1. Saura Import and Export Co v.

Development Bank of the demand that the other party also fulfills his own
Phils obligation and if the latter fails, default sets in.

 Article 1934 provides: An accepted promise to

deliver something by way of commodatum or 3. Bonnevie v. CA
simple loan is binding upon the parties, but the  A contract of loan being a consensual contract is
commodatum or simple loan itself shall not be perfected at the same time the contract of mortgage
perfected until delivery of the object of the was executed. The promissory note executed on
contract. December 12, 1966 is only an evidence of
indebtedness and does not indicate lack of
 There was undoubtedly offer and acceptance in
consideration of the mortgage at the time of its
the case. The application of Saura, Inc. for a loan
execution.
of P500,000.00 was approved by resolution of the
defendant, and the corresponding mortgage was  Respondent Bank had every right to rely on the
executed and registered. The defendant failed to certificate of title. It was not bound to go behind the
fulfill its obligation and the plaintiff is therefore same to look for flaws in the mortgagor's title, the
entitled to recover damages. doctrine of innocent purchaser for value being
applicable to an innocent mortgagee for value.
 When an application for a loan of money was
approved by resolution of the respondent  Thru certificate of sale in favor of appellee was
corporation and the responding mortgage was registered on September 2, 1968 and the one year
executed and registered, there arises a perfected redemption period expired on September 3, 1969. It
consensual contract. was not until September 29, 1969 that Honesto
Bonnevie first wrote respondent and offered to
 However, it should be noted that RFC imposed
redeem the property.
two conditions (availability of raw materials and
increased production) when it restored the loan  Loan matured on December 26, 1967 so when
to the original amount of P500,000.00. respondent Bank applied for foreclosure, the loan was
already six months overdue. Payment of interest on
 Saura, Inc. obviously was in no position to comply
July 12, 1968 does not make the earlier act of PBC
with RFC’s conditions. So instead of doing so and
inequitous nor does it ipso facto result in the renewal
insisting that the loan be released as agreed
of the loan. In order that a renewal of a loan may be
upon, Saura, Inc. asked that the mortgage be
effected, not only the payment of the accrued interest
cancelled.The action thus taken by both parties
is necessary but also the payment of interest for the
was in the nature of mutual desistance which is
proposed period of renewal as well. Besides, whether
a mode of extinguishing obligations. It is a
or not a loan may be renewed does not solely depend
concept that derives from the principle that
on the debtor but more so on the discretion of the
since mutual agreement can create a contract,
bank.
mutual disagreement by the parties can cause its
extinguishment.
4. Central Bank of the Phils. v. CA
2. Bpi Investment v. CA
 Island Savings Bank cannot fully foreclose the
land of Tolentino. But it can only foreclose up to
 A loan contract is not a consensual contract but a
the equivalent of the P17,000 that it had released
real contract. It is perfected upon delivery of the
to Tolentino or a total of 21.25 hectares of the
object of the contract. Although a perfected
total 100 hectares of land. The reason for which is
consensual contract can give rise to an action for
that Tolentino issued a promissory note for the
damages, it does not constitute a real contract
amount the bank has given him. The Court ruled
which requires delivery for perfection. A
that if Tolentino did not issue a PN, then he would
perfected real contract gives rise only to
not be liable to pay the amount to the bank since
obligations on the part of the borrower.
the bank was also in default in paying Tolentino
 In the present case, the loan contract was only
with the remaining P63,000 of the loan.
perfected on the date of the second release of the
 The reason of ISB that it can no longer provide for
loan.
the P63,000 because of the Central Bank’s
 A contract of loan involves a reciprocal obligation,
resolution is untenable. The resolution only
wherein the obligation or promise of each party is
prohibits the ISB from issuing new loans and
the consideration for that of the other. It is a basic
investments, and nowhere did it prohibit Island
principle in reciprocal obligations that neither
Savings Bank from releasing the balance of loan
party incurs in delay, if the other does not comply
agreements previously contracted. Likewise,
or is not ready to comply in a proper manner with
since Tolentino issued a Promissory Note in favor
what is incumbent upon him. Only when a party
of the bank, and failed to pay the amount of the
has performed his part of the contract can he
 note, he is also liable for default in payment of his
obligation.
5. Republic v. Bagtas
 Commodatum is essentially gratuitous. However,
in this case, there is a 10% charge. If this is
considered compensation, then the case at bar is
a lease. Lessee is liable as possessor in bad faith
because the period already lapsed.
 Even if this is a commodatum, Bagtas is still liable
because the fortuitous event happened when he
held the bull and the period stipulated already
expired and he is liable because the thing loaned
was delivered with appraisal of value and there
was no contrary stipulation regarding his liability
in case there is a fortuitous event.
6. Catholic Vicar Apostolic of the Mountain Province v. CA
 Private respondents were able to prove that their
predecessors' house was borrowed by petitioner
Vicar after the church and the convent were
destroyed. They never asked for the return of the
house, but when they allowed its free use, they
became bailors in commodatum and the
petitioner the bailee.
 The bailees' failure to return the subject matter of
commodatum to the bailor did not mean adverse
possession on the part of the borrower. The
bailee held in trust the property subject matter of
commodatum. The adverse claim of petitioner
came only in 1951 when it declared the lots for
taxation purposes. The action of petitioner Vicar
by such adverse claim could not ripen into title by
