compilation of cases credit transactions

7/25/2019 Compilation of Cases Credit Transactions

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G.R. No. L-46240 November 3, 1939MARGARITA QUINTOS an ANG!L A. ANSAL"O,plaintiffs-appellants,vs.#!$%,defendant-appellee.Mauricio Carlos for appellants.Felipe Buencamino, Jr. for appellee.IM&!RIAL, J.:

The plaintiff brought this action to compel the defendant to return her certain furniture which shelent him for his use. She appealed from the judgment of the Court of First Instance of Manilawhich ordered that the defendant return to her the three has heaters and the four electric lampsfound in the possession of the Sheriff of said cit, that she call for the other furniture from thesaid sheriff of Manila at her own e!pense, and that the fees which the Sheriff ma charge for thedeposit of the furniture be paidpro rata b both parties, without pronouncement as to the costs.The defendant was a tenant of the plaintiff and as such occupied the latter"s house on M. #. del$ilar street, %o. &&'(. )n *anuar &+, &, upon the novation of the contract of lease betweenthe plaintiff and the defendant, the former gratuitousl granted to the latter the use of thefurniture described in the third paragraph of the stipulation of facts, subject to the condition thatthe defendant would return them to the plaintiff upon the latter"s demand. The plaintiff sold thepropert to Maria /ope0 and 1osario /ope0 and on September &+, &, these three notifiedthe defendant of the conveance, giving him si!t das to vacate the premises under one of theclauses of the contract of lease. There after the plaintiff re2uired the defendant to return all thefurniture transferred to him for them in the house where the were found. )n %ovember(, &, the defendant, through another person, wrote to the plaintiff reiterating that she macall for the furniture in the ground floor of the house. )n the 'th of the same month, thedefendant wrote another letter to the plaintiff informing her that he could not give up the threegas heaters and the four electric lamps because he would use them until the &(th of the samemonth when the lease in due to e!pire. The plaintiff refused to get the furniture in view of thefact that the defendant had declined to ma3e deliver of all of them. )n %ovember &(th,before vacating the house, the defendant deposited with the Sheriff all the furniture belonging tothe plaintiff and the are now on deposit in the warehouse situated at %o. &(4&, 1i0al 5venue, inthe custod of the said sheriff.In their seven assigned errors the plaintiffs contend that the trial court incorrectl applied thelaw6 in holding that the violated the contract b not calling for all the furniture on %ovember (,&, when the defendant placed them at their disposal7 in not ordering the defendant to pathem the value of the furniture in case the are not delivered7 in holding that the should get allthe furniture from the Sheriff at their e!penses7 in ordering them to pa-half of the e!pensesclaimed b the Sheriff for the deposit of the furniture7 in ruling that both parties should pa theirrespective legal e!penses or the costs7 and in dening pa their respective legal e!penses orthe costs7 and in dening the motions for reconsideration and new trial. To dispose of the case,it is onl necessar to decide whether the defendant complied with his obligation to return thefurniture upon the plaintiff"s demand7 whether the latter is bound to bear the deposit feesthereof, and whether she is entitled to the costs of litigation.lawphi1.netThe contract entered into between the parties is one of commadatum, because under it theplaintiff gratuitousl granted the use of the furniture to the defendant, reserving for herself theownership thereof7 b this contract the defendant bound himself to return the furniture to theplaintiff, upon the latters demand 8clause ' of the contract, 9!hibit 57 articles &'+:, paragraph &,and &'+& of the Civil Code;. The obligation voluntaril assumed b the defendant to return thefurniture upon the plaintiff"s demand, means that he should return all of them to the plaintiff atthe latter"s residence or house. The defendant did not compl with this obligation when hemerel placed them at the disposal of the plaintiff, retaining for his benefit the three gas heatersand the four eletric lamps. The provisions of article && of the Civil Code cited b counsel for


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the parties are not s2uarel applicable. The trial court, therefore, erred when it came to the legalconclusion that the plaintiff failed to compl with her obligation to get the furniture when thewere offered to her.

5s the defendant had voluntaril underta3en to return all the furniture to the plaintiff, upon thelatter"s demand, the Court could not legall compel her to bear the e!penses occasioned b thedeposit of the furniture at the defendant"s behest. The latter, as bailee, was not entitled to placethe furniture on deposit7 nor was the plaintiff under a dut to accept the offer to return the

furniture, because the defendant wanted to retain the three gas heaters and the four electriclamps.5s to the value of the furniture, we do not believe that the plaintiff is entitled to the pamentthereof b the defendant in case of his inabilit to return some of the furniture because underparagraph of the stipulation of facts, the defendant has neither agreed to nor admitted thecorrectness of the said value. Should the defendant fail to deliver some of the furniture, thevalue thereof should be latter determined b the trial Court through evidence which the partiesma desire to present.The costs in both instances should be borne b the defendant because the plaintiff is theprevailing part 8section +


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returned or their boo3 value paid not later than & )ctober &(:. *ose =. >agtas failed to pathe boo3 value of the three bulls or to return them. So, on 4: Aecember &(: in the Court ofFirst Instance of Manila the 1epublic of the $hilippines commenced an action against himpraing that he be ordered to return the three bulls loaned to him or to pa their boo3 value inthe total sum of $,4+&.+( and the unpaid breeding fee in the sum of $&.4, both withinterests, and costs7 and that other just and e2uitable relief be granted in 8civil %o. &4aggao, and of the pending appeal he had ta3en to the Secretar of 5griculture and %atural1esources and the $resident of the $hilippines from the refusal b the Airector of 5nimalIndustr to deduct from the boo3 value of the bulls corresponding earl depreciation of


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contract. 5nd even if the contract be commodatum, still the appellant is liable, because article&+4 of the Civil Code provides that a bailee in a contract of commodatum. . . is liable for loss of the things, even if it should be through a fortuitous event684; If he 3eeps it longer than the period stipulated . . .8; If the thing loaned has been delivered with appraisal of its value, unless there is a stipulatione!empting the bailee from responsibilit in case of a fortuitous event7The original period of the loan was from < Ma &+< to ' Ma &+. The loan of one bull was

renewed for another period of one ear to end on < Ma &(:. >ut the appellant 3ept and usedthe bull until %ovember &( when during a #u3 raid it was 3illed b stra bullets. Furthermore,when lent and delivered to the deceased husband of the appellant the bulls had each anappraised boo3 value, to with6 the Sindhi, at $&,&'.+, the >hagnari at $&,4:.( and theSahiniwal at $'++.+. It was not stipulated that in case of loss of the bull due to fortuitous eventthe late husband of the appellant would be e!empt from liabilit.The appellant"s contention that the demand or praer b the appellee for the return of the bull orthe pament of its value being a mone claim should be presented or filed in the intestateproceedings of the defendant who died on 4 )ctober &(&, is not altogether without merit.#owever, the claim that his civil personalit having ceased to e!ist the trial court lost jurisdictionover the case against him, is untenable, because section &' of 1ule of the 1ules of Courtprovides that

5fter a part dies and the claim is not thereb e!tinguished, the court shall order, upon propernotice, the legal representative of the deceased to appear and to be substituted for thedeceased, within a period of thirt 8:; das, or within such time as ma be granted. . . .and after the defendant"s death on 4 )ctober &(& his counsel failed to compl with section &of 1ule which provides that Ehenever a part to a pending case dies . . . it shall be the dut of his attorne to inform thecourt promptl of such death . . . and to give the name and residence of the e!ecutoradministrator, guardian, or other legal representative of the deceased . . . .The notice b the probate court and its publication in the Vo) de Manilathat Felicidad M. >agtashad been issue letters of administration of the estate of the late *ose >agtas and that Dallpersons having claims for monopol against the deceased *ose =. >agtas, arising from contracte!press or implied, whether the same be due, not due, or contingent, for funeral e!penses ande!penses of the last sic3ness of the said decedent, and judgment for monopol against him, tofile said claims with the Cler3 of this Court at the Cit #all >ldg., #ighwa (+, ue0on Cit,within si! 8; months from the date of the first publication of this order, serving a cop thereofupon the aforementioned Felicidad M. >agtas, the appointed administratri! of the estate of thesaid deceased,D is not a notice to the court and the appellee who were to be notified of thedefendant"s death in accordance with the above-2uoted rule, and there was no reason for suchfailure to notif, because the attorne who appeared for the defendant was the same whorepresented the administratri! in the special proceedings instituted for the administration andsettlement of his estate. The appellee or its attorne or representative could not be e!pected to3now of the death of the defendant or of the administration proceedings of his estate institutedin another court that if the attorne for the deceased defendant did not notif the plaintiff or itsattorne of such death as re2uired b the rule.

5s the appellant alread had returned the two bulls to the appellee, the estate of the latedefendant is onl liable for the sum of $


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but must be presented to the probate court for pament b the appellant, the administratri!appointed b the court.

5CC)1AI%B/G, the writ of e!ecution appealed from is set aside, without pronouncement as tocosts.Ben*)on, C.J., Bautista An*elo, !a+rador, Concepcion, e$es, J.B.!., aredes, "i)on, e*alaand Maalintal, JJ., concur.Barrera, J.,concurs in the result.

