G.R. No.

118375
2003

October 3,

CELESTINA T. NAGUIAT, petitioner,

vs.
COURT OF APPEALS and AURORA
QUEAO, respondents.
The mere issuance of the checks did not
result in the perfection of the contract of
loan. For the Civil Code provides that the
delivery of bills of exchange and
mercantile documents such as checks
shall produce the effect of payment only
when they have been cashed. It is only
after the checks have produced the
effect of payment that the contract of
loan may be deemed perfected. Art.
1934 of the Civil Code provides:
"An accepted promise to deliver
something by way of commodatum or
simple loan is binding upon the parties,
but the commodatum or simple loan
itself shall not be perfected until the
delivery of the object of the contract."
A loan contract is a real contract, not
consensual, and, as such, is perfected
only upon the delivery of the object of
the contract
G.R. No. 133632 : February 15, 2002
BPI INVESTMENT CORPORATION,,
Petitioner, v. HON. COURT OF
APPEALS and ALS MANAGEMENT &
DEVELOPMENT CORPORATION,
Respondents.
A loan contract is not a consensual
contract but a real contract. It is

perfected only upon the delivery of the

object of the contract.
It is an accepted promise to deliver
something by way of simple loan.

G.R. No. 96770. March 30,

1993.
HERMENEGILDO AGDEPPA
(substituted by his heirs
MAGDALENA S. AGDEPPA,
EMMANUEL S. AGDEPPA, NELIA A.
UNISA, MARILYN A. LEONES,
EVANGELINE A. PIMENTEL, EDWIN S.
AGDEPPA EDNA A. AGDEPPA EDNA A.
ABELLA, JOCELYN A. VICUNA, MA.
THERESA S. AGDEPPA and VIVIANNE
S. AGDEPPA, petitioners, vs.
EMILIANO IBE (substituted by her
husband FRUCTUOSO IBE and
children LOLITA and CESAR IBE),
BENJAMIN IBE and FERDINAND IBE,
respondents.
Cabio and Rabanes Law Offices for
petitioners.
Public Attorney's Office for private
respondents.
2. ID.; EVIDENCE; CREDIBILITY; FINDINGS
OF FACT OF THE COURT OF APPEALS,
GENERALLY CONCLUSIVE; EXCEPTIONS.
The findings of fact of the Court of
Appeals are conclusive upon this Court
(Ronquillo vs. Court of Appeals, 195 SCRA
433 [1991]). However, there are
exceptions to this rule such as when
there is a conflict between the factual
findings of the Court of Appeals and the
trial court. The resolution of such conflict
requires the review of the same factual
findings by this Court (Co vs. Court of

Appeals, 193 SCRA 198 [1991] citing

Raneses vs. IAC, 187 SCRA 397 [1990]
and Remalante vs. Tibe, 158 SCRA 138
[1988]).
3. ID.; ID.; RESIDENCE CERTIFICATE; A
PUBLIC DOCUMENT. A residence
certificate, being a receipt prescribed by
the government to be issued upon
receipt of money for public purposes
(Moran, Comments on the Rules of Court,
Vol. 6, 1980 ed., p. 101), is a public
document.
4. ID.; ID.; PROOF OF DOCUMENTS;
CONTENTS OF RESIDENCE CERTIFICATE,
HOW PROVED. As such, presentation
of the same document would suffice to
prove its contents. As part of the public
record, it may also be proved by the
presentation of a copy attested by the
officer having legal custody of the
duplicates (Sec. 25, Rule 132, Rules of
Court) if, as in this case, a certified copy
of the residence certificate itself cannot
be presented. Exhibit F, upon which the
trial court relied in nullifying the
questioned documents, is, as correctly
pointed out by the Court of Appeals,
merely a secondary evidence. It is even
based on the lost pages of an abstract of
the residence certificates issued by the
municipal treasurer of Sinait. The
evidentiary value of Exh. F is therefore
suspect.
5. ID.; ID.; NOTARIZED DEEDS OF
CONVEYANCES, PRESUMED VALID;
PREPONDERANT EVIDENCE, NOT
SUFFICIENT TO OVERCOME
PRESUMPTION. The questioned deeds
of conveyances, being public documents
as they are duly notarized (Moran,
Comments on the Rules of Court, supra),
therefore retain the presumption of

