TolentinovsGonzales:

Facts: Tolentino and Manio the PlaintiffAppellants purchased a certain property for Php 25,000
payable in installments with a clause reverting ownership back to the original owner if they
missed payments.. When appellants failed to pay the final installment, the former owner
demanded a return of the property. When the appellants could not find the means to pay the
money, they made a debt to defendantappellee Gonzales with the condition that the plaintiffs
wouldexecuteapactoderetrosaleoftheproperty.

The contract also provides that the plaintiffs are to pay a rent of enormous amountsmonthly.
Thiswascontestedbytheplaintiffsasausuryrate.

Issues: Is the contract of a mortgage and not a pacto de retro? the court disagreed. The
contract was of sale with theright to repurchase, this isbased onthelanguageandtermsused
inthecontract.

Can parol evidence beadmissible? While it is general rule that parolevidenceisnotadmissible

for thepurposeofvaryingthetermsofacontract,butwhenanissueissquarelypresentedthata
contract does not express the intention of the parties, courts will, when a proper foundation is
laidtherefor,hearevidenceforthepurposeofascertainingthetrueintentionoftheparties.

Is it unlawful fortheownerofapropertytoenterintoa contractwith thetenantforthepaymentof

a specific amount of rent for the use and occupation of said property, even though the amount
paid as "rent," based upon the value oftheproperty,mightexceedtherateofinterestallowedby
law?Yesitislawful.TheusurylawonlycoverscontractsofLOAN,andnotofrent.

Usury, generallyspeaking,maybedefinedascontractingfororreceivingsomethinginexcessof
the amount allowed bylaw forthe loan or forbearance ofmoneythetakingofmoreinterestfor
theuseofmoneythanthelawallows.

Malcom dissents: This is nothing but a clever device used to hide the true intention of the
appellee,thisisaLOANandtheinterestusurious.

QuintosvsBeck

Facts: Beck the appellee was a tenant for the appellant Quintos and Ansaldo. The appellants
gratuitously allowed appellee theuseoftheirfurniturewiththeclausethattheybereturnedupon
demand. When plaintiffsappellant sold the property in which defendantappellee was currently
residing, the plaintiffs ordered the return of the furniture. Defendant only returned some of the
furniture,andlaterondepositedthefurnituretothesheriff.

The court of first instance ruled that the expenses be shared by the parties prorata, and that
theypartiesaretopaytheirrespectivelegalfees.


Issues: Did the trial court err in their conclusion that the plaintiff failed to comply with her
obligation to get the furniture when offered to her? YES. Thecontract entered into between the
parties is one of commadatum, because under it the plaintiff gratuitously granted the use of the
furniture to the defendant, reserving for herself the ownership thereof by this contract the
defendant bound himself to return the furniture to the plaintiff, upon the latters demand, to be
deliveredatherresidenceorhouse.

Is the plaintiff legally bound to bear the expenses occasion by the deposit of the furniture? NO.
As the defendant had voluntarily undertaken to return all the furniture to the plaintiff, upon the
latter's demand. The defendant was not entitled to place the furniture on deposit nor was the
plaintiffunderadutytoaccepttheoffertoreturnthefurniture.

Is the plaintiff entitled to the value of the furniture? NO. The defendanthas neitheragreedtonor
admitted the correctness of the said value. Should the defendant fail to deliver some of the
furniture, the value thereofshould be latter determined by thetrialCourtthroughevidencewhich
thepartiesmaydesiretopresent.

Should the cost be borne by the defendant? YES (section 487 of the Code of Civil Procedure).
Thedefendantwastheonewhobreachedthecontractofcommodatum.

RepublicvsGrijaldo

Facts: Jose Grijaldo thedefendantappellant created acontract of loan with the Bank ofTaiwan
supported by various evidences, this was secured by a chattel mortgage on his crops in
hinigaran. By virtue ofVestingOrderNo.P4,theassetsinthe PhilippinesoftheBankofTaiwan
were vested in the Government of the US and were subsequently transferred to the the
PhilippinesbytheUS.

Upon demand the appellant failedtopay. TheRepublicfiledsuitandwasdeniedbythejusticeof

the peace of hinigaran due to prescription. The appellee then filed suit in the court of first
instance of Negros who then ordered that the appellant pay the appellee the sum owed, plus
interest,andlegalfees.

Issues: Does the Republic haveanycauseofactionagainsttheappellant?Yes.ThePhilippines

becamethesuccessoroftherightsovertheloansinquestion.

Had the cause of action prescribed? NO. The statute of limitations, both acquisitive and
extinctive, does not run against the state (Philippines vs Monte Piedad).Furthermore theperiod
ofprescriptionwasinterruptedbyachangeoflaws.