G.R. No. L-24967 A8r/ 2', 19'2SAURA IM&ORT an !&ORT $O., IN$., plaintiff-appellee,vs."!!LO&M!NT #AN% O+ T! &ILI&&IN!S, defendant-appellant.Ma+ana*, li*er and Associates and &aura, Ma*no and Associates for plaintiff-appellee.Jesus A. Avancea and /ilario '. %rsolino for defendant-appellant.MA%ALINTAL, J.:pIn Civil Case %o. ((:< of the Court of First Instance of Manila, judgment was rendered on*une 4an3 of the $hilippines 8A>$; to pa actualand conse2uential damages to plaintiff Saura Import and 9!port Co., Inc. in the amount of$


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ac2uired the latter"s shares in Saura, Inc.In view of such re2uest 1FC approved 1esolution %o. ' on Februar +, &(+, designating ofthe members of its >oard of Bovernors, for certain reasons stated in the resolution, Dtoree!amine all the aspects of this approved loan ... with special reference as to the advisabilit offinancing this particular project based on present conditions obtaining in the operations of jutemills, and to submit his findings thereon at the ne!t meeting of the >oard.D)n March 4+, &(+ Saura, Inc. wrote 1FC that China 9ngineers, /td. had again agreed to act

as co-signer for the loan, and as3ed that the necessar documents be prepared in accordancewith the terms and conditions specified in 1esolution %o. &+(. In connection with theree!amination of the project to be financed with the loan applied for, as stated in 1esolution %o.', the parties named their respective committees of engineers and technical men to meetwith each other and underta3e the necessar studies, although in appointing its own committeeSaura, Inc. made the observation that the same Dshould not be ta3en as an ac2uiescence on8its; part to novate, or accept new conditions to, the agreement alread; entered into,D referringto its acceptance of the terms and conditions mentioned in 1esolution %o. &+(.)n 5pril &, &(+ the loan documents were e!ecuted6 the promissor note, with F.1. #alling,representing China 9ngineers, /td., as one of the co-signers7 and the corresponding deed ofmortgage, which was dul registered on the following 5pril &'.It appears, however, that despite the formal e!ecution of the loan agreement the ree!aminationcontemplated in 1esolution %o. ' proceeded. In a meeting of the 1FC >oard of Bovernors on*une &:, &(+, at which 1amon Saura, $resident of Saura, Inc., was present, it was decided toreduce the loan from $(::,:::.:: to $::,:::.::. 1esolution %o.


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&. That the raw materials needed b the borrower-corporation to carr out its operation areavailable in the immediate vicinit7 and4. That there is prospect of increased production thereof to provide ade2uatel for there2uirements of the factor.DThe action thus ta3en was communicated to Saura, Inc. in a letter of 1FC dated Aecember 44,&(+, wherein it was e!plained that the certification b the Aepartment of 5griculture and%atural 1esources was re2uired Das the intention of the original approval 8of the loan; is to

develop the manufacture of sac3s on the basis of locall available raw materials.D This point isimportant, and sheds light on the subse2uent actuations of the parties. Saura, Inc. does notden that the factor he was building in Aavao was for the manufacture of bags from local rawmaterials. The cover page of its brochure 89!h. M; describes the project as a D*oint venture band between the Mindanao Industr Corporation and the Saura Import and 9!port Co., Inc. tofinance, manage and operate a 0enafmill plant, to manufacture copra and corn bags, runners,floor mattings, carpets, draperies7 out of &::? local raw materials, principal enaf.D Thee!planator note on page & of the same brochure states that, the venture Dis the first seriousattempt in this countr to use &::? locall grown raw materials notabl enafwhich is presentlgrown commerciall in theIsland of Mindanao where the proposed jutemill is located ...DThis fact, according to defendant A>$, is what moved 1FC to approve the loan application inthe first place, and to re2uire, in its 1esolution %o. :


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prospect of increased production thereof to provide ade2uatel the re2uirements of the factor,we wish to reiterate that the basis of the original approval is to develop the manufacture ofsac3s on the basis of the locall available raw materials. Gour statement that ou will have torel on the importation of jute and our re2uest that we give ou assurance that our companwill be able to bring in sufficient jute materials as ma be necessar for the operation of ourfactor, would not be in line with our principle in approving the loan.Eith the foregoing letter the negotiations came to a standstill. Saura, Inc. did not pursue the

matter further. Instead, it re2uested 1FC to cancel the mortgage, and so, on *une &', &((1FC e!ecuted the corresponding deed of cancellation and delivered it to 1amon F. Saurahimself as president of Saura, Inc.It appears that the cancellation was re2uested to ma3e wa for the registration of a mortgagecontract, e!ecuted on 5ugust , &(+, over the same propert in favor of the $rudential >an3and Trust Co., under which contract Saura, Inc. had up to Aecember & of the same ear withinwhich to pa its obligation on the trust receipt heretofore mentioned. It appears further that forfailure to pa the said obligation the $rudential >an3 and Trust Co. sued Saura, Inc. on Ma &(,&((.)n *anuar , &+, ahnost ears after the mortgage in favor of 1FC was cancelled at there2uest of Saura, Inc., the latter commenced the present suit for damages, alleging failure of1FC 8as predecessor of the defendant A>$; to compl with its obligation to release theproceeds of the loan applied for and approved, thereb preventing the plaintiff from completingor paing contractual commitments it had entered into, in connection with its jute mill project.The trial court rendered judgment for the plaintiff, ruling that there was a perfected contractbetween the parties and that the defendant was guilt of breach thereof. The defendant pleadedbelow, and reiterates in this appeal6 8&; that the plaintiff"s cause of action had prescribed, or thatits claim had been waived or abandoned7 84; that there was no perfected contract7 and 8; thatassuming there was, the plaintiff itself did not compl with the terms thereof.Ee hold that there was indeed a perfected consensual contract, as recogni0ed in 5rticle &+ ofthe Civil Code, which provides6

51T. &(+. 5n accepted promise to deliver something, b wa of commodatum or simple loan isbinding upon the parties, but the commodatum or simple loan itself shall not be perferted untilthe deliver of the object of the contract.There was undoubtedl offer and acceptance in this case6 the application of Saura, Inc. for aloan of $(::,:::.:: was approved b resolution of the defendant, and the correspondingmortgage was e!ecuted and registered. >ut this fact alone falls short of resolving the basicclaim that the defendant failed to fulfill its obligation and the plaintiff is therefore entitled torecover damages.It should be noted that 1FC entertained the loan application of Saura, Inc. on the assumptionthat the factor to be constructed would utili0e locall grown raw materials, principall enaf.There is no serious dispute about this. It was in line with such assumption that when 1FC, b1esolution %o. :


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probabl ne!t ear,D and as3ing that out of the loan agreed upon the sum of $',(


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remittance ta! ..............................................&,&+',:(


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actuall paid of $l,&+',:(


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and its resolution dated 5pril 4&, &$IIC applied thereto the proceeds of private respondentsL loan of $(::,:::.)n September &, &$IIC released to private respondents $',&+.


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The Court further finds that 5/S and /itonjua suffered compensable damages when >$I causedtheir publication in a newspaper of general circulation as defaulting debtors, and thereforeorders >$I to pa 5/S and /itonjua the following sums6a; $::,:::.:: for and as moral damages7b; $(:,:::.:: as and for e!emplar damages7c; $(:,:::.:: as and for attorneLs fees and e!penses of litigation.The foreclosure suit 8Civil Case %o. &&$I.S) )1A919A.4

>oth parties appealed to the Court of 5ppeals. #owever, private respondentsL appeal wasdismissed for non-pament of doc3et fees.)n Februar 4$IIC to e!trajudiciall foreclose the mortgage and cause thepublication in newspapers concerning private respondentsL delin2uenc in the pament of theirloan. This fact constituted sufficient ground for moral damages in favor of private respondents.The motion for reconsideration filed b petitioner >$IIC was li3ewise denied, hence this petition,where >$IIC submits for resolution the following issues6I. E#9T#91 )1 %)T 5 C)%T15CT )F /)5% IS 5 C)%S9%S@5/ C)%T15CT I% T#9/IB#T )F T#9 1@/9 /5IA A)E% I% B%99V5 V&. C%:# %F AA!&, 1;< &CA 1;;.II. E#9T#91 )1 %)T >$I S#)@/A >9 #9/A /I5>/9 F)1 M)15/ 5%A 99M$/51GA5M5B9S 5%A 5TT)1%9GLS F99S I% T#9 F5C9 )F I119B@/51 $5GM9%TS M5A9 >G

5/S 5%A )$$)S9A T) T#9 1@/9 /5IA A)E% I% &%C5A! &C:5#= &=M V&.C%:# %F AA!&, 1;> &CA 8>8.)n the first issue, petitioner contends that the Court of 5ppeals erred in ruling that because asimple loan is perfected upon the deliver of the object of the contract, the loan contract in thiscase was perfected onl on September &, &


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so in 5ugust &


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the monthl amorti0ation after September &, &$IIC e!trajudiciall caused the foreclosure of the mortgage, the starting date is )ctober &,&ut as admitted b private respondents themselves, the were irregular in their pament ofmonthl amorti0ation. Conformabl with our ruling in &&&, we can not properl declare >$IIC inbad faith. Conse2uentl, we should rule out the award of moral and e!emplar damages.&&

#owever, in our view, >$IIC was negligent in reling merel on the entries found in the deed ofmortgage, without chec3ing and correspondingl adjusting its records on the amount actuallreleased to private respondents and the date when it was released. Such negligence resulted indamage to private respondents, for which an award of nominal damages should be given inrecognition of their rights which were violated b >$IIC. &4For this purpose, the amount of$4(,::: is sufficient./astl, as in &&& where we awarded attorneLs fees because private respondents werecompelled to litigate, we sustain the award of $(:,::: in favor of private respondents asattorneLs fees.


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&RO"U$!RS #AN% O+ T! &ILI&&IN!S =no> +IRST INT!RNATIONAL #AN%?, petitioner,vs.ON. $OURT O+ A&&!ALS AN" +RAN%LIN I!S,respondents.A 9 C I S I ) %$ALL!O, SR., J.:This is a petition for review on certiorariof the Aecision&of the Court of 5ppeals dated *une 4(,&& in C5-B.1. C= %o. &&'& and of its 1esolution4dated Ma (, &+, dening the motion for

reconsideration of said decision filed b petitioner $roducers >an3 of the $hilippines.Sometime in &', private respondent Fran3lin =ives was as3ed b his neighbor and friend5ngeles Sanche0 to help her friend and townmate, Col. 5rturo Aoronilla, in incorporating hisbusiness, the Sterela Mar3eting and Services 8DSterelaD for brevit;. Specificall, Sanche0 as3edprivate respondent to deposit in a ban3 a certain amount of mone in the ban3 account ofSterela for purposes of its incorporation. She assured private respondent that he could withdrawhis mone from said account within a monthLs time. $rivate respondent as3ed Sanche0 to bringAoronilla to their house so that the could discuss Sanche0Ls re2uest.

