI43 $OART D4T/D AN/ 6,5665. 16

Si#pl! put, the issue is* Di the $ou"t of 4ppeals e"" in sustainin) thet"ial cou"ts "ulin) uphol in) the 7? an 7.> ? stipulate #onthl!inte"est

Petitione"s conten that the! a"e not liable to pa! inte"est as thestipulate #onthl! "ates of 7? an 7.> ? 1% a"eunconscionable. Petitione"s fu"the" conten that the "efo"#einst"u#ent, i.e ., the Option to Hu! ate Septe#be" 5>, >, i not#ention an! "ate of inte"est cha")eable to the loan but "athe", anescalation 18 of the pu"chase p"ice.

On the othe" han , "espon ents #aintain that petitione"s a"e liable to pa!inte"est base on the Dee of 4bsolute Sale an Option to Hu! e9ecuteb! the pa"ties. Respon ents asse"t that the P766,666 an P7> ,666

i e"ences pe" #onth as state in the Option to Hu! "ep"esents the 7? o"7.> ? inte"est to be cha")e on the loan. Respon ents fu"the" asse"t thatthe 7? o" 7.> ? inte"est is not usu"ious since $ent"al Han@ $i"cula" No.

6+->5 19 "e#ove the ceilin) on inte"est "ates on secu"e an unsecu"eloans.

In "esolvin) the issue in this cont"ove"s!, 'e have a)"ee to focus ou"attention on the basic p"ovisions of statutes as 'ell as the p"io" ecisionsof this $ou"t bea"in) on "ates of inte"est on #oneta"! obli)ations.

In a loan o" fo"bea"ance of #one!, acco" in) to the $ivil $o e, theinte"est ue shoul be that stipulate in '"itin), 2& an in the absencethe"eof, the "ate shall be 5? pe" annu#. 21

The , the pa"ties a)"ee on an inte"est "ate of 7? pe"#onth.

The secon an thi" ti#es that the pa"ties t"ansacte 'e"e on

Septe#be" 57 an 5>, > 'hen the! e9ecute the Dee of 4bsolute

Sale an the Option to Hu!, "espectivel!. These t'o ocu#ents 'e"e theinst"u#ents "efo"#e in $ivil $ase No. 66- 7:, 'he"e both pa"ties a)"eethat the t"ansactions e#bo ie the"ein 'e"e "eall! that of an e&uitable#o"t)a)e. The stipulation in a cont"act sha"pl! escalatin) the "epu"chasep"ice eve"! #onth is fo" the pu"pose of secu"in) the "etu"n of #one!investe ' ith substantial p"o ,666 successive inc"eases state in the Option toHu! "ep"esent the #onthl! inte"est 'hich "espon ents sou)ht to "ecove"

f"o# petitione"s.

hile the pa"ties a"e f"ee to stipulate on the inte"est to bei#pose on #oneta"! obli)ations, the $ou"t 'ill te#pe" inte"est "ates if the! a"e unconscionable. 23 /ven if the Asu"! 3a' has been suspen e b!$ent"al Han@ $i"cula" No. 6+->5, an pa"ties to a loan a)"ee#ent havebeen )iven 'i e latitu e to a)"ee on an! inte"est "ate, 'e have hel thatstipulate inte"est "ates a"e ille)al if the! a"e unconscionable.

24 $onse&uentl!, in ou" vie', the $ou"t of 4ppeals e""e in sustainin) thet"ial cou"ts ecision uphol in) the stipulate inte"est of 7? an7.> ?. Thus, 'e a"e unani#ous no' in ou" "ulin) to "e uce the above

stipulate inte"est "ates to ? pe" #onth, in confo"#it! 'ith ou" "ulin)in Rui4 !. Court o ppeals . 2$ Fo" as 'ell st"esse in that case*

Nothin) in the sai ci"cula" $H $i"cula" No. 6+,s. >5 )"ants len e"s ca"te blanche autho"it! to "aiseinte"est "ates to levels 'hich 'ill eithe" enslave thei"bo""o'e"s o" lea to a he#o""ha)in) of thei" assets.

An eniabl!, in the p"esent case, petitione"s faile to pa! thep"incipal loan on its #atu"it! an upon e#an b! "espon ents, as 'ell asthe inte"est pa!#ents the"eafte".In ee , petitione"s cannot tu"n thei"

bac@s on thei" obli)ation; the! have to co#pl! 'ith 'hat is incu#bentupon the#. 4ll othe" clai#s fo" a#a)es havin) been 'aive b! thepa"ties, petitione"s a"e boun to pa! "espon ents the p"incipal loanof P 6,666,666, plus 'hat 'e have "epeate l! hel as the app"op"iate"ate of inte"est of ? pe" #onth, f"o#Dece#be" , > 26 until full!pai .

/"EREFORE , the assaile Decision an Resolution ate Ma"ch5>, 566+ an une 76, 566+, "espectivel!, of the $ou"t of 4ppeals in $4-E.R. $V No. : >7 a"e MOD!F!ED to the e ect that the stipulateinte"est "ate of 7? o" 7.> ? pe" #onth on the sub(ect e&uitable #o"t)a)e

http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn16http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn20http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn20http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn21http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn16http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn17http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn18http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn19http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn20http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn21http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn22http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2008/october2008/168782.htm#_ftn26


20/60

is he"eb! o" e"e REDUCED to ? pe" #onth onl!. No p"onounce#entas to costs.

SO ORDERED.


Manila

TBIRD DIVISION

G.R. No. %6$18 ( : 13, 199&

!RENE P. RELUC!O, petitione", vs.#E!D . R!LL NTE-G RF!N *+ COURT OF

PPE LS, "espon ents.

Orlando . 2arti4ano or petitioner.

i!estre :. (ar;n or pri!ate respondent.

R E S O L U T ! O N

FEL!C! NO, J.:

On 55 Octobe" : , p"ivate "espon ent ei a H. H"illante-Ea"


21/60

to be entitle la'full! to e#an the e9ecution of a ee of absolute salein he" favo". This issue in tu"n 'ill epen on the &uestion of 'hethe" o"not petitione" #a! vali l! cha")e inte"est on install#ent pa!#ents,not'ithstan in) that p"ivate "espon ent ha been p"o#pt in he" #onthl!pa!#ents; an 051 'hethe" o" not petitione"Cs notice of cancellation 'as

vali an e ective.

/9a#ination of the "eco" sho's that the &uestione $ont"act to Hu! an

Sell the sub ivision lots p"ovi e fo" pa!#ent b! p"ivate "espon ent ofthe su# of P566.66 as o'npa!#ent, an that 2the balance ofP 6, 66.66 shall be pai in >6 #onthl! install#ents at P> .8+ pe"#onth, inclu in) inte"est "ate at si9 pe"cent 0 ?1 pe" annu#, until thepu"chase p"ice is full! pai .2 3 This stipulation clea"l! speci, theinitial P> .8+ 'as appo"tione bet'een the p"incipal an the inte"est,

'ith P+7.66$

bein) allocate to se"vice the inte"est cha")e anP7 .8+ 6 bein) c"e ite to the p"incipal. Du"in) the succee in) #onthl!pa!#ents, ho'eve", as the outstan in) balance on the p"incipal )"a uall!

ecline , the inte"est co#ponent 0in absolute te"#s1 co""espon in)l! fell'hile the co#ponent c"e ite to the p"incipal inc"ease p"opo"tionatel!,thus a#o"ti%in) the balance of the p"incipal pu"chase p"i%e as thatbalance )"a uall! ecline . % This e9plains petitione"Cs theo"! of eclinin)balance, 'hich unfo"tunatel! 'as not app"eciate b! both the t"ial anappellate cou"ts.