NOTE: Though the Monatorium acts were declared unconstitutional the suspension of loans

interrupted prescription, the officials merely acting in the course of theirduties, thelawshaving
effectuntiltheyaredeclaredunconstitutional.

Didthelowercourterrinorderingtheappellanttopaytheexuberantamount?NO.

Hilado vs. De la Costa Contracts stipulating for payments presumably in Japanese war notes
may be enforced in our Courts after the liberation to the extent of the just obligation of the
contracting parties and,assaidnoteshavebecome worthless,inorderthatjusticemaybedone
and the party entitled to be paid can recover their actualvalue in Philippine Currency, what the
debtor or defendant bank should return or pay is the value of the Japanese military notes in
relation to thepesoinPhilippineCurrencyobtaining onthedatewhenandatthe placewherethe
obligationwasincurredunlessthepartieshadagreedotherwise.

FirasvsSanDiegosison

Facts: Petitioner Bobie Rose Frias is an owner of a certain property which heentered into an
agreement with respondent Dra. FloraSanDiegoSison. TheyentereredintoaMemorandumof
Agreement over the property with terms that for the consideration of sum of P3,000,000.00,
DiegoSison will be given a six month period to notify and decide if she wantsto purchase the
said property at the price of 6.4M andthatafternotice, shewill begiven6monthswithinwhichto
pay theremainingbalanceof3.4M.TheMOAalsostatesthatpriortothesixmonthsperiodgiven
to Dego Sison within whichto decide whetherornottopurchasetheabovementionedproperty,
the Frias may still offer the said property to other persons who may be interested to buy the
same provided that the amount of P3,000,000.00 given to Frias shall be paid to the latter
including interest based on prevailing compounded bank interestplus the amount of the sale in
excess of P7,000,000.00 should the propertybe soldatapricemorethanP7million.Lastly,that
in case the Frias has no other buyer within the first six months from the execution of this
contract, nointerestshallbechargedbyDiegoSisonontheP3millionhowever,intheeventthat
on the sixth month latter woulddecide not topurchasetheaforementionedproperty,Friashasa
period of another six monthswithin which to pay the sum of P3 millionpesosprovided that the
said amount shall earn compounded bank interest for the last six months only. Under this
circumstance, the amount of P3 million shall be treated as [a] loan and the property shall be
consideredasthesecurityforthemortgagewhichcanbeenforcedinaccordancewithlaw.

Frias received from respondent two million pesos in cash andonemillionpesosinapostdated

check dated February 28,1990, instead of 1991, whichrenderedsaidcheckstale.DiegoSison
decided not to purchase the property and notified petitioner through a letter dated March 20,
1991, which Frias received only on June 11, 1991, reminding Frias of their agreement that the
amount of two million pesos which Frias received from respondent should be considered as a
loan payable within sixmonths. The latter subsequently failed to pay respondent the amount of
twomillionpesos.

On April 1, 1993, DiegoSison filedwiththeRegionalTrialCourt(RTC)ofManila,acomplaintfor

sum of money with preliminary attachment against Frias. The RTC issued a decision Ordering
defendant to pay plaintiff thesumofP2Million plusinterestthereonattherateofthirtytwo(32%)
per centperannumbeginningDecember7,1991untilfullypaid.Petitionerhereinfiledherappeal
with the CA. Initsdecision,theCAaffirmedtheRTCdecisionwith modification,inthesensethat
therateofinterestisreducedfrom32%to25%perannum,effectiveJune7,1991untilfullypaid.

Issues: WHETHER OR NOT THE COMPOUNDED BANK INTEREST SHOULD BE LIMITED

TOSIX(6)MONTHSASCONTAINEDINTHEMEMORANDUMOFAGREEMENT.No.

The interpretation of 1956 in the civil code cannot be usedby the petitioner as a means not to
pay what heowesthe respondent. The phraseonly6monthsintheirMOAdoesnotmeanthat
interest stops only at 6 months, but rather interest starts after the next 6 months. Otherwise
petitioner can ignore paying the loan, disrupting respondents assets, while petitioner enjoys
privilegesthatimpairanotherindividual.Thisisunjustenrichment.

OBITER:Aloanisnotaloanifitdoesnotpayinterestiswrong,therearegratuitousloans.

(B)WHETHERORNOTTHERESPONDENTISENTITLEDTOMORALDAMAGES.Yes.

Despite beingdeclared not guilty in criminal charges, thecourts canstillawarddamagesbased

on the civil aspect of the case. Damages do not require that a crime be committed, only proof
thattheactionsofoneimpairedtheother,causingthelatterharmorloss.

(C) WHETHER OR NOT THE GRANT OF CORRECTIVE AND EXEMPLARY DAMAGES AND
ATTORNEYS FEES IS PROPER EVEN IF NOT MENTIONED IN THE TEXT OF THE
DECISION.Yes,Yes,andNo.

