CASE 2: GSIS vs. Court of Appeals (1986) Ponente: Paras FACTS: This is a petition for review on certiorari of the decision of the Court of Appeals affirming the decision of the trial court, and at the same time ordering the GSIS to reimburse the amount of P9,580.00 as over-payment and to pay the spouses Nemencio R. Medina and Josefina G. Medina P3,000.00 and P1,000.00 as attorney's fees and litigation expenses. In 1961, private respondents spouses Nemencio R. Medina and Josefina G. Medina (Medinas for short) applied with petitioner GSIS for a loan of P600,000.00. The GSIS Board of Trustees approved only the amount of P350,000.00, subject to the following conditions: that the rate of interest shall be 9% per annum compounded monthly; repayable in ten (10) years at a monthly amortization of P4,433.65 including principal and interest, and that any installment or amortization that remains due and unpaid shall bear interest at the rate of 9%/12% per month. The Office of the Economic Coordinator, in a 2nd Indorsement further reduced the approved amount to P295,000.00. The Medinas accepting the reduced amount, executed a promissory note and a real estate mortgage in favor of GSIS. Later, the GSIS, and the Office of the Economic Coordinator both approved the restoration of the amount of P350,000.00 (P295,000.00 + P55,000.00) originally approved by the GSIS. In 1963, additional loan of 230k was granted to the Medinas on the security of the same mortgaged properties and the additional properties to bear interest at 9% per annum compounded monthly and repayable in 10 years. Beginning 1965, the Medinas having defaulted in the payment of the monthly amortization on their loan, the GSIS imposed 9%/12% interest on all installments due and unpaid. In 1967, the Medinas began defaulting in the payment of fire insurance premiums. On May 3, 1974, the GSIS notified the Medinas that they had arrearages in the aggregate amount of P575,652.42 as of April 18, 1974, and demanded payment within 7 days from notice thereof, otherwise, it would foreclose the mortgage. On April 21, 1975, the

GSIS filed an Application for Foreclosure of Mortgage with the Sheriff of the City of Manila. The Medinas filed with the CFI of Manila a complaint, praying a restraining order or writ of preliminary injunction be issued to prevent the GSIS and the Sheriff of the City of Manila from proceeding with the extra-judicial foreclosure of their mortgaged properties. However, no restraining order or writ of preliminary injunction was issued by the trial court. On April 25, 1975, the Medinas made a last partial payment in the amount of P209,662.80. Under an Auction, the properties of Medina were sold to GSIS for the total amount of P440,080.00, and the corresponding Certificate of Sale was executed by the Sheriff of Manila. the Medinas filed an Amended Complaint with the trial court, praying for (a) the declaration of nullity of their two real estate mortgage contracts with the GSIS as well as of the extra-judicial foreclosure proceedings; and (b) the refund of excess payments, plus damages and attorney's fees. RTC and CA ruled in favor of Medina spouses. Hence this petition. ISSUE: WON the amendment of the real estate mortgage supersedes the original mortgage contract RATIO: It is a basic and fundamental rule in the interpretation of contract that if the terms thereof are clear and leave no doubt as to the intention of the contracting parties, the literal meaning of the stipulations shall control but when the words appear contrary to the evident intention of the parties, the latter shall prevail over the former. In order to judge the intention of the parties, their contemporaneous and subsequent acts shall be principally considered. First, the title "Amendment of Real Estate Mortgage" recognizes the existence and effectivity of the previous mortgage contract. Second, nowhere in the aforesaid Amendment did the parties manifest their intention to supersede the original contract. On the contrary in the WHEREAS clauses, the existence of the previous mortgage contract was fully recognized and the fact that the same was just being

amended as to amount and amortization is fully established as to obviate any doubt. Third, the Amendment of Real Estate Mortgage dated July 6, 1962 does not embody the act of conveyancing the subject properties by way of mortgage. In fact the intention of the parties to be bound by the unaffected provisions of the mortgage contract of April 4, 1962 expressed in unmistakable language is clearly evident in the last provision of the Amendment of Real Estate Mortgage

A review of prior, contemporaneous, and subsequent acts supports the conclusion that both contracts are fully subsisting insofar as the latter is not inconsistent with the former. The fact is the GSIS, as a matter of policy, imposes uniform terms and conditions for all its real estate loans, particularly with respect to compounding of interest. As shown in the case at bar, the original mortgage contract embodies the same terms and conditions as in the additional loan while the amendment carries the provision that it shall be subject to the same terms and conditions as the real estate mortgage of April 4, 1962 except as to amount and amortization.