Despite p"ivate "espon entCs failu"e to full! pa! the stipulate p"ice of thet'o lots in &uestion, petitione", ho'eve", coul not vali l! "escin thecont"act not bein) la'full! entitle to o so. Petitione" faile to "ebutp"ivate "espon entsC alle)ations that the fo"#e" ha faile to int"o uce"e&ui"e i#p"ove#ents in the sub ivision; the fo"#e"Cs ba"e alle)ationthat the i#p"ove#ents have al"ea ! been onate to the cit! )ove"n#ent'as not accepte b! the t"ial cou"t. Section 57 of P"esi ential Dec"ee No.

+:, othe"'ise @no'n as The Sub ivision an $on o#iniu# Hu!e"sCP"otective Dec"ee, p"ovi es*

Section 57. Non-fo"feitu"e of Pa!#ents. Q No install#entpa!#ent #a e b! the bu!e" in a sub ivi sion o"con o#iniu# p"o(ect fo" the lot o" unit he cont"acte to

bu! shall be fo"feite in favo" of the o'ne" o" evelope"'hen the bu!e", afte" ue notice to the o'ne" o"

evelope" esists f"ont fu"the" pa!#ent ue to the failu"eof the o'ne" o" evelope" to evelop the sub ivision o"con o#iniu# p"o(ect acco" in) to the app"ove plans an'ithin the ti#e li#it fo" co#pl!in) 'i th the sa#e. Suchbu!e" #a!, at his option, be "ei#bu"se the total a#ountpai . . . 0/#phasis supplie 1

In this "espect, the t"ial cou"t 'as co""ect in hol in) thatpetitione" coul not "escin the cont"act. 4s the la' vests upon

the bu!e" the option to e#an "ei#bu"se#ent of the totala#ount pai , o" to 'ait fo" fu"the" evelop#ent of the


22/60

sub ivision, p"ivate "espon ent 'ho opte fo" the latte"alte"native b! 'aitin) fo" the p"ope" evelop#ent of the site, #a!not be ouste f"o# the sub ivision. 8

4$$ORDINE3=, the $ou"t Resolve to ER4NT the Petition ue cou"se anto S/T 4SID/ an NA33IF= the Decision of the $ou"t of 4ppeals. In lieuthe"eof, a ne' Decision is he"eb! R/ND/R/D "e&ui"in) Q

. the petitione" to co#plete the necessa"! i#p"ove#entsan evelop#ents in the sub ivision a"ea in acco" ance'ith the app"ove sub ivision plans an applicablep"ovisions of P.D. No. +: as 'ell as applicablei#ple#entin) a #inist"ative "e)ulations an $it! of Na)a%onin) o" inances, if an!;

5. p"ivate "espon ent i##e iatel! to "esu#e pa!in)install#ent pa!#ents un e" he" $ont"act to Hu! an Sell'ith petitione", sub(ect to he" "i)ht to p"ocee a)ainstpetitione" shoul petitione" fail a)ain to co#pl! 'ith he"obli)ations un e" P.D. No. +:; an

7. petitione" to e9ecute the Dee of 4bsolute Sale 'henp"ivate "espon ent shall have full! pai the pu"chase p"icein acco" ance 'ith the #entione $ont"act to Hu! anSell.

No p"onounce#ent as to costs.

SO ORD/R/D.

Republic of the PhilippinesSUPREME COURTManila

TBIRD DIVISION

G.R. No. 9&6%6 ( +e 19, 1991

ST TE !N'ESTMENT "OUSE, !NC., petitione", vs.T"E "ONOR LE COURT OF PPE LS, "ON. (UDGE PERL!T (.

TR! T!RON , Pre +< ( 5, "espon ent spouses Rafael an Refu)io 4&uino ple )ece"tain sha"es of stoc@ to petitione" State Invest#ent Bouse, Inc. 02State21in o" e" to secu"e a loan of P 56,666.66 esi)nate as 4ccount No. IF->5-6 7 -44. P"io" to the e9ecution of the ple )e, "espon ent-spouses, as anacco##o ation to an to)ethe" 'ith the spouses ose an Ma"celina

4&uino, si)ne an a)"ee#ent 04ccount No. IF->5- 7: -441 'ith petitione"State fo" the latte"Cs pu"chase of "eceivables a#ountin) to P7:+,666.66.

hen 4ccount No. IF->5-6 7 -44 fell ue, "espon ent spouses pai thesa#e pa"tl! 'ith thei" o'n fun s an pa"tl! f"o# the p"ocee s of anothe"loan 'hich the! obtaine also f"o# petitione" State esi)nate as 4ccountNo. IF->5-6 68-44. This ne' loan 'as secu"e b! the sa#e ple )ea)"ee#ent e9ecute in "elation to 4ccount No. IF->56 7 -44. hen thene' loan #atu"e , State e#an e pa!#ent. Respon ents e9p"esse'illin)ness to pa!, "e&uestin) that upon pa!#ent, the sha"es of stoc@ple )e be "elease . Petitione" State enie the "e&uest on the )"ounthat the loan 'hich it ha e9ten e to the spouses ose an Ma"celina

4&uino 04ccount No. IF->5- 7: - 441 ha "e#aine unpai .

On 5 une >8, 4tt!. Rolan o Salon)a sent to "espon ent spouses aNotice of Nota"ial Sale statin) that upon "e&uest of State an b! vi"tue ofthe ple )e a)"ee#ent, he 'oul sell at public auction the sha"es of stoc@ple )e to State. This p"o#pte "espon ents to


23/60

The t"ial cou"t, in a ecision ate 8 Dece#be" >8 "en e"e b! u )eillel#o Fo"tun, initiall! is#isse the co#plaint. Respon ent spouses

+,o" e"in) State to i##e iatel! "elease the ple )e an to elive" to"espon ents the sha"e of stoc@ 2upon pa!#ent of the loan un e" $o e No.>5-6 68-44.2

On appeal, the $ou"t of 4ppeals a i"#e in toto the ne' ecision of thet"ial cou"t, hol in) that the loan e9ten e to ose an Ma"celina 4&uino,havin) been e9ecute p"io" to the ple )e 'as not cove"e b! the ple )e'hich secu"e onl! loans e9ecute subse&uentl!. Thus, upon pa!#ent ofthe loan un e" $o e No. IF-6 68-44, the sha"es of stoc@ shoul be"elease . The ecisions of the $ou"t of 4ppeals an of u )e Fo"tunbeca#e , the t"ial cou"t, spea@in) this ti#e th"ou)h u )ePe"lita T"ia Ti"ona, "en e"e a ecision pu"po"tin) to cla"if! the ecisionof u )e Fo"tun an "ulin) that petitione" State shall "elease "espon entsCsha"es of stoc@ upon pa!#ent b! "espon ents of the p"incipal of the loanas set fo"th in PN No. >5-6 68-44 in the a#ount of P 6,666.66, withoutinterest penalties and other charges .