The entitlement to moraldamageshavingbeen established,theawardofexemplarydamagesis

proper. Exemplary damages may be imposed upon petitioner by way of exampleor correction
forthepublicgood.

The attorneys fees however were deleted, the CA showing no reason why petitioner should be
liableforsaidfees.

AngelWarehousingvsChelda

Facts: Angel Jose Warehousing hereafter the plaintiff was a business partner of Chelda
Enterprises the defendant.Duringthecourseoftheirbusiness,thedefendantissueddishonored
checks in payment of loans owed to the plaintiff, later investigation showed that defendant had
intention to defraud the plaintiff and a civil suit was filed. The lower courts ruled in favor of the
plaintiff andissued a courtorderforthedefendanttopayhisdebtalongwiththeinterestaccrued
during litigation, as wellas legal fees. The defendants refute the claim and brought the case to

the Supreme Court believing the rates to be usurious and finding no reason to pay attorneys
fees.

Issues: In a loan with usurious interest, may the creditor recovertheprincipaloftheloan?YES.

The claim of the defendant that the illegal rates forfeited theagreement is absurd. Theprincipal
obligationwaslegalandisdifferentfromtheaccessoryagreement.

Shouldattorney'sfeesbeawardedinplaintiff'sfavor?NO(FirasvsSanDiegosison)

CuUnjiengvsMabalacat

Facts: Cu Unjieng e Hijos the plaintiffappellee, instituted anactionforthepurposeofrecovering

from the Mabalacat Sugar Company the defendantappellant an indebtedness with interest,and
to foreclose a mortgage given by thedebtortosecurethesame,aswellastorecoverstipulated
attorney's fee and the sum by the plaintiff for insurance upon the mortgaged property, with
incidental relief. The lower court decreed that defendantappellant should paywhattheyowedin
full, with compounding interest. The defendant however filed for appeal stating that the actual
debtwasstilltobedue,andthattheydidnotagreetohaveaninterestintheirinterest.

Issues: Was the action prematurelystated?NO.Reviewofthecontractshowsthattheactionof

the plaintiff was in fact timely and legal. Any delay or nonperformance on the part of the
defendantwasagroundfortheplaintifftotakeactiontoprotecthisinterests.

Should there bea compounding interest? NO. The trial courts erred in their interpretation ofthe
contract. The provisions of the contract did not show any languageofstipulationthataninterest
can be made out of the interest. Such a stipulation should be clear and convincing in the
contract.

Shouldtherebeattorneysfees?Nope(samerulingfromtheabovecases)

Was the failure of the trial court to grant an amendment to the complaint a grave abuse of
discretion? No, the amendmentwasfiledonthedayofthecauseofaction,thegrantingordenial
ofsuchanactionispurelydiscretionaryonthepartofthecourt.Nograveabusewasfound.

EasternShippingLinesINC.vsCA

Facts: Eastern Shipping Lines INC.thepetitionerin thiscase wasashippingcompanywhowas

charged with the delivery of sensitive goods from Japan. When thegoodsarriveddamagedand
tampered they were sued for mishandling the goods. The trial courts showed they they were in
fact to blame. Upon receiving said judgement, petitioner immediately filedsuit citing numerous
issues.TheSupremeCourtgrantedtopetitionerpartialadmission,hencetheissuesathand.

Issue: W/O aclaimfordamagesustainedonashipmentofgoodscanbeasolidary,orjointand

several, liability of the common carrier, the arrastre operator and the customs broker. In this
case solidarily liable. But liability between the carrier and arrastre operators and customs
brokers are not always the same, itisacasetocasebasis.Inthiscase, petitionerwasfoundto
have been negligent in the handling of goods, and is therefore liable. His liability is inevitable
regardlessthereareothersliablewithhim.

Should thepayment oflegal interestonanawardforlossordamageistobecomputedfromthe

timethecomplaintisfiledorfromthedatethedecisionappealedfromisrenderedand

Which is the applicable rate of interest, referredtoabove,is twelvepercent(12%)orsixpercent

(6%)?

To answer both queries. the courts decided to modify the decision of the lower courts. Upon
examination of the laws, and various jurisprudence, the Supreme Court decided that the legal
interest to be paid is 6% on the amount due computed from the decision, dated 03 February
1988, of the court aquo. And12% interest,shallbeimposedonsuchamountuponfinalityofthis
decisionuntilthepaymentthereof.

Ratio: The Supreme court harmonized the rules. Since the legal loans when silent earn an
interest prescribed by lawat 12%,thelawalsostatesthatdamagesthatarenotyetliquidatedor
know grow ata6%rate,thecourtscalculatedtherates at6%untilthetotalobligationwasfound,
thenthecourtcomputedattherateof12%thiswasnowaloanoraforbearance..