)n Ma , &', private respondent, Sanche0, Aoronilla and a certain 9strella Aumagpi,AoronillaLs private secretar, met and discussed the matter. Thereafter, reling on theassurances and representations of Sanche0 and Aoronilla, private respondent issued a chec3 inthe amount of Two #undred Thousand $esos 8$4::,:::.::; in favor of Sterela. $rivaterespondent instructed his wife, Mrs. Inocencia =ives, to accompan Aoronilla and Sanche0 inopening a savings account in the name of Sterela in the >uendia, Ma3ati branch of $roducers>an3 of the $hilippines. #owever, onl Sanche0, Mrs. =ives and Aumagpi went to the ban3 todeposit the chec3. The had with them an authori0ation letter from Aoronilla authori0ingSanche0 and her companions, Din coordination with Mr. 1ufo 5tien0a,D to open an account forSterela Mar3eting Services in the amount of $4::,:::.::. In opening the account, theauthori0ed signatories were Inocencia =ives andJor 5ngeles Sanche0. 5 passboo3 for Savings

5ccount %o. &:-&(' was thereafter issued to Mrs. =ives.+

Subse2uentl, private respondent learned that Sterela was no longer holding office in theaddress previousl given to him. 5larmed, he and his wife went to the >an3 to verif if theirmone was still intact. The ban3 manager referred them to Mr. 1ufo 5tien0a, the assistantmanager, who informed them that part of the mone in Savings 5ccount %o. &:-&(' had beenwithdrawn b Aoronilla, and that onl $:,:::.:: remained therein. #e li3ewise told them thatMrs. =ives could not withdraw said remaining amount because it had to answer for somepostdated chec3s issued b Aoronilla. 5ccording to 5tien0a, after Mrs. =ives and Sanche0opened Savings 5ccount %o. &:-&(', Aoronilla opened Current 5ccount %o. &:-:4: forSterela and authori0ed the >an3 to debit Savings 5ccount %o. &:-&(' for the amountsnecessar to cover overdrawings in Current 5ccount %o. &:-:4:. In opening said currentaccount, Sterela, through Aoronilla, obtained a loan of $&'(,:::.:: from the >an3. To coverpament thereof, Aoronilla issued three postdated chec3s, all of which were dishonored.

5tien0a also said that Aoronilla could assign or withdraw the mone in Savings 5ccount %o. &:-&(' because he was the sole proprietor of Sterela. (

$rivate respondent tried to get in touch with Aoronilla through Sanche0. )n *une 4, &', hereceived a letter from Aoronilla, assuring him that his mone was intact and would be returnedto him. )n 5ugust &, &', Aoronilla issued a postdated chec3 for Two #undred TwelveThousand $esos 8$4&4,:::.::; in favor of private respondent. #owever, upon presentmentthereof b private respondent to the drawee ban3, the chec3 was dishonored. Aoronillare2uested private respondent to present the same chec3 on September &(, &' but when thelatter presented the chec3, it was again dishonored.

$rivate respondent referred the matter to a lawer, who made a written demand upon Aoronillafor the return of his clientLs mone. Aoronilla issued another chec3 for $4&4,:::.:: in privaterespondentLs favor but the chec3 was again dishonored for insufficienc of funds.'


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$rivate respondent instituted an action for recover of sum of mone in the 1egional Trial Court81TC; in $asig, Metro Manila against Aoronilla, Sanche0, Aumagpi and petitioner. The casewas doc3eted as Civil Case %o. +++I/ITG )F

5% 9M$/)G91 F)1 5CTS C)MMITT9A >G 5% 9M$/)G99 IS 5$$/IC5>/97=.T#9 #)%)15>/9 C)@1T )F 5$$95/S 9119A I% @$#)/AI%B T#9 A9CISI)% )F T#9/)E91 C)@1T T#5T #919I% $9TITI)%91 >5%K IS *)I%T/G 5%A S9=915//G /I5>/9EIT# T#9 )T#91 A9F9%A5%TS F)1 T#9 5M)@%T )F $4::,:::.:: 19$19S9%TI%BT#9 S5=I%BS 5CC)@%T A9$)SIT, $(:,:::.:: F)1 M)15/ A5M5B9S, $(:,:::.:: F)199M$/51G A5M5B9S, $+:,:::.:: F)1 5TT)1%9GLS F99S 5%A T#9 C)STS )F S@IT.&&

$rivate respondent filed his Comment on September 4, &+. $etitioner filed its 1epl theretoon September 4(, &(. The Court then re2uired private respondent to submit a rejoinder to therepl. #owever, said rejoinder was filed onl on 5pril 4&, &', due to petitionerLs dela infurnishing private respondent with cop of the repl&4and several substitutions of counsel on thepart of private respondent.&)n *anuar &', 4::&, the Court resolved to give due course to thepetition and re2uired the parties to submit their respective memoranda. &+ $etitioner filed itsmemorandum on 5pril &, 4::& while private respondent submitted his memorandum on March


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44, 4::&.$etitioner contends that the transaction between private respondent and Aoronilla is a simpleloan 8mutuum; since all the elements of a mutuum are present6 first, what was delivered bprivate respondent to Aoronilla was mone, a consumable thing7 and second, the transactionwas onerous as Aoronilla was obliged to pa interest, as evidenced b the chec3 issued bAoronilla in the amount of $4&4,:::.::, or $&4,::: more than what private respondentdeposited in SterelaLs ban3 account.&(Moreover, the fact that private respondent sued his good

friend Sanche0 for his failure to recover his mone from Aoronilla shows that the transactionwas not merel gratuitous but Dhad a business angleD to it. #ence, petitioner argues that itcannot be held liable for the return of private respondentLs $4::,:::.:: because it is not priv tothe transaction between the latter and Aoronilla.&

It argues further that petitionerLs 5ssistant Manager, Mr. 1ufo 5tien0a, could not be faulted forallowing Aoronilla to withdraw from the savings account of Sterela since the latter was the soleproprietor of said compan. $etitioner asserts that AoronillaLs Ma


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factual findings of that court, especiall since the conclusions of fact of the Court of 5ppeals andthe trial court are not onl consistent but are also ampl supported b the evidence on record.%o error was committed b the Court of 5ppeals when it ruled that the transaction betweenprivate respondent and Aoronilla was a commodatum and not a mutuum. 5 circumspecte!amination of the records reveals that the transaction between them was a commodatum.

5rticle & of the Civil Code distinguishes between the two 3inds of loans in this wise6> the contract of loan, one of the parties delivers to another, either something not consumable

so that the latter ma use the same for a certain time and return it, in which case the contract iscalled a commodatum7 or mone or other consumable thing, upon the condition that the sameamount of the same 3ind and 2ualit shall be paid, in which case the contract is simpl called aloan or mutuum.Commodatum is essentiall gratuitous.Simple loan ma be gratuitous or with a stipulation to pa interest.In commodatum, the bailor retains the ownership of the thing loaned, while in simple loan,ownership passes to the borrower.The foregoing provision seems to impl that if the subject of the contract is a consumable thing,such as mone, the contract would be a mutuum. #owever, there are some instances where acommodatum ma have for its object a consumable thing. 5rticle & of the Civil Codeprovides6Consumable goods ma be the subject of commodatum if the purpose of the contract is not theconsumption of the object, as when it is merel for e!hibition.Thus, if consumable goods are loaned onl for purposes of e!hibition, or when the intention ofthe parties is to lend consumable goods and to have the ver same goods returned at the endof the period agreed upon, the loan is a commodatum and not a mutuum.The rule is that the intention of the parties thereto shall be accorded primordial consideration indetermining the actual character of a contract.4' In case of doubt, the contemporaneous andsubse2uent acts of the parties shall be considered in such determination. 4ellosillo, 8Chairman;, Mendo0a, uisumbing and 5ustria-Martine0, **., concur.

G.R. No. 146364 :ne 3, 2004$OLITO T. &AU@O,petitioner,vs.$OURT O+ A&&!ALS an !""I! GU!ARRA,respondents.

A 9 C I S I ) %$AR&IO, J.Te $ae>efore us is a petition for review& of the 4& *une 4::: Aecision4 and &+ Aecember 4:::1esolution of the Court of 5ppeals in C5-B.1. S$ %o. +&4. The Court of 5ppeals set asidethe && %ovember & decision of the 1egional Trial Court of ue0on Cit, >ranch ranch &.

The 5ntecedentsIn *une &', petitioner Colito T. $ajuo 8D$ajuoD; paid $+:: to a certain $edro $ere0 for therights over a 4(:-s2uare meter lot in >arrio $aatas, ue0on Cit. $ajuo then constructed ahouse made of light materials on the lot. $ajuo and his famil lived in the house from &' to 'Aecember &ranch


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Buevarra received the 1TC decision on 4 %ovember &. Buevarra had onl until &+Aecember & to file his appeal with the Court of 5ppeals. Instead of filing his appeal with theCourt of 5ppeals, Buevarra filed with the Supreme Court a DMotion for 9!tension of Time to File

5ppeal b Certiorari >ased on 1ule +4D 8Dmotion for e!tensionD;. Buevarra theori0ed that hisappeal raised pure 2uestions of law. The 1eceiving Cler3 of the Supreme Court received themotion for e!tension on & Aecember & or one da before the right to appeal e!pired.)n *anuar &', Buevarra filed his petition for review with the Supreme Court.

