credit mutuum deposit cases

8/13/2019 Credit Mutuum Deposit Cases

1/189

CHEE KIONG YAM, AMPANG MAH, ANITA YAM JOSE Y.C. YAM AND RICHARDYAM, petitioners,

vs.

HON. NABDAR J. MALIK, Mni!ip"# J$%e o& Jo#o, S# 'Br"n!( I), THE PEOPLE O*

THE PHILIPPINES, ROSALINDA AMIN, TAN CH+ KAO "n$ LT. COL. AGOSTOSAJOR respon$ents.

To"s P. M"ti!, Jr. &or petitioners.

Jose E. *ern"n$e- &or priv"te respon$ent.

O&&i!e o& t(e So#i!itor Gener"# &or respon$ent t(e Peop#e o& t(e P(i#ippines.

ABAD SANTOS, J.

T(is is " petition &or !ertior"ri, pro(i/ition, "n$ "n$"s 0it( pre#iin"r1 in2n!tion.Petitioners "##e%e$ t("t respon$ent Mni!ip"# J$%e N"/$"r J. M"#i3 o& Jo#o, S#, "!te$0it(ot 2ris$i!tion, in e4!ess o& 2ris$i!tion "n$ 0it( %r"ve "/se o& $is!retion 0(en

'") (e (e#$ in t(e pre#iin"r1 investi%"tion o& t(e !("r%es o& est"&" &i#e$ /1 respon$entsRos"#in$" Ain, T"n C( K"o "n$ A%sto S"2or "%"inst petitioners t("t t(ere 0"s "pri" &"!ie !"se "%"inst t(e #"tter5

'/) (e isse$ 0"rr"nts o& "rrest "%"inst petitioners "&ter "3in% t(e "/ove$eterin"tion5 "n$

'!) (e n$ertoo3 to !on$!t tri"# on t(e erits o& t(e !("r%es 0(i!( 0ere $o!3ete$in (is !ort "s Criin"# C"ses No. M6777, M6789 "n$ M6:;8.


2/189

Respon$ent 2$%e is s"i$ to ("ve "!te$ 0it(ot 2ris$i!tion, in e4!ess o& 2ris$i!tion "n$0it( %r"ve "/se o& $is!retion /e!"se t(e &"!ts re!ite$ in t(e !op#"ints $i$ not!onstitte t(e !rie o& est"&", "n$ "ssin% t(e1 $i$, t(e1 0ere not 0it(in t(e

2ris$i!tion o& t(e respon$ent 2$%e.

In " reso#tion $"te$ M"1 :9, 7


3/189

ot(er t0o !"ses, t(e !op#"int in Criin"# C"se No. M6:;8 $oes not st"te t("t t(e"ont 0"s re!eive$ "s #o"n. Ho0ever, in " s0orn st"teent $"te$ Septe/er :


4/189

T(e n"tre o& sip#e #o"n is $e&ine$ in Arti!#es 7"#it1s("## /e p"i$, in 0(i!( !"se t(e !ontr"!t is sip#1 !"##e$ " #o"n or t.

Coo$"t is essenti"##1 %r"titos.

Sip#e #o"n "1 /e %r"titos or 0it( " stip#"tion to p"1 interest.

In !oo$"t t(e /"i#or ret"ins t(e o0ners(ip o& t(e t(in% #o"ne$, 0(i#e in sip#e#o" o0ners(ip p"sses to t(e /orro0er.

Art. 7ires t(e o0ners(ip t(ereo&, "n$ is /on$ to p"1 to t(e !re$itor "n e>"# "ont o&t(e s"e 3in$ "n$ >"#it1.

It !"n /e re"$i#1 note$ &ro t(e "/ove6>ote$ provisions t("t in sip#e #o"n 't),"s !ontr"ste$ to !oo$"t, t(e /orro0er "!>ires o0ners(ip o& t(e one1, %oo$sor person"# propert1 /orro0e$. Bein% t(e o0ner, t(e /orro0er !"n $ispose o& t(e t(in%/orro0e$ 'Arti!#e :8, Civi# Co$e) "n$ (is "!t 0i## not /e !onsi$ere$ is"ppropri"tiont(ereo&.

In +.S. vs. I/"e-, 7< P(i#. @@


5/189

It "ppe"rs t("t respon$ent 2$%e &"i#e$ to "ppre!i"te t(e $istin!tion /et0een t(e t0ot1pes o& #o"n, t "n$ !oo$"t, 0(en (e per&ore$ t(e >estione$ "!ts, Heistoo3 t(e tr"ns"!tion /et0een petitioners "n$ respon$ents Ros"#in$" Ain, T"n C(K"o "n$ A%sto S"2or to /e !oo$"t 0(erein t(e /orro0er $oes not "!>ireo0ners(ip over t(e t(in% /orro0e$ "n$ ("s t(e $t1 to retrn t(e s"e t(in% to t(e

#en$er.

+n$er Se!. 8= o& t(e J$i!i"r1 A!t, t(e ni!ip"# !ort o& " provin!i"# !"pit"#, 0(i!( t(eMni!ip"# Cort o& Jo#o is, ("s 2ris$i!tion over !riin"# !"ses 0(ere t(e pen"#t1provi$e$ /1 #"0 $oes not e4!ee$ prision !orre!!ion"# or iprisonent &or not ore t("nsi4 ') 1e"rs, or &ine not e4!ee$in% P,;;;.;; or /ot(, T(e "onts "##e%e$#1is"ppropri"te$ /1 petitioners r"n%e &ro P:;,;;;.;; to P@;,;;;.;;. T(e pen"#t1 &oris"ppropri"tion o& t(is "%nit$e e4!ee$s prision !orre!!ion"# or 1e"r iprisonent.'Arti!#e 97@, Revise$ Pen"# Co$e), Assin% t(en t("t t(e "!ts re!ite$ in t(e!op#"ints !onstitte t(e !rie o& est"&", t(e Mni!ip"# Cort o& Jo#o ("s no 2ris$i!tion

to tr1 t(e on t(e erits. T(e "##e%e$ o&&enses "re n$er t(e 2ris$i!tion o& t(e Cort o&*irst Inst"n!e.

Respon$ents Peop#e o& t(e P(i#ippines /ein% t(e soverei%n "t(orit1 !"n not /e se$&or $""%es. T(e1 "re ine &ro s!( t1pe o& sit.

?it( respe!t to t(e ot(er respon$ents, t(is Cort is not t(e proper &or &or t(e!onsi$er"tion o& t(e !#"i &or $""%es "%"inst t(e.

?HERE*ORE, t(e petition is (ere/1 %r"nte$5 t(e tepor"r1 restr"inin% or$erprevios#1 isse$ is (ere/1 "$e per"nent5 t(e !riin"# !op#"ints "%"inst petitioners"re (ere/1 $e!#"re$ n## "n$ voi$5 respon$ent 2$%e is (ere/1 or$ere$ to $isiss s"i$!riin"# !"ses "n$ to re!"## t(e 0"rr"nts o& "rrest (e ("$ isse$ in !onne!tiont(ere0it(. Moreover, respon$ent 2$%e is (ere/1 re/3e$ &or "ni&est i%nor"n!e o&e#eent"r1 #"0. Let " !op1 o& t(is $e!ision /e in!#$e$ in (is person"# #i&e. Costs"%"inst priv"te respon$ents.

SO ORDERED.

SECOND DIFISION

G.R. No. 77@9:. *e/r"r1 7


6/189

PROD+CERS BANK O* THE PHILIPPINES 'no0 *IRST INTERNATIONAL BANK),petitioner, vs. HON. CO+RT O* APPEALS AND *RANKLIN FIFES, respon$ents.

D E C I S I O N

CALLEJO, SR., J.

T(is is " petition &or revie0 on !ertior"ri o& t(e De!ision7 o& t(e Cort o& Appe"#s $"te$Jne :@, 7


7/189


8/189

'") t(e "ont o& P:;;,;;;.;;, representin% t(e one1 $eposite$, 0it( interest "tt(e #e%"# r"te &ro t(e &i#in% o& t(e !op#"int nti# t(e s"e is #1 p"i$5

'/) t(e s o& P@;,;;;.;; &or or"# $""%es "n$ " sii#"r "ont &or e4ep#"r1

$""%es5

'!) t(e "ont o& P;,;;;.;; &or "ttorne1s &ees5 "n$

'$) t(e !osts o& t(e sit.

SO ORDERED.8

Petitioner "ppe"#e$ t(e tri"# !orts $e!ision to t(e Cort o& Appe"#s. In its De!ision$"te$ Jne :@, 7


9/189

III.

THE HONORABLE CO+RT O* APPEALS ERRED IN ADOPTING THE ENTIRERECORDS O* THE REGIONAL TRIAL CO+RT AND A**IRMING THE J+DGMENTAPPEALED *ROM, AS THE *INDINGS O* THE REGIONAL TRIAL CO+RT ?EREBASED ON A MISAPPREHENSION O* *ACTS5

IF.

THE HONORABLE CO+RT O* APPEALS ERRED IN DECLARING THAT THE CITED

DECISION IN SAL+DARES FS. MARTINE, :< SCRA =@, +PHOLDING THELIABILITY O* AN EMPLOYER *OR ACTS COMMITTED BY AN EMPLOYEE ISAPPLICABLE5

F.

THE HONORABLE CO+RT O* APPEALS ERRED IN +PHOLDING THE DECISIONO* THE LO?ER CO+RT THAT HEREIN PETITIONER BANK IS JOINTLY ANDSEFERALLY LIABLE ?ITH THE OTHER DE*ENDANTS *OR THE AMO+NT O*P:;;,;;;.;; REPRESENTING THE SAFINGS ACCO+NT DEPOSIT, P@;,;;;.;;*OR MORAL DAMAGES, P@;,;;;.;; *OR EEMPLARY DAMAGES, P;,;;;.;;*OR ATTORNEYS *EES AND THE COSTS O* S+IT.77

Priv"te respon$ent &i#e$ (is Coent on Septe/er :9, 7


10/189


11/189

He #i3e0ise "sserts t("t t(e tri"# !ort $i$ not err in &in$in% t("t petitioner, Atien-"sep#o1er, is #i"/#e &or t(e retrn o& (is one1. He insists t("t Atien-", petitioners"ssist"nt "n"%er, !onnive$ 0it( Doroni##" in $e&r"$in% priv"te respon$ent sin!e it

0"s Atien-" 0(o &"!i#it"te$ t(e openin% o& Stere#"s !rrent "!!ont t(ree $"1s "&terMrs. Fives "n$ S"n!(e- opene$ " s"vin%s "!!ont 0it( petitioner &or s"i$ !op"n1, "s

0e## "s t(e "pprov"# o& t(e "t(orit1 to $e/it Stere#"s s"vin%s "!!ont to !over "n1over$r"0in%s in its !rrent "!!ont.:9

T(ere is no erit in t(e petition.

At t(e otset, it st /e ep("si-e$ t("t on#1 >estions o& #"0 "1 /e r"ise$ in "petition &or revie0 &i#e$ 0it( t(is Cort. T(e Cort ("s repe"te$#1 (e#$ t("t it is not its&n!tion to "n"#1-e "n$ 0ei%( "## over "%"in t(e evi$en!e presente$ /1 t(e p"rties$rin% tri"#.: T(e Corts 2ris$i!tion is in prin!ip#e #iite$ to revie0in% errors o& #"0t("t i%(t ("ve /een !oitte$ /1 t(e Cort o& Appe"#s.:@ Moreover, &"!t"# &in$in%so& !orts, 0(en "$opte$ "n$ !on&ire$ /1 t(e Cort o& Appe"#s, "re &in"# "n$!on!#sive on t(is Cort n#ess t(ese &in$in%s "re not spporte$ /1 t(e evi$en!e onre!or$.: T(ere is no s(o0in% o& "n1 is"ppre(ension o& &"!ts on t(e p"rt o& t(e Corto& Appe"#s in t(e !"se "t /"r t("t 0o#$ re>ire t(is Cort to revie0 "n$ overtrn t(e&"!t"# &in$in%s o& t("t !ort, espe!i"##1 sin!e t(e !on!#sions o& &"!t o& t(e Cort o&Appe"#s "n$ t(e tri"# !ort "re not on#1 !onsistent /t "re "#so "p#1 spporte$ /1 t(eevi$en!e on re!or$.

No error 0"s !oitte$ /1 t(e Cort o& Appe"#s 0(en it r#e$ t("t t(e tr"ns"!tion/et0een priv"te respon$ent "n$ Doroni##" 0"s " !oo$"t "n$ not " t. A!ir!spe!t e4"in"tion o& t(e re!or$s reve"#s t("t t(e tr"ns"!tion /et0een t(e 0"s" !oo$"t. Arti!#e 7"#it1 s("## /e p"i$, in 0(i!(

!"se t(e !ontr"!t is sip#1 !"##e$ " #o"n or t.