MariaSoledadTomimbangvsAtty.JoseTomimbang

Facts: Maria Soledad Tomimbang herein the petitioner was an heir to acertainproperty, when
repairs and improvements were deemed necessary she opted to borrow money from her
brother Jose Tomimbang the respondent. Their agreement was that her obligation topaywould
become due and demandable upon completion of the renovations. Upon her failure to pay,
respondentfiledforsuit,thelowercourtsrulinginhisfavor.Hencethepetition.

Issues:Whetherpetitioner'sobligationisdueanddemandableItwasdue.
The lower courts did not err in their decision to grant respondent the loanthat was owed him.
The respondent claims that there was in fact a novation on their agreement, and that the
obligation was due and demandable the moment thatshebecameahindrancetotheobligation,
andhavinglostthebenefitofhertermuponmakingpartialpayments.

Whether respondent is entitled to attorney's fees No. The courts found no reason why the
respondentshouldbeallowedthebenefitofattorneysfees.

Whether interest should be imposed on petitioner's indebtedness and, if in the affirmative, at

what rate. The answer wasin the case above. 12% per annum,computed from the date ofthe
extrajudicialdemand.

UnitedPlantersSugarMillingINC.vsCA

Facts: UPSUMCO the Petitioner was a domestic sugar milling company who acquired loans
from respondent PNB. Their contract included the right of PNB to withdrawfromUPSUMCOs
account when payment wasdue. The sugar industry however suffereda sudden unpredictable
collapse in the market, and many sugar companies, UPSUMCO included defaulted on their
loans. Sugar Bonds were released to protect the sugar industry and PNB assigned to the
PHILSUCORaportionofUPSUMCOsdebt.PNBlaterassignedUPSUMCOsaccounttoAPT.

APT negotiated with UPSUMCO to foreclose their company, and during the negotiations APT
proposed a condonation of UPSUMCOs debt once they foreclose, petitioner agreed. Upon
foreclosure the assetsofpetitioneramountedto400M, asmallvaluecomparedtothepetitioners
actual debt of 2B. APT the respondent then transferred fundsfromthevariousaccountsinPNB
deposited by the petitioner to their own accounts. Petitioner filed a claim against both PNB and
APT.

The trial courts ruled in favor of UPSUMCO stating that after the foreclosure the respondent
effectively condonedthe rest of the debt, freeing petitioner from any liabilitytherein,andordered
a reimbursement. The respondents filed for appeal and was answered bythe CA who ruled in
their favor remanding the case back to the trial courts and stating that the contract between
petitionerandPNBallowedtherespondenttosiphonanyduepaymentsfromtheiraccount.Thus
anappealwasmadetotheSupremeCourt.

Issues:CantheSupremeCourtentertainthiscasewhenitquestionsfact,andnotlaw?Yes.
The procedural prohibition that disallows the SC from dealing with questions of fact have
exceptions. The lowers courts have conflicting facts, therefore the SC chooses to review the
case.

DoesUPSUMCOhaveanyunpaidbalance?No.

In its decision the SC reinstated the TCs decision, agreeing with the respondent upon
foreclosing hadcondoned the restofthedebt,andhadnorighttowithdrawfromthe accounts of
petitioner, and that the PNBs right to withdraw based as a creditor have expired when it
assigneditsrightstoAPT,anovationoccurred.

MacalinaovsBPI

Facts: Dr. Illenea Macalinao the petitioner was given credit via credit card by the Bank of the
Philippine Islandhereafterreferredtoastherespondent.Shethususedthecardandwasunable
to pay herfees.Therespondentthenchargedheratotalof9.25%interestpermonth,amounting
to an 111%interest rateper annum, petitioner failed to show in court.The METCofMakatiruled
that a rateof111%perannumwasunconscionable butgaveafavorabledecisionto respondent.
The case was brought tothe RTC and theyupheldthe decisionofthelowercourtbutincreased
the already decreased interest rate that the lower courts declared. The CA upheld thedecision.
Thuspetitionerbroughtthesuittothehighestcourtoftheland.

Issues:ShouldthedecisionoftheMETCtoreducetherateto2%bereinstated?Yes.

ThecourtcitedapreviousdecisionChuavsTimanwhereinit ruledthatatotalinterestrateof2%
was unreasonable.Thoughthecourtsmayattheirdiscretion decidewhatisanequitableinterest
rate at a case to casebasis, thecourt findsinthisinstance thatarateof2%permonthor24%
perannumwasjustandfair.

Whether or not the case should be remanded due to lack of evidence? No. Due process is a
right granted toallpeople, the opportunity to protect ones self fromunwarrantedattacksshould
be aninviolablerightthateachcitizenshouldbegranted,yetinthiscasepetitionerwasgivenher
day in court, but was unable to answer without any just excuse, thus to allow a reevaluation
wouldthenviolatetherespondentsrightstohisowndueprocess.