)n < *anuar &', the First Aivision of the Supreme Court issued a 1esolution

referring themotion for e!tension to the Court of 5ppeals which has concurrent jurisdiction over the case.The case presented no special and important matter for the Supreme Court to ta3e cogni0anceof at the first instance.)n 4< *anuar &', the Thirteenth Aivision of the Court of 5ppeals issued a 1esolution &:

granting the motion for e!tension conditioned on the timeliness of the filing of the motion.)n 4' Februar &', the Court of 5ppeals ordered $ajuo to comment on BuevaraLs petitionfor review. )n && 5pril &', $ajuo filed his Comment.)n 4& *une 4:::, the Court of 5ppeals issued its decision reversing the 1TC decision. Thedispositive portion of the decision reads6E#919F)19, premises considered, the assailed Aecision of the court a 2uo in Civil Case %o.--4+ is R!!RS!"and S!T ASI"!7 and it is hereb declared that the ejectment casefiled against defendant-appellant is without factual and legal basis.S) )1A919A.&&

$ajuo filed a motion for reconsideration of the decision. $ajuo pointed out that the Court of5ppeals should have dismissed outright BuevarraLs petition for review because it was filed outof time. Moreover, it was BuevarraLs counsel and not Buevarra who signed the certificationagainst forum-shopping.)n &+ Aecember 4:::, the Court of 5ppeals issued a resolution dening $ajuoLs motion forreconsideration. The dispositive portion of the resolution reads6E#919F)19, for lac3 of merit, the motion for reconsideration is hereb "!NI!". %o costs.S) )1A919A.&4

Te R:/n o )e MT$The MTC ruled that the subject of the agreement between $ajuo and Buevarra is the houseand not the lot. $ajuo is the owner of the house, and he allowed Buevarra to use the houseonl b tolerance. Thus, BuevarraLs refusal to vacate the house on $ajuoLs demand madeBuevarraLs continued possession of the house illegal.Te R:/n o )e RT$The 1TC upheld the 0asunduan, which established the landlord and tenant relationshipbetween $ajuo and Buevarra. The terms of the 0asunduan bound Buevarra to returnpossession of the house on demand.The 1TC rejected BuevarraLs claim of a better right under $roclamation %o. &', the 1evised%ational Bovernment Center #ousing $roject Code of $olicies and other pertinent laws. In anejectment suit, the 1TC has no power to decide BuevarraLs rights under these laws. The 1TCdeclared that in an ejectment case, the onl issue for resolution is material or phsicalpossession, not ownership.Te R:/n o )e $o:r) o A88eaThe Court of 5ppeals declared that $ajuo and Buevarra are s2uatters. $ajuo and Buevarraillegall occupied the contested lot which the government owned.$ere0, the person from whom $ajuo ac2uired his rights, was also a s2uatter. $ere0 had noright or title over the lot because it is public land. The assignment of rights between $ere0 and$ajuo, and the 0asunduanbetween $ajuo and Buevarra, did not have an legal effect.$ajuo and Buevarra are inpari delictoor in e2ual fault. The court will leave them where theare.


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The Court of 5ppeals reversed the MTC and 1TC rulings, which held that the 0asunduanbetween $ajuo and Buevarra created a legal tie a3in to that of a landlord and tenantrelationship. The Court of 5ppeals ruled that the 0asunduan is not a lease contract but acommodatumbecause the agreement is not for a price certain.Since $ajuo admitted that he resurfaced onl in &+ to claim the propert, the appellate courtheld that Buevarra has a better right over the propert under $roclamation %o. &'. $residentCora0on C. 52uino 8D$resident 52uinoD; issued $roclamation %o. &' on ' September &@S9A ITS 5@T#)1ITG 5%AAISC19TI)% T5%T5M)@%T T) /5CK )F *@1ISAICTI)%6&; in B15%TI%B, instead of dening, $rivate 1espondentLs Motion for an 9!tension of thirtdas to file petition for review at the time when there was no more period to e!tend as thedecision of the 1egional Trial Court had alread become final and e!ecutor.4; in giving due course, instead of dismissing, private respondentLs $etition for 1eview eventhough the certification against forum-shopping was signed onl b counsel instead of bpetitioner himself.; in ruling that the 0asunduan voluntaril entered into b the parties was in fact acommodatum, instead of a Contract of /ease as found b the Metropolitan Trial Court and inholding that Dthe ejectment case filed against defendant-appellant is without legal and factualbasisD.+; in reversing and setting aside the Aecision of the 1egional Trial Court in Civil Case %o. --4+ and in holding that the parties are in pari delictobeing both s2uatters, therefore, illegaloccupants of the contested parcel of land.(; in deciding the unlawful detainer case based on the so-called Code of $olicies of the %ationalBovernment Center #ousing $roject instead of deciding the same under the 0asunduanvoluntaril e!ecuted b the parties, the terms and conditions of which are the laws betweenthemselves.&

Te R:/n o )e $o:r)


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The procedural issues $ajuo is raising are baseless. #owever, we find merit in the substantiveissues $ajuo is submitting for resolution.Procedural Issues$ajuo insists that the Court of 5ppeals should have dismissed outright BuevarraLs petition forreview because the 1TC decision had alread become final and e!ecutor when the appellatecourt acted on BuevarraLs motion for e!tension to file the petition. $ajuo points out thatBuevarra had onl one da before the e!pir of his period to appeal the 1TC decision. Instead

of filing the petition for review with the Court of 5ppeals, Buevarra filed with this Court anundated motion for e!tension of : das to file a petition for review. This Court merel referredthe motion to the Court of 5ppeals. $ajuo believes that the filing of the motion for e!tensionwith this Court did not toll the running of the period to perfect the appeal. #ence, when the Courtof 5ppeals received the motion, the period to appeal had alread e!pired.Ee are not persuaded.Aecisions of the regional trial courts in the e!ercise of their appellate jurisdiction are appealableto the Court of 5ppeals b petition for review in cases involving 2uestions of fact or mi!ed2uestions of fact and law.&+Aecisions of the regional trial courts involving pure 2uestions of laware appealable directl to this Court b petition for review.&(These modes of appeal are nowembodied in Section 4, 1ule +& of the &' 1ules of Civil $rocedure.Buevarra believed that his appeal of the 1TC decision involved onl 2uestions of law. Buevarrathus filed his motion for e!tension to file petition for review before this Court on &+ Aecember&. )n *anuar &', Buevarra then filed his petition for review with this Court. 5 perusal ofBuevarraLs petition for review gives the impression that the issues he raised were pure2uestions of law. There is a 2uestion of law when the doubt or difference is on what the law ison a certain state of facts.&There is a 2uestion of fact when the doubt or difference is on thetruth or falsit of the facts alleged.&'

In his petition for review before this Court, Buevarra no longer disputed the facts. BuevarraLspetition for review raised these 2uestions6 8&; Ao ejectment cases pertain onl to possession ofa structure, and not the lot on which the structure standsR 84; Aoes a suit b a s2uatter againsta fellow s2uatter constitute a valid case for ejectmentR 8; Should a $residential $roclamationgoverning the lot on which a s2uatterLs structure stands be considered in an ejectment suit filedb the owner of the structureRThese 2uestions call for the evaluation of the rights of the parties under the law on ejectmentand the $residential $roclamation. 5t first glance, the 2uestions Buevarra raised appearedpurel legal. #owever, some factual 2uestions still have to be resolved because the have abearing on the legal 2uestions raised in the petition for review. These factual matters refer to themetes and bounds of the disputed propert and the application of Buevarra as beneficiar of$roclamation %o. &'.The Court of 5ppeals has the power to grant an e!tension of time to file a petition for review. InLacsamana v. Second Special Cases Division of the Intermediate Appellate Court,&


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onl fifteen das save in e!ceptionall meritorious cases where the Court of 5ppeals ma granta longer period.

5 judgment becomes Dfinal and e!ecutorD b operation of law. Finalit of judgment becomes afact on the lapse of the reglementar period to appeal if no appeal is perfected. 4The 1TCdecision could not have gained finalit because the Court of 5ppeals granted the :-dae!tension to Buevarra.The Court of 5ppeals did not commit grave abuse of discretion when it approved BuevarraLs

motion for e!tension. The Court of 5ppeals gave due course to the motion for e!tensionbecause it complied with the condition set b the appellate court in its resolution dated 4ased on the 0asunduan, $ajuo permitted Buevarra to reside in the house and lot free of rent,but Buevarra was under obligation to maintain the premises in good condition. Buevarrapromised to vacate the premises on $ajuoLs demand but Buevarra bro3e his promise andrefused to heed $ajuoLs demand to vacate.These facts ma3e out a case for unlawful detainer. @nlawful detainer involves the withholding ba person from another of the possession of real propert to which the latter is entitled after thee!piration or termination of the formerLs right to hold possession under a contract$ e)press orimplied.(

Ehere the plaintiff allows the defendant to use his propert b tolerance without an contract,the defendant is necessaril bound b an implied promise that he will vacate on demand, failingwhich, an action for unlawful detainer will lie. :The defendantLs refusal to compl with thedemand ma3es his continued possession of the propert unlawful. &The status of the defendantin such a case is similar to that of a lessee or tenant whose term of lease has e!pired but whoseoccupanc continues b tolerance of the owner.4

This principle should appl with greater force in cases where a contract embodies thepermission or tolerance to use the propert. The 0asunduane!pressl articulated $ajuoLsforbearance. $ajuo did not re2uire Buevarra to pa an rent but onl to maintain the houseand lot in good condition. Buevarra e!pressl vowed in the 0asunduanthat he would vacate thepropert on demand. BuevarraLs refusal to compl with $ajuoLs demand to vacate madeBuevarraLs continued possession of the propert unlawful.


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Ee do not subscribe to the Court of 5ppealsL theor that the 0asunduanis one of commodatum.In a contract of commodatum, one of the parties delivers to another something not consumableso that the latter ma use the same for a certain time and return it. 5n essential feature ofcommodatumis that it is gratuitous. 5nother feature of commodatumis that the use of the thingbelonging to another is for a certain period.+Thus, the bailor cannot demand the return of thething loaned until after e!piration of the period stipulated, or after accomplishment of the use forwhich the commodatum is constituted.(If the bailor should have urgent need of the thing, he

ma demand its return for temporar use.

