Q: iBank, a commercial bank, granted Yulim, a domestic partnership, a credit facility in the form

of an Omnibus Loan Line for P5,000,000. The partners, namely, H, I, J, and K executed a
Continuing Surety Agreement in favor of iBank whereby they bound themselves jointly and
severally with Yulim and unconditionally and irrevocably guaranteed full and complete
payment of any and all credit accommodations granted by the bank to Yulim. Yulim defaulted
on the said note. iBank sent demand letters to Yulim but the demand went unheeded. iBank
then filed a Complaint for Sum of Money with Replevin against Yulim and its sureties, H, I, J,
and K. Are the individual defendants liable for the obligation of Yulim?

A: YES, the individual defendants are jointly and severally liable with Yulim. A surety is considered
in law as being the same party as the debtor in relation to whatever is adjudged touching the
obligation of the latter, and their liabilities are interwoven as to be inseparable. And it is well
settled that when the obligor/s undertake to be jointly and severally liable, it means that the
obligation is solidary, as in this case. There can thus be no doubt that the individual petitioners
have bound themselves to be solidarily liable with Yulim for the payment of its loan with iBank.
(Yulim International Company v. International Exchange Bank (now Union Bank), G.R. No. 203133,
February 18, 2015)

Q: Sps. Castro obtained loans which were secured by Real Estate Mortgage over two parcels of
land, one in Quezon City, and the other in Laguna. After maturity, the loans remained unpaid
thus the bank filed petitions for foreclosure. The Notice of Sheriff’s Sale of the Quezon City
property contained errors as a result of inadvertence. There was a mix-up of the pages of the
petition such that page two of the petition for foreclosure of the Quezon City lot contained the
technical description of the Laguna property. Thereafter, the property was sold at a public
auction. Sps. Castro filed a complaint alleging that the extrajudicial foreclosure and sale is null
and void. Whether the errors in the Notice of Sheriff’s Sale would invalidate the notice and
render the sale void?

A: No. The errors in the Notice of Sheriff’s Sale are not prejudicial to the public and would not
invalidate the sale. Notices are given for the purpose of securing bidders and to prevent a
sacrifice of the property. If these objects are attained, immaterial errors and mistakes will not
affect the sufficiency of the notice. In this case, the errors pointed out appear to be harmless.
There was no intention to mislead. (BPI v. Sps. David and Consuelo Castro, G.R. No. 195272,
January 14, 2015)

Q: AR and YT attempted several times to withdraw their deposits but MBTC refused stating
that their bank accounts were placed under “Hold Out” status. No explanation was given to
them. Thus, they filed a complaint for Breach of Obligation and Contract with Damages and
prayed that the Hold Out status be lifted and be allowed to withdraw their deposits. Is the Hold
Out status bank account of proper?

A: No. Bank deposits, which are in the nature of a simple loan or mutuum, must be paid upon
demand by the depositor.
The "Hold Out" clause applies only if there is a valid and existing obligation arising from any of
the sources of obligation enumerated in Article 1157 of the Civil Code, to wit: law, contracts,
quasi-contracts, delict, and quasi-delict. In this case, MBTC failed to show that AR and YT have
an obligation to it under any law, contract, quasi-contract, delict, or quasi-delict. And although a
criminal case was filed by MBTC against AR, this is not enough reason for petitioner to issue a
"Hold Out" order as the case is still pending and no final judgment of conviction has been
rendered against AR. In fact, it is significant to note that at the time MBTC issued the "Hold Out"
order, the criminal complaint had not yet been filed. Thus, considering that AR is not liable under
any of the five sources of obligation, there was no legal basis for MBTC to issue the "Hold Out"
order. In view of the foregoing, we find that MBTC is guilty of breach of contract when it
unjustifiably refused to release AR’s and YT’s deposit despite demand. Having breached its
contract with AR and YT, MBTC is liable for damages. (Metropolitan Bank and Trust Company v.
Ana Grace Rosales and Yo Yuk To, G.R. No. 183204, 13 January 2014)