validity in the absence of a full, clear and

convincing evidence to overcome such
presumption (Favor vs. Court of Appeals,
194 SCRA 308 [1991] citing Antonio vs.
Estrella, 156 SCRA 68 [1987]). Merely
preponderant evidence may not destroy
such presumption because strong
evidence is required to prove a defect of
a public instrument.
G.R. No. 85909 February 9, 1993
TERESITA C. GERALES, CESAR DELA
FUENTE, MARCELA GOLDING, MARIA
VERGARA and PERLITO
TRIGERO, petitioners,
vs.
HON. COURT OF APPEALS, ENRIQUE E.
PIMENTEL and LETICIA FIDELDIA,
respondents.
A notarized instrument is admissible in
evidence without further proof of its due
execution and is conclusive as to the
truthfulness of its contents, although not
absolute but rebuttable by clear and convincing
evidence to the contrary (Baranda v. Baranda,
150 SCRA 59 [1987], citing Antillon v. Barcelon,
37 Phil. 148 [1917] and Mendezona v. Phil
Sugar Estate Development Corporation. 41
Phil. 475 [1921]). A public document executed
and attested through the intervention of the
notary public is evidence of the facts in clear,
unequivocal manner therein expressed. It has
in its favor the presumption of regularity. To
contradict all these, there must be evidence
that is clear and convincing more than merely
preponderant (Collantes v. Capuno, 123 SCRA
652 [1983]).
G.R. No. L-24968 April 27, 1972
SAURA IMPORT and EXPORT CO., INC.,
plaintiff-appellee,

vs.
DEVELOPMENT BANK OF THE
PHILIPPINES, defendant-appellant.

THE HONORABLE COURT OF APPEALS

and THE PHILIPPINE BANK OF
COMMERCE, respondents

The trial court rendered judgment for the

plaintiff, ruling that there was a perfected
contract between the parties and that the
defendant was guilty of breach thereof. The
defendant pleaded below, and reiterates in this
appeal: (1) that the plaintiff's cause of action
had prescribed, or that its claim had been
waived or abandoned; (2) that there was no
perfected contract; and (3) that assuming there
was, the plaintiff itself did not comply with the
terms thereof.

A contract of loan being a consensual contract,

the herein contract of loan was perfected at the
same time the contract of mortgage was
executed. The promissory note executed on
December 12, 1966 is only an evidence of
indebtedness and does not indicate lack of
consideration of the mortgage at the time of its
execution.

We hold that there was indeed a perfected

consensual contract, as recognized in Article
1934 of the Civil Code, which provides:
ART. 1954. An accepted promise to deliver
something, by way of commodatum or simple
loan is binding upon the parties, but the
commodatum or simple loan itself shall not be
perferted until the delivery of the object of the
contract.
There was undoubtedly offer and acceptance
in this case: the application of Saura, Inc. for a
loan of P500,000.00 was approved by
resolution of the defendant, and the
corresponding mortgage was executed and
registered. But this fact alone falls short of
resolving the basic claim that the defendant
failed to fulfill its obligation and the plaintiff is
therefore entitled to recover damages..

the provision 2 of the contract of mortgage

which prohibits the sale, disposition of,
mortgage and encumbrance of the mortgaged
properties, without the written consent of the
mortgagee, as well as the additional proviso
that if in spite of said stipulation, the mortgaged
property is sold, the vendee shall assume the
mortgage in the terms and conditions under
which it is constituted. These provisions are
expressly made part and parcel of the Deed of
Sale with Assumption of Mortgage.