If the use of the thing is merel tolerated b thebailor, he can demand the return of the thing at will, in which case the contractual relation iscalled a precarium.'@nder the Civil Code,precariumis a 3ind of commodatum.ner L was missing on the ground thatit is the depositors-clients, and not the >an3, which filed the complaint in these cases, who arethe owners of the mone allegedl ta3en b respondents and hence, are the real parties-in-

interest7 and84; the Informations are bereft of the phrase alleging De8enen(e, :ar/an/8 or v//an(ebe)>een )e re8onen) an )e oene 8ar)5 )a) >o: ave (rea)e a / ereeo (on/en(e be)>een )em >/( )e re8onen) (o: ave ab:e.DIt added that allowing the &&4 cases for ualified Theft filed against the respondents to pushthrough would be violative of the right of the respondents under Section &+84;, 5rticle III of the&@S9 )F C)%FIA9%C9.$etitioner pras that judgment be rendered annulling and setting aside the )rders dated :*anuar 4:: and *une 4:: issued b the trial court, and that it be directed to proceed withCriminal Cases %o. :(-:(+ to :(-&(.$etitioner e!plains that under 5rticle &oo33eeper of the 1ural >an3 of $ototan, Inc.,respectivel, and that the too3 various amounts of mone with grave abuse of confidence, andwithout the 3nowledge and consent of the ban3, to the damage and prejudice of the ban3.$arentheticall, respondents raise procedural issues. The challenge the petition on the groundthat a $etition for 1eview on Certiorari via1ule +( is the wrong mode of appeal because afinding of probable cause for the issuance of a warrant of arrest presupposes evaluation of factsand circumstances, which is not proper under said 1ule.1espondents further claim that the Aepartment of *ustice 8A)*;, through the Secretar of*ustice, is the principal part to file a $etition for 1eview on Certiorari, considering that theincident was indorsed b the A)*.Ee find merit in the petition.


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The dismissal b the 1TC of the criminal cases was allegedl due to insufficienc of theInformations and, therefore, because of this defect, there is no basis for the e!istence ofprobable cause which will justif the issuance of the warrant of arrest. $etitioner assails thedismissal contending that the Informations for ualified Theft sufficientl state facts whichconstitute 8a; the 2ualifing circumstance of *rave a+use of confidenceE and +G the element oftain*, with intent to *ain and without the consent of the owner, which is the >an3.In determining the e!istence of probable cause to issue a warrant of arrest, the 1TC judge

found the allegations in the Information inade2uate. #e ruled that the Information failed to statefacts constituting the 2ualifing circumstance of *rave a+use of confidenceand the element oftain* without the consent of the owner, since the owner of the mone is not the >an3, but thedepositors therein. #e also cites eople v. 0oc &on*,+in which this Court held6There must be allegation in the information and proof of a relation, b reason of dependence,guardianship or vigilance, between the respondents and the offended part that has created ahigh degree of confidence between them, which the respondents abused.

At this point, it needs stressin* that the #C Jud*e +ased his conclusion that there was nopro+a+le cause simpl$ on the insufficienc$ of the alle*ations in the 5nformations concernin* thefacts constitutive of the elements of the offense char*ed. #his, therefore, maes the issue ofsufficienc$ of the alle*ations in the 5nformations the focal point of discussion.ualified Theft, as defined and punished under 5rticle &: of the 1evised $enal Code, iscommitted as follows, vi)6

51T. &:. Hualified #heft. N The crime of theft shall be punished b the penalties ne!t higher btwo degrees than those respectivel specified in the ne!t preceding article, if committed b adomestic servant, or with *rave a+use of confidence, or if the propert stolen is motor vehicle,mail matter or large cattle or consists of coconuts ta3en from the premises of a plantation, fishta3en from a fishpond or fisher or if propert is ta3en on the occasion of fire, earth2ua3e,tphoon, volcanic eruption, or an other calamit, vehicular accident or civil disturbance.89mphasis supplied.;Theft, as defined in 5rticle :< of the 1evised $enal Code, re2uires the phsical ta3ing ofanotherLs propert without violence or intimidation against persons or force upon things. Theelements of the crime under this 5rticle are6&. Intent to gain74. @nlawful ta3ing7. $ersonal propert belonging to another7+. 5bsence of violence or intimidation against persons or force upon things.To fall under the crime of ualified Theft, the following elements must concur6&. Ta3ing of personal propert74. That the said propert belongs to another7. That the said ta3ing be done with intent to gain7+. That it be done without the ownerLs consent7(. That it be accomplished without the use of violence or intimidation against persons, nor offorce upon things7. #hat it +e done with *rave a+use of confidence.)n the sufficienc of the Information, Section , 1ule &&: of the 1ules of Court re2uires, interalia, that the information must state the acts or omissions complained of as constitutive of theoffense.)n the manner of how the Information should be worded, Section , 1ule &&: of the 1ules ofCourt, is enlightening6Section . Cause of the accusation. The acts or omissions complained of as constituting theoffense and the 2ualifing and aggravating circumstances must be stated in ordinar andconcise language and not necessaril in the language used in the statute but in terms sufficientto enable a person of common understanding to 3now what offense is being charged as well as


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its 2ualifing and aggravating circumstances and for the court to pronounce judgment.It is evident that the Information need not use the e!act language of the statute in alleging theacts or omissions complained of as constituting the offense. The test is whether it enables aperson of common understanding to 3now the charge against him, and the court to render

judgment properl.(

The portion of the Information relevant to this discussion reads65Qbove-named PrespondentsQ, conspiring, confederating, and helping one another, "ith #rave abuse of confidence$ bein# the Cashier and /oo&&eeperof the

1ural >an3 of $ototan, Inc., $ototan, Iloilo, without the 3nowledge andJor consent of the management of the >an3 ! ! !.

It is beond doubt that tellers, Cashiers, >oo33eepers and other emploees of a >an3 whocome into possession of the monies deposited therein enjo the confidence reposed in them btheir emploer. >an3s, on the other hand, where monies are deposited, are considered theowners thereof. This is ver clear not onl from the e!press provisions of the law, but fromestablished jurisprudence. The relationship between ban3s and depositors has been held to bethat of creditor and debtor. 5rticles &( and &an3, without particularl referring to itas owner of the mone deposits, as sufficient to ma3e out a case of ualified Theft. For agraphic illustration, we cite oDue v. eople, where the accused teller was convicted forualified Theft based on this Information6That on or about the &th da of %ovember, &asa 5ir >aseSavings and /oan 5ssociation Inc. 8>5>S/5; with office address at >asa 5ir >ase,Floridablanca, $ampanga, and as such was authori0ed and reposed with the responsibilit toreceive and collect capital contributions from its memberJcontributors of said corporation, andhaving collected and received in her capacit as teller of the >5>S/5 the sum of T9%T#)@S5%A $9S)S 8$&:,:::.::;, said accused, with intent of gain, "ith #rave abuse ofconfidence and "ithout the &no"led#e and consent of said corporation , did then and therewillfull, unlawfull and feloniousl ta3e, steal and carr awa the amount of $&:,:::.::,$hilippine currenc, b ma3ing it appear that a certain depositor b the name of 5ntonio Sala0arwithdrew from his Savings 5ccount %o. &(, when in truth and in fact said 5ntonio Sala0ar didnot withdrPaQw the said amount of $&:,:::.:: to the damage and prejudice of >5>S/5 in thetotal amount of $&:,:::.::, $hilippine currenc.In convicting the therein appellant, the Court held that6PSQince the teller occupies a position of confidence, and the ban3 places mone in the tellerLspossession due to the confidence reposed on the teller, the felon of 2ualified theft would becommitted.'

5lso in People v. Sison,ranch )perations )fficer was convicted of the crime of ualifiedTheft based on the Information as herein cited6That in or about and during the period compressed between *anuar 4+, &4 and Februar &,&4, both dates inclusive, in the Cit of Manila, $hilippines, the said accused did then andthere wilfull, unlawfull and feloniousl, with intent of gain and without the 3nowledge and


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consent of the owner thereof, ta3e, steal and carr awa the following, to wit6Cash mone amounting to $,:::,:::.:: in different denominations belonging to the$#I/I$$I%9 C)MM91CI5/ I%T91%5TI)%5/ >5%K 8$CI>an3 for brevit;, /uneta >ranch,Manila represented b its >ranch Manager, #9/9% @. F51B5S, to the damage and prejudiceof the said owner in the aforesaid amount of $,:::,:::.::, $hilippine Currenc.That in the commission of the said offense, herein accused acted with grave abuse ofconfidence and unfaithfulness, he being the Branch %peration %fficerof the said complainant

and as such he had free access to the place where the said amount of mone was 3ept.The judgment of conviction elaborated thus6The crime perpetuated b appellant against his emploer, the $hilippine Commercial andIndustrial >an3 8$CI>;, is ualified Theft. 5ppellant could not have committed the crime had henot been holding the position of /uneta >ranch )peration )fficer which gave him not onl soleaccess to the ban3 vault !!!. The management of the $CI> reposed its trust and confidence inthe appellant as its /uneta >ranch )peration )fficer, and it was this trust and confidence whichhe e!ploited to enrich himself to the damage and prejudice of $CI> ! ! !.

From another end, People v. Locson,&:in addition to People v. Sison, described the nature ofpossession b the >an3. The mone in this case was in the possession of the defendant asreceiving teller of the ban3, and the possession of the defendant was the possession of the>an3. The Court held therein that when the defendant, with grave abuse of confidence,removed the mone and appropriated it to his own use without the consent of the >an3, therewas ta3ing as contemplated in the crime of ualified Theft.&&

Conspicuousl, in all of the foregoing cases, where the Informations merel alleged thepositions of the respondents7 that the crime was committed with grave abuse of confidence, withintent to gain and without the 3nowledge and consent of the >an3, without necessaril statingthe phrase being assiduousl insisted upon b respondents, D of a relation b! reason ofdependence$ #uardianship or vi#ilance$ bet"een the respondents and the offended part!that has created a hi#h de#ree of confidence bet"een them$ "hich respondentsabused,D&4and without emploing the word DownerD in lieu of the D>an3D were considered tohave satisfied the test of sufficienc of allegations.