Coo$"t is essenti"##1 %r"titos.

Sip#e #o"n "1 /e %r"titos or 0it( " stip#"tion to p"1 interest.


12/189

In !oo$"t, t(e /"i#or ret"ins t(e o0ners(ip o& t(e t(in% #o"ne$, 0(i#e in sip#e#o"n, o0ners(ip p"sses to t(e /orro0er.

T(e &ore%oin% provision sees to ip#1 t("t i& t(e s/2e!t o& t(e !ontr"!t is "!ons"/#e t(in%, s!( "s one1, t(e !ontr"!t 0o#$ /e " t. Ho0ever, t(ere"re soe inst"n!es 0(ere " !oo$"t "1 ("ve &or its o/2e!t " !ons"/#e t(in%.Arti!#e 7


13/189

P:;;,;;;.;;. Arti!#e 7


14/189

To /e%in 0it(, t(e $eposit 0"s "$e in $e&en$"nts Ben$i" /r"n!( pre!ise#1 /e!"seAtien-" 0"s " 3e1 o&&i!er t(erein. T(e re!or$s s(o0 t("t p#"inti&& ("$ s%%este$ t("tt(e P:;;,;;;.;; /e $eposite$ in (is /"n3, t(e M"ni#" B"n3in% Corpor"tion, /tDoroni##" "n$ D"%pi insiste$ t("t it st /e in $e&en$"nts /r"n!( in M"3"ti &or it 0i##/e e"sier &or t(e to %et " !erti&i!"tion. In &"!t /e&ore (e 0"s intro$!e$ to p#"inti&&,

Doroni##" ("$ "#re"$1 prep"re$ " #etter "$$resse$ to t(e Ben$i" /r"n!( "n"%er"t(ori-in% An%e#es B. S"n!(e- "n$ !op"n1 to open " s"vin%s "!!ont &or Stere#" int(e "ont o& P:;;,;;;.;;, "s per !oor$in"tion 0it( Mr. R&o Atien-", Assist"ntM"n"%er o& t(e B"n3 4 4 4 'E4(. 7). T(is is " !#e"r "ni&est"tion t("t t(e ot(er$e&en$"nts ("$ /een in !ons#t"tion 0it( Atien-" &ro t(e in!eption o& t(e s!(ee.Si%ni&i!"nt#1, t(ere 0ere testionies "n$ "$ission t("t Atien-" is t(e /rot(er6in6#"0 o&" !ert"in Roeo Mir"so#, " &rien$ "n$ /siness "sso!i"te o& Doroni##".

T(en t(ere is t(e "tter o& t(e o0ners(ip o& t(e &n$. Be!"se o& t(e !oor$in"tion/et0een Doroni##" "n$ Atien-", t(e #"tter 3ne0 /e&ore ("n$ t("t t(e one1 $eposite$

$i$ not /e#on% to Doroni##" nor to Stere#". Asi$e &ro s!( &ore3no0#e$%e, (e 0"se4p#i!it#1 to#$ /1 Ino!en!i" Fives t("t t(e one1 /e#on%e$ to (er "n$ (er (s/"n$ "n$t(e $eposit 0"s ere#1 to "!!oo$"te Doroni##". Atien-" even $e!#"re$ t("t t(eone1 !"e &ro Mrs. Fives.

A#t(o%( t(e s"vin%s "!!ont 0"s in t(e n"e o& Stere#", t(e /"n3 re!or$s $is!#oset("t t(e on#1 ones epo0ere$ to 0it($r"0 t(e s"e 0ere Ino!en!i" Fives "n$ An%e#esB. S"n!(e-. In t(e si%n"tre !"r$ pert"inin% to t(is "!!ont 'E4(. J), t(e "t(ori-e$si%n"tories 0ere Ino!en!i" Fives Qor An%e#es B. S"n!(e-. Atien-" st"te$ t("t it is t(es"# /"n3in% pro!e$re t("t 0it($r"0"#s o& s"vin%s $eposits !o#$ on#1 /e "$e /1persons 0(ose "t(ori-e$ si%n"tres "re in t(e si%n"tre !"r$s on &i#e 0it( t(e /"n3.He, (o0ever, s"i$ t("t t(is pro!e$re 0"s not &o##o0e$ (ere /e!"se Stere#" 0"so0ne$ /1 Doroni##". He e4p#"ine$ t("t Doroni##" ("$ t(e # "t(orit1 to 0it($r"0 /1virte o& s!( o0ners(ip. T(e Cort is not in!#ine$ to "%ree 0it( Atien-". In t(e &irstp#"!e, (e 0"s "## t(e tie "0"re t("t t(e one1 !"e &ro Fives "n$ $i$ not /e#on% toStere#". He 0"s "#so to#$ /1 Mrs. Fives t("t t(e1 0ere on#1 "!!oo$"tin% Doroni##"so t("t " !erti&i!"tion !"n /e isse$ to t(e e&&e!t t("t Stere#" ("$ " $eposit o& so !("ont to /e se$ in t(e in!orpor"tion o& t(e &ir. In t(e se!on$ p#"!e, t(e si%n"tre o&Doroni##" 0"s not "t(ori-e$ in so &"r "s t("t "!!ont is !on!erne$ in"s!( "s (e ("$not si%ne$ t(e si%n"tre !"r$ provi$e$ /1 t(e /"n3 0(enever " $eposit is opene$. Int(e t(ir$ p#"!e, neit(er Mrs. Fives nor S"n!(e- ("$ %iven Doroni##" t(e "t(orit1 to

0it($r"0.

Moreover, t(e tr"ns&er o& &n$ 0"s $one 0it(ot t(e p"ss/oo3 ("vin% /een presente$.It is "n "!!epte$ pr"!ti!e t("t 0(enever " 0it($r"0"# is "$e in " s"vin%s $eposit, t(e/"n3 re>ires t(e present"tion o& t(e p"ss/oo3. In t(is !"se, s!( re!o%ni-e$ pr"!ti!e

0"s $ispense$ 0it(. T(e tr"ns&er &ro t(e s"vin%s "!!ont to t(e !rrent "!!ont 0"s


15/189

0it(ot t(e s/ission o& t(e p"ss/oo3 0(i!( Atien-" ("$ %iven to Mrs. Fives. Inste"$,it 0"s "$e to "ppe"r in " !erti&i!"tion si%ne$ /1 Estre##" D"%pi t("t " $p#i!"tep"ss/oo3 0"s isse$ to Stere#" /e!"se t(e ori%in"# p"ss/oo3 ("$ /een srren$ere$to t(e M"3"ti /r"n!( in vie0 o& " #o"n "!!oo$"tion "ssi%nin% t(e s"vin%s "!!ont'E4(. C). Atien-", 0(o n$o/te$#1 ("$ " ("n$ in t(e e4e!tion o& t(is !erti&i!"tion,

0"s "0"re t("t t(e !ontents o& t(e s"e "re not tre. He 3ne0 t("t t(e p"ss/oo3 0"sin t(e ("n$s o& Mrs. Fives &or (e 0"s t(e one 0(o %"ve it to (er. Besi$es, "s "ssist"nt"n"%er o& t(e /r"n!( "n$ t(e /"n3 o&&i!i"# servi!in% t(e s"vin%s "n$ !rrent "!!ontsin >estion, (e "#so 0"s "0"re t("t t(e ori%in"# p"ss/oo3 0"s never srren$ere$. He

0"s "#so !o%ni-"nt t("t Estre##" D"%pi 0"s not "on% t(ose "t(ori-e$ to 0it($r"0so (er !erti&i!"tion ("$ no e&&e!t 0("tsoever.

T(e !ir!st"n!e srron$in% t(e openin% o& t(e !rrent "!!ont "#so $eonstr"te t("tAtien-"s "!tive p"rti!ip"tion in t(e perpetr"tion o& t(e &r"$ "n$ $e!eption t("t !"se$t(e #oss. T(e re!or$s in$i!"te t("t t(is "!!ont 0"s opene$ t(ree $"1s #"ter "&ter t(e

P:;;,;;;.;; 0"s $eposite$. In spite o& (is $is!#"ier, t(e Cort /e#ieves t("t Atien-"0"s in$ "n$ poste$ re%"r$in% t(e openin% o& t(e !rrent "!!ont !onsi$erin% t("tDoroni##" 0"s "## t(e 0(i#e in !oor$in"tion 0it( (i. T("t it 0"s (e 0(o &"!i#it"te$ t(e"pprov"# o& t(e "t(orit1 to $e/it t(e s"vin%s "!!ont to !over "n1 over$r"0in%s in t(e!rrent "!!ont 'E4(. :) is not ("r$ to !opre(en$.

C#e"r#1 Atien-" ("$ !oitte$ 0ron% "!ts t("t ("$ res#te$ to t(e #oss s/2e!t o& t(is!"se. 4 4 4.97

+n$er Arti!#e :78; o& t(e Civi# Co$e, ep#o1ers s("## /e (e#$ pri"ri#1 "n$ so#i$"ri#1#i"/#e &or $""%es !"se$ /1 t(eir ep#o1ees "!tin% 0it(in t(e s!ope o& t(eir "ssi%ne$t"s3s. To (o#$ t(e ep#o1er #i"/#e n$er t(is provision, it st /e s(o0n t("t "nep#o1er6ep#o1ee re#"tions(ip e4ists, "n$ t("t t(e ep#o1ee 0"s "!tin% 0it(in t(es!ope o& (is "ssi%ne$ t"s3 0(en t(e "!t !op#"ine$ o& 0"s !oitte$.9: C"se #"0 int(e +nite$ St"tes o& Aeri!" ("s it t("t " !orpor"tion t("t entrsts " %ener"# $t1 to itsep#o1ee is responsi/#e to t(e in2re$ p"rt1 &or $""%es o0in% &ro t(e ep#o1ees

0ron% "!t $one in t(e !orse o& (is %ener"# "t(orit1, even t(o%( in $oin% s!( "!t,t(e ep#o1ee "1 ("ve &"i#e$ in its $t1 to t(e ep#o1er "n$ $iso/e1e$ t(e #"ttersinstr!tions.99

T(ere is no $ispte t("t Atien-" 0"s "n ep#o1ee o& petitioner. *rt(erore, petitioner$i$ not $en1 t("t Atien-" 0"s "!tin% 0it(in t(e s!ope o& (is "t(orit1 "s Assist"ntBr"n!( M"n"%er 0(en (e "ssiste$ Doroni##" in 0it($r"0in% &n$s &ro Stere#"sS"vin%s A!!ont No. 7;67@=, in 0(i!( "!!ont priv"te respon$ents one1 0"s$eposite$, "n$ in tr"ns&errin% t(e one1 0it($r"0n to Stere#"s Crrent A!!ont 0it(petitioner. Atien-"s "!ts o& (e#pin% Doroni##", " !stoer o& t(e petitioner, 0ere


16/189

o/vios#1 $one in &rt(er"n!e o& petitioners interests9 even t(o%( in t(e pro!ess,Atien-" vio#"te$ soe o& petitioners r#es s!( "s t(ose stip#"te$ in its s"vin%s"!!ont p"ss/oo3.9@ It 0"s est"/#is(e$ t("t t(e tr"ns&er o& &n$s &ro Stere#"ss"vin%s "!!ont to its !rrent "!!ont !o#$ not ("ve /een "!!op#is(e$ /1 Doroni##"

0it(ot t(e inv"#"/#e "ssist"n!e o& Atien-", "n$ t("t it 0"s t(eir !onniv"n!e 0(i!( 0"s

t(e !"se o& priv"te respon$ents #oss.

T(e &ore%oin% s(o0s t("t t(e Cort o& Appe"#s !orre!t#1 (e#$ t("t n$er Arti!#e :78; o&t(e Civi# Co$e, petitioner is #i"/#e &or priv"te respon$ents #oss "n$ is so#i$"ri#1 #i"/#e

0it( Doroni##" "n$ D"%pi &or t(e retrn o& t(e P:;;,;;;.;; sin!e it is !#e"r t("tpetitioner &"i#e$ to prove t("t it e4er!ise$ $e $i#i%en!e to prevent t(e n"t(ori-e$

0it($r"0"#s &ro Stere#"s s"vin%s "!!ont, "n$ t("t it 0"s not ne%#i%ent in t(ese#e!tion "n$ spervision o& Atien-". A!!or$in%#1, no error 0"s !oitte$ /1 t(e"ppe##"te !ort in t(e "0"r$ o& "!t"#, or"# "n$ e4ep#"r1 $""%es, "ttorne1s &ees"n$ !osts o& sit to priv"te respon$ent.

?HERE*ORE, t(e petition is (ere/1 DENIED. T(e "ss"i#e$ De!ision "n$ Reso#tiono& t(e Cort o& Appe"#s "re A**IRMED.

SO ORDERED.

SEFERINO TOLENTINO "n$ POTENCIANA MANIO, p#"inti&&s6"ppe##"nts,

vs.