Petitione" State appeale u )e Ti"onaCs ecision to the $ou"t of 4ppeals;

the appeal 'as is#isse . The $ou"t of 4ppeals a)"ee 'ith u )e Ti"onathat no inte"est nee be pai an a e that the cla"i


24/60

should ha!e ordered that the de)t )e paid >se!erally> andin omitting the word or ad!er) >se!erally> inad!ertentlysaid 5udgment )ecame am)iguous. This am)iguity may )eclari;ed at any time a ter the decision is rendered ande!en a ter it had )ecome ;nal 078 $o"pus u"is, 57+, 75 1.This "espon ent (u )e i not, the"efo"e, e9cee his

(u"is iction in cla"if!in) the ispositive pa"t of the (u )#ent b! suppl!in) the o#ission. 0/#phasis supplie 1

In $ilipino Legion Corporation !s. Court o ppeals et al ., the applicablep"inciple 'as set out in the follo'in) te"#s*

he"e the"e is am)iguity caused )y an omission or mista&e in thedispositi!e portion of a ecision, the court may clari y such am)iguity b!an a#en #ent e!en a ter the 5udgment had )ecome ;nal an fo" thispu"pose it #a! "eso"t to the plea in)s 5-6 68-44

to efen ants;

051 O" e"in) efen ant State Invest#ent Bouse, Inc. to pa! toplainti s P 6,666.66 as #o"al a#a)es, P+,666.66 as e9e#pla"!

a#a)es, P ,666.66 as atto"ne!Cs fees, plus costs;

071 Dis#issin) efen antsC counte"clai#, fo" lac@ of #e"it an

#a@in) the p"eli#ina"! in(unction pe"#anent.

SO ORD/R/D .7

u )e Fo"tun evi entl! #eant to act favo"abl! on the #otion fo""econsi e"ation of the "espon ent 4&uino spouses an in e ect accepte"espon ent spousesC a")u#ent that the!ha not incu""e mora consi e"in) that thei" failu"e to pa! PN No. IF>5-6 68-44 on ti#e ha been ue to petitione" StateCs un(usti


25/60

Fo"tun )"ante "espon ent spouses onl! P 6,666.66 as #o"al a#a)esan P+,666.66 as e9e#pla"! a#a)es, plus P ,666.66 as atto"ne!Cs feesan costs. Fo" anothe", "espon ent spouses as@e u )e Fo"tun to o" e"the "elease of the sha"es ple )e 2upon pa!#ent of "espon ent spousesCloan un e" $o e No. >5-6 68-44 without interest , as plainti s 'e"e not in

ela! in acco" ance 'ith 4"ticle of the Ne' $ivil $o e 2 0/#phasissupplie 1. In othe" 'o" s, "espon ent spouses i not the#selves beco#e

ve"! clea" 'hat the! 'e"e as@in) u )e Fo"tun to )"ant the#; the! i notappa"entl! istin)uish bet'een "e)ula" inte"est o" 2#oneta"! inte"est2 inthe a#ount of seventeen pe"cent 0 :?1 per annum an penalt! cha")es o"2co#pensato"! inte"est2 in the a#ount of t'o pe"cent 05?1 pe" #onth o"t'ent!-fou" pe"cent 058?1 per annum .

It thus appea"s that the Fo"tun ecision 'as a#bi)uous in the sense thatit 'as c"!ptic. e believe that in these ci"cu#stances, 'e #ust assu#ethat u )e Fo"tun #eant to eci e in accordance with law that 'e cannotfai"l! assu#e that u )e Fo"tun 'as )"ossl! i)no"ant of the la', o" that heinten e to )"ant the "espon ent spouses "elief to 'hich the! 'e"e notentitle un e" la'. Thus, the ulti#ate &uestion 'hich a"ises is* if"espon ent 4&uino spouses 'e"e not in ela!, 'hat shoul the! have beenhel liable fo" in accordance with law?

e believe an so hol that since "espon ent 4&uino spouses 'e"e helnot to have been in ela!, the! 'e"e p"ope"l! liable onl! fo"* 0a1 thep"incipal of the loan o" P 6,666.66; an 0b1 "e)ula" o" #oneta"! inte"estin the a#ount of seventeen pe"cent 0 :?1 per annum . The!'e"e not liable fo" penalt! o" co#pensato"! inte"est, 5-6 68-44 at t'o pe"cent 05?1 pe"#onth o" t'ent!-fou" 058?1 per annum . It #ust be st"esse in thisconnection that un e" 4"ticle 556 of the $ivil $o e 'hich p"ovi es that

. . . i f the obli)ation consists in the pa!#ent of a su# of #one!,an the ebto" incu"s in ela!. the in e#nit! fo" a#a)es, the"ebein) no sti#ulation to the cont"a"!. shall be the pa!#ent of theinte"est a)"ee upon, an in the absence of stipulation, the le)alinte"est, 'hich is si9 pe" cent per annum .

the app"op"iate #easu"e fo" a#a)es in case of ela! in ischa")in) anobli)ation consistin) of the pa!#ent of a su# o" #one!, is the pa!#ent ofpenalt! inte"est at the "ate a)"ee upon; an in the absence of astipulation of a pa"ticula" "ate of penalt! inte"est, then the pa!#ent ofa itional inte"est at a "ate e&ual to the "e)ula" #oneta"! inte"est; an if

no "e)ula" inte"est ha been a)"ee upon, then pa!#ent of le)al inte"esto" si9 pe"cent 0 ?1 per annum .8

The fact that the "espon ent 4&uino spouses 'e"e not in efaulti not #ean that the!, as a #atte" of la', 'e"e "elieve f"o# the

pa!#ent not onl! of penalt! o" co#pensato"! inte"est at the "ate oft'ent!-fou" pe"cent 058?1 per annum but also of "e)ula" o" #oneta"!inte"est of seventeen pe"cent 0 :?1 per annum . The "e)ula" o" #oneta"!inte"est continue to acc"ue un e" the te"#s of the "elevant p"o#isso"!note until actual pa!#ent is e ecte . The pa!#ent of "e)ula" inte"estconstitutes the p"ice o" cost of the use of #one! an thus, until thep"incipal su# ue is "etu"ne to the c"e ito", "e)ula" inte"est continues toacc"ue since the ebto" continues to use such p"incipal a#ount. The"elevant "ule is set out in 4"ticle 5+ of the $ivil $o e 'hich p"ovi es asfollo's*

4"t. 5+ . If the c"e ito" to 'ho# ten e" of pa!#ent has been#a e "efuses 'ithout (ust cause to accept it, the ebto" shall be"elease f"o# "esponsibilit! )y the consignation o the thing orsum due .

$onsi)nation alone shall p"o uce the sa#e e ect in the follo'in)cases*

0 1 hen the c"e ito" is absent o" un@no'n, o" oes not appea" atthe place of pa!#ent;

051 hen he is incapacitate to "eceive the pa!#ent at the ti#e itis ue;

071 hen, 'ithout (ust cause, he "efuses to )ive a "eceipt;

081 hen t'o o" #o"e pe"sons clai# the sa#e "i)ht to collect;

0+1 hen the title of the obli)ation has been lost. 0/#phasissupplie 1

he"e the c"e ito" un(ustl! "efuses to accept pa!#ent, the ebto"esi"ous of bein) "elease f"o# his obli)ation #ust co#pl! 'ith t'o 051

con itions* 0a1 ten e" of pa!#ent; an 0b1 consi)nation of the su# ue.Ten e" of pa!#ent #ust be acco#panie o" follo'e b! consi)nation ino" e" that the e ects of pa!#ent #a! be p"o uce . Thus, in Llamas !.