5s regards the respondents who were emploed as Cashier and >oo33eeper of the >an3 in thiscase, there is even no reason to 2uibble on the allegation in the Informations that the actedwith grave abuse of confidence. In fact, the Information which alleged grave abuse ofconfidence b accused herein is even more precise, as this is e!actl the re2uirement of the lawin 2ualifing the crime of Theft.In summar, the >an3 ac2uires ownership of the mone deposited b its clients7 and theemploees of the >an3, who are entrusted with the possession of mone of the >an3 due to theconfidence reposed in them, occup positions of confidence. The Informations, therefore,sufficientl allege all the essential elements constituting the crime of ualified Theft.)n the theor of the defense that the A)* is the principal part who ma file the instant petition,the ruling in Mo+ilia roducts, 5nc. v. /a(ime :me)awa& is instructive. The Court thusenunciated6In a criminal case in which the offended part is the State, the interest of the private complainantor the offended part is limited to the civil liabilit arising therefrom. #ence, if a criminal case isdismissed b the trial court or if there is an ac2uittal, a reconsideration of the order of dismissalor ac2uittal ma be underta3en, whenever legall feasible, insofar as the criminal aspect thereofis concerned and ma be made onl b the public prosecutor7 or in the case of an appeal, bthe State onl, through the )SB. ! ! !.)n the alleged wrong mode of appeal b petitioner, suffice it to state that the rule is well-settledthat in appeals b certiorari under 1ule +( of the 1ules of Court, onl errors of law ma beraised,&+and herein petitioner certainl raised a 2uestion of law.

5s an aside, even if we go beond the allegations of the Informations in these cases, a closer


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loo3 at the records of the preliminar investigation conducted will show that, indeed, probablecause e!ists for the indictment of herein respondents. $ursuant to Section , 1ule &&4 of the1ules of Court, the judge shall issue a warrant of arrest onl upon a finding of probable causeafter personall evaluating the resolution of the prosecutor and its supporting evidence. Solivenv. 0a&asiar,&( as reiterated in Allado v. Drio&no,& e!plained that probable cause for theissuance of a warrant of arrest is the e!istence of such facts and circumstances that would leada reasonabl discreet and prudent person to believe that an offense has been committed b the

person sought to be arrested.

&'

The records reasonabl indicate that the respondents ma have,indeed, committed the offense charged.>efore closing, let it be stated that while it is trul imperative upon the fiscal or the judge, as thecase ma be, to relieve the respondents from the pain of going through a trial once it isascertained that no probable cause e!ists to form a sufficient belief as to the guilt of therespondents, conversel, it is also e2uall imperative upon the judge to proceed with the caseupon a showing that there is aprima faciecase against the respondents.


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informed the other members of the $antaleon famil that the entire tour group was waiting forthem. 5s it was alread 6+: a.m., and he was alread worried about further inconveniencingthe tour group, $antaleon as3ed the store cler3 to cancel the sale. The store manager thoughas3ed plaintiff to wait a few more minutes. 5fter &( minutes, the store manager informed$antaleon that respondent had demanded ban3 references. $antaleon supplied the names ofhis depositar ban3s, then instructed his daughter to return to the bus and apologi0e to the tourgroup for the dela.

5t around &:6:: a.m, or around +( minutes after $antaleon had presented his 5me!Card, and: minutes after the tour group was supposed to have left the store, Coster decided to releasethe items even without respondentLs approval of the purchase. The spouses $antaleon returnedto the bus. It is alleged that their offers of apolog were met b their tourmates with stonsilence.+The tour groupLs visible irritation was aggravated when the tour guide announced thatthe cit tour of 5msterdam was to be canceled due to lac3 of remaining time, as the had tocatch a 6:: p.m. ferr at Calais, >elgium to /ondon. (Mrs. $antaleon ended up weeping, whileher husband had to ta3e a tran2uili0er to calm his nerves.It later emerged that $antaleonLs purchase was first transmitted for approval to respondentLs

5msterdam office at 64: a.m., 5msterdam time, then referred to respondentLs Manila office at6 a.m, then finall approved at &:6& a.m., 5msterdam time. The 5pproval Code wastransmitted to respondentLs 5msterdam office at &:6< a.m., several minutes after petitioner hadalread left Coster, and '< minutes from the time the purchases were electronicall transmittedb the jewelr store to respondentLs 5msterdam office.

5fter the star-crossed tour had ended, the $antaleon famil proceeded to the @nited Statesbefore returning to Manila on &4 %ovember &4. Ehile in the @nited States, $antaleoncontinued to use his 5m9! card, several times without hassle or dela, but with two otherincidents similar to the 5msterdam brouhaha. )n : )ctober &&, $antaleon purchased golfe2uipment amounting to @S &,+'(.:: using his 5m9! card, but he cancelled his credit cardpurchase and borrowed mone instead from a friend, after more than : minutes had transpiredwithout the purchase having been approved. )n %ovember &&, $antaleon used the card topurchase childrenLs shoes worth


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The 3e 2uestion is whether respondent, in connection with the aforementioned transactions,had committed a breach of its obligations to $antaleon. In addition, $antaleon submits that evenassuming that respondent had not been in breach of its obligations, it still remained liable fordamages under 5rticle 4& of the Civil Code.The 1TC had concluded, based on the testimonial representations of $antaleon andrespondentLs credit authori0er, 9dgardo *aurigue, that the normal approval time for purchaseswas Da matter of seconds.D >ased on that standard, respondent had been in clear dela with

respect to the three subject transactions. 5s it appears, the Court of 5ppeals conceded thatthere had been dela on the part of respondent in approving the purchases. #owever, it madetwo critical conclusions in favor of respondent. First, the appellate court ruled that the dela wasnot attended b bad faith, malice, or gross negligence. Second, it ruled that respondent Dhade!ercised diligent efforts to effect the approvalD of the purchases, which were Dnot in accordancewith the charge patternD petitioner had established for himself, as e!emplified b the fact that atCoster, he was Dma3ing his ver first single charge purchase of @S&,


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less than the one hour it apparentl too3 before the purchase at Coster was finall approved.The findings of the trial court, to our mind, ampl established that the tardiness on the part ofrespondent in acting on petitionerLs purchase at Coster did constitute culpable dela on its partin compling with its obligation to act promptl on its customerLs purchase re2uest, whethersuch action be favorable or unfavorable. Ee 2uote the trial court, thus6

5s to the first issue, both parties have testified that normal approval time for purchases was amatter of seconds.

$laintiff testified that his personal e!perience with the use of the card was that e!cept for thethree charge purchases subject of this case, approvals of his charge purchases were alwasobtained in a matter of seconds.AefendantLs credit authori0er 9dgardo *auri2ue li3ewise testified6. N Gou also testified that on normal occasions, the normal approval time for charges would be to + secondsR

5. N Ges, MaLam.>oth parties li3ewise presented evidence that the processing and approval of plaintiffLs chargepurchase at the Coster Aiamond #ouse was wa beond the normal approval time of a Dmatterof secondsD.$laintiff testified that he presented his 5me!Card to the sales cler3 at Coster, at 6&( a.m. andb the time he had to leave the store at &:6:( a.m., no approval had et been received. In fact,the Credit 5uthori0ation Sstem 8C5S; record of defendant at $hoeni! 5me! shows thatdefendantLs 5msterdam office received the re2uest to approve plaintiffLs charge purchase at64: a.m., 5msterdam time or :&64:, $hoeni! time, and that the defendant relaed its approvalto Coster at &:6< a.m., 5msterdam time, or 46


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%otabl, petitioner frames the obligation of respondent as Dto approve or disapproveD thepurchase Din timel dispatch,D and not Dto approve the purchase instantaneousl or withinseconds.D Certainl, had respondent disapproved petitionerLs purchase Dwithin secondsD orwithin a timel manner, this particular action would have never seen the light of da. $etitionerand his famil would have returned to the bus without dela N internall humiliated perhaps overthe rejection of his card N et spared the shame of being held accountable b newl-madefriends for ma3ing them miss the chance to tour the cit of 5msterdam.

Ee do not wish do dispute that respondent has the right, if not the obligation, to verif whetherthe credit it is e!tending upon on a particular purchase was indeed contracted b thecardholder, and that the cardholder is within his means to ma3e such transaction. The culpablefailure of respondent herein is not the failure to timel approve petitionerLs purchase, but themore elemental failure to timel act on the same, whether favorabl or unfavorabl. 9venassuming that respondentLs credit authori0ers did not have sufficient basis on hand to ma3e a

judgment, we see no reason wh respondent could not have promptl informed petitioner thereason for the dela, and dul advised him that resolving the same could ta3e some time. In thatwa, petitioner would have had informed basis on whether or not to pursue the transaction atCoster, given the attending circumstances. Instead, petitioner was left uncomfortabl dangling inthe chill autumn winds in a foreign land and soon forced to confront the wrath of foreign fol3.Moral damages avail in cases of breach of contract where the defendant acted fraudulentl or inbad faith, and the court should find that under the circumstances, such damages are due. Thefindings of the trial court are ample in establishing the bad faith and unjustified neglect ofrespondent, attributable in particular to the Ddill-dallingD of respondentLs Manila creditauthori0er, 9dgardo *auri2ue.4Erote the trial court6Ehile it is true that the Cardmembership 5greement, which defendant prepared, is silent as tothe amount of time it should ta3e defendant to grant authori0ation for a charge purchase,defendant ac3nowledged that the normal time for approval should onl be three to four seconds.Speciall so with cards used abroad which re2uires Dspecial handlingD, meaning with priorit.)therwise, the object of credit or charge cards would be lost7 it would be so inconvenient to usethat buers and consumers would be better off carring bundles of currenc or travellerLschec3s, which can be delivered and accepted 2uic3l. Such right was not accorded to plaintiff inthe instances complained off for reasons 3nown onl to defendant at that time. This, to theCourtLs mind, amounts to a wanton and deliberate refusal to compl with its contractualobligations, or at least abuse of its rights, under the contract.4+