BENITO GONALE SY CHIAM, $e&en$"nts6"ppe##ee.

Ar"net" "n$ "r"%o-" &or "ppe##"nts.

Ese/io Orense &or "ppe##e.

Jo(nson, J.

PRINCIPAL +ESTIONS PRESENTED BY THE APPEAL

T(e prin!ip"# >estions presente$ /1 t(is "ppe"# "re


17/189


18/189

&or t(e prpose o& re!overin% t(e propert1, to%et(er 0it( $""%es &or non !op#i"n!e0it( t(e !on$ition o& t(e !ontr"!t o& pr!("se. T(e pertinent p"rts o& s"i$ #etter re"$ "s&o##o0s

Sirv"se not"r >e $e no est"r #i>i$"$" est" !ent" e# $i" 9; $e# !orriente,pro!e$ereos 2$i!i"#ente !ontr" F$. p"r" re!#""r #" $evo#!ion $e# !""rin 1 #os$"os 1 per2i!ios o!"sion"$os " #" !op"i" por s in!p#iiento "# !ontr"to.

Soos $e F$. "tentos 1 S. S.

SMITH, BELL Q CO., LTD.

B1 'S%$.) *. I. HIGHAM

Tre"srer.

Gener"# M"n"%ers

L+ON RICE MILLS INC.

A!!or$in% to E4(i/its B "n$ D, 0(i!( represent t(e "!!ont ren$ere$ /1 t(e ven$or,t(ere 0"s $e "n$ p"1"/#e pon s"i$ !ontr"!t o& pr!("se on t(e 9;t( $"1 o&Nove/er, 7


19/189

In "!!or$"n!e 0it( t("t "%reeent t(e $e&en$"nt p"i$ to t(e p#"inti&&s /1 e"ns o& "!(e!3 t(e s o& P7,inientos pesos 'P7=,@;;) one$" &i#ipin", >e en este"!to (eos re!i/i$o " nestr" enter" s"tis&"!!ion $e Don Benito Gon-"#e- S1 C(i",!e$eos, ven$eos 1 tr"sp"s"os " &"vor $e $i!(o Don Benito Gon-"#e- S1 C(i",ss (ere$eros 1 !"s"("/ientes, n" &in!" >e, se%n e# Certi&i!"$o $e Tr"ns&eren!i"$e Tit#o No. ; e4pe$i$o por e# Re%istr"$or $e Tit#os $e #" Provin!i" $e T"r#"! " &"vor$e L-on Ri!e Mi##s Cop"n1 Liite$ >e "# in!orpor"rse se $onoino 1 se$enoin" L-on Ri!e Mi##s In!., 1 >e est" !orpor"!ion nos (" tr"ns&eri$o en vent""/so#t", se $es!ri/e !oo si%e

+n terreno '#ote No. 7) !on #"s e2or"s e4istentes en e# iso, sit"$o en e# Mni!ipio$e T"r#"!. Lin$" por e# O. 1 N. !on propie$"$ $e M"ne# +r>i!o5 por e# E. !onpropie$"$ $e #" M"ni#" R"i#ro"$ Co.5 1 por e# S. !on n !"ino. P"rtien$o $e n pnto

"r!"$o 7 en e# p#"no, !1o pnto se ("##" "# N. 7 %$s. 7= E.8@


20/189

por o2ones $e# P. L. S. B. L. #" orient"!ion se%i$" es #" ver$"$er", sien$o #"$e!#in"!ion "%neti!" $e ; %$s. @ E. 1 #" &e!(" $e #" e$i!ion, 7.UVW $e &e/rero $e7e$" o/#i%"$o $i!(o Sr. Benito Gon-"#e- 1 C(i" " retroven$ernos #" &in!""rri/" $es!rit"5 pero si tr"ns!rre $i!(o p#"-o $e !in!o "os sin e2er!it"r e# $ere!(o $eretr"!to >e nos (eos reserv"$o, enton!es >e$"r" est" vent" "/so#t" eirrevo!"/#e.

Ter!ero. e $r"nte e# e4pres"$o terino $e# retr"!to ten$reos en "rren$"iento #"&in!" "rri/" $es!rit", s2eto " !on$i!iones si%ientes

'") E# "#>i#er >e nos o/#i%"os " p"%"r por ens"#i$"$es ven!i$"s " Don BenitoGon-"#e- S1 C(i" 1 en s $oi!i#io, er" $e tres!ientos setent" 1 !in!o pesos 'P9=@)one$" &i#ipin", !"$" es.

'/) E# "i##"r"iento $e #" &in!" "rren$"$" ser" por !ent" $e $i!(o Don BenitoGon-"#e- S1 C(i", "si !oo t"/ien #" pri" $e# se%ro !ontr" in!en$ios, si e#!onvinier" "# re&eri$o Sr. Benito Gon-"#e- S1 C(i" "se%r"r $i!(" &in!".

'!) L" &"#t" $e p"%o $e# "#>i#er ">i estip#"$o por $os eses !onse!tivos $"r" #%"r" #" terin"!ion $e este "rren$"ieno 1 " #" per$i$" $e# $ere!(o $e retr"!to >e nos(eos reserv"$o, !oo si n"tr"#ente (/ier" e4pir"$o e# terino p"r" e##o,p$ien$o en s virt$ $i!(o Sr. Gon-"#e- S1 C(i" to"r posesion $e #" &in!" 1$es"(!i"rnos $e #" is".

C"rto. e 1o, Benito Gon-"#e- S1 C(i", " i ve- otor%o >e "!epto est" es!ritr"

en #os pre!isos terinos en >e #" $e2"n otor%"$" #os !on1%es Severino To#entino 1Poten!i"n" M"nio.

En testionio $e to$o #o !"#, &ir"os #" presente $e nestr" "no en M"ni#", por!"$rp#i!"$o en M"ni#", (o1 " :8 $e novie/re $e 7


21/189

'*$o.) SEFERINO TOLENTINO

'*$".) POTENCIANA MANIO

'*$o.) BENITO GONALE SY CHIAM

*ir"$o en presen!i" $e

'*$os.) MOISES M. B+HAIN

B. S. BANAAG

An e4"in"tion o& s"i$ !ontr"!t o& s"#e 0it( re&eren!e to t(e &irst >estion "/ove, s(o0s!#e"r#1 t("t it is " p"!to $e retro "n$ not " ort%"%e. T(ere is no pretension on t(e p"rto& t(e "ppe##"nt t("t s"i$ !ontr"!t, st"n$in% "#one, is " ort%"%e. T(e pertinent#"n%"%e o& t(e !ontr"!t is

Se%n$o. e es !on$i!ion $e est" vent" #" $e >e si en e# p#"-o $e !in!o '@) "os!ont"$os $es$e e# $i" 7.UVW $e $i!ie/re $e 7inientos pesos'P7=,@;;) >e$" o/#i%"$o $i!(o Sr. Benito Gon-"#es S1 C(i" " retroven$ornos #"&in!" "rri/" $es!rit"5 pero si tr"ns!rre $i!(o p#"-o $e !in!o '@) "os sin e2er!it"r "#$ere!(o $e retr"!to >e nos (eos reserv"$o, enton!es >e$"r" est" vent" "/so#t" eirrevo!"/#e.

L"n%"%e !"nnot /e !#e"rer. T(e prpose o& t(e !ontr"!t is e4presse$ !#e"r#1 in s"i$>ot"tion t("t t(ere !"n !ert"in#1 /e not $o/t "s to t(e prpose o& t(e p#"inti&& to se##

t(e propert1 in >estion, reservin% t(e ri%(t on#1 to repr!("se t(e s"e. T(e intentionto se## 0it( t(e ri%(t to repr!("se !"nnot /e ore !#e"r#1 e4presse$.

It 0i## /e note$ &ro " re"$in% o& s"i$ s"#e o& p"!to $e retro, t("t t(e ven$or, re!o%ni-in%t(e "/so#te s"#e o& t(e propert1, entere$ into " !ontr"!t 0it( t(e pr!("ser /1 virte o&


22/189


23/189

?(i#e it is %ener"# r#e t("t p"ro# evi$en!e is not "$issi/#e &or t(e prpose o& v"r1in%t(e ters o& " !ontr"!t, /t 0(en "n isse is s>"re#1 presente$ t("t " !ontr"!t $oesnot e4press t(e intention o& t(e p"rties, !orts 0i##, 0(en " proper &on$"tion is #"i$t(ere&or, (e"r evi$en!e &or t(e prpose o& "s!ert"inin% t(e tre intention o& t(e p"rties.

In t(e present !"se t(e p#"inti&&s "##e%e in t(eir !op#"int t("t t(e !ontr"!t in >estion is" p"!to $e retro. T(e1 "$it t("t t(e1 si%ne$ it. T(e1 "$it t(e1 so#$ t(e propert1 in>estion 0it( t(e ri%(t to repr!("se it. T(e ters o& t(e !ontr"!t >ote$ /1 t(e p#"inti&&sto t(e $e&en$"nt 0"s " s"#e 0it( p"!to $e retro, "n$ t(e p#"inti&&s ("ve s(o0n no!ir!st"n!e 0("tever 0(i!( 0o#$ 2sti&1 s in !onstrin% s"i$ !ontr"!t to /e " ere#o"n 0it( %"r"nt1. In ever1 !"se in 0(i!( t(is !ort ("s !onstre$ " !ontr"!t to /e "ort%"%e or " #o"n inste"$ o& " s"#e 0it( p"!to $e retro, it ("s $one so, eit(er /e!"set(e ters o& s!( !ontr"!t 0ere in!op"ti/#e or in!onsistent 0it( t(e t(eor1 t("t s"i$!ontr"!t 0"s one o& pr!("se "n$ s"#e. 'O#ino vs. Me$in", spr"5 P"$i##" vs. Lins"n%"n,spr"5 M"n#"%nit vs. D1 Pi!o, 9 P(i#., 9:@5 Ro$ri%e- vs. P"int"n "n$ De Jess,

9= P(i#., 8=.)

In t(e !"se o& P"$i##" vs. Lins"n%"n t(e ter ep#o1e$ in t(e !ontr"!t to in$i!"te t(en"tre o& t(e !onve1"n!e o& t(e #"n$ 0"s p#e$%e$ inste"$ o& so#$. In t(e !"se o&M"n#"%nit vs. D1 Pi!o, 0(i#e t(e ven$or se$ to t(e ters s"#e "n$ tr"ns&er 0it( t(eri%(t to repr!("se, 1et in s"i$ !ontr"!t (e $es!ri/e$ (ise#& "s " $e/tor t(epr!("ser "s " !re$itor "n$ t(e !ontr"!t "s " ort%"%e. In t(e !"se o& Ro$ri%e- vs.P"int"n "n$ De Jess t(e person 0(o e4e!te$ t(e instrent, prportin% on its&"!e to /e " $ee$ o& s"#e o& !ert"in p"r!e#s o& #"n$, ("$ ere#1 "!te$ n$er " po0er o&"ttorne1 &ro t(e o0ner o& s"i$ #"n$, "t(ori-in% (i to /orro0 one1 in s!( "ont"n$ pon s!( ters "n$ !on$itions "s (e i%(t $ee proper, "n$ to se!re p"1ento& t(e #o"n /1 " ort%"%e. In t(e !"se o& Fi##" vs. S"nti"%o '98 P(i#., 7@=), "#t(o%( "!ontr"!t prportin% to /e " $ee$ o& s"#e 0"s e4e!te$, t(e sppose$ ven$or re"ine$in possession o& t(e #"n$ "n$ investe$ t(e one1 (e ("$ o/t"ine$ &ro t(e sppose$ven$ee in "3in% iproveents t(ereon, 0(i!( &"!t 2sti&ie$ t(e !ort in (o#$in% t("tt(e tr"ns"!tion 0"s " ere #o"n "n$ not " s"#e. In t(e !"se o& C1%"n vs. S"ntos '9ent to t(e !ontr"!t. An$ "!!or$in% to"rti!#e 7:89, (o0ever %ener"# t(e ters o& " !ontr"!t "1 /e, t(e1 st not /e (e#$ toin!#$e t(in%s "n$ !"ses $i&&erent &ro t(ose 0it( re%"r$ to 0(i!( t(e intereste$ p"rties"%ree$ to !ontr"!t. T(e Spree Cort o& t(e P(i#ippine Is#"n$s (e#$ t(e p"ro#evi$en!e 0"s "$issi/#e in t("t !"se to v"r1 t(e ters o& t(e !ontr"!t /et0een t(eGovernent o& t(e P(i#ippine Is#"n$s "n$ t(e P(i#ippine S%"r Est"tes Deve#opentCo. In t(e !orse o& t(e opinion o& t(e Spree Cort o& t(e +nite$ St"tes Mr. Jsti!eBr"n$eis, spe"3in% &or t(e !ort, s"i$

It is 0e## sett#e$ t("t !orts o& e>it1 0i## re&or " 0ritten !ontr"!t 0(ere, o0in% tot"# ist"3e, t(e #"n%"%e se$ t(erein $i$ not #1 or "!!r"te#1 e4press t(e"%reeent "n$ intention o& t(e p"rties. T(e &"!t t("t interpret"tion or !onstr!tion o& "!ontr"!t presents " >estion o& #"0 "n$ t("t, t(ere&ore, t(e ist"3e 0"s one o& #"0 isnot " /"r to %r"ntin% re#ie&. . . . T(is !ort is "#0"1s $ispose$ to "!!ept t(e !onstr!tion

0(i!( t(e (i%(est !ort o& " territor1 or possession ("s p#"!e$ pon " #o!"# st"tte. Btt("t $isposition "1 not /e 1ie#$e$ to 0(ere t(e #o0er !ort ("s !#e"r#1 erre$. Here t(e!onstr!tion "$opte$ 0"s reste$ pon " !#e"r#1 erroneos "ssption "s to "nest"/#is(e$ r#e o& e>it1. . . . T(e /r$en o& proo& restin% pon t(e "ppe##"nt !"nnot /es"tis&ie$ /1 ere prepon$er"n!e o& t(e evi$en!e. It is sett#e$ t("t re#ie& /1 0"1 o&re&or"tion 0i## not /e %r"nte$ n#ess t(e proo& o& t"# ist"3e /e o& t(e !#e"rest "n$ost s"tis&"!tor1 !("r"!ter.