)aya + the Sup"e#e $ou"t st"esse that a '"itten ten e" of pa!#entalone, 'ithout consi)nation in cou"t of the su# ue, oes not suspen theacc"uin) of "e)ula" o" #oneta"! inte"est.

http://www.lawphil.net/judjuris/juri1991/jun1991/gr_90676_1991.html#rnt4http://www.lawphil.net/judjuris/juri1991/jun1991/gr_90676_1991.html#rnt4http://www.lawphil.net/judjuris/juri1991/jun1991/gr_90676_1991.html#rnt5http://www.lawphil.net/judjuris/juri1991/jun1991/gr_90676_1991.html#rnt5http://www.lawphil.net/judjuris/juri1991/jun1991/gr_90676_1991.html#rnt4http://www.lawphil.net/judjuris/juri1991/jun1991/gr_90676_1991.html#rnt5


26/60

In the instant case, "espon ent spouses 4&uino, 'hile the! a"e p"ope"l!"e)a" e as havin) #a e a '"itten ten e" of pa!#ent to petitione" State,faile to consi)n in cou"t the a#ount ue at the ti#e of the #atu"it! of

4ccount No. IF->56 68-44. It follo's that thei" obli)ation to pa! p"incipal-cum -"e)ula" o" #oneta"! inte"est un e" the te"#s an con itions of

4ccount No. IF->5-6 68-44 'as not e9tin)uishe b! such ten e" ofpa!#ent alone.

Fo" the "espon ent spouses to continue in possession of the p"incipal ofthe loan a#ountin) to P 6,666.66 an to continue to use the sa#e afte"#atu"it! of the loan 'ithout pa!#ent of "e)ula" o" #oneta"! inte"est,'oul constitute un(ust en"ich#ent on the pa"t of the "espon ent spousesat the e9pense of petitione" State even thou)h the spouses ha not been)uilt! of mora . It is p"ecisel! this un(ust en"ich#ent 'hich 4"ticle 5+ ofthe $ivil $o e p"events b! "e&ui"in), in a ition to ten e" of pa!#ent, theconsi)nation of the a#ount ue in cou"t 'hich a#ount 'oul the"eafte"be eposite b! the $le"@ of $ou"t in a ban@ an ea"n inte"est to 'hichthe c"e ito" 'oul be entitle .

B/R/FOR/, the Petition fo" Revie' is he"eb! ER4NT/D DA/ $OARS/.The Decision of the $ou"t of 4ppeals ate 76 4u)ust > in $.4.-E.R. No. : +8 an the Decision of the Re)ional T"ial $ou"t ate :Feb"ua"! > in $ivil $ase No. K-85 >> a"e he"eb! R/V/RS/D an S/T

4SID/. The ispositive po"tion of the ecision of u )e Fo"tun is he"eb!cla"i8, upon full pa!#ent of the a#ount of P 6,666.66 plusseventeen pe"cent 0 :?1 per annum "e)ula" inte"est co#pute f"o# the

ti#e of #atu"it! of the plainti sC loan 04ccount No. IF->5-6 68-441 anuntil full pa!#ent of such p"incipal an inte"est to efen ants;

051 O" e"in) efen ant State Invest#ent Bouse, Inc. to pa! to the plainti spouses Rafael an Refu)io 4&uino P 6,666.66 as #o"al a#a)es,P+,666.66 as e9e#pla"! a#a)es, P ,666.66 as atto"ne!Cs fees, plus costs;an

071 Dis#issin) efen antsC counte"clai# fo" lac@ of #e"it an #a@in) thep"eli#ina"! in(unction pe"#anent.2


SO ORD/R/D.

$ernan C.#. (utierre4 #r. Bidin and @a!ide #r. ##. concur.

Re7 b c o5 e P 77 +eS 7reme Co r

M*+ *

TBIRD DIVISION

!NTERN T!ON L CONT !NER G.R. No. 161$39

TERM!N L SER'!CES, !NC.,

Petitione", P"esent*

=N4R/S-S4NTI4EO, #.

Chairperson

- ve"sus - 4ASTRI4-M4RTIN/ ,

$BI$O-N4 4RIO,

N4$BAR4, and

R/=/S, ##.

FGU !NSUR NCE

CORPOR T!ON, P"o#ul)ate *

Respon ent. une 5:, 566>

9 - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - 9

D E C ! S ! O N


27/60

USTR! -M RT!NE#, J .A

In a Decision ate ul! , in $ivil $ase No. +-:7+75, the Re)ional T"ial$ou"t 0RT$1 of Manila, H"anch 76, o" e"e Inte"national $ontaine" Te"#inalSe"vices, Inc. 0petitione"1 to pa! FEA Insu"ance $o"po"ation 0"espon ent1 thefollo'in) su#s* 0 1 P ,>:+,6 >.>> 'ith 5? inte"est pe" annu# f"o# anua"! 7,

+ until full! pai ; 051 P+6,666.66 as atto"ne!Cs fees; an 071P 6,666.66 asliti)ation e9penses.

Petitione"Cs liabilit! a"ose f"o# a lost ship#ent of 8 $a" boa" s 866 @)s. of Silve"Nit"ate 7.+7 F$T 4nal!ticall! Pu"e 0pu"it! . > P$T1, shippe b! Bapa)-3lo!

4E th"ou)h the vesselBannove" /9p"ess f"o# Ba#bu"), Ee"#an! on ul! 6,8, 'ith Manila, Philippines as the po"t of ischa")e, an Republic 4sahi Elass

$o"po"ation 0R4E$1 as consi)nee. Sai ship#ent 'as insu"e b! FEA Insu"ance$o"po"ation 0FEA1. hen R4E$Cs custo#s b"o@e", Des#a $a")o Ban le"s, Inc.,'as clai#in) the ship#ent, petitione", 'hich 'as the a""ast"e cont"acto", coulnot


28/60

The "ule in ou" (u"is iction is that onl! &uestions of la' #a! be ente"taine b! this$ou"t in a petition fo" "evie' on certiorari . This "ule, ho'eve", is not i"oncla ana #its ce"tain e9ceptions, such as 'hen 0 1 the conclusion is )"oun e onspeculations, su"#ises o" con(ectu"es; 051 the infe"ence is #anifestl! #ista@en,absu" o" i#possible; 071 the"e is )"ave abuse of isc"etion; 081 the (u )#ent isbase on a #isapp"ehension of facts; 0+1 the


29/60

hile it appea"s in the p"esent case that the R4E$ availe itself of petitione"Csse"vices an the"efo"e, PP4 4O 6-> shoul appl!, the $ou"t


30/60

p"ope"l! i enti5.

The pa"ties o not ispute the facts in this case. The isputeconce"ns onl! the e9ecution of the Decision of the Re)ional T"ial $ou"t of Manila, H"anch 5:, in $ivil $ase No. 8:> , ate Octobe" 7 , : , asa#en e b! an O" e" ate une 56, >6.

