, the negotiations
which had been going on for the implementation of the
agreement reached an impasse. Saura, Inc. obviously was in
no position to comply with RFC's conditions. So instead of doing
at the legal rate from the time this complaint was filed less
P14,667,678.01. "BPI Family Bank liable for the amount of
P65,332,321.99 plus interest at 17% per annum from August 29,
1989 until fully restored. Further, this 17% interest shall itself
earn interest at 12% from October 4, 1989 until fully paid.
Petitioner BPI FB contends:
(1) that the Court of Appeals erred in awarding the 17% per
annum interest corresponding to the amount deposited by
respondent FMIC.
(2) that respondents deposit is not a special savings account
similar to a time deposit, but actually a demand deposit,
withdrawable upon demand, proscribed from earning
interest under Central Bank Circular 777.
(3) that the transaction is not valid as its Branch Manager, Jaime
Sebastian, clearly overstepped his authority in entering into such
an agreement with respondents Executive Vice President.
ISSUES:
1.
2.
3.
HELD:
1. YES. We hold that the parties did not intend the deposit to be
treated as a demand deposit but rather as an interest- earning
time deposit not withdrawable any time. This is quite obvious
from the communications between the Branch
Manager, and Antonio Ong, respondents Executive Vice
President. Both agreed that the deposit of P100 million was nonwithdrawable for one year upon payment in advance of
the 17% per annum interest. Clearly, when respondent FMIC
invested its money with petitioner BPI FB, they intended the
P100 million as a time deposit, to earn 17% per annum interest
and to remain intact until its maturity date one year thereafter.
Ordinarily, a time deposit is defined as "one the payment of
which cannot legally be required within such a specified number
of days."
In contrast, demand deposits are "all those liabilities of the
Bangko Sentral and of other banks which are denominated in
Philippine currency and are subject to payment in legal
tender upon demand by the presentation of
(depositors) checks."
While it may be true that barely one month and seven days from
the date of deposit, respondent FMIC demanded the withdrawal
of P86,057,646.72 through the issuance of a check payable to
itself, the same was made as a result of the fraudulent and
unauthorized transfer by petitioner BPI FB of its P80 million
deposit to Tevestecos savings account. Certainly, such was a
normal reaction of respondent as a depositor to petitioners
failure in its fiduciary duty to treat its account with the highest
degree of care.
Under this circumstance, the withdrawal of deposit by
respondent FMIC before the one-year maturity date did not
June 10, 1968 and the notice of sale was published in the Luzon
Weekly Courier on June 30, July 7, and July 14, 1968. On
Septtember 4, 1968, PBC bought the property from the public
auction for P84,387.
On October 9, 1969, Raoul and Honesto offered to repurchase the
property but were denied. Thereafter they caused an adverse
claim to be annotated on the title of the property.
The Bonnevies contend, first, that the mortgage was invalid for
lacking consideration as the Lozanos have not received the
amount. Second, that the renewals of the Lozanos of the loan
using the same property already sold rendered it null and void.
Third, the foreclosure sale lacked notice to them.
ISSUES:
1. Whether the real estate mortgage executed by the
spouses Lozano in favor of respondent bank was validly
and legally executed.
2. Whether the extrajudicial foreclosure of the said
mortgage was validly and legally effected.
3. Whether petitioners had a right to redeem the
foreclosed property.
HELD:
1. Yes. Under the law, a contract of loan being a consensual
contract, it was perfected at the same time the contract of
mortgage was executed. The fact that the Lozanos did not
collect from the respondent Bank the consideration of the
mortgage on the date it was executed is immaterial. 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.
The argument that the renewals of the Lozanos of the loan
using the property already sold rendered it null and void, is
untenable because of the assumption of mortgage. A contract of
mortgage which prohibits the sale, disposition of, mortgage and
encumbrance of the mortgaged properties, without the written
consent of the mortgagee, and then mortgaged property is sold,
the vendee shall assume the mortgage in the terms and
conditions under which it is constituted.
In this case, the title of the property remained in the name of
the Lozano spouses so they could validly renew the loan and the
bank could rely on the certificate of title because the sale or
assignment was not registered. The doctrine of innocent
purchaser for value is applicable to an innocent mortgagee for
value. Furthermore, the petitioners voluntarily assumed the
mortgage when they entered into the Deed of Sale with
Assumption of Mortgage. As a result, they are estopped from
impugning its validity whether on the original loan or renewals
thereof.
2. Yes. Under Act No. 3135, Section 3. Notice shall be given by
posting notices of the sale for not less than twenty days in at
least three public places of the municipality or city where the
property is situated, and if such property is worth more than
four hundred pesos, such notice shall also be published once a
week for at least three consecutive weeks in a newspaper of
general circulation in the municipality or city.