T(e evi$en!e intro$!e$ /1 t(e "ppe##"nt in t(e present !"se $oes not eet 0it( t("tstrin%ent re>ireent. T(ere is not " 0or$, " p(r"se, " senten!e or " p"r"%r"p( in t(eentire re!or$, 0(i!( 2sti&ies t(is !ort in (o#$in% t("t t(e s"i$ !ontr"!t o& p"!to $e retrois " ort%"%e "n$ not " s"#e 0it( t(e ri%(t to repr!("se. Arti!#e 7:87 o& t(e Civi# Co$eprovi$es I& t(e ters o& " !ontr"!t "re !#e"r "n$ #e"ve no $o/t "s to t(e intention o&t(e !ontr"!tin% p"rties, t(e #iter"# sense o& its stip#"tions s("## /e &o##o0e$. Arti!#e 7:8:provi$es in or$er to 2$%e "s to t(e intention o& t(e !ontr"!tin% p"rties, "ttention st

/e p"i$ prin!ip"##1 to t(eir !on$!t "t t(e tie o& "3in% t(e !ontr"!t "n$ s/se>ent#1t(ereto.

?e !"nnot t(ereto !on!#$e t(is /r"n!( o& or $is!ssion o& t(e >estion invo#ve$,0it(ot >otin% &ro t("t ver1 0e## re"sone$ $e!ision o& t(e #"te C(ie& Jsti!e Are##"no,one o& t(e %re"test 2rists o& (is tie. He s"i$, in $is!ssin% t(e >estion 0(et(er or not


25/189

t(e !ontr"!t, in t(e !"se o& Li!("!o vs. Beren%er ':; P(i#., 7:), 0"s " p"!to $e retroor " ort%"%e

T(e p/#i! instrent, E4(i/it C, in p"rt re"$s "s &o##o0s Don M"!"rion Beren%er

$e!#"res "n$ st"tes t("t (e is t(e proprietor in &ee sip#e o& t0o p"r!e#s o& &"##o0n"ppropri"te$ !ro0n #"n$ sit"te$ 0it(in t(e $istri!t o& (is pe/#o. T(e &irst ("s "n "re"o& =9 >iones, 8 /"#it"s "n$ 8 #o"nes, #o!"te$ in t(e sitio o& B"t"s"n, "n$ its/on$"ries "re, et!., et!. T(e se!on$ is in t(e sitio o& P"n"nt"%#"1, /"rrio o& C"#p"n%("s "s "re" o& =9 (e!t"res, :: "res, "n$ !ent"res, "n$ is /on$e$ on t(e nort(, et!.,et!.

In t(e e4e!tor1 p"rt o& t(e s"i$ instrent, it is st"te$

XT("t n$er !on$ition o& ri%(t to repr!("se 'p"!to $e retro) (e se##s t(e s"i$ propertiesto t(e "&oreentione$ Do" Corne#i" L"o!("n%!o &or P,;;; "n$ pon t(e &o##o0in%!on$itions *irst, t(e s"#e stip#"te$ s("## /e &or t(e perio$ o& t0o 1e"rs, !ontin% &rot(is $"te, 0it(in 0(i!( tie t(e $eponent s("## /e entit#e$ to repr!("se t(e #"n$ so#$pon p"1ent o& its pri!e5 se!on$, t(e #"n$s so#$ s("##, $rin% t(e ter o& t(e present!ontr"!t, /e (e#$ in #e"se /1 t(e n$ersi%ne$ 0(o s("## p"1, "s rent"# t(ere&or, t(e so& ;; pesos per "nn, or t(e e>iv"#ent in s%"r "t t(e option o& t(e ven$or5 t(ir$, "##t(e &rits o& t(e s"i$ #"n$s s("## /e $eposite$ in t(e s%"r $epositor1 o& t(e ven$ee,sit"te$ in t(e $istri!t o& i"po o& t(is !it1, "n$ t(e v"#e o& 0(i!( s("## /e "pp#ie$ on"!!ont o& t(e pri!e o& t(is s"#e5 &ort(, t(e $eponent "!3no0#e$%es t("t (e ("s

re!eive$ &ro t(e ven$or t(e pr!("se pri!e o& P,;;; "#re"$1 p"i$, "n$ in #e%"# ten$er!rren!1 o& t(is !ontr1 . . .5 &i&t(, "## t(e t"4es 0(i!( "1 /e "ssesse$ "%"inst t(e #"n$ssrve1e$ /1 !opetent "t(orit1, s("## /e p"1"/#e /1 "n$ !onstitte " !("r%e "%"instt(e ven$or5 si4t(, i&, t(ro%( "n1 ns"# event, s!( "s oo$, tepest, et!., t(eproperties (erein/e&ore ener"te$ s(o#$ /e $estro1e$, 0(o##1 or in p"rt, it s("## /ein!/ent pon t(e ven$or to rep"ir t(e $""%e t(ereto "t (is o0n e4pense "n$ to ptt(e into " %oo$ st"te o& !#tiv"tion, "n$ s(o#$ (e &"i# to $o so (e /in$s (ise#& to %iveto t(e ven$ee ot(er #"n$s o& t(e s"e "re", >"#it1 "n$ v"#e.

4 4 4 4 4 4 4 4 4

T(e opponent "int"ine$, "n$ (is t(eor1 0"s "!!epte$ /1 t(e tri"# !ort, t("tBeren%ers !ontr"!t 0it( L"o!("n%!o 0"s not one o& s"#e 0it( ri%(t o& repr!("se, /tere#1 one o& #o"n se!re$ /1 t(ose properties, "n$, !onse>ent#1, t("t t(e o0ners(ipo& t(e #"n$s in >estions !o#$ not ("ve /een !onve1e$ to L"o!("n%!o, in"s!( "s it


26/189

!ontine$ to /e (e#$ /1 Beren%er, "s 0e## "s t(eir possession, 0(i!( (e ("$ not!e"se$ to en2o1.

S!( " t(eor1 is, "s "r%e$ /1 t(e "ppe##"nt, erroneos. T(e instrent e4e!te$ /1

M"!"rio Beren%er, t(e te4t o& 0(i!( ("s /een tr"ns!ri/e$ in t(is $e!ision, is ver1 !#e"r.Beren%ers (eirs "1 not %o !onter to t(e #iter"# tenor o& t(e o/#i%"tion, t(e e4"!te4pression o& t(e !onsent o& t(e !ontr"!tin% !ont"ine$ in t(e instrent, E4(i/it C. Not/e!"se t(e #"n$s "1 ("ve !ontine$ in possession o& t(e ven$or, not /e!"se t(e#"tter "1 ("ve "sse$ t(e p"1ent o& t(e t"4es on s!( properties, nor 1et /e!"set(e s"e p"rt1 "1 ("ve /on$ (ise#& to s/stitte /1 "not(er "n1 one o& t(eproperties 0(i!( i%(t /e $estro1e$, $oes t(e !ontr"!t !e"se to /e 0("t it is, "s set&ort( in $et"i# in t(e p/#i! instrent. T(e ven$or !ontine$ in t(e possession o& t(e#"n$s, not "s t(e o0ner t(ereo& "s /e&ore t(eir s"#e, /t "s t(e #essee 0(i!( (e /e!"e"&ter its !ons"tion, /1 virte o& " !ontr"!t e4e!te$ in (is &"vor /1 t(e ven$ee in t(e$ee$ itse#&, E4(i/it C. Ri%(t o& o0ners(ip is not ip#ie$ /1 t(e !ir!st"n!e o& t(e

#essees "ssin% t(e responsi/i#it1 o& t(e p"1ent is o& t(e t"4es on t(e propert1#e"se$, &or t(eir p"1ent is not pe!#i"r#1 in!/ent pon t(e o0ner, nor is s!( ri%(tip#ie$ /1 t(e o/#i%"tion to s/stitte t(e t(in% so#$ &or "not(er 0(i#e in (is possessionn$er #e"se, sin!e t("t o/#i%"tion !"e &ro (i "n$ (e !ontines n$er "not(er!("r"!ter in its possession6" re"son 0(1 (e %"r"ntees its inte%rit1 "n$ o/#i%"tes(ise#& to retrn t(e t(in% even in " !"se o& &or!e "2ere. S!( #i"/i#it1, "s " %ener"#r#e, is &orei%n to !ontr"!ts o& #e"se "n$, i& re>ire$, is e4or/it"nt, /t possi/#e "n$#"0, i& vo#nt"ri#1 "%ree$ to "n$ s!( "%reeent $oes not on t(is "!!ont invo#ve "n1si%n o& o0ners(ip, nor ot(er e"nin% t("n t(e 0i## to ipose pon onese#& s!rp#os$i#i%en!e in t(e !"re o& " t(in% /e#on%in% to "not(er.

T(e pr!("se "n$ s"#e, on!e !ons"te$, is " !ontr"!t 0(i!( /1 its n"tre tr"ns&erst(e o0ners(ip "n$ ot(er ri%(ts in t(e t(in% so#$. A p"!to $e retro, or s"#e 0it( ri%(t torepr!("se, is not(in% /t " person"# ri%(t stip#"te$ /et0een t(e ven$ee "n$ t(even$or, to t(e en$ t("t t(e #"tter "1 "%"in "!>ire t(e o0ners(ip o& t(e t(in% "#ien"te$.

It is tre, ver1 tre in$ee$, t("t t(e s"#e 0it( ri%(t o& repr!("se is ep#o1e$ "s "et(o$ o& #o"n5 it is #i3e0ise tre t("t in pr"!ti!e "n1 !"ses o!!r 0(ere t(e!ons"tion o& " p"!to $e retro s"#e e"ns t(e &in"n!i"# rin o& " person5 it is "#so,

n>estion"/#e t("t in p"!to $e retro s"#es ver1 iport"nt interests o&ten intervene, int(e &or o& t(e pri!e o& t(e #e"se o& t(e t(in% so#$, 0(i!( is stip#"te$ "s "n "$$ition"#!oven"nt. 'M"nres", Civi# Co$e, p. :=.)

Bt in t(e present !"se, n#i3e ot(ers (e"r$ /1 t(is !ort, t(ere is no proo& t("t t(e s"#e0it( ri%(t o& repr!("se, "$e /1 Beren%er in &"vor o& L"on!("n%!o is r"t(er "ort%"%e to se!re " #o"n.


27/189

?e !oe no0 to " $is!ssion o& t(e se!on$ >estion presente$ "/ove, "n$ t("t is,st"tin% t(e s"e in "not(er &or M"1 " ten"nt !("r%e (is #"n$#or$ 0it( " vio#"tion o&t(e +sr1 L"0 pon t(e %ron$ t("t t(e "ont o& rent (e p"1s, /"se$ pon t(e re"#v"#e o& t(e propert1, "onts to " srios r"te o& interest ?(en t(e ven$or o&propert1 n$er " p"!to $e retro rents t(e propert1 "n$ "%rees to p"1 " rent"# v"#e &ort(e propert1 $rin% t(e perio$ o& (is ri%(t to repr!("se, (e t(ere/1 /e!oes " ten"nt"n$ in "## respe!ts st"n$s in t(e s"e re#"tion 0it( t(e pr!("ser "s " ten"nt n$er "n1ot(er !ontr"!t o& #e"se.