The Re)ional T"ial $ou"t of Manila, H"anch 5:, 'ith u )e Rica" oDia%, then p"esi in), issue a '"it of attach#ent ove" "eal p"ope"tiescove"e b! T$T Nos. >6: > an 65> of p"ivate "espon ents. In hisDecision ate Octobe" 7 , : , u )e Dia% o" e"e p"ivate "espon ent

4fable to pa! petitione" P ,+66.66 plus inte"est f"o# ul! 58, :8, untilfull! pai , plus P+,666.66 as atto"ne!s fees, an to pa! the costs of suit.

http://sc.judiciary.gov.ph/jurisprudence/2008/june2008/161539.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2008/june2008/161539.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2008/june2008/161539.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2008/june2008/161539.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2008/june2008/161539.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2008/june2008/161539.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2008/june2008/161539.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2008/june2008/161539.htm#_ftn27http://sc.judiciary.gov.ph/jurisprudence/2008/june2008/161539.htm#_ftn23http://sc.judiciary.gov.ph/jurisprudence/2008/june2008/161539.htm#_ftn24http://sc.judiciary.gov.ph/jurisprudence/2008/june2008/161539.htm#_ftn25http://sc.judiciary.gov.ph/jurisprudence/2008/june2008/161539.htm#_ftn26http://sc.judiciary.gov.ph/jurisprudence/2008/june2008/161539.htm#_ftn27


31/60

On une 56, >6, ho'eve", u )e Dia% issue an O" e" a#en in)sai Decision, so that the le)al "ate of inte"est shoul be co#pute f"o#

anua"! 8, , instea of f"o# ul! 58, :8. The a#en e Decision inthe ec"etal po"tion "ea s*

B/R/FOR/, (u )#ent is he"eb! "en e"e a)ainst the efen ant, Valentin 4fable "., o" e"in) hi# to pa! to the plainti the su# ofP ,+66.66 7 e e, 7, 'hich pe"tinentl! states*

In acco" ance 'ith $H $i"cula" No. 8 an as const"ue in Refo"#ina vs.To#ol 0 7 S$R4 5 61, le)al inte"est on P ,+66.66 co""espon s to ?pe" annu# fo" the pe"io anua"! 8, to ul! 5>, :8 an 5? pe"annu# f"o# ul! 5 , :8 up to 4p"il 5 , 7, a#ountin) to P78, >6. 5an P 8 ,+>5.75, "espectivel!, o" a )"an total of P >7,: 7.58.

$onfo"#abl! 'ith the She"i s $o#putation of Inte"est ate 4p"il 5 ,7 an Supple#ental Repo"t ate une 8, 7, the (u )#ent as of

4p"il 5 , 7 a#ounte to P5: ,67 .>8, b"o@en o'n as follo's*

P"incipal P ,+66.66

Inte"est >7,: 7.58

4tto"ne!s fees +,666.66

Publication e9penses +,+66.66

$osts of suit 5: . 6

Total P5: ,67 .>8

$onsi e"in) that plainti s P7,65:,57>.+6 bi e9cee s the a#ount of hi s (u )#ent, then he is not entitle to a ce"ti


32/60

efen ant be o" e"e to pa! plainti e m o5 P66,$&&.&& A+ ere ereo+ at the le)al "ate f"o# the ate of


33/60

that has beco#e


34/60

D / $ I S I O N

EON 4E4UR/=/S, .*

Hefo"e us is a Petition fo" Revie' on $e"tio"a"i of the Decision of the$ou"t of 4ppeals in $4-E.R. $V No. 8+> entitle $43VIN S. 4R$I334an /3S4 H. 4R$I334 vs. H4N$O FI3IPINO S4VINES an MORTE4E/H4N , /T. 43. 'hich a i"#e the ecision of the Re)ional T"ial $ou"t

0RT$1, H"anch 77, Manila o" e"in) H4N$O FI3IPINO to pa! $43VIN an/3S4 4R$I334 the a#ount of P 5 , 7 .66 'ith inte"est the"eon at 5?pe" annu# f"o# the >,666.66. The

4ppellees e9ecute a 2P"o#isso"! Note2, ate anua"! +, :+, 'he"eb!the! boun an obli)e the#selves, (ointl! an seve"all!, to pa! the

4ppellant the afo"esai a#ount of P >>,666.66 'ith inte"est at the "ate of 5? pe" annu#, in nineteen 0 1 !ea"s f"o# ate the"eof, in state

install#ents of P5,6 . 7 a #onth 0pa)e 75, Reco" s1.

On anua"! 5, : , the $ent"al Han@ of the Philippines issue $ent"alHan@ $i"cula" No. 8 8, &uote inf"a, as follo's*

W9 9 9

W7. The #a9i#u# "ate of inte"est, inclu in) co##issions, p"e#iu#s, feesan othe" cha")es on loans 'ith #atu"it! of #o"e than seven hun "ethi"t! 0:761 a!s, b! ban@in) institutions, inclu in) th"ift ban@s, o" b!8,8 6.:+ 0pa)e +++,Reco" s1. It tu"ne out that the 4ppellant unilate"all! inc"ease the "ateof inte"est on the loan account of the 4ppellees f"o# 5? pe" annu#, ascovenante in the 2Real /state Mo"t)a)e2 an 2Dee of $onsol i ate an

4#en e Real /state Mo"t)a)e2 to :? pe" annu# on the autho"it! ofthe afo"e&uote $ent"al Han@ $i"cula".

The 4ppellees faile to pa! thei" #onthl! a#o"ti%ations to 4ppellant. Thelatte" fo"th'ith .66inclusive of the :? pe" annu# 'hich pu"po"te l! 'as the totalit! of

4ppellees account 'ith the 4ppellant on thei" loans. The 4ppellant 'as

the pu"chase" of the p"ope"t! at public auction fo" the afo"esai a#ount

http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt1http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt1


35/60

of P758,: >.66. On Ma! 5+, : , the She"i e9ecute a 2$e"ti>-> , Reco" s1

In its 4ns'e" to the $o#plaint, the 4ppellant ave""e that the inte"estscha")e b! it on 4ppellees loan accounts an that the sai loan cont"acts

an #o"t)a)es 'e"e la'ful. The 4ppellant fu"the" ave""e that the 4ppellees action ha al"ea ! p"esc"ibe .

In the inte"i#, the Sup"e#e $ou"t p"o#ul)ate its Decision in thep"ece ent - settin) case of 2Hanco Filipino Savin)s an Mo"t)a)e Han@ vs.Bon. Mi)uel Nava""o, et al., +5 S$R4 78 2 'he"e it ecla"e that$ent"al Han@ $i"cula" No. 8 8 'as not the 2la'2 envisa)e in the#o"t)a)e ee s of bo""o'e"s of the Han@; that the escalation clauseinco"po"ate in sai ee s )ivin) autho"it! to the 4ppell ant to inc"easethe "ate of inte"ests 'ithout the co""espon in) eescalation clause shoulnot be )iven e ect because of its one-si e ness in favo" of the 4ppellant;

that the afo"esai $ent"al Han@ $i"cula" i not appl! to loans secu"e b!"eal estate #o"t)a)es, an that, the"efo"e, the 4ppellant cannot "el! sai$i"cula" as autho"it! fo" it to unilate"all! inc"ease the "ate of inte"ests onloans secu"e b! Real /state Mo"t)a)es.

In the #eanti#e, the FEA Insu"ance $o"p., Inc.,


36/60

On Dece#be" 7, >:, the 4ppellees , , the

4ppellees


37/60

2I. TB/ BONOR4H3/ $OART OF 4PP/43S /RR/D B/N IT B/3DTB4T TB/ $4AS/ OF 4$TION OF TB/ PRIV4T/ R/SPOND/NTS

4$$RA/D ON O$TOH/R 76, :>, 4ND TB/R/FOR/ TB/ FI3INE OFTB/IR $OMP34INT FOR 4NNA3M/NT OF TB/IR 3O4N $ONTR4$TS

ITB TB/ P/TITION/R IN >+ 4S NOT =/T H4RR/D H=PR/S$RIPTION.