G.R. No. L-45710 October 3, 1985

CENTRAL BANK OF THE PHILIPPINES
and ACTING DIRECTOR ANTONIO T.
CASTRO, JR. OF THE DEPARTMENT
OF COMMERCIAL AND SAVINGS
BANK, in his capacity as statutory
receiver of Island Savings
Bank, petitioners,
vs.
THE HONORABLE COURT OF
APPEALS and SULPICIO M.
TOLENTINO, respondents

G.R. No. L-49101 October 24, 1983

RAOUL S.V. BONNEVIE and HONESTO V.
BONNEVIE, petitioners,
vs.

It is the obligation of the bank's officials and

employees that before they approve the loan
application of their customers, they must
investigate the existence and evaluation of the

properties being offered as a loan security. The

recent rush of events where collaterals for
bank loans turn out to be non-existent or
grossly over-valued underscore the importance
of this responsibility. The mere reliance by
bank officials and employees on their
customer's representation regarding the loan
collateral being offered as loan security is a
patent non-performance of this responsibility. If
ever bank officials and employees totally reIy
on the representation of their customers as to
the valuation of the loan collateral, the bank
shall bear the risk in case the collateral turn out
to be over-valued.

It has been held that the elements of

usury are (1) a loan, express or implied;
(2) an understanding between the
parties that the money lent shall or may
be returned; that for such loan a greater
rate or interest that is allowed by law
shall be paid, or agreed to be paid, as
the case may be; and (4) a corrupt
intent to take more than the legal rate
for the use of money loaned. Unless
these four things concur in every
transaction, it is safe to affirm that no
case of usury can be declared.

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

FRANCISCO HERRERA, plaintiffappellant,
vs.
PETROPHIL
CORPORATION, defendant-appellee.
The difference between a discount and
a loan or forbearance is that the former
does not have to be repaid. The loan or
forbearance is subject to repayment and
is therefore governed by the laws on
usury. 10
To constitute usury, "there must be loan
or forbearance; the loan must be of
money or something circulating as
money; it must be repayable absolutely
and in all events; and something must
be exacted for the use of the money in
excess of and in addition to interest
allowed by law." 11

CHINA BANKING CORPORATION, in

substitution of Filipinas Compania de
Seguros, Plaintiff-Appellee, v. FAUSTINO
LICHAUCO ET AL., DefendantsAppellants.
Jose a. Espiritu for Appellants.
Feria & La O and P. J. Sevilla for Appellee.
The interest due at the time of the filing of the
complaint for the recovery thereof, earns legal
interest from said date, under article 1109 of
the Civil Code, although the obligation is
silent on this point, and the action of the trial
court is in accordance with law, which
includes in its judgment an order for the
payment of legal interest upon the interest due
on the amount claimed, at the time of the filing
of the complaint.

The consideration of the mortgage

contract is the same as that of the
principal contract from which it receives

life, and without which it cannot exist as

independent contract.

mortgage is
nevertheless binding
between the parties.

G.R. No. L-68010 May 30, 1986

FILIPINAS MABLE
CORPORATION, petitioner,
vs.
THE HONORABLE INTERMEDIATE
APPELLATE COURT, THE
HONORABLE CANDIDO
VILLANUEVA, Presiding Judge of
Br. 144, RTC, Makati,
DEVELOPMENT BANK OF THE
PHILIPPINES (DBP), BANCOM
SYSTEMS CONTROL, INC.
(Bancom), DON FERRY,
CASIMERO TANEDO, EUGENIO
PALILEO, ALVARO TORIO, JOSE T.
PARDO, ROLANDO ATIENZA,
SIMON A. MENDOZA, Sheriff
NORVELL R. LIM, respondents
Article 2125 of the Civil Code clearly
provides that the non-registration of
the mortgage does not affect the
immediate parties. It states:
Art. 2125. In addition
to the requisites stated
in article 2085, it is
indispensable, in order
that a mortgage may
be validly constituted
that the document in
which it appears be
recorded in the
Registry of Property. If
the instrument is not
recorded, the

As regards the second assignment of

error, we agree with the petitioner
that a mortgage is a mere accessory
contract and, thus, its validity would
depend on the validity of the loan
secured by it. We, however, reject
the petitioner's argument that since
the chattel mortgage involved was
not registered, the same is null and
void.
The petitioner cannot invoke the
above provision to nullify the chattel
mortgage it executed in favor of
respondent DBP.

appellants,
vs.
BENITO GONZALEZ SY
CHIAM, defendants-appellee.