The law does not require personal notice to the mortgagor. In
Basa vs Mercado, it was held that to be a newspaper of general
circulation, it is enough that "it is published for the
dissemination of local news and general information; that it has
a bona fide subscription list of paying subscribers; that it is
published at regular intervals." In this case, there was sufficient
publication.
3. No. The petitioners assumed the mortgage without the consent
of PBC. As a result, petitioners were not validly substituted as
debtors. Furthermore, their rights were never recorded and
Issues:
1. WON Sulpicio can maintain an action for specific
performance against Island Savings Bank
2. Is Sulpicion liable to pay the 17,000
3. Failure to pay 17,000, can his real estate mortgage be
foreclosed
Held:
1.
2.
Article 1192 of the Civil Code provides that in case both parties
have committed a breach of their reciprocal obligations, the
liability of the first infractor shall be equitably tempered by
the courts.
3.
The original period of the loan was from 8 May 1948 to 7 May
1949. The loan of one bull was renewed for another period of one
year to end on 8 May 1950. But the appellant kept and used the
bull until November 1953 when during a Huk raid it was killed by
stray bullets. Furthermore, when lent and delivered to the
deceased husband of the appellant the bulls had each an
appraised book value, to with: the Sindhi, at P1,176.46, the
Bhagnari at P1,320.56 and the Sahiniwal at P744.46. It was not
stipulated that in case of loss of the bull due to fortuitous event
the late husband of the appellant would be exempt from liability.
Doctrine:
Loan of bulls for breeding purposes; Nature of contract affected
by payment of fee.The loan by the Bureau of Animal Industry
to the defendant of three bulls for breeding purposes for a period
of one year, later on renewed for another as regards one bull, was
subject to the payment by the borrower of breeding fee of 10% of
the book value of the bulls. If the breeding fee be considered a
compensation, the contract would be a lease of the bulls; it could
not be a contract of commodatum, because that contract is
essentially gratuitous.
HELD:
1. The contract 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
(clause 7 of the contract, Exhibit A; articles 1740, paragraph 1,
and 1741 of the Civil Code). The obligation voluntarily assumed
by the defendant to return the furniture upon the plaintiff's
demand, means that he should return all of them to the plaintiff
9. REPUBLIC vs GRIJALDO
Jose Grijaldo obtained five loans from the branch office of the
Bank of Taiwan, Ltd. in Bacolod City, in the total sum of
P1,281.97 with interest at the rate of 6% per annum, compounded
quarterly.
By virtue of Vesting Order No. P-4, and the Enemy Act, the
assets in the Philippines of the Bank of Taiwan, Ltd. were vested
in the Government of the United States.
These assets, including the loans in question, were subsequently
transferred to the Republic of the Philippines by the Government
of the United States under Transfer Agreement.
Appellee, Republic of the Philippines, represented by the
Chairman of the Board of Liquidators, made a written
extrajudicial demand upon the appellant for the payment of the
account in question.
The appellant contends: (1) that the appellee has no cause of
action against the appellant because the loans were secured by a
chattel mortgage on the standing crops on a land owned by him
and these crops were lost or destroyed through enemy action,
hence his obligation to pay the loans was thereby extinguished;
(2) that if the appellee has a cause of action at all, that action had
prescribed; and
(3) that the lower court erred in ordering the appellant to pay the
amount of P2,377.23.
ISSUE:
1. Whether or not there is no cause of against appellant; t hat the
appellee has no privity of contract with the appellant.
This appears to be the basis for the awarding interest at the legal
rate from
Oct. 1968, although the debt was judicially demanded only on
July 6 1970) and attorneys fees and the cost of the suit. Later on,
Respondent advised the petitioner that payment was not in full
satisfaction of the judgment because he has to pay
compound interest or additional sum of P10, 375.77. The
respondent secured a writ if execution upon the refusal of the
petitioner to pay the additional sum claimed; which was affirmed
by the Judge. Hence this review.
ISSUE: Whether or not the petitioner is obligated to pay
compound interest under the judgment.
HELD: NO. The questioned Order cannot be sustained. The
judgment which was sought to be executed ordered the payment
of simple "legal interest" only. It said nothing about the payment
silent upon this point. Both legal provisions are inapplicable for
they contemplate the presence of stipulated or conventional
interest which had accrued when demand was judicially made.
In this case, no interest had been stipulated by the parties. In
other words, there was no accrued conventional interest which
could further earn interest upon judicial demand. Wherefore,
decision was set aside.
Doctrine: Both Art. 2212 of the Civil code and Section 5 of the
Usury Law refer to stipulated or
conventional interest and does not apply where no interest was
stipulated by the parties.