II. TB/ BONOR4H3/ $OART OF 4PP/43S /RR/D B/N IT B/3DTB4T TB/ M4T/RI43 433/E4TIONS OF TB/ PRIV4T/ R/SPOND/NTS$OMP34INT /R/ SAFFI$I/NT TO 4RR4NT TB/ R/3I/FSER4NT/D TO TB/M H= TB/ 3O /R $OART, P4TI$A34R3= TB/R/FAND OF P 5 , 7 .66 R/PR/S/NTINE 433/E/D /X$/SSINT/R/ST P4ID ON TB/IR 3O4N.

III. TB/ BONOR4H3/ $OART OF 4PP/43S /RR/D IN BO3DINE TB4TTB/ PRIV4T/ R/SPOND/NTS /R/ /NTIT3/D TO TB/ S4ID R/FANDOF P 5 , 7 .66 $34IM/D H= TB/M.2 +

The petitione" #aintains that the co#plaint as founb! the $ou"t of 4ppeals. Thus, p"ivate "espon ents cause of action hasal"ea ! p"esc"ibe inas#uch as the case 'as + o" al#ost ei)ht !ea"s the"eafte", thei"action ha not !et p"esc"ibe . Mo"eove", p"ivate "espon ents ave" thatthe! a"e entitle to the "efun inas#uch as the escalation clauseinco"po"ate in the loan cont"acts o not have a co""espon in) e-escalation clause an is the"efo"e ille)al.

The appeal is un#e"ito"ious.

The"e a"e onl! t'o issues, 'hich #ust be "esolve in the p"esent appeal.Fi"st, has the action of the p"ivate "espon ents p"esc"ibe ; an secon ,a"e the "espon ents entitle to the "efun of the alle)e inte"estove"pa!#ents.

Petitione" s clai# that the action of the p"ivate "espon ents hasp"esc"ibe is be"eft of #e"it. An e" 4"ticle +6 of the $ivil $o e, theti#e fo" p"esc"iption of all @in s of actions, 'hen the"e is no specialp"ovision 'hich o" ains othe"'ise, shall be counte f"o# the a! the!#a! be b"ou)ht. Thus, the pe"io of p"esc"iption of an! cause of action is"ec@one onl! f"o# the ate the cause of action acc"ue . : 4n a cause ofaction a"ises 'hen that 'hich shoul have been one is not one, o" that'hich shoul not have been one is one. > The pe"io shoul not be #a eto "et"oact to the ate of the e9ecution of the cont"act on anua"! +,

:+ as clai#e b! the petitione" fo" at that ti#e, the"e 'oul be no 'a!fo" the "espon ents to @no' of the violation of thei" "i)hts. The $ou"t of

4ppeals the"efo"e co""ectl! foun that "espon ents cause of actionacc"ue on Octobe" 76, :>, the ate the! "eceive the state#ent ofaccount sho'in) the inc"ease "ate of inte"est, fo" it 'as onl! f"o# that#o#ent that the! iscove"e the petitione" s unilate"al inc"ease the"eof.

e &uote 'ith app"oval the pe"tinent po"tions of the $ou"t of 4ppealsecision as follo's*

2It is the le)al possibil it! of b"in)in) the action that ete"#ines thesta"tin) point fo" the co#putation of the pe"io of p"esc"iption0$onstancia $. Telentino vs. $ou"t of 4ppeals, et al., 5 S$R4 1. In


38/60

vs. $ou"t of 4ppeals, et al., 576 S$R4 7+ 1. 4 pa"t! s "i)ht of actionacc"ues onl! 'hen the conGuence of the follo'in) ele#ents is establishe *

2999* a1 a "i)ht in favo" of the plainti b! 'hateve" #eans an un e"'hateve" la' it a"ises o" is c"eate ; b1 an obli)ation on the pa"t of

efen ant to "espect such "i)ht; an c1 an act o" o#ission on the pa"t ofsuch efen ant violative of the "i)ht of the plainti 0$ole vs. V a. eE"e)o"io, S$R4 :6 >5 ; Matha! vs. $onsoli ate Han@ T"ust$o., +> S$R4 ++ :8 ; V a. e /n"i&ue% vs. Dela $"u%, +8 S$R4

:7 . It is onl! 'hen the last ele#ent occu"s o" ta@es place that it canbe sai in la' that a cause of action has a"isen 0$ole vs. V a. De E"e)o"io,sup"a12 0Ma"ia A. /spaJol vs. $hai"#an, etc., et al.,, 7: S$R4 7 8, pa)e7 >1

Mo"e, the a))"ieve #ust have eithe" actual o" p"esu#ptive @no'le )e of the violation, b! the )uilt! pa"t! of his "i)hts eithe" b! an act o" o#ission.The &uestion that no' co#es to the fo"e is 'hen the 4ppellees beca#ep"ecisel! a'a"e of the unilate"al inc"ease, b! the 4ppellant, of the "ate ofinte"est on thei" loan account to :? pe" annu#. 4s can be asce"tainef"o# the "eco" s, the 4ppellees iscove"e o" shoul have iscove"e , fo"the 8 'hich beca#e e ective Ma"ch :, >6'he"ein to be vali , escalation clauses shoul p"ovi e* .1 that the"e canbe an inc"ease in inte"est if inc"ease b! la' o" b! the Moneta"! Hoa" ;an 5.1 in o" e" fo" such stipulation to be vali , it #ust inclu e a p"ovisionfo" the "e uction of the stipulate inte"est in the event that the #a9i#u#"ate of inte"est is "e uce b! la' o" b! the Moneta"! Hoa" . :

http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt10http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt11http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt11http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt12http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt13http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt14http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt14http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt15http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt16http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt16http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt17http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt17http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt10http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt11http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt12http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt13http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt14http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt15http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt16http://www.lawphil.net/judjuris/juri2000/may2000/gr_129227_2000.html#fnt17


39/60

Eiven the vali it! of the escalation clause, coul the petitione" inc"easethe stipulate inte"est pu"suant to the $ent"al Han@ $i"cula" 8 8 f"o#

5? to :?.

e "ule that it #a! not.

The escalation clause in the loan cont"acts "ea s as follo's*

2999 )1 The "ate of inte"est cha")e on the obli)ation secu"e b! this#o"t)a)e, as 'ell as the inte"est on the a#ount 'hich #a! have beena vance b! the Mo"t)a)ee in acco" ance 'ith pa"a)"aph 0b1 an 0 1he"eof, shall be sub(ect, u"in) the te"#s of this cont"act, to such aninc"ease, 'ithin the li#its allo'e b! la', as the Hoa" of Di"ecto"s of theMo"t)a)ee #a! p"esc"ibe fo" its ebto"s; 9992 0e#phasis supplie 1 >

In Hanco Filipino Savin)s Mo"t)a)e Han@ vs. Nava""o, 'hich involvea si#ila" escalation clause 56 , 'e "ule that $ent"al Han@ $i"cula" 8 8,althou)h it has the fo"ce an e ect of la', is not a la' an is not the la'conte#plate b! the pa"ties 'hich autho"i%es the petitione" to unilate"all!"aise the inte"est "ate of the loan. 5 $onse&uentl!, the "el iance b! thepetitione" on $ent"al Han@ $i"cula" 8 8 to unilate"all! "aise the inte"est"ates on the loan in &uestion 'as 'ithout an! le)al basis.