T(e "ppe##"nt !onten$s t("t t(e rent"# pri!e p"i$ $rin% t(e perio$ o& t(e e4isten!e o&t(e ri%(t to repr!("se, or t(e s o& P9=@ per ont(, /"se$ pon t(e v"#e o& t(epropert1, "onte$ to sr1. +sr1, %ener"##1 spe"3in%, "1 /e $e&ine$ "s !ontr"!tin%&or or re!eivin% soet(in% in e4!ess o& t(e "ont "##o0e$ /1 #"0 &or t(e #o"n or

&or/e"r"n!e o& one16t(e t"3in% o& ore interest &or t(e se o& one1 t("n t(e #"0"##o0s. It sees t("t t(e t"3in% o& interest &or t(e #o"n o& one1, "t #e"st t(e t"3in% o&e4!essive interest ("s /een re%"r$e$ 0it( "/(orren!e &ro t(e e"r#iest ties. 'Dn("vs. Go#$, 7 Jo(nson N. Y., 9=.) Drin% t(e i$$#e "%es t(e peop#e o& En%#"n$, "n$espe!i"##1 t(e En%#is( C(r!(, entert"ine$ t(e opinion, t(en, !rrent in Erope, t("t t(et"3in% o& "n1 interest &or t(e #o"n o& one1 0"s " $etest"/#e vi!e, ("te to "n "n$!ontr"r1 to t(e #"0s o& Go$. '9 Co3es Institte, 7@;5 T"1#er on +sr1, .)

C("n!e##or Kent, in t(e !"se o& Dn(" vs. Go#$, spr", s"i$ I& 0e #oo3 /"!3 pon(istor1, 0e s("## &in$ t("t t(ere is s!"r!e#1 "n1 peop#e, "n!ient or o$ern, t("t ("ve not

("$ sr1 #"0s. . . . T(e Ro"ns, t(ro%( t(e %re"ter p"rt o& t(eir (istor1, ("$ t(e$eepest "/(orren!e o& sr1. . . . It 0i## /e $eee$ " #itt#e sin%#"r, t("t t(e s"e voi!e"%"inst sr1 s(o#$ ("ve /een r"ise$ in t(e #"0s o& C(in", in t(e Hin$ instittes o&Men, in t(e Kor"n o& M"(oet, "n$ per("ps, 0e "1 s"1, in t(e #"0s o& "## n"tionst("t 0e 3no0 o&, 0(et(er Gree3 or B"r/"ri"n.

T(e !o##e!tion o& " r"te o& interest (i%(er t("n t("t "##o0e$ /1 #"0 is !on$ene$ /1 t(eP(i#ippine Le%is#"tre 'A!ts Nos. :@@, :: "n$ :


28/189

It 0i## /e note$ t("t s"i$ st"tte iposes " pen"#t1 pon " #o"n or &or/e"r"n!e o& "n1one1, %oo$s, !("tte#s or !re$its, et!. T(e !entr"# i$e" o& s"i$ st"tte is to pro(i/it "r"te o& interest on #o"ns. A !ontr"!t o& #o"n, is ver1 $i&&erent !ontr"!t &ro t("t o&rent. A #o"n, "s t("t ter is se$ in t(e st"tte, si%ni&ies t(e %ivin% o& " s o&one1, %oo$s or !re$its to "not(er, 0it( " proise to rep"1, /t not " proise to retrn

t(e s"e t(in%. To #o"n, in %ener"# p"r#"n!e, is to $e#iver to "not(er &or tepor"r1 se,on !on$ition t("t t(e t(in% or its e>iv"#ent /e retrne$5 or to $e#iver &or tepor"r1 seon !on$ition t("t "n e>iv"#ent in 3in$ s("## /e retrne$ 0it( " !opens"tion &or its se.T(e 0or$ #o"n, (o0ever, "s se$ in t(e st"tte, ("s " te!(ni!"# e"nin%. It nevere"ns t(e retrn o& t(e s"e t(in%. It e"ns t(e retrn o& "n e>iv"#ent on#1, /t nevert(e s"e t(in% #o"ne$. A #o"n ("s /een proper#1 $e&ine$ "s "n "$v"n!e p"1ent o&one1, %oo$s or !re$its pon " !ontr"!t or stip#"tion to rep"1, not to retrn, t(e t(in%#o"ne$ "t soe &tre $"1 in "!!or$"n!e 0it( t(e ters o& t(e !ontr"!t. +n$er t(e!ontr"!t o& #o"n, "s se$ in s"i$ st"tte, t(e oent t(e !ontr"!t is !op#ete$ t(eone1, %oo$s or !("tte#s %iven !e"se to /e t(e propert1 o& t(e &orer o0ner "n$/e!oes t(e propert1 o& t(e o/#i%or to /e se$ "!!or$in% to (is o0n 0i##, n#ess t(e

!ontr"!t itse#& e4press#1 provi$es &or " spe!i"# or spe!i&i! se o& t(e s"e. At "## events,t(e one1, %oo$s or !("tte#s, t(e oent t(e !ontr"!t is e4e!te$, !e"se to /e t(epropert1 o& t(e &orer o0ner "n$ /e!oes t(e "/so#te propert1 o& t(e o/#i%or.

A !ontr"!t o& #o"n $i&&ers "teri"##1 &ro " !ontr"!t o& rent. In " !ontr"!t o& rent t(eo0ner o& t(e propert1 $oes not #ose (is o0ners(ip. He sip#1 #oses (is !ontro# over t(epropert1 rente$ $rin% t(e perio$ o& t(e !ontr"!t. In " !ontr"!t o& #o"n t(e t(in% #o"ne$/e!oes t(e propert1 o& t(e o/#i%or. In " !ontr"!t o& rent t(e t(in% sti## re"ins t(epropert1 o& t(e #essor. He sip#1 #oses !ontro# o& t(e s"e in " #iite$ 0"1 $rin% t(eperio$ o& t(e !ontr"!t o& rent or #e"se. In " !ontr"!t o& rent t(e re#"tion /et0een t(e

!ontr"!tors is t("t o& #"n$#or$ "n$ ten"nt. In " !ontr"!t o& #o"n o& one1, %oo$s,!("tte#s or !re$its, t(e re#"tion /et0een t(e p"rties is t("t o& o/#i%or "n$ o/#i%ee. Rent"1 /e $e&ine$ "s t(e !opens"tion eit(er in one1, provisions, !("tte#s, or #"/or,re!eive$ /1 t(e o0ner o& t(e soi# &ro t(e o!!p"nt t(ereo&. It is $e&ine$ "s t(e retrn or!opens"tion &or t(e possession o& soe !orpore"# in(erit"n!e, "n$ is " pro&it issin%ot o& #"n$s or teneents, in retrn &or t(eir se. It is t("t, 0(i!( is to p"i$ &or t(e se o"n$, 0(et(er in one1, #"/or or ot(er t(in% "%ree$ pon. A !ontr"!t o& rent is "!ontr"!t /1 0(i!( one o& t(e p"rties $e#ivers to t(e ot(er soe non!ons"/#e t(in%, inor$er t("t t(e #"tter "1 se it $rin% " !ert"in perio$ "n$ retrn it to t(e &orer5

0(ere"s " !ontr"!t o& #o"n, "s t("t 0or$ is se$ in t(e st"tte, si%ni&ies t(e $e#iver1 o&one1 or ot(er !ons"/#e t(in%s pon !on$ition o& retrnin% "n e>iv"#ent "ont o&

t(e s"e 3in$ or >"ntit1, in 0(i!( !"ses it is !"##e$ ere#1 " #o"n. In t(e !"se o& "!ontr"!t o& rent, n$er t(e !ivi# #"0, it is !"##e$ " !oo$"t.

*ro t(e &ore%oin% it 0i## /e seen t("t t(ere is " 0(i#e $istin!tion /et0een " !ontr"!t oo"n, "s t("t 0or$ is se$ in t(e st"tte, "n$ " !ontr"!t o& rent even t(o%( t(ose

0or$s "re se$ in or$in"r1 p"r#"n!e "s inter!("n%e"/#e ters.


29/189

T(e v"#e o& one1, %oo$s or !re$its is e"si#1 "s!ert"ine$ 0(i#e t(e "ont o& rent to/e p"i$ &or t(e se "n$ o!!p"tion o& t(e propert1 "1 $epen$ pon " t(os"n$$i&&erent !on$itions5 "s &or e4"p#e, &"r #"n$s o& e4"!t#1 e>"# pro$!tive !"p"!it1 "n$o& t(e s"e p(1si!"# v"#e "1 ("ve " $i&&erent rent"# v"#e, $epen$in% pon #o!"tion,pri!es o& !oo$ities, pro4iit1 to t(e "r3et, et!. Hoses "1 ("ve " $i&&erent rent"#v"#e $e to #o!"tion, !on$itions o& /siness, %ener"# prosperit1 or $epression,"$"pt"/i#it1 to p"rti!#"r prposes, even t(o%( t(e1 ("ve e4"!t#1 t(e s"e ori%in"#!ost. A store on t(e Es!o#t", in t(e !enter o& /siness, !onstr!te$ e4"!t#1 #i3e " store#o!"te$ otsi$e o& t(e /siness !enter, 0i## ("ve " !( (i%(er rent"# v"#e t("n t(eot(er. T0o p#"!es o& /siness #o!"te$ in $i&&erent se!tions o& t(e !it1 "1 /e!onstr!te$ e4"!t#1 on t(e s"e "r!(ite!tr"# p#"n "n$ 1et one, $e to p"rti!#"r#o!"tion or "$"pt"/i#it1 to " p"rti!#"r /siness 0(i!( t(e #essor $esires to !on$!t, "1("ve " ver1 !( (i%(er rent"# v"#e t("n one not so #o!"te$ "n$ not so 0e## "$"pte$to t(e p"rti!#"r /siness. A ver1 !(e"p /i#$in% on t(e !"rniv"# %ron$ "1 rent &orore one1, $e to t(e p"rti!#"r !ir!st"n!es "n$ srron$in%s, t("n " !( orev"#"/#e propert1 #o!"te$ e#se0(ere. It 0i## t(s /e seen t("t t(e rent to /e p"i$ &or t(ese "n$ o!!p"tion o& propert1 is not ne!ess"ri#1 &i4e$ pon t(e v"#e o& t(e propert1.T(e "ont o& rent is &i4e$, /"se$ pon " t(os"n$ $i&&erent !on$itions "n$ "1 or "1not ("ve "n1 $ire!t re&eren!e to t(e v"#e o& t(e propert1 rente$. To (o#$ t("t sr1!"n /e /"se$ pon t(e !op"r"tive "!t"# rent"# v"#e "n$ t(e "!t"# v"#e o& t(epropert1, is to s/2e!t ever1 #"n$#or$ to "n "nno1"n!e not !ontep#"te$ /1 t(e #"0, "n$

0o#$ !re"te " ver1 %re"t $istr/"n!e in ever1 /siness or rr"# !onit1. ?e !"nnot/rin% orse#ves to /e#ieve t("t t(e Le%is#"tre !ontep#"te$ "n1 s!( $istr/"n!e in t(ee>i#i/ri o& t(e /siness o& t(e !ontr1.

In t(e present !"se t(e propert1 in >estion 0"s so#$. It 0"s "n "/so#te s"#e 0it( t(eri%(t on#1 to repr!("se. Drin% t(e perio$ o& re$eption t(e pr!("ser 0"s t(e"/so#te o0ner o& t(e propert1. Drin% t(e perio$ o& re$eption t(e ven$or 0"s not t(eo0ner o& t(e propert1. Drin% t(e perio$ o& re$eption t(e ven$or 0"s " ten"nt o& t(epr!("ser. Drin% t(e perio$ o& re$eption t(e re#"tion 0(i!( e4iste$ /et0een t(even$or "n$ t(e ven$ee 0"s t("t o& #"n$#or$ "n$ ten"nt. T("t re#"tion !"n on#1 /eterin"te$ /1 " repr!("se o& t(e propert1 /1 t(e ven$or in "!!or$"n!e 0it( t(e terso& t(e s"i$ !ontr"!t. T(e !ontr"!t 0"s one o& rent. T(e !ontr"!t 0"s not " #o"n, "s t("t

0or$ is se$ in A!t No. :@@.

As o/no4ios "s !ontr"!ts o& p"!to $e retro "re, 1et nevert(e#ess, t(e !orts ("ve nori%(t to "3e !ontr"!ts &or p"rties. T(e1 "$e t(eir o0n !ontr"!t in t(e present !"se.T(ere is not " 0or$, " p(r"se, " senten!e or p"r"%r"p(, 0(i!( in t(e s#i%(test 0"1in$i!"tes t("t t(e p"rties to t(e !ontr"!t in >estion $i$ not inten$ to se## t(e propert1 in>estion "/so#te#1, sip#1 0it( t(e ri%(t to repr!("se. Peop#e 0(o "3e t(eir o0n/e$s st #ie t(ereon.