! ! !The dela committed b defendant was clearl attended b unjustified neglect and bad faith,since it alleges to have consumed more than one hour to simpl go over plaintiffLs past credithistor with defendant, his pament record and his credit and ban3 references, when all suchdata are alread stored and readil available from its computer. This Court also ta3es note ofthe fact that there is nothing in plaintiffLs billing histor that would warrant the imprudentsuspension of action b defendant in processing the purchase. AefendantLs witness *auri2ueadmits6. N >ut did ou discover that he did not have an outstanding accountR

5. N %othing in arrears at that time.. N Gou were well aware of this fact on this ver dateR

5. N Ges, sir.Mr. *auri2ue further testified that there were no Ddelin2uenciesD in plaintiffLs account.4(

It should be emphasi0ed that the reason wh petitioner is entitled to damages is not simplbecause respondent incurred dela, but because the dela, for which culpabilit lies under

5rticle &&':, led to the particular injuries under 5rticle 44&' of the Civil Code for which moraldamages are remunerative.4Moral damages do not avail to soothe the plaints of the simplimpatient, so this decision should not be cause for relief for those who time the length of their


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credit card transactions with a stopwatch. The somewhat unusual attending circumstances tothe purchase at Coster N that there was a deadline for the completion of that purchase bpetitioner before an dela would redound to the injur of his several traveling companions Ngave rise to the moral shoc3, mental anguish, serious an!iet, wounded feelings and socialhumiliation sustained b the petitioner, as concluded b the 1TC. 4'Those circumstances arefairl unusual, and should not give rise to a general entitlement for damages under a moremundane set of facts.

Ee sustain the amount of moral damages awarded to petitioner b the 1TC. There is no hard-and-fast rule in determining what would be a fair and reasonable amount of moral damages,since each case must be governed b its own peculiar facts, however, it must be commensurateto the loss or injur suffered.4


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Si del producto de la venta hubiese algun remanente, este se destinara al pago del credito del>anco %acional, o sea de $4,':+., con sus intereses de por ciento al ano desde el ' de

junio de &4, sin perjuicio de la orden de ejecucion 2ue pudiera e!pedirse en el asundo %o.4+( del *u0gado de $rimera Instancia de Manila.Se condena ademas a The Mabalacat Sugar Compan al pago de la suma de $,4:(.'ut in the absence of e!press stipulation for theaccumulation of compound interest, no interest can be collected upon interest until the debt is

judiciall claimed, and then the rate at which interest upon accrued interest must be computedis fi!ed at per cent per annum.In the present case, however, the language which we have 2uoted above does not justif the


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charging of interest upon interest, so far as interest on the capital is concerned. The provision2uoted merel re2uires the debtor to pa interest monthl at the end of each month, suchinterest to be computed upon the capital of the loan not alread paid. Clearl this provision doesnot justif the charging of compound interest upon the interest accruing upon the capitalmonthl. It is true that in subsections 8a;, 8b; and 8c; of article I= of the mortgage, it is stipulatedthat the interest can be thus computed upon sums which the creditor would have to pa out 8a;to maintain insurance upon the mortgaged propert, 8+; to pa the land ta! upon the same

propert, and 8c; upon disbursements that might be made b the mortgagee to maintain thepropert in good condition. >ut the chief thing is that interest cannot be thus accumulated on

unpaid interest accruing upon the capital of the debt.The trial court was of the opinion that interest could be so charged, because of the 9!hibit & ofthe Mabalacat Sugar Compan, which the court considered as an interpretation b the parties tothe contract and a recognition b the debtor of the propriet of compounding the interest earnedb the capital. >ut the e!hibit referred to is merel a receipt showing that the sum of $4(.4achrach Barage and Ta!icab Co. vs.Bolingco 8 $hil., &4;, wherethis court held that interest cannot be allowed in the absence of stipulation, or in default thereof,e!cept when the debt is judiciall claimed7 and when the debt is judiciall claimed, the interestupon the interest can onl be computed at the rate of per cent per annum.It results that the appellant"s second assignment of error is well ta3en, and the compoundinterest must be eliminated from the judgment. Eith respect to the amount improperl charged,we accept the estimate submitted b the president and manager of the Mabalacat SugarCompan, who sas that the amount improperl included in the computation made b theplaintiff"s boo33eeper is $


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G.R. No. L-4'7'7 :5 24, 1942GIL AR"!NIL,plaintiff-appellant,vs.!+TI SOLAS =alias!&TI SOLAS, !&TI SOLAS?,defendant-appellee.leuterio J. 'ustilo for appellant.Jose C. o+les for appellee.MORAN, J.

This is an action for foreclosure of mortgage. The onl 2uestion raised in this appeal is6 Isdefendant-appellee bound to pa the stipulated interest onl up to the date of maturit as fi!edin the promissor note, or up to the date pament is effectedR This 2uestion is, in our opinioncontrolled b the e!press stipulation of the parties.$aragraph + of the mortgage deed recites6ue en consideracion a dicha suma aun por pagar de A)S MI/ C@5T1)CI9%T)S $9S)S8$4,+:::.::;, moneda filipina, 2ue el Sr. #epti Solas se compromete a pagar al Sr. *ardenil eno antes del dia treintaiuno 8&; de mar0o de mil novecientos treintaicuarto 8&+;, con losintereses de dicha suma al tipo de doce por ciento 8&4?; anual a partir desde fecha hasta el diade su vencimiento o sea treintaiuno 8&; de mar0o de mil novecientos treintaicuatro 8&+;, porla presente, el Sr. #epti Solas cede traspasa, por via de primera hipoteca, a favor del Sr.*ardenil, sus herederos causahabientes, la parcela de terreno descrita en el parrafo primero8&.U; de esta escritura.Aefendant-appellee has, therefore, clearl agreed to pa interest onl up to the date of maturit,or until March &, &+. 5s the contract is silent as to whether after that date, in the event ofnon-pament, the debtor would continue to pa interest, we cannot in law, indulge in anpresumption as to such interest7 otherwise, we would be imposing upon the debtor an obligationthat the parties have not chosen to agree upon. 5rticle &'(( of the Civil Code provides thatDinterest shall be due onl when it has been epressl$ stipulated.D 89mphasis supplied.;

5 writing must be interpreted according to the legal meaning of its language 8section 4


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been made which we ma assume to have been so made on the e!piration of the ear of grace,he shall be entitled to legal interest upon the principal and the accrued interest from 5pril &,&(, until full pament.Thus modified judgment is affirmed, with costs against appellant.=ulo, C.J., %)aeta and Boco+o, JJ.,concur.

G.R. No. 160*33 an:ar5 12, 200*

+IRST +IL-SIN L!N"ING $OR&ORATION, petitioner,vs.GLORIA ". &A"ILLO, respondent.A 9 C I S I ) %

@NAR!S-SANTIAGO, J.:>efore us is a petition for review under 1ule +( of the 1ules of Court, see3ing a reversal of theCourt of 5ppealsL decision in C5-B.1. C= %o. '(&ranch 4& in Civil Case %o. ::-4(.)n *ul 44, &', respondent Bloria A. $adillo obtained a $(::,:::.:: loan from petitionerFirst Fil-Sin /ending Corp. )n September ', &', respondent obtained another $(::,:::.::loan from petitioner. In both instances, respondent e!ecuted a promissor note and disclosurestatement.4

For the first loan, respondent made & monthl interest paments of $44,(::.:: each beforeshe settled the $(::,:::.:: outstanding principal obligation on Februar 4, &. 5s regardsthe second loan, respondent made && monthl interest paments of $4(,:::.:: each beforepaing the principal loan of $(::,:::.:: on Februar 4, &.In sum, respondent paid a totalof $'4,(::.:: for the first loan and $''(,:::.:: for the second loan.)n *anuar 4', 4:::, respondent filed an action for sum of mone against herein petitionerbefore the 1egional Trial Court of Manila. 5lleging that she onl agreed to pa interest at therates of +.(? and (? per annum, respectivel, for the two loans, and not +.(? and (? permonth, respondent sought to recover the amounts she allegedl paid in e!cess of her actualobligations.)n )ctober &4, 4::&,+ the trial court dismissed respondentLs complaint, and on thecounterclaim, ordered her to pa petitioner $&&,&4(.:: with legal interest from Februar ,& until full paid plus &:? of the amount due as attorneLs fees and costs of the suit. (Thetrial court ruled that b issuing chec3s representing interest paments at +.(? and (? monthlinterest rates, respondent is now estopped from 2uestioning the provisions of the promissornotes.)n appeal, the Court of 5ppeals 8C5; reversed and set aside the decision of the court a Duo,the dispositive portion of which reads6I% =I9E )F 5// T#9 F)19B)I%B, the appealed decision is 19=91S9A and S9T 5SIA9 anda new one entered6 8&; ordering First Fil-Sin /ending Corporation to return the amount of$&&+,:::.:: to Bloria A. $adillo, and 84; deleting the award of attorneLs fees in favor ofappellee. )ther claims and counterclaims are dismissed for lac3 of sufficient causes. %opronouncement as to cost.S) )1A919A.