Petitione" s a")u#ent that the Hanco Filipino case cannot be applie tothe p"esent case since the "espon ents 'e"e not inte"veno"s the"ein isGa'e . Onl! the (u )#ent in sai case cannot bin the "espon ents asthe! 'e"e not pa"ties the"eto, ho'eve", the oct"ine enunciate the"ein isa (u icial ecision an fo"#s pa"t of the le)al s!ste# of the l an . 55 Itfo"#s a p"ece ent, 'hich #ust be a he"e to un e" the oct"ine of sta"e

ecisis. 57 Thus, even if the "espon ents 'e"e not pa"ties to the above-#entione case, the oct"ine enunciate the"ein #a! be applie to the

p"esent case.

B/R/FOR/, the ecision of the $ou"t of 4ppeals in $4-E.R. $V No.8+> is 4FFIRM/D an the instant petition is he"eb! D/NI/D.


SO ORD/R/D.


Manila

TBIRD DIVISION

G.R. No. L-66826 < 19, 1988

N OF T"E P"!L!PP!NE !SL NDS, petitione", vs.T"E !NTERMED! TE PPELL TE COURT *+#S"ORN C "espon ents.

Pacis < Reyes Law Ofice or petitioner.

'rnesto T. "shornac& #r. or pri!ate respondent.

CORTES, J.:

The o"i)inal pa"ties to this case 'e"e Ri%al ! T. sho"nac@ an the$o##e"cial Han@ an T"ust $o#pan! of the Philippines he"eafte"

"efe""e to as 2$OMTRAST.2 In >6, the Han@ of the Philippine Islan s0he"eafte" "efe""e to as HPI abso"be $OMTRAST th"ou)h a co"po"ate#e")e", an 'as substitute as pa"t! to the case.

Ri%al ! sho"nac@ initiate p"ocee in)s on une 5>, : b!


40/60

the .

An aunte , the ban@ co#es to this $ou"t p"a!in) that it be totall!absolve f"o# an! liabilit! to sho"nac@. The latte" not havin) appealethe $ou"t of 4ppeals ecision, the issues facin) this $ou"t a"e li#ite tothe ban@Cs liabilit! 'ith "e)a" to the


41/60

that peso $u""ent 4ccount No. 5 6-8 +-5 'as eve" c"e ite 'ith thepeso e&uivalent of the ASY ,666.66 'ith "a'n on Octobe" 5:, :+ f"o#Dolla" Savin)s 4ccount No. 5+-8 6 .

5. 4s fo" the secon cause of action, the co#plaint , :+

MR. RI 43D= T. SBORN4$

OR MRS SBIR3/= /. SBORN4$

Si" Ma a#*

e ac@no'le )e 0sic1 havin) "eceive

f"o# !ou to a! the su# of AS DO334RS*TBR// TBOAS4ND ON3= 0ASY7,666.661fo" safe@eepin).

Receive b!*

0S) .1 VIREI3IO V.E4R$I4

It 'as also alle)e in the co#plaint that espite e#an s, the ban@"efuse to "etu"n the #one!.

In its ans'e", $OMTRAST ave""e that the ASY7,666 'as c"e ite tosho"nac@Cs peso cu""ent account at p"evailin) conve"sion "ates.

It #ust be e#phasi%e that $OMTRAST i not en! speci


42/60

In the past, this $ou"t ha occasion to e9plain the "eason behin thisp"oce u"al "e&ui"e#ent.

The "eason fo" the "ule enunciate in the fo"e)oin)autho"ities 'ill, 'e thin@, be "ea il! app"eciate . In

ealin) 'ith co"po"ations the public at la")e is boun to"el! to a la")e e9tent upon out'a" appea"ances. If a #anis foun actin) fo" a co"po"ation 'ith the e9te"nal in iciaof autho"it!, an! pe"son, not havin) notice of 'ant ofautho"it!, #a! usuall! "el! upon those appea"ances; an ifit be foun that the i"ecto"s ha pe"#itte the a)ent toe9e"cise that autho"it! an the"eb! hel hi# out as ape"son co#petent to bin the co"po"ation, o" haac&uiesce in a cont"act an "etaine the bene1.

Petitione"Cs a")u#ent #ust also be "e(ecte fo" anothe" "eason. Thep"actical e ect of absolvin) a co"po"ation f"o# liabilit! eve"! ti#e ano ice" ente"s into a cont"act 'hich is be!on co"po"ate po'e"s, even'ithout the p"ope" alle)ation o" p"oof that the co"po"ation has notautho"i%e no" "ati


43/60

institutions locate in the Philippines,inclu in) money , chec@s, "afts, bullionsban@ "afts, eposit accounts 0 e#an ,ti#e an savin)s1, all ebts, in ebte nesso" obli)ations,


44/60

S/$. . 4ll "eceipts of fo"ei)n e9chan)e b!an! resident pe"son, ,666.66 as

a#a)es. The othe" causes of action of p"ivate "espon ent a"e o" e"eis#isse .

SO ORD/R/D.


Manila

TBIRD DIVISION

G.R. No. 9&&2% M*rc 3, 1993

C GRO-!NDUSTR! L DE'ELOPMENT CORP., petitione", vs.T"E "ONOR LE COURT OF PPE LS *+ SECUR!T) N NDTRUST COMP N), "espon ents.

@olor;no < @omingue4 Law Ofices or petitioner.

@anilo B. Banares or pri!ate respondent.

D '!DE, (R., J.:

Is the cont"actual "elation bet'een a co##e"cial ban@ an anothe" pa"t!in a cont"act of "ent of a safet! eposit bo9 'ith "espect to its contentsplace b! the latte" one of bailo" an bailee o" one of lesso" an lessee

This is the c"u9 of the p"esent cont"ove"s!.

On 7 ul! : , petitione" 0th"ou)h its P"esi ent, Se")io 4)ui""e1 an thespouses Ra#on an Paula Pu)ao ente"e into an a)"ee#ent 'he"eb! the

fo"#e" pu"chase f"o# the latte" t'o 051 pa"cels of lan fo" a


45/60

consi e"ation of P7+6, 5+.66. Of this a#ount, P:+,:5+.66 'as pai aso'npa!#ent 'hile the balance 'as cove"e b! th"ee 071 post ate

chec@s. 4#on) the te"#s an con itions of the a)"ee#ent e#bo ie in aMe#o"an u# of T"ue an 4ctual 4)"ee#ent of Sale of 3an 'e"e that thetitles to the lots shall be t"ansfe""e to the petitione" upon full pa!#ent of the pu"chase p"ice an that the o'ne"Cs copies of the ce"ti of p"ivate "espon ent Secu"it! Han@ an T"ust$o#pan!, a o#estic ban@in) co"po"ation he"einafte" "efe""e to as the"espon ent Han@. Fo" this pu"pose, both si)ne a cont"act of lease0/9hibit 2521 'hich contains, inter alia , the follo'in) con itions*

7. The ban@ is not a eposita"! of the contents of the safean it has neithe" the possession no" cont"ol of the sa#e.

8. The ban@ has no inte"est 'hatsoeve" in sai contents,

e9cept he"ein e9p"essl! p"ovi e , an it assu#esabsolutel! no liabilit! in connection the"e'ith. 1

4fte" the e9ecution of the cont"act, t'o 051 "ente"Cs @e!s 'e"e )iven to the"ente"s Q one to 4)ui""e 0fo" the petitione"1 an the othe" to the Pu)aos.