way of ordinary acquisitive prescription because
of the absence of just title.
 The Court of Appeals found that petitioner Vicar
did not meet the requirement of 30 years
possession for acquisitive prescription over Lots 2
and 3. Neither did it satisfy the requirement of 10
years possession for ordinary acquisitive
prescription because of the absence of just title.
The appellate court did not believe the findings of
the trial court that Lot 2 was acquired from Juan
Valdez by purchase and Lot 3 was acquired also
by purchase from Egmidio Octaviano by
petitioner Vicar because there was absolutely no
documentary evidence to support the same and
the alleged purchases were never mentioned in
the application for registration.
7. Quintos v. Beck
 The contract entered into between the parties is
one of commodatum, 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 latter's
demand
 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 at the latter's residence
or house. The defendant did not comply with this
obligation when he merely placed them at the
disposal of the plaintiff, retaining for his benefit
the three gas heaters and the four electric lamps.
 As the defendant had voluntarily undertaken to
return all the furniture to the plaintiff, upon the
latter's demand, the Court could not legally
compel her to bear the expenses occasioned by
the deposit of the furniture at the defendant's
behest. The latter, as bailee, was not... entitled to
place the furniture on deposit; nor was the
plaintiff under a duty to accept the offer to return
the furniture, because the defendant wanted to
retain the three gas heaters and the four electric
lamps.
 The costs in both instances should be borne by
the defendant
 The defendant was the one who breached the
contract of commodatum, and without any
reason he refused to return... and deliver all the
furniture upon the plaintiff's demand. In these
circumstances, it is just and equitable that he pay
the legal expenses and other judicial costs which
the plaintiff would not have otherwise defrayed.
8. Consolidated Bank &Trust v. CA
 The contract between the bank and its depositor
is governed by the provisions of the Civil Code on
simple loan (Article 1980, Civil Code). There is a
debtor-creditor relationship between the bank
and its depositor. The bank is the debtor and the
depositor is the creditor. The depositor lends the
bank money and the bank agrees to pay the
depositor on demand. The savings deposit
agreement between the bank and the depositor
is the contract that determines the rights and
obligations of the parties. Under their contract, it
is the duty of LC Diaz to secure its passbook.
However, this duty is also applicable to Solidbank
when it gains possession of said passbook which
it did when the messenger left it to the bank’s
possession through the bank’s teller.
 The act of the teller returning the passbook to
someone else other than Calapre, the firm’s
authorized messenger, is a clear breach of
contract. Such negligence binds the bank under
the principle of respondeat superior or command
responsibility
9. Republic v. Grijaldo
 The obligation of the contracts was not to deliver
a determinate thing, it was a generic thing. The
 amount of money representing the total sum of
his laons. The destruction of anything of the same
kind does not extinguish the ibligation. 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. Also,
prescription does not run against the state.
10. Casa Filipina Development Corp v. Deputy Sec.
 The ruling in Reformina v. Tomol deals exclusively
with cases where damages in the form of interest
is due but no specific rate has been previously set
by the parties. In such cases the legal interest of
12% per annum must be applied. In the present
case, however, the interest rate of 24% per
annum was mutually agreed upon by petitioner
and private respondent in their contract to sell—
this was the interest rate imposed on the private
respondent for the payment of the installments
on the contract price and there is no reason why
the same interest rate should be equally applied
to petitioner who is guilty of violating the
reciprocal obligation.
 In Solid Homes Inc v. CA, the SC held that the
proper rate of interest is 12% expressly agreed
upon in writing by the parties, as appearing in the
invoices and sanctioned by Art 2209 is applicable.
 It is, thus, evident that if a particular rate of
interest has been expressly stipulated by the
parties, that interest, not the legal rate of
interest, shall be applied.
 PERIOD OF REDEMPTION IS 6 MONTHS FROM
ISSUANCE OF TITLE
 Sec 25 of PD 957 imposes an obligation on the
part of the owner or developer, in the event the
mortgage over the lot or unit is outstanding at the
time of the issuance of the title to the buyer, to
redeem the mortgage or the corresponding
portion thereof within 6 months from such
issuance. The argument that the issuance of the
title is a prerequisite to the running of the 6-
month period of redemption is untenable.
Otherwise, the owner or developer can readily
concoct various reasons to justify its failure to
issue the title and in the process, prolong the
period within which to deliver the title to the
buyer free from any liens or encumbrances.
 Additionally, by not issuing or delivering the title
to the private respondent upon full payment
thereof, Casa Filipina had already violated the
explicit mandate of the first sentence of Sec 25 of
PD 957.
11. PNB v. CA
 theycontemplate the presence of stipulated or
12. Relucio v. Brillante-Garfin
13. Eastern Shipping Lines v. CA
(1) The Court held that the legal interest is
6% computed from the decision of the court a quo. When
an obligation, not constituting a loan or forbearance of
money, is breached, an interest on the amount of damaes
awarded may be imposed at the discretion of the court at
the rate of 6% per annum. No interest shall be adjudged on
unliquidated claims or damages except when or until the
demand can be established with reasonable certainty.
When the judgment of the court awarding a
sum of money becomes final and executor, the rate of legal
interest shall be 12% per annum from such finality until
satisfaction, this interim period being deemed to be by then
an equivalent to a forbearance of money.
The interest due shall be 12% PA to be
computed fro default, J or EJD.