G.R. No. 26085

12, 1927

August

SEVERINO TOLENTINO and

POTENCIANA MANIO, plaintiffs-

It will be noted that said statute

imposes a penalty upon a "loan" or
forbearance of any money, goods,
chattels or credits, etc. The central
idea of said statute is to prohibit a
rate of interest on "loans." A contract
of "loan," is very different contract
from that of "rent". A "loan," as that
term is used in the statute, signifies
the giving of a sum of money, goods
or credits to another, with a promise
to repay, but not a promise to return
the same thing. To "loan," in general
parlance, is to deliver to another for
temporary use, on condition that the
thing or its equivalent be returned; or
to deliver for temporary use on
condition that an equivalent in kind
shall be returned with a
compensation for its use. The word
"loan," however, as used in the
statute, has a technical meaning. It
never means the return of the same
thing. It means the return of an
equivalent only, but never the same
thing loaned. A "loan" has been
properly defined as an advance
payment of money, goods or credits
upon a contract or stipulation to
repay, not to return, the thing loaned
at some future day in accordance
with the terms of the contract. Under
the contract of "loan," as used in said
statute, the moment the contract is
completed the money, goods or

chattels given cease to be the

property of the former owner and
becomes the property of the obligor
to be used according to his own will,
unless the contract itself expressly
provides for a special or specific use
of the same. At all events, the
money, goods or chattels, the
moment the contract is executed,
cease to be the property of the
former owner and becomes the
absolute property of the obligor.
A contract of "loan" differs materially
from a contract of "rent." In a
contract of "rent" the owner of the
property does not lose his ownership.
He simply loses his control over the
property rented during the period of
the contract. In a contract of "loan"
the thing loaned becomes the
property of the obligor. In a contract
of "rent" the thing still remains the
property of the lessor. He simply
loses control of the same in a limited
way during the period of the contract
of "rent" or lease. In a contract of
"rent" the relation between the
contractors is that of landlord and
tenant. In a contract of "loan" of
money, goods, chattels or credits,
the relation between the parties is
that of obligor and obligee. "Rent"
may be defined as the compensation
either in money, provisions, chattels,
or labor, received by the owner of
the soil from the occupant thereof. It
is defined as the return or
compensation for the possession of
some corporeal inheritance, and is a

profit issuing out of lands or

tenements, in return for their use. It
is that, which is to paid for the use of
land, whether in money, labor or
other thing agreed upon. A contract
of "rent" is a contract by which one
of the parties delivers to the other
some nonconsumable thing, in order
that the latter may use it during a
certain period and return it to the
former; whereas a contract of "loan",
as that word is used in the statute,
signifies the delivery of money or
other consumable things upon
condition of returning an equivalent
amount of the same kind or quantity,
in which cases it is called merely a
"loan." In the case of a contract of
"rent," under the civil law, it is called
a "commodatum."

G.R. No. L-20240

31, 1965

representing the total sum of the five loans, with

interest. The transaction between the appellant and
the Bank of Taiwan, Ltd. was a series of five
contracts of simple loan of sums of money. "By a
contract of (simple) loan, one of the parties delivers
to another ... money or other consumable thing upon
the condition that the same amount of the same kind
and quality shall be paid." (Article 1933, Civil
Code) The obligation of the appellant under the five
promissory notes evidencing the loans in questions
is to pay the value thereof; that is, to deliver a sum
of money a clear case of an obligation to deliver,
a generic thing. Article 1263 of the Civil Code
provides:
In an obligation to deliver a generic thing, the loss
or destruction of anything of the same kind does not
extinguish the obligation.
The chattel mortgage on the crops growing on
appellant's land simply stood as a security for the
fulfillment of appellant's obligation covered by the
five promissory notes, and the loss of the crops did
not extinguish his obligation to pay, because the
account could still be paid from other sources aside
from the mortgaged crops.