30/189

?("t ("s /een s"i$ "/ove 0it( re&eren!e to t(e ri%(t to o$i&1 !ontr"!ts /1 p"ro#evi$en!e, s&&i!ient#1 "ns0ers t(e t(ir$ >estions presente$ "/ove. T(e #"n%"%e o& t(e!ontr"!t is e4p#i!it, !#e"r, n"/i%os "n$ /e1on$ >estion. It e4presses t(e e4"!tintention o& t(e p"rties "t t(e tie it 0"s "$e. T(ere is not " 0or$, " p(r"se, "senten!e or p"r"%r"p( &on$ in s"i$ !ontr"!t 0(i!( nee$s e4p#"n"tion. T(e p"rtiest(ereto entere$ into s"i$ !ontr"!t 0it( t(e # n$erst"n$in% o& its ters "n$ s(o#$ notno0 /e peritte$ to !("n%e or o$i&1 it /1 p"ro# evi$en!e.

?it( re&eren!e to t(e iproveents "$e pon s"i$ propert1 /1 t(e p#"inti&&s $rin% t(e#i&e o& t(e !ontr"!t, E4(i/it C, t(ere is (ere/1 reserve$ to t(e p#"inti&&s t(e ri%(t toe4er!ise in " sep"r"te "!tion t(e ri%(t %"r"ntee$ to t(e n$er "rti!#e 97 o& t(e Civi#Co$e.

*or "## o& t(e &ore%oin% re"sons, 0e "re #1 pers"$e$ &ro t(e &"!ts o& t(e re!or$, inre#"tion 0it( t(e #"0 "pp#i!"/#e t(ereto, t("t t(e 2$%ent "ppe"#e$ &ro s(o#$ /e "n$is (ere/1 "&&ire$, 0it( !osts. So or$ere$.

CARMEN LI?ANAG, petitioner, vs. THE HON. CO+RT O* APPEALS "n$ THEPEOPLE O* THE PHILIPPINES, represente$ /1 t(e So#i!itor Gener"#, respon$ents.

D E C I S I O N

ROMERO, J.

Petitioner 0"s !("r%e$ 0it( t(e !rie o& est"&" /e&ore t(e Re%ion"# Tri"# Cort 'RTC),Br"n!(


31/189

to (er person"# se "n$ /ene&it, $espite repe"te$ $e"n$s "$e pon (er, "!!se$&"i#e$ "n$ re&se$ "n$ sti## &"i#s "n$ re&ses to $e#iver "n$or retrn t(e s"e to t(e$""%e "n$ pre2$i!e o& t(e s"i$ ISIDORA ROSALES, in t(e "&oreentione$ "ont"n$ in s!( ot(er "ont "s "1 /e "0"r$e$ n$er t(e provision o& t(e Civi# Co$e.

CONTRARY TO LA?.

T(e "nte!e$ent &"!ts "re "s &o##o0s

Petitioner C"ren Li0"n"% 'Li0"n"%) "n$ " !ert"in T(e#" T"/#i%"n 0ent to t(e (ose

o& !op#"in"nt Isi$or" Ros"#es 'Ros"#es) "n$ "s3e$ (er to 2oin t(e in t(e /siness o&/1in% "n$ se##in% !i%"rettes. Convin!e$ o& t(e &e"si/i#it1 o& t(e ventre, Ros"#esre"$i#1 "%ree$. +n$er t(eir "%reeent, Ros"#es 0o#$ %ive t(e one1 nee$e$ to /1t(e !i%"rettes 0(i#e Li0"n"% "n$ T"/#i%"n 0o#$ "!t "s (er "%ents, 0it( "!orrespon$in% ; !oission to (er i& t(e %oo$s "re so#$5 ot(er0ise t(e one1 0o#$/e retrne$ to Ros"#es. Conse>ent#1, Ros"#es %"ve sever"# !"s( "$v"n!es toLi0"n"% "n$ T"/#i%"n "ontin% to P99,@;.;;.

Drin% t(e &irst t0o ont(s, Li0"n"% "n$ T"/#i%"n "$e perio$i! visits to Ros"#es toreport on t(e pro%ress o& t(e tr"ns"!tions. T(e visits, (o0ever, s$$en#1 stoppe$, "n$

"## e&&orts /1 Ros"#es to o/t"in in&or"tion re%"r$in% t(eir /siness prove$ &ti#e.

A#"re$ /1 t(is $eve#opent "n$ /e#ievin% t("t t(e "onts s(e "$v"n!e$ 0ere /ein%is"ppropri"te$, Ros"#es &i#e$ " !"se o& est"&" "%"inst Li0"n"%.

A&ter tri"# on t(e erits, t(e tri"# !ort ren$ere$ " $e!ision $"te$ J"n"r1


32/189

T(e "!!se$ is #i3e0ise or$ere$ to rei/rse t(e priv"te !op#"in"nt t(e s o&P@:,@;.;;, 0it(ot s/si$i"r1 iprisonent, in !"se o& inso#ven!1.

SO ORDERED.

S"i$ $e!ision 0"s "&&ire$ 0it( o$i&i!"tion /1 t(e Cort o& Appe"#s in " $e!ision $"te$Nove/er :


33/189

/1 "n$ se## t(e !i%"rettes, "n$ #"ter $ivi$e t(e pro&its /et0een t(e.7 S(e "#so"r%es t("t t(e tr"ns"!tion !"n "#so /e interprete$ "s " sip#e #o"n, 0it( Ros"#es#en$in% to (er t(e "ont st"te$ on "n inst"##ent /"sis.:

T(e Cort o& Appe"#s !orre!t#1 re2e!te$ t(ese pretenses.

?(i#e &"!t"# &in$in%s o& t(e Cort o& Appe"#s "re !on!#sive on t(e p"rties "n$ notrevie0"/#e /1 t(e Spree Cort, "n$ !"rr1 ore 0ei%(t 0(en t(ese "&&ir t(e &"!t"#&in$in%s o& t(e tri"# !ort,9 0e $ee it ore e4pe$ient to reso#ve t(e inst"nt petition onits erits.

Est"&" is " !rie !oitte$ /1 " person 0(o $e&r"$s "not(er !"sin% (i to s&&er

$""%es, /1 e"ns o& n&"it(ness or "/se o& !on&i$en!e, or o& &"#se pretenses o&&r"$#ent "!ts.

*ro t(e &ore%oin%, t(e e#eents o& est"&" "re present, "s &o##o0s '7) t("t t(e "!!se$$e&r"$e$ "not(er /1 "/se o& !on&i$en!e or $e!eit5 "n$ ':) t("t $""%e or pre2$i!e!"p"/#e o& pe!ni"r1 esti"tion is !"se$ to t(e o&&en$e$ p"rt1 or t(ir$ p"rt1,@ "n$ itis essenti"# t("t t(ere /e " &i$!i"r1 re#"tion /et0een t(e eit(er in t(e &or o& " trst,!oission or "$inistr"tion.

T(e re!eipt si%ne$ /1 Li0"n"% st"tes t(s

M"1 7


34/189

: H. K"#ir"1" St.

e-on Cit1

Si%ne$ in t(e presen!e o&

'S%$) I##e%i/#e 'S%$) Doin% . B"#i%"$

T(e #"n%"%e o& t(e re!eipt !o#$ not /e "n1 !#e"rer. It in$i!"tes t("t t(e one1$e#ivere$ to Li0"n"% 0"s &or " spe!i&i! prpose, t("t is, &or t(e pr!("se o& !i%"rettes,"n$ in t(e event t(e !i%"rettes !"nnot /e so#$, t(e one1 st /e retrne$ to Ros"#es.

T(s, even "ssin% t("t " !ontr"!t o& p"rtners(ip 0"s in$ee$ entere$ into /1 "n$/et0een t(e p"rties, 0e ("ve r#e$ t("t 0(en one1 or propert1 ("ve /een re!eive$ /1" p"rtner &or " spe!i&i! prpose 's!( "s t("t o/t"inin% in t(e inst"nt !"se) "n$ (e #"teris"ppropri"te$ it, s!( p"rtner is %i#t1 o& est"&".=

Neit(er !"n t(e tr"ns"!tion /e !onsi$ere$ " #o"n, sin!e in " !ontr"!t o& #o"n on!e t(eone1 is re!eive$ /1 t(e $e/tor, o0ners(ip over t(e s"e is tr"ns&erre$.8 Bein% t(eo0ner, t(e /orro0er !"n $ispose o& it &or 0("tever prpose (e "1 $ee proper.

In t(e inst"nt petition, (o0ever, it is evi$ent t("t Li0"n"% !o#$ not $ispose o& t(eone1 "s s(e p#e"se$ /e!"se it 0"s on#1 $e#ivere$ to (er &or " sin%#e prpose,n"e#1, &or t(e pr!("se o& !i%"rettes, "n$ i& t(is 0"s not possi/#e t(en to retrn t(eone1 to Ros"#es. Sin!e in t(is !"se t(ere 0"s no tr"ns&er o& o0ners(ip o& t(e one1$e#ivere$, Li0"n"% is #i"/#e &or !onversion n$er Art. 97@, p"r. 7'/) o& t(e Revise$ Pen"#Co$e.

?HERE*ORE, in vie0 o& t(e &ore%oin%, t(e "ppe"#e$ $e!ision o& t(e Cort o& Appe"#s$"te$ Nove/er :


35/189

DEFELOPMENT BANK O* THE PHILIPPINES, $e&en$"nt6"ppe##"nt.

M"/"n"%, E#i%er "n$ Asso!i"tes "n$ S"r", M"%no "n$ Asso!i"tes &or p#"inti&&6"ppe##ee.

Jess A. Av"n!e" "n$ Hi#"rio G. Orso#ino &or $e&en$"nt6"ppe##"nt.

MAKALINTAL, J.p

In Civi# C"se No. @@


36/189

7. T("t t(e pro!ee$s o& t(e #o"n s("## /e ti#i-e$ e4!#sive#1 &or t(e &o##o0in%prposes

*or !onstr!tion o& &"!tor1 /i#$in% P:@;,;;;.;;

*or p"1ent o& t(e /"#"n!e o& pr!("se

pri!e o& "!(iner1 "n$ e>ipent :;,estin% " o$i&i!"tion o& t(e ters #"i$ $o0n /1 it, n"e#1 t("t in #ieo& ("vin% C(in" En%ineers, Lt$. '0(i!( 0"s 0i##in% to "sse #i"/i#it1 on#1 to t(e e4tent

o& its sto!3 s/s!ription 0it( S"r", In!.) si%n "s !o6"3er on t(e !orrespon$in%proissor1 notes, S"r", In!. 0o#$ pt p " /on$ &or P7:9,@;;.;;, "n "onte>iv"#ent to s!( s/s!ription5 "n$ t("t M"ri" S. Ro!" 0o#$ /e s/stitte$ &orIno!en!i" Are##"no "s one o& t(e ot(er !o6"3ers, ("vin% "!>ire$ t(e #"tterZs s("res inS"r", In!.


37/189

In vie0 o& s!( re>est R*C "pprove$ Reso#tion No. =9 on *e/r"r1 , 7ies!en!e on 'its) p"rt to nov"te, or "!!ept ne0 !on$itions to, t(e

"%reeent "#re"$1) entere$ into, re&errin% to its "!!ept"n!e o& t(e ters "n$ !on$itionsentione$ in Reso#tion No. 7@.

On Apri# 79, 7


38/189

On Jne 7estin% t("t t(e #o"n o& P@;;,;;;.;; /e%r"nte$. T(e re>est 0"s $enie$ /1 R*C, 0(i!( "$$e$ in its #etter6rep#1 t("t it 0"s!onstr"ine$ to !onsi$er "s !"n!e##e$ t(e #o"n o& P9;;,;;;.;; ... in vie0 o& " noti&i!"tion... &ro t(e C(in" En%ineers Lt$., e4pressin% t(eir $esire to !onsi$er t(e #o"n inso&"r "st(e1 "re !on!erne$.

On J#1 :, 7"te#1 &ort(e re>ireents o& t(e &"!tor1.

T(e "!tion t(s t"3en 0"s !oni!"te$ to S"r", In!. in " #etter o& R*C $"te$De!e/er ::, 7


39/189

"v"i#"/#e r"0 "teri"#s. T(is point is iport"nt, "n$ s(e$s #i%(t on t(e s/se>ent"!t"tions o& t(e p"rties. S"r", In!. $oes not $en1 t("t t(e &"!tor1 (e 0"s /i#$in% inD"v"o 0"s &or t(e "n&"!tre o& /"%s &ro #o!"# r"0 "teri"#s. T(e !over p"%e o& its/ro!(re 'E4(. M) $es!ri/es t(e pro2e!t "s " Joint ventre /1 "n$ /et0een t(eMin$"n"o In$str1 Corpor"tion "n$ t(e S"r" Iport "n$ E4port Co., In!. to &in"n!e,

"n"%e "n$ oper"te " Ken"& i## p#"nt, to "n&"!tre !opr" "n$ !orn /"%s, rnners,oor "ttin%s, !"rpets, $r"peries5 ot o& 7;; #o!"# r"0 "teri"#s, prin!ip"# 3en"&. T(ee4p#"n"tor1 note on p"%e 7 o& t(e s"e /ro!(re st"tes t("t, t(e ventre is t(e &irstserios "ttept in t(is !ontr1 to se 7;; #o!"##1 %ro0n r"0 "teri"#s not"/#1 3en"&

0(i!( is present#1 %ro0n !oer!i"##1 in t(eIs#"n$ o& Min$"n"o 0(ere t(e propose$2tei## is #o!"te$ ...