(2) From the date the judgment is made.
Where the demand is established with reasonable
certainty, the interest shall begin to run from the time the
claim is made judicially or EJ but when such certainty cannot
be so reasonably established at the time the demand is
made, the interest shll begin to run only from the date of
judgment of the court is made.
(3) The Court held that it should be computed from the decision
rendered by the court a quo.
14. Phil. American Accident Insurance Co. v. Flores
 The questioned Order cannot be sustained. The
judgment which was sought to be
executedordered the payment of simple "legal
interest" only. It said nothing about the payment
of compoundinterest. Accordingly, when the
respondent judge ordered the payment of
compound interest he wentbeyond the confines
of his own judgment which had been affirmed by
the Court of Appeals and whichhad become final.
 Private Respondent invokes Sec. 5 of the Usury
Law which reads in part as follows: “In computi ng
theinterest on any obligation, promissory note or
other instrument or contract, compound interest
shall notbe reckoned, except by agreement, or in
default thereof, whenever the debt is judicially
claimed inwhich case it shall draw sic per centum
per annum interest xxx as well as Art. 2212 of the
Civil Code which stipulates: “Interest due shall
earn legal interest from the time it is judicially
demanded, althoughthe obligation may be silent
upon this point.”
 Both legal provisions are inapplicable for
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 accruedconventional
interest which could further earn interest upon
judicial demand. Wherefore, decision was set
aside
15. BPI v. IAC
 The document which embodies the contract
states that the US$3,000.00 was received by the
bank for safekeeping. The subsequent acts of the
parties also show that the intent of the parties
was really for the bank to safely keep the dollars
and to return it to Zshornack at a later time. Thus,
Zshornack demanded the return of the money on
May 10, 1976, or over five months later.
 The above arrangement is that contract defined
under Article 1962, New Civil Code, which reads:
 Art. 1962. A deposit is constituted from the
moment a person receives a thing belonging to
another, with the obligation of safely keeping it
and of returning the same. If the safekeeping of
the thing delivered is not the principal purpose of
the contract, there is no deposit but some other
contract.
16. Triple-V Food Services v. Filipino Merchants Insurance
 The Supreme Court ruled in the affirmative. In a
contract of deposit, a person receives an object
belonging to another with the obligation of safely
keeping it and returning the same. A deposit may
be constituted even without any consideration. It
is not necessary that the depositary receives a fee
before it becomes obligated to keep the item
entrusted for safekeeping and to return it later to
the depositor. Petitioner cannot evade liability by
arguing that neither a contract of deposit nor that
of insurance, guaranty or surety for the loss of the
car was constituted when De Asis availed of its
free valet parking service.
17. CA Agro-Industrial Development Corp. v. CA
1. No. SC ruled that it is a special kind of deposit
because:
 the full and absolute possession and control of
the SDB was not given to the joint renters — the
Petitioner and the Pugaos.
 The guard key of the box remained with the
Respondent Bank; without this key, neither of the
renters could open the box and vice versa.
 In this case, the said key had a duplicate which
was made so that both renters could have access
to the box.
 Moreover, the renting out of the SDBs is not
independent from, but related to or in
conjunction with, the principal function of a
contract of deposit the receiving in custody of
funds, documents and other valuable objects for
safekeeping.
2. NO. SC opined that it is void.
 Generally, the Civil Code provides that the
depositary (Respondent Bank) would be liable if,
in performing its obligation, it is found guilty of
fraud, negligence, delay or contravention of the
tenor of the agreement.
 In the absence of any stipulation, the diligence of
a good father of a family is to be observed.
 Hence, any stipulation exempting the depositary
from any liability arising from the loss of the
thing deposited on account of fraud, negligence
or delay would be void for being contrary to law
and public policy (which is present in the
disputed contract)
 Said provisions are inconsistent with the
Respondent Bank's responsibility as a depositary
under Section 72(a) of the General Banking Act.
18. Roman Catholic Bishop of Jaro v. Dela peña
19. YHT Realty Corp v. CA
 Article 2003 was incorporated in the New Civil
Code as an expression of public policy precisely to
apply to situations such as that presented in this
case. The hotel business like the common
carrier’s business is imbued with public interest.
Catering to the public, hotelkeepers are bound to
provide not only lodging for hotel guests and
security to their persons and belongings. The twin
duty constitutes the essence of the business. The
law in turn does not allow such duty to the public
to be negated or diluted by any contrary
stipulation in so-called “undertakings” that
ordinarily appear in prepared forms imposed by
hotel keepers on guests for their signature.
 In an early case (De Los Santos v. Tan Khey), CA
ruled that to hold hotelkeepers or innkeeper
liable for the effects of their guests, it is not
necessary that they be actually delivered to the
innkeepers or their employees. It is enough that
such effects are within the hotel or inn. With
greater reason should the liability of the
hotelkeeper be enforced when the missing items
are taken without the guest’s knowledge and
consent from a safety deposit box provided by the
hotel itself, as in this case.
 Paragraphs (2) and (4) of the “undertaking”
manifestly contravene Article 2003, CC for they
allow Tropicana to be released from liability
arising from any loss in the contents and/or use
of the safety deposit box for any cause
whatsoever. Evidently, the undertaking was
intended to bar any claim against Tropicana for
any loss of the contents of the safety deposit box
whether or not negligence was incurred by
Tropicana or its employees.
20. PNB v. Se