The appellate court ruled that, based on the disclosure statements e!ecuted b respondent, theinterest rates should be imposed on a monthl basis but onl for the -month term of theloan.lvvphi1.netThereafter, the legal interest rate will appl. The C5 also found the penaltcharges pegged at &? per da of dela highl unconscionable as it would translate to (? perannum. Thus, it was reduced to &? per month or &4? per annum.#ence, the instant petition on the following assignment of errors6I


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T#9 C)@1T )F 5$$95/S 9119A I% FI%AI%B T#5T T#9 5$$/IC5>/9 I%T919STS#)@/A >9 T#9 /9B5/ I%T919ST )F TE9/=9 $91 C9%T 8&4?; $91 5%%@M A9S$IT9T#9 C/951 5B199M9%T )F T#9 $51TI9S )% 5%)T#91 5$$/IC5>/9 15T9.IIT#9 C)@1T )F 5$$95/S 9119A I% IM$)SI%B 5 $9%5/TG C)M$@T9A 5T T#9 15T9 )FTE9/=9 $91 C9%T 8&4?; $91 5%%@M A9S$IT9 T#9 C/951 5B199M9%T )F T#9$51TI9S )% 5%)T#91 5$$/IC5>/9 15T9.

IIIT#9 C)@1T )F 5$$95/S 9119A I% A9/9TI%B T#9 5TT)1%9GLS F99S 5E51A9A >GT#9 19BI)%5/ T1I5/ C)@1T.'

$etitioner maintains that the trial court and the C5 are correct in ruling that the interest rates areto be imposed on a monthl and not on a per annum basis. #owever, it insists that the +.(? and(? monthl interest shall be imposed until the outstanding obligations have been full paid.

5s to the penalt charges, petitioner argues that the &4? per annum penalt imposed b the C5in lieu of the &? per da as agreed upon b the parties violates their freedom to stipulate termsand conditions as the ma deem proper.$etitioner finall contends that the C5 erred in deleting the trial courtLs award of attorneLs feesarguing that the same is anchored on sound and legal ground.1espondent, on the other hand, avers that the interest on the loans is per annum as e!presslstated in the promissor notes and disclosure statements. The provision as to annual interestrate is clear and re2uires no room for interpretation. 1espondent asserts that an ambiguit inthe promissor notes and disclosure statements should not favor petitioner since the loandocuments were prepared b the latter.1awphi1.ntEe agree with respondent.$erusal of the promissor notes and the disclosure statements pertinent to the *ul 44, &'and September ', &' loan obligations of respondent clearl and unambiguousl provide forinterest rates of +.(? per annum and (? per annum, respectivel. %owhere was it stated thatthe interest rates shall be applied on a monthl basis.Thus, when the terms of the agreement are clear and e!plicit that the do not justif an attemptto read into it an alleged intention of the parties, the terms are to be understood literall just asthe appear on the face of the contract.


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documents, and that it failed to correct the pro formanote Dp.a.D to Dper monthD.&&Since themista3e is e!clusivel attributed to petitioner, the same should be charged against it. Thisunilateral mista3e cannot be ta3en against respondent who merel affi!ed her signature on thepro forma loan agreements. 5s between two parties to a written agreement, the part who gaverise to the mista3e or error in the provisions of the same is estopped from asserting a contrarintention to that contained therein. The chec3s issued b respondent do not clearl andconvincingl prove that the real intent of the parties is to appl the interest rates on a monthl

basis. 5bsent an proof of vice of consent, the promissor notes and disclosure statementsremain the best evidence to ascertain the real intent of the [email protected] same promissor note provides that D! ! ! an and all remaining amount due on theprincipal upon maturit hereof shall earn interest at the rate of VVVVV from date of maturit untilfull paid.D The C5 thus properl imposed the legal interest of &4? per annum from the time theloans matured until the same has been full paid on Februar 4, &. 5s decreed in 9astern&hippin* !ines, 5nc. v. Court of Appeals,&4Din the absence of stipulation, the rate of interest shallbe &4? per annum to be computed from default.D

5s regards the penalt charges, we agree with the C5 in ruling that the &? penalt per da ofdela is highl unconscionable. 5ppling 5rticle &44 of the Civil Code, courts shall e2uitablreduce the penalt when the principal obligation has been partl or irregularl complied with, orif it is ini2uitous or unconscionable.Eith regard to the attorneLs fees, the C5 correctl deleted the award in favor of petitioner sincethe trial courtLs decision does not reveal an e!plicit basis for such an award. 5ttorneLs fees arenot automaticall awarded to ever winning litigant. lvvphi1.netIt must be shown that an of theinstances enumerated under 5rt. 44:esides, b filing the complaint, respondent was merelasserting her rights which, after due deliberations, proved to be lawful, proper and valid.


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propert with the following terms6%)E, T#919F)19, for and in consideration of the sum of T#199 MI//I)% $9S)S8$,:::,:::.::; receipt of which is hereb ac3nowledged b the FI1ST $51TG from theS9C)%A $51TG, the parties have agreed as follows6&. That the S9C)%A $51TG has a period of Si! 8; months from the date of the e!ecution ofthis contract within which to notif the FI1ST $51TG of her intention to purchase theaforementioned parcel of land together within 8sic; the improvements thereon at the price of SI

MI//I)% F)@1 #@%A19A T#)@S5%A $9S)S 8$,+::,:::.::;. @pon notice to the FI1ST$51TG of the S9C)%A $51TGLs intention to purchase the same, the latter has a period ofanother si! months within which to pa the remaining balance of $.+ million.4. That prior to the si! months period given to the S9C)%A $51TG within which to decidewhether or not to purchase the above-mentioned propert, the FI1ST $51TG ma still offer thesaid propert to other persons who ma be interested to bu the same provided that the amountof $,:::,:::.:: given to the FI1ST $51TG >G T#9 S9C)%A $51TG shall be paid to thelatter including interest based on prevailing compounded ban3 interest plus the amount of thesale in e!cess of $',:::,:::.:: should the propert be sold at a price more than $' million.. That in case the FI1ST $51TG has no other buer within the first si! months from thee!ecution of this contract, no interest shall be charged b the S9C)%A $51TG on the $million however, in the event that on the si!th month the S9C)%A $51TG would decide not topurchase the aforementioned propert, the FI1ST $51TG has a period of another si! monthswithin which to pa the sum of $ million pesos provided that the said amount shall earncompounded ban3 interest for the last si! months onl. @nder this circumstance, the amount of$ million given b the S9C)%A $51TG shall be treated as PaQ loan and the propert shall beconsidered as the securit for the mortgage which can be enforced in accordance with law.! ! ! !.

$etitioner received from respondent two million pesos in cash and one million pesos in a post-dated chec3 dated Februar 4ranch &+47 that thepetition was granted in an )rder&dated 5ugust &, &&7 that said )rder was subse2uentl setaside in an )rder dated 5pril &:, &4&+where the 1TC Ma3ati granted respondentLs petition forrelief from judgment due to the fact that respondent is in possession of the ownerLs duplicatecop of TCT %o. &


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$etitioner filed an 5mended 5nswer& alleging that the Memorandum of 5greement wasconceived and arranged b her lawer, 5tt. Carmelita /o0ada, who is also respondentLs lawer7that she was as3ed to sign the agreement without being given the chance to read the same7that the title to the propert and the Aeed of Sale between her and the IM1AC were entrustedto 5tt. /o0ada for safe3eeping and were never turned over to respondent as there was noconsummated sale et7 that out of the two million pesos cash paid, 5tt. /o0ada too3 the onemillion pesos which has not been returned, thus petitioner had filed a civil case against her7 that

she was never informed of respondentLs decision not to purchase the propert within the si!month period fi!ed in the agreement7 that when she demanded the return of TCT %o. &


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The C5 found that6 petitioner gave the one million pesos to 5tt. /o0ada partl as hercommission and partl as a loan7 respondent did not replace the mista3enl dated chec3 of onemillion pesos because she had decided not to bu the propert and petitioner 3new of herdecision as earl as 5pril &&7 the award of moral damages was warranted since even grantingpetitioner had no hand in the filing of the petition for the issuance of an ownerLs cop, shee!ecuted an affidavit of loss of TCT %o. &an3, 4& that in fairness to petitioner, the rate to becharged should be 4(? onl.$etitionerLs motion for reconsideration was denied b the C5 in a 1esolution dated September&&, 4::4.#ence the instant $etition for 1eview on Certiorari filed b petitioner raising the following issues685; E#9T#91 )1 %)T T#9 C)M$)@%A9A >5%K I%T919ST S#)@/A >9 /IMIT9A T)SI 8; M)%T#S 5S C)%T5I%9A I% T#9 M9M)15%A@M )F 5B199M9%T.8>; E#9T#91 )1 %)T T#9 19S$)%A9%T IS 9%TIT/9A T) M)15/ A5M5B9S.8C; E#9T#91 )1 %)T T#9 B15%T )F C)119CTI=9 5%A 99M$/51G A5M5B9S 5%A

5TT)1%9GLS F99S IS $1)$91 9=9% IF %)T M9%TI)%9A I% T#9 T9T )F T#9A9CISI)%.44

$etitioner contends that the interest, whether at 4? per annum awarded b the trial court or at4(? per annum as modified b the C5 which should run from *une ', && until full paid, iscontrar to the partiesL Memorandum of 5greement7 that the agreement provides that ifrespondent would decide not to purchase the propert, petitioner has the period of another si!months to pa the loan with compounded ban3 interest for the last si! months onl7 that theC5Ls ruling that a loan alwas bears interest otherwise it is not a loan is contrar to 5rt. &( ofthe %ew Civil Code which provides that no interest shall be due unless it has been e!presslstipulated in writing.Ee are not persuaded.Ehile the C5Ls conclusion, that a loan alwas bears interest otherwise it is not a loan, is flawedsince a simple loan ma be gratuitous or with a stipulation to pa interest,4we find no errorcommitted b the C5 in awarding a 4(? interest per annum on the two-million peso loan evenbeond the second si! months stipulated period.The Memorandum of 5greement e!ecuted between the petitioner and respondent on Aecember', &: is the law between the parties. In resolving an issue based upon a contract, we mustfirst e!amine the contract itself, especiall the provisions thereof which are relevant to thecontrovers.4+The general rule is that if the terms of an agreement are clear and leave no doubtas to the intention of the contracting parties, the literal meaning of its

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