4 )ua" @e! "e#aine in the possession of the "espon ent Han@. Thesafet! eposit bo9 has t'o 051 @e!holes, one fo" the )ua" @e! an theothe" fo" the "ente"Cs @e!, an can be opene onl! 'ith the use of both@e!s. Petitione" clai#s that the ce"ti , the ispositivepo"tion of 'hich "ea s*

B/R/FOR/, p"e#ises consi e"e , (u )#ent is he"eb!"en e"e is#issin) plainti Cs co#plaint.

On efen antCs counte"clai#, (u )#ent is he"eb!"en e"e o" e"in) plainti to pa! efen ant the a#ount of FIV/ TBOAS4ND 0P+,666.661 P/SOS as atto"ne!Cs fees.

ith costs a)ainst plainti . 6

The unfavo"able ve" ict is base on the t"ial cou"tCs conclusion that un e"pa"a)"aphs 7 an 8 of the cont"act of lease, the Han@ has no liabilit! fo"the loss of the ce"ti


46/60

In its Decision p"o#ul)ate on 8 ul! > , 9 "espon ent $ou"t a i"#ethe appeale ecision p"incipall! on the theo"! that the cont"act 0/9hibit2521 e9ecute b! the petitione" an "espon ent Han@ i s in the natu"e of acont"act of lease b! vi"tue of 'hich the petitione" an its co-"ente" 'e"e)iven cont"ol ove" the safet! eposit bo9 an its contents 'hile the Han@"etaine no "i)ht to open the sai bo9 because it ha neithe" thepossession no" cont"ol ove" it an its contents. 4s such, the cont"act is)ove"ne b! 4"ticle 87 of the $ivil $o e 1& 'hich p"ovi es*

4"t. 87. In the lease of thin)s, one of the pa"ties bin shi#self to )ive to anothe" the en(o!#ent o" use of a thin)fo" a p"ice ce"tain, an fo" a pe"io 'hich #a! be e


47/60

t"ansaction as to such secu"ities o" othe" valuables; thefact that thesafe- eposit co#pan! oes not @no', an that it is note9pecte that it shall @no', the cha"acte" o" esc"iption of the p"ope"t! 'hich is eposite in such safe- eposit bo9o" safe oes not chan)e that "elation. That access to thecontents of the safe- eposit bo9 can be ha onl! b! theuse of a @e! "etaine b! the lessee 0 'hethe" it is the sole@e! o" one to be use in connection 'ith one "etaine b!the lesso"1 oes not ope"ate to alte" the fo"e)oin) "ule.The a")u#ent that the"e is not, in such a case, a elive"!of e9clusive possession an cont"ol to the epositco#pan!, an that the"efo"e the situation is enti"el!

i e"ent f"o# that of o" ina"! bail#ent, has been)ene"all! "e(ecte b! the cou"ts, usuall! on the )"ounthat as possession #ust be eithe" in the eposito" o" in theco#pan!, it shoul "easonabl! be consi e"e as in thelatte" "athe" than in the fo"#e", since the co#pan! is, b!the natu"e of the cont"act, )iven absolute cont"ol ofaccess to the p"ope"t!, an the eposito" cannot )ain

access the"eto 'ithout the consent an activepa"ticipation of the co#pan!. . . . 0citations o#itte 1.

an a se)#ent f"o# o" s an Ph"ases 18 'hich states that acont"act fo" the "ental of a ban@ safet! eposit bo9 inconsi e"ation of a


48/60

In the conte9t of ou" la's 'hich autho"i%e ban@in) institutions to "ent outsafet! eposit bo9es, it is clea" that in this (u"is iction, the p"evailin) "ulein the Anite States has been a opte . Section :5 of the Eene"al Han@in)

4ct 23 pe"tinentl! p"ovi es*

Sec. :5. In a ition to the ope"ations speci


49/60

co#pan!, in "entin)safe- eposit bo9es, cannot e9e#pt itself f"o# liabilit! fo"loss of the contents b! its o'n f"au o" ne)li)ence o" thatof its a)ents o" se"vants, an i f a p"ovision of the cont"act#a! be const"ue as an atte#pt to o so, it 'ill be heline ective fo" the pu"pose. 4lthou)h it has been hel thatthe lesso" of a safe- eposit bo9 cannot li#it its liabilit! fo"loss of the contents the"eof th"ou)h its o'n ne)li)ence,the vie' has been ta@en that such a lesso" #a! li#its itsliabilit! to so#e e9tent b! a)"ee#ent o"stipulation. 3& 0citations o#itte 1

Thus, 'e "each the sa#e conclusion 'hich the $ou"t of 4ppeals a""iveat, that is, that the petition shoul be is#isse , but on )"oun s &uite

i e"ent f"o# those "elie upon b! the $ou"t of 4ppeals. In the instantcase, the "espon ent Han@Cs e9one"ation cannot, cont"a"! to the hol in)of the $ou"t of 4ppeals, be base on o" p"ocee f"o# a cha"acte"i%ation of the i#pu)ne cont"act as a cont"act of lease, but "athe" on the fact thatno co#petent p"oof 'as p"esente to sho' that "espon ent Han@ 'asa'a"e of the a)"ee#ent bet'een the petitione" an the Pu)aos to the

e ect that the ce"ti >, untilfull pa!#ent shoul be #a e, e uctin) f"o# the a#ount of inte"est uethe su# of P , 65. , an to pa! the costs of the p"ocee in)s.

4utho"it! f"o# the cou"t havin) been p"eviousl! obtaine , the co#plaint

'as a#en e on the 6th of anua"!, 6:; it 'as then alle)e , on the5 th of Ma!, > :, the efen ants e9ecute an subsc"ibe a ocu#ent infavo" of the plainti "ea in) as follo's*

e have "eceive f"o# 4n)el avellana, as a eposit 'ithout inte"est, thesu# of t'o thousan si9 hun "e an ei)ht!-si9 cents of pesos uertes ,'hich 'e 'ill "etu"n to the sai )entle#an, (ointl! an seve"all!, on the56th of anua"!, > >. Q a"o, 5 th of Ma!, > :. Q Si)ne ose 3i#. QSi)ne * $efe"ino Do#in)o 3i#.

That, 'hen the obli)ation beca#e ue, the efen ants be))e the plainti fo" an e9tension of ti#e fo" the pa!#ent the"eof, buil in) the#selves topa! inte"est at the "ate of + pe" cent on the a#ount of thei"


50/60

in ebte ness, to 'hich the plainti acce e ; that on the +th of Ma!,65, the ebto"s pai on account of inte"est ue the su# of P ,666

pesos, 'ith the e9ception of eithe" capital o" inte"est, ha the"eb! beensub(ecte to loss an a#a)es.

4 e#u""e" to the o"i)inal co#plaint 'as ove""ule , an on the 8th of anua"!, 6:, the efen ants ans'e"e the o"i)inal co#plaint befo"e itsa#en #ent, settin) fo"th that the! ac

Documents

Credit Full Text (Feb 1, 2016)