Furthermore, it would be contrary to human experience and to ordinary practice for the mortgagee to impose less onerous conditions on an increased loan by the deletion of compound interest exacted on a lesser loan.

CASE 5: The ROMAN CATHOLIC BISHOP OF JARO vs. De La Peña(1913) Ponente: Moreland FACTS: The plaintiff is the trustee of a charitable bequest made for the construction of a leper hospital and that father Agustin de la Peña was the duly authorized representative of the plaintiff to receive the legacy. The defendant is the administrator of the estate of Father Dela Peña. In the year 1898 the books Father De la Peña, as trustee, showed that he had on hand as such trustee the sum of P6,641, collected by him for the charitable purposes. In the same year he deposited in his personal account P19,000 in the Hongkong

and Shanghai Bank at Iloilo. Shortly thereafter and during the war of the revolution, Father De la Peña was arrested by the military authorities as a political prisoner, and while thus detained made an order on said bank in favor of the United States Army officer under whose charge he then was for the sum thus deposited in said bank. The arrest of Father De la Peña and the confiscation of the funds in the bank were the result of the claim of the military authorities that he was an insurgent and that the funds thus deposited had been collected by him for revolutionary purposes. The money was taken from the bank by the military authorities by virtue of such order was confiscated and turned over to the Government. While there is considerable dispute in the case over the question whether the P6,641 of trust funds was included in the P19,000 deposited as aforesaid, nevertheless, a careful examination of the case leads us to the conclusion that said trust funds were a part of the funds deposited and which were removed and confiscated by the military authorities of the United States. ISSUE: WON Father de la Peña is liable for the loss of the money under his trust HELD: No, he is not liable. RATIO: The court finds and declares that the money which is the subject matter of this action was deposited by Father De la Peña in the Hongkong and Shanghai Banking Corporation of Iloilo; that said money was forcibly taken from the bank by the armed forces of the United States during the war of the insurrection; and that said Father De la Peña was not responsible for its loss. Father De la Peña's liability is determined by those portions of the Civil Code which relate to obligations.(Book 4, Title 1.) Although the Civil Code states that "a person obliged to give something is also bound to preserve it with the diligence pertaining to a good father of a family" (art.1094), it also provides, following the principle of the Roman law, major casus est, cui humanainfirmitasresistere non potest , that "no one shall be liable for events which could not be foreseen, or which having been foreseen were inevitable, with the exception of the cases expressly

mentioned in the law or those in which the obligation so declares." (Art. 1105.) By placing the money in the bank and mixing it with his personal funds De la Peña did not thereby assume an obligation different from that under which he would have lain if such deposit had not been made, nor did he thereby make himself liable to repay the money at all hazards. If the money had been forcibly taken from his pocket or from his house by the military forces of one of the combatants during a state of war, it is clear that under the provisions of the Civil Code he would have been exempt from responsibility. The fact that he placed the trust fund in the bank in his personal account does not add to his responsibility. Such deposit did not make him a debtor who must respond at all hazards. CASE 8: YHT Realty v. CA (2005) Ponente: Tinga FACTS: Respondent McLoughlin would stay at Tropicana Hotel every time he is here in the Philippines and would rent a safety deposit box. The safety deposit box could only be opened through the use of 2 keys, one of which is given to the registered guest, and the other remaining in the possession of the management of the hotel. McLoughlin allegedly placed the following in his safety deposit box –Fifteen Thousand US Dollars (US$15,000.00) which he placed in two envelopes, one envelope containing Ten Thousand US Dollars (US$10,000.00) and the other envelope Five Thousand US Dollars (US$5,000.00); Ten Thousand Australian Dollars (AUS$10,000.00) which he also placed in another envelope; 2 other envelopes containing letters and credit cards; 2 bankbooks; and a checkbook, arranged side by side inside the safety deposit box.

When he went abroad, a few dollars were missing and the jewelry he bought was likewise missing. Eventually, he confronted Lainez and Paiyam who admitted that Tan opened the safety deposit box with the key assigned to him. McLoughlin went up to his room where Tan was staying and confronted her. Tan admitted that she had stolen McLouglin’s key and was able to open the safety deposit box with the

assistance of Lopez, Paiyam and Lainez. Lopez alsto told McLoughlin that Tan stole the key assigned to McLouglin while the latter was asleep.McLoughlin insisted that it must be the hotel who must assume responsibility for the loss he suffered.Lopez refused to accept responsibility relying on the conditions for renting the safety deposit box entitled “Undertaking For the Use of Safety Deposit Box” which provides: 2. To release and hold free and blameless TROPICANA APARTMENT HOTEL from any liability arising from any loss in the contents and/or use of the said deposit box for any cause whatsoever, including but not limited to the presentation or use thereof by any other person should the key be lost; 4. To return the key and execute the RELEASE in favor of TROPICANA APARTMENT HOTEL upon giving up the use of the box