21. Ortiz v. Kayanan

22. Navoa and Navoa v. CA

23. Spouses Constantino v. Cuisia

24. Intestate of Leyson v. Silva (L-4090)

PNB V ATENDIDO
 The surrendering of the warehouse receipt was
not that of a final transfer but merely as guaranty
to the fulfillment of the original obligation of 3000
 The 2000 cavanes of palay covered by the
warehouse receipt were given to PNB only as
guarantee to the fulfillment by atendido of his
obligation. This appears in the contract between
them wherein it is expressly stated that said 2000
cavanes of palay were given as a collateral
security
 The delivery of said palay being merely by way of
security, it follows that by the very nature of the
transaction, its ownership remains with atendido
subject only to the foreclosure in case of
nonfulfillment of the obligation
 Id the obligation is not paid upon maturity the
most that PNB can do is to sell the property and
apply the proceeds to the payment of the
obligation and to return the balance, if any to the
pledger
 This is the essence of the contract because a
pledgee cannot become the owner of nor
appropriate to humself the thing given in pledge.

VASQUEZ V GARCIA
 Yes, a warehouseman who deposited
merchandise in his own warehouse, issued a
warehouse receipts therefore and thereafter
negotiated the receipts by endorsement. The
receipt recites that the goods were deposited
“por orden” of the depositor, the
warehouseman, but contained no statement
that the goods were to be delivered to the
bearer of the receipts or to a specified person. It
is in the form of a warehouse receipts and was
not mark “nonnegotiable”.
 Therefore the receipts was negotiable
warehouse receipts and the words “por orden”
must be construed to mean “to the order”.