"acceptance", in the sense in which this

term is used in the Negotiable
Instruments Law9 is not required for
checks, for the same are payable on
demand.10 Indeed, "acceptance" and
"payment" are, within the purview of
said Law, essentially different things, for
the former is "a promise to perform an
act," whereas the latter is the "actual
performance" thereof.11 In the words of
the Law,12 "the acceptance of a bill is the
signification by the drawee of
his assent to the order of the drawer,"
which, in the case of checks, is the
payment, on demand, of a given sum of
money. Upon the other hand, actual
payment of the amount of a check
implies not only an assent to said order
of the drawer and a recognition of the
drawer's obligation to pay the
aforementioned sum, but, also,
a compliance with such obligation.

December

REPUBLIC OF THE
PHILIPPINES, plaintiff-appellee,
vs.
JOSE GRIJALDO, defendantappellant.
The terms of the promissory notes and the chattel
mortgage that the appellant executed in favor of the
Bank of Taiwan, Ltd. do not support the claim of
appellant. The obligation of the appellant under the
five promissory notes was not to deliver a
determinate thing namely, the crops to be harvested
from his land, or the value of the crops that would
be harvested from his land. Rather, his obligation
was to pay a generic thing the amount of money

EN BANC
G.R. No. L-26001
1968

October 29,

PHILIPPINE NATIONAL
BANK, petitioner,
vs.
THE COURT OF APPEALS and
PHILIPPINE COMMERCIAL AND
INDUSTRIAL BANK, respondents.

G.R. No. 116285

2001

October 19,

ANTONIO TAN, petitioner,

vs.
COURT OF APPEALS and the
CULTURAL CENTER OF THE
PHILIPPINES, respondents.

. There is no doubt that the petitioner is

liable for both the stipulated monetary
interest and the stipulated penalty
charge. The penalty charge is also
called penalty or compensatory interest.
Having clarified the same, the next issue
to be resolved is whether interest may
accrue on the penalty or compensatory
interest without violating the provisions
of Article 1959 of the New Civil Code,
which provides that:
Without prejudice to the
provisions of Article 2212,
interest due and unpaid shall not
earn interest. However, the
contracting parties may by
stipulation capitalize the interest
due and unpaid, which as added
principal, shall earn new interest.
According to the petitioner, there is no
legal basis for the imposition of interest
on the penalty charge for the reason
that the law only allows imposition of
interest on monetary interest but not the
charging of interest on penalty. He
claims that since there is no law that
allows imposition of interest on
penalties, the penalties should not earn
interest. But as we have already
explained, penalty clauses can be in the
form of penalty or compensatory
interest. Thus, the compounding of the
penalty or compensatory interest is
sanctioned by and allowed pursuant to
the above-quoted provision of Article
1959 of the New Civil Code considering
that:
First, there is an express stipulation in
the promissory note (Exhibit "A")
permitting the compounding of interest.
The fifth paragraph of the said

promissory note provides that: "Any

interest which may be due if not paid
shall be added to the total amount when
due and shall become part thereof, the
whole amount to bear interest at the
maximum rate allowed by
law."10 Therefore, any penalty interest
not paid, when due, shall earn the legal

interest of twelve percent (12%) per

annum,11 in the absence of express
stipulation on the specific rate of
interest, as in the case at bar
G.R. No. 138677
2002

February 12,

TOLOMEO LIGUTAN and LEONIDAS

DE LA LLANA, petitioners,
vs.
HON. COURT OF APPEALS &
SECURITY BANK & TRUST
COMPANY, respondents.