T(is &"!t, "!!or$in% to $e&en$"nt DBP, is 0("t ove$ R*C to "pprove t(e #o"n"pp#i!"tion in t(e &irst p#"!e, "n$ to re>ire, in its Reso#tion No. ireents o& t(e &"!tor1. S"r", In!. itse#&!on&ire$ t(e $e&en$"ntZs st"n$ ip#ie$#1 in its #etter o& J"n"r1 :7, 7estin%"ssr"n!es '&ro R*C) t("t 1 !op"n1 "n$ "sso!i"tes 0i## /e "/#e to /rin% ins&&i!ient 2te "teri"#s "s "1 /e ne!ess"r1 &or t(e # oper"tion o& t(e 2te i##5 "n$'9) "s3in% t("t re#e"ses o& t(e #o"n /e "$e "s &o##o0s

") *or t(e p"1ent o& t(e re!eipt &or 2te i##

"!(ineries 0it( t(e Pr$enti"# B"n3 Q

Trst Cop"n1 P:@;,;;;.;;

'*or ie$i"te re#e"se)

/) *or t(e pr!("se o& "teri"#s "n$ e>ip6

ent per "tt"!(e$ #ist to en"/#e t(e 2te

i## to oper"te 78:,79.


40/189

7) P:@,;;;.;; to /e re#e"se$ on t(e open6

in% o& t(e #etter o& !re$it &or r"0 2te

&or [:@,;;;.;;.

:) P:@,;;;.;; to /e re#e"se$ pon "rriv"#

o& r"0 2te.

9) P7=,@8.;< to /e re#e"se$ "s soon "s t(e

i## is re"$1 to oper"te.

On J"n"r1 :@, 7ireents o& t(e &"!tor1, 0e 0is( to reiter"te t("t t(e /"sis o& t(e ori%in"# "pprov"# is

to $eve#op t(e "n&"!tre o& s"!3s on t(e /"sis o& t(e #o!"##1 "v"i#"/#e r"0 "teri"#s.Yor st"teent t("t 1o 0i## ("ve to re#1 on t(e iport"tion o& 2te "n$ 1or re>est t("t0e %ive 1o "ssr"n!e t("t 1or !op"n1 0i## /e "/#e to /rin% in s&&i!ient 2te"teri"#s "s "1 /e ne!ess"r1 &or t(e oper"tion o& 1or &"!tor1, 0o#$ not /e in #ine

0it( or prin!ip#e in "pprovin% t(e #o"n.


41/189

?it( t(e &ore%oin% #etter t(e ne%oti"tions !"e to " st"n$sti##. S"r", In!. $i$ not prset(e "tter &rt(er. Inste"$, it re>este$ R*C to !"n!e# t(e ort%"%e, "n$ so, on Jne7=, 7


42/189

It s(o#$ /e note$ t("t R*C entert"ine$ t(e #o"n "pp#i!"tion o& S"r", In!. on t(e"ssption t("t t(e &"!tor1 to /e !onstr!te$ 0o#$ ti#i-e #o!"##1 %ro0n r"0 "teri"#s,prin!ip"##1 3en"&. T(ere is no serios $ispte "/ot t(is. It 0"s in #ine 0it( s!("ssption t("t 0(en R*C, /1 Reso#tion No. ireents o& t(e &"!tor1.T(e iposition o& t(ose !on$itions 0"s /1 no e"ns " $evi"tion &ro t(e ters o& t(e"%reeent, /t r"t(er " step in its ip#eent"tion. T(ere 0"s not(in% in s"i$ !on$itionst("t !ontr"$i!te$ t(e ters #"i$ $o0n in R*C Reso#tion No. 7@, p"sse$ on J"n"r1 =,7est in its #etter o& J"n"r1 :@, 7est &or !"n!e##"tion o& t(e ort%"%e !"rrie$ noreserv"tion o& 0("tever ri%(ts it /e#ieve$ it i%(t ("ve "%"inst R*C &or t(e #"tterZs non6!op#i"n!e. In 7est, t("t S"r", In!. /ro%(t t(is"!tion &or $""%es.A## t(ese !ir!st"n!es $eonstr"te /e1on$ $o/t t("t t(e s"i$"%reeent ("$ /een e4tin%is(e$ /1 t"# $esist"n!e "n$ t("t on t(e initi"tive o&t(e p#"inti&&6"ppe##ee itse#&.


43/189

?it( t(is vie0 0e t"3e o& t(e !"se, 0e &in$ it nne!ess"r1 to !onsi$er "n$ reso#ve t(eot(er isses r"ise$ in t(e respe!tive /rie&s o& t(e p"rties.

?HERE*ORE, t(e 2$%ent "ppe"#e$ &ro is reverse$ "n$ t(e !op#"int $isisse$,0it( !osts "%"inst t(e p#"inti&&6"ppe##ee.

CRISTOBAL RO\O, petitioner,

vs.

JOSE L. GOME, ET AL., respon$ents.

A#&onso *"r!on &or petitioner.

C"pistr"no Q A-ores &or respon$ents.

BENGON, J.

T(is petition to revie0 " $e!ision o& t(e Cort o& Appe"#s 0"s "$itte$ "in#1 /e!"seit invo#ves one p("se o& t(e vit"# !ontepor"r1 >estion t(e rep"1ent o& #o"ns %ivenin J"p"nese &i"t !rren!1 $rin% t(e #"st 0"r o& t(e P"!i&i!.

On O!to/er @, 7


44/189

0(erein Att1. Jose L. Goe- 0i## re!eive /1 ri%(t (is one1 in t(e "ont o& P,;;;. I"&&ir t(e #e%"# ten$er, !rren!1 or "n1 e$i o& e4!("n%e, or one1 in t(is s o&P,;;; 0i## /e p"i$ /1 e to Jose L. Goe- one 1e"r "&ter t(is $"te, O!to/er @, 7


45/189

t("t !ontin%en!1. I& 0it(in one 1e"r "not(er 3in$ o& !rren!1 /e!"e #e%"# ten$er,Goe- 0o#$ pro/"/#1 %et ore &or (is one1. I& t(e s"e J"p"nese !rren!1!ontine$, (e 0o#$ %et #ess, t(e v"#e o& J"p"nese one1 /ein% t(en on t(e$o0n%r"$e.

Or #e%is#"tion ("s " 0or$ &or t(ese !ontr"!ts "#e"tor1. T(e Civi# Co$e re!o%ni-es t(eirv"#i$it1 'see "rt. 7=


46/189

to retrn t(e s"e n/er o& pesos in P(i#ippines !rren!1 or in t(e !rren!1prev"i#in% "&ter t(e 0"r. T(ere "1 /e roo &or "r%ent 0(en t(ose #iti%"tions !oep &or "$2$i!"tion. A## 0e s"1 (ere "n$ no0 is t("t t(e !ontr"!t in >estion is #e%"# "n$o/#i%"tor1.

A inor point !on!erns t(e person"#it1 o& t(e p#"inti&&, t(e 0i&e o& Jose L. Goe-. ?eopine 0it( t(e Cort o& Appe"#s t("t t(e "tter invo#ve " $e&e!t in pro!e$re 0(i!( $oesnot "ont to pre2$i!i"# error.

?(ere&ore, t(e "ppe"#e$ 2$%ent 0i## /e "&&ire$ 0it( !osts. So or$ere$

To$"1 is Mon$"1, Nove/er :@, :;79

Rep/#i! o& t(e P(i#ippines

S+PREME CO+RT

M"ni#"

EN BANC

G.R. No. L679:8 Septe/er


47/189

OAETA, J.

On Nove/er 7, 7


48/189

!opp#"int, "s "en$e$ on Septe/er =, 7it"/#e in t(e preises.


49/189


50/189

It 0i## /e note$ t("t t(e ori%in"# !ontr"!t o& ort%"%e provi$e$ &or interest "t 8 per !entper "nn "n$ t("t t(e prin!ip"# to%et(er 0it( t(e interest 0"s p"1"/#e 0it(in t(e perio$o& seven 1e"rs &ro Nove/er 7, 7


51/189

/siness n$er t(e n"e

"n$ st1#e KEN MARKETING, Pro#%"te$

KEN APPLIANCE DIFISION,

INC. "n$ BENJAMIN E. GO,Respon$ents. De!e/er 7


52/189

A&ter tri"#, t(e RTC p(e#$ t(e v"#i$it1 o& t(e proissor1 notes. It &on$ t("t, in:;;7 "#one, E>it"/#e restr!tre$ respon$entsZ #o"ns "ontin% to +S[::8,:;; "n$P7,;;;,;;;.77 T(e tri"# !ort, (o0ever, inv"#i$"te$ t(e es!"#"tion !#"se !ont"ine$t(erein /e!"se it vio#"te$ t(e prin!ip#e o& t"#it1 o& !ontr"!ts.7: Nevert(e#ess, ittoo3 2$i!i"# noti!e o& t(e steep $epre!i"tion o& t(e peso $rin% t(e intervenin%

perio$79 "n$ $e!#"re$ t(e e4isten!e o& e4tr"or$in"r1 $e"tion.7 Conse>ent#1, t(eRTC or$ere$ t(e se o& t(e 7


53/189

G) Dire!tin% p#"inti&& N% S(en% N%or "n$ Ken M"r3etin% to p"1 E>it"/#e interest "s&o##o0s

7) 7: per "nn &or t(e peso #o"ns5

:) 8 per "nn &or t(e $o##"r #o"ns. T(e /"sis &or t(e p"1ent o& t(e $o##"ro/#i%"tion is t(e !onversion r"te o& P:.@; per $o##"r "v"i#e$ o& "t t(e tie o& in!rrin% o&t(e o/#i%"tion in "!!or$"n!e 0it( Arti!#e 7:@; o& t(e Civi# Co$e o& t(e P(i#ippines5

H) Disissin% E>it"/#eZs !onter!#"i e4!ept t(e p"1ent o& t(e "&orest"te$ np"i$prin!ip"# #o"n o/#i%"tions "n$ interest.

SO ORDERED.7it"/#e "n$ respon$ents &i#e$ t(eir respe!tive noti!es o& "ppe"#.:;

In t(e M"r!( 7, :;; or$er o& t(e RTC, /ot( noti!es 0ere $enie$ $e !orse

/e!"se E>it"/#e "n$ respon$ents &"i#e$ to s/it proo& t("t t(e1 p"i$ t(eirrespe!tive "ppe"# &ees.:7

?HERE*ORE, preises !onsi$ere$, t(e "ppe"# interpose$ /1 $e&en$"nts &ro t(eDe!ision in t(e "/ove6entit#e$ !"se is DENIED $e !orse. As o& *e/r"r1 :=, :;;,t(e De!ision $"te$ *e/r"r1 @, :;;, is !onsi$ere$ &in"# "n$ e4e!tor1 in so &"r "sE>it"/#e, Aiee Y "n$ Be2"n Lione# Ap"s "re !on!erne$.:: 'ep("sis spp#ie$)

E>it"/#e ove$ &or t(e re!onsi$er"tion o& t(e M"r!( 7, :;; or$er o& t(eRTC:9 on t(e %ron$ t("t it $i$ in &"!t p"1 t(e "ppe"# &ees. Respon$ents, on t(eot(er ("n$, pr"1e$ &or t(e iss"n!e o& " 0rit o& e4e!tion.:


54/189

On M"r!( :, :;;, t(e RTC isse$ "n oni/s or$er $en1in% E>it"/#eZsotion &or re!onsi$er"tion &or #"!3 o& erit:@ "n$ or$ere$ t(e iss"n!e o& " 0rit o&e4e!tion in &"vor o& respon$ents.: A!!or$in% to t(e RTC, /e!"se respon$ents $i$not ove &or t(e re!onsi$er"tion o& t(e previos or$er '$en1in% $e !orse to t(ep"rties noti!es o& "ppe"#),:= t(e *e/r"r1 @, :;; $e!ision /e!"e &in"# "n$

e4e!tor1 "s to /ot( p"rties "n$ " 0rit o& e4e!tion "%"inst E>it"/#e 0"s in or$er.:8

A 0rit o& e4e!tion 0"s t(ere"&ter isse$:it"/#e 0ere #evie$ pon.9;