ISSUE: WON the hotel’s Undertaking is valid HELD: NO it is not valid. RATIO: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. In the case at bar, the responsibility of securing the safety deposit box was shared not only by the guest himself but also by the management since two keys are necessary to open the safety deposit box. Without the assistance of hotel employees, the loss would not have occurred. Thus, Tropicana was guilty of concurrent negligence in allowing Tan, who was not the registered guest, to open the safety deposit box of McLoughlin, even assuming that the latter was also guilty of negligence in allowing another person to use his key. To rule otherwise would result in undermining the safety of the safety deposit boxes in hotels for the management will be given imprimatur to allow any person, under the pretense of being a family member or a visitor of the guest, to have access to the safety deposit box without fear of any liability that will attach thereafter in case such person turns out to be a complete stranger. This will allow the hotel to evade responsibility for any liability incurred by its employees in conspiracy with the guest’s relatives and visitors. CASE 11: RCBC vs. ARFA RTW (2001) Ponente: SANDOVAL-GUTIERREZ FACTS:On March 12, 1982, Rizal Banking Corporation (RCBC) filed with the RTC of Makati, a civil case, for a sum of money against Alfa RTW Manufacturing Corporation, Johnny Teng, Ramon Lee, Antonio Lacdao, Ramon Luy and Alfa Integrated Textile Mills. The trial court rendered judgment on August 19, 1991, the dispositive portion, which reads: Order the defendants to pay, jointly and severally, to plaintiff the amount of Eighteen Million Nine Hundred Sixty-one Thousand Three Hundred Seventy-two Pesos and Forty-three Centavos (P18,961,372.43), Philippine Currency, (inclusive of

interest, service charges, litigation expenses and attorney’s fees), with interest thereon at the legal rate from February 15, 1988 until fully paid. On appeal, the CA affirmed with modification of the RTC decision, thus: “WHEREFORE, with the modification that instead of P18,961,372.43, all the defendants are hereby ordered to pay, jointly and severally to plaintiff the amount of P3,060,406.25, Philippine Currency, inclusive of stipulated interest, service charges, litigation expenses and attorney’s fees, with interest thereon at the legal rate from February 15, 1988, until fully paid.” ISSUE: WONCA can deviate from the provisions of the contract, which itself is the law between the parties HELD: No. The general rule is it cannot RATIO:The rule is well settled that the jurisdiction of the Court of Appeals via Rule 45 of the 1997 Rules of Civil Procedure, as amended, is limited to reviewing errors of law. Findings of fact of the said Court are conclusive, except in a number of instances. Where in the case at bar, exception n0. 6 stated in Siguan vs Lim (318 SCRA 725) is present to wit: (6) when the Court of Appeals, in making its findings, went beyond the issues of the case and the same is to the admissions of both the appellant and appelle Herein lies the reversible error on the part of the Court of Appeals. When it ruled that only P3,060,406.25 should be awarded to petitioner RCBC, the Appellate Court disregarded the parties’ stipulations in their contracts of loan, more specifically, those pertaining to the agreed (1) Interest rates, (2) service charge and (3) penalties in case of any breach thereof. The CA failed to apply the honoured doctrine” “That which is agreed to in a contract is the law between the parties. Thus, obligations arising from contracts have the force of law between the contracting parties and should be complied with in good faith.” “The court cannot vary the terms and conditions therein stipulated unless such stipulation is contrary to law, morals, good customs, public order or public policy.”

In the determination and computation of interest of payment, this court, in Eastern Shipping Lines, Inc. vs Court of Appeals held: When the obligation is breached and it consist in the payment of a sum of money (i.e., loan or forbearance of money), the interest due should be that which may be have stipulated in writing. Furthermore, the interest due shall itself earn legal interest from the time it is judicially demanded. In the absence of stipulation, the rate of interest shall be 12% per annum to be computed from default i.e., from judicial or extrajudicial demand under and subject to the provisions of Article 169 of the Civil Code When the obligation, not constituting a loan or forbearance of money, is breached, and interest on the amount of damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No interest, however, shall be adjudged on unliquidated claims or damages except when or until the demand can be established with reasonable certainty. The award to petitioner RCBC of P3,0606,406.25 is SET ASIDE and substituted with an amount to be computed by the trial court, upon finality of this Decision