On M"r!( :, :;;, E>it"/#e &i#e$ " petition &or re#ie& in t(e RTC &ro t(e M"r!(7, :;; or$er.97 It, (o0ever, 0it($re0 t("t petition on M"r!( 9;, :;;9: "n$ inste"$&i#e$ " petition &or !ertior"ri 0it( "n "pp#i!"tion &or "n in2n!tion in t(e CA to en2oin t(eip#eent"tion "n$ e4e!tion o& t(e M"r!( :, :;; oni/s or$er.99

On Jne 7, :;;, t(e CA %r"nte$ E>it"/#eZs "pp#i!"tion &or in2n!tion. A 0rit o&pre#iin"r1 in2n!tion 0"s !orrespon$in%#1 isse$.9

Not0it(st"n$in% t(e 0rit o& in2n!tion, t(e properties o& E>it"/#e previos#1 #evie$pon 0ere so#$ in " p/#i! "!tion on J#1 7, :;;. Respon$ents 0ere t(e (i%(est/i$$ers "n$ !erti&i!"tes o& s"#e 0ere isse$ to t(e.9@

On A%st 7;, :;;, E>it"/#e ove$ to "nn# t(e J#1 7, :;; "!tion s"#e "n$to !ite t(e s(eri&&s 0(o !on$!te$ t(e s"#e in !ontept &or pro!ee$in% 0it( t(e "!tion$espite t(e in2n!tion or$er o& t(e CA.9

On O!to/er :8, :;;@, t(e CA $isisse$ t(e petition &or !ertior"ri.9= It &on$E>it"/#e %i#t1 o& &or s(oppin% /e!"se t(e /"n3 &i#e$ its petition &or !ertior"ri in t(eCA sever"# (ors /e&ore 0it($r"0in% its petition &or re#ie& in t(e RTC.98 Moreover,E>it"/#e &"i#e$ to $is!#ose, /ot( in t(e st"teent o& "teri"# $"tes "n$ !erti&i!"te o&

non6&or s(oppin% '"tt"!(e$ to its petition &or !ertior"ri in t(e CA), t("t it ("$ "pen$in% petition &or re#ie& in t(e RTC.9it"/#e ove$ &or re!onsi$er"tion; /t it 0"s $enie$.7 T(s, t(is petition.


55/189

E>it"/#e "sserts t("t it 0"s not %i#t1 o& &or s(oppin% /e!"se t(e petition &orre#ie& 0"s 0it($r"0n on t(e s"e $"1 t(e petition &or !ertior"ri 0"s &i#e$.: It #i3e0ise"vers t("t its petition &or !ertior"ri 0"s eritorios /e!"se t(e RTC !oitte$ %r"ve"/se o& $is!retion in issin% t(e M"r!( :, :;; oni/s or$er 0(i!( 0"s /"se$ on"n erroneos "ssption. T(e M"r!( 7, :;; or$er $en1in% its noti!e o& "ppe"# &or non

p"1ent o& "ppe"# &ees 0"s erroneos /e!"se it ("$ in &"!t p"i$ t(e re>ire$ &ees.9T(s, t(e RTC, /1 issin% its M"r!( :, :;; oni/s or$er, e&&e!tive#1 prevente$E>it"/#e &ro "ppe"#in% t(e p"tent#1 0ron% *e/r"r1 @, :;; $e!ision.

T(is petition is eritorios.

E+ITABLE ?AS NOT G+ILTY O* *OR+M SHOPPING

*or s(oppin% e4ists 0(en t0o or ore "!tions invo#vin% t(e s"etr"ns"!tions, essenti"# &"!ts "n$ !ir!st"n!es "re &i#e$ "n$ t(ose "!tions r"isei$enti!"# isses, s/2e!t "tter "n$ !"ses o& "!tion.@ T(e test is 0(et(er, in t0o orore pen$in% !"ses, t(ere is i$entit1 o& p"rties, ri%(ts or !"ses o& "!tions "n$ re#ie&s.

E>it"/#eZs petition &or re#ie& in t(e RTC "n$ its petition &or !ertior"ri in t(e CA $i$not ("ve i$enti!"# !"ses o& "!tion. T(e petition &or re#ie& &ro t(e $eni"# o& its noti!e o&"ppe"# 0"s /"se$ on t(e RTCs 2$%ent or &in"# or$er preventin% it &ro t"3in% "n"ppe"# /1 &r"$, "!!i$ent, ist"3e or e4!s"/#e ne%#i%en!e.= On t(e ot(er ("n$, itspetition &or !ertior"ri in t(e CA, " spe!i"# !ivi# "!tion, so%(t to !orre!t t(e %r"ve "/seo& $is!retion "ontin% to #"!3 o& 2ris$i!tion !oitte$ /1 t(e RTC.8

In " petition &or re#ie&, t(e 2$%ent or &in"# or$er is ren$ere$ /1 " !ort 0it( !opetent2ris$i!tion. In " petition &or !ertior"ri, t(e or$er is ren$ere$ /1 " !ort 0it(ot or ine4!ess o& its 2ris$i!tion.

Moreover, E>it"/#e s/st"nti"##1 !op#ie$ 0it( t(e r#e on non6&or s(oppin%0(en it ove$ to 0it($r"0 its petition &or re#ie& in t(e RTC on t(e s"e $"1 'in &"!t 2st&or (ors "n$ &ort1 intes "&ter) it &i#e$ t(e petition &or !ertior"ri in t(e CA. Even i&


56/189

E>it"/#e &"i#e$ to $is!#ose t("t it ("$ " pen$in% petition &or re#ie& in t(e RTC, it re!ti&ie$0("t 0"s $o/t#ess#1 " !"re#ess oversi%(t /1 0it($r"0in% t(e petition &or re#ie& 2st "&e0 (ors "&ter it &i#e$ its petition &or !ertior"ri in t(e CA ^ " !#e"r in$i!"tion t("t it ("$no intention o& "int"inin% t(e t0o "!tions "t t(e s"e tie.

THE TRIAL CO+RT COMMITTED GRAFE AB+SE O* DISCRETION IN ISS+ING ITSMARCH 7, :;; AND MARCH :, :;; ORDERS

Se!tion 7, R#e @ o& t(e R#es o& Cort provi$es

Se!tion 7. Petition &or Certior"ri. ?(en "n1 tri/n"#, /o"r$ or o&&i!er e4er!isin% 2$i!i"#or >"si62$i!i"# &n!tion ("s "!te$ 0it(ot or in e4!ess o& its or (is 2ris$i!tion, or 0it(%r"ve "/se o& $is!retion "ontin% to #"!3 or e4!ess o& 2ris$i!tion, "n$ t(ere is no"ppe"#, nor "n1 p#"in, spee$1 or "$e>"te ree$1 in t(e or$in"r1 !orse o& #"0, "person "%%rieve$ t(ere/1 "1 &i#e " veri&ie$ petition in t(e proper !ort, "##e%in% t(e&"!ts 0it( !ert"int1 "n$ pr"1in% t("t 2$%ent /e ren$ere$ "nn##in% or o$i&1in% t(epro!ee$in%s o& s!( tri/n"#, /o"r$ or o&&i!er, "n$ %r"ntin% s!( in!i$ent"# re#ie&s "s #"0"n$ 2sti!e "1 re>ire.

T(e petition s("## /e "!!op"nie$ /1 " !erti&ie$ tre !op1 o& t(e 2$%ent, or$eror reso#tion s/2e!t t(ereo&, !opies o& "## p#e"$in%s "n$ $o!ents re#ev"nt "n$pertinent t(ereto, "n$ " s0orn !erti&i!"te o& non6&or s(oppin% "s provi$e$ in t(e t(ir$p"r"%r"p( o& Se!tion 9, R#e .

T(ere "re t0o s/st"nti"# re>ireents in " petition &or !ertior"ri. T(ese "re

7. t("t t(e tri/n"#, /o"r$ or o&&i!er e4er!isin% 2$i!i"# or >"si62$i!i"# &n!tions"!te$ 0it(ot or in e4!ess o& (is or its 2ris$i!tion or 0it( %r"ve "/se o& $is!retion"ontin% to #"!3 or e4!ess o& 2ris$i!tion5 "n$

:. t("t t(ere is no "ppe"# or "n1 p#"in, spee$1 "n$ "$e>"te ree$1 in t(e or$in"r1!orse o& #"0.


57/189

*or " petition &or !ertior"ri preise$ on %r"ve "/se o& $is!retion to prosper,petitioner st s(o0 t("t t(e p/#i! respon$ent p"tent#1 "n$ %ross#1 "/se$ (is

$is!retion "n$ t("t "/se "onte$ to "n ev"sion o& positive $t1 or " virt"# re&s"# toper&or " $t1 en2oine$ /1 #"0 or to "!t "t "## in !ontep#"tion o& #"0, "s 0(ere t(epo0er 0"s e4er!ise$ in "n "r/itr"r1 "n$ $espoti! "nner /1 re"son o& p"ssion or(osti#it1.it"/#e, et "#. &ro "ppe"#in% t(e *e/r"r1 @, :;; $e!ision. Not on#1 t("t.T(e e4e!tion o& t(e $e!ision 0"s n$ert"3en 0it( in$e!ent ("ste, e&&e!tive#1 o/vi"tin%or $e&e"tin% E>it"/#eZs ri%(t to "v"i# o& possi/#e #e%"# ree$ies. No "tter (o0 0e #oo3"t it, t(e RTC !oitte$ %r"ve "/se o& $is!retion in ren$erin% t(ose or$ers.

?it( re%"r$ to 0(et(er E>it"/#e ("$ " p#"in, spee$1 "n$ "$e>"te ree$1 int(e or$in"r1 !orse o& #"0, 0e (o#$ t("t t(ere 0"s none. T(e RTC $enie$ $e !orse toits noti!e o& "ppe"# in t(e M"r!( 7, :;; or$er. It "&&ire$ t("t $eni"# in t(e M"r!( :,:;; oni/s or$er. Hen!e, t(ere 0"s no 0"1 E>it"/#e !o#$ ("ve possi/#1 "ppe"#e$t(e *e/r"r1 @, :;; $e!ision.@:

A#t(o%( E>it"/#e &i#e$ " petition &or re#ie& &ro t(e M"r!( :, :;; or$er, t("tpetition 0"s not " p#"in, spee$1 "n$ "$e>"te ree$1 in t(e or$in"r1 !orse o& #"0.@9A petition &or re#ie& n$er R#e 98 is "n e>it"/#e ree$1 "##o0e$ on#1 in e4!eption"#!ir!st"n!es or 0(ere t(ere is no ot(er "v"i#"/#e or "$e>"te ree$1.@

T(s, 0e %r"nt E>it"/#eZs petition &or !ertior"ri "n$ !onse>ent#1 %ive $e!orse to its "ppe"#.


58/189


59/189

ot "n$ ne%oti"te$ 0it( "not(er /"n3 "t t(e &irst "v"i#"/#e inst"n!e. Bt t(e1 $i$ not.Inste"$, t(e1 !ontinos#1 "v"i#e$ o& E>it"/#eZs !re$it &"!i#ities &or &ive #on% 1e"rs.

?(i#e t(e RTC !"te%ori!"##1 &on$ t("t respon$ents ("$ otst"n$in% $o##"r6 "n$

peso6$enoin"te$ #o"ns 0it( E>it"/#e, it, (o0ever, &"i#e$ to "s!ert"in t(e tot"# "ont$e 'prin!ip"#, interest "n$ pen"#ties, i& "n1) "s o& J#1


60/189

:. t("t t(e stip#"te$ r"te o& interest 0i## /e re$!e$ i& t(e "pp#i!"/#e"4i r"te o& interest is re$!e$ /1 #"0 or /1 t(e Monet"r1 Bo"r$ '$e6es!"#"tion!#"se).


61/189

s!( $e!re"se !o#$ not /e re"son"/#1 &oreseen or 0"s "ni&est#1 /e1on$ t(e!ontep#"tion o& t(e p"rties "t t(e tie o& t(e o/#i%"tion. E4tr"or$in"r1 $e"tion, on t(eot(er ("n$, invo#ves "n inverse sit"tion.=9

Arti!#e 7:@; o& t(e Civi# Co$e provi$es

Arti!#e 7:@;. In !"se "n e4tr"or$in"r1 in"tion or $e"tion o& t(e !rren!1 stip#"te$s(o#$ intervene, t(e v"#e o& t(e !rren!1 "t t(e tie o& t(e est"/#is(ent o& t(eo/#i%"tion s("## /e t(e /"sis o& p"1ent, n#ess t(ere is "n "%reeent to t(e !ontr"r1.

*or e4tr"or$in"r1 in"tion 'or $e"tion) to "&&e!t "n o/#i%"tion, t(e &o##o0in% re>isitesst /e proven

7. t("t t(ere 0"s "n o&&i!i"# $e!#"r"tion o& e4tr"or$in"r1 in"tion or $e"tion &ro t(eB"n%3o Sentr"# n% Pi#ipin"s 'BSP)5=

:. t("t t(e o/#i%"tion 0"s !ontr"!t"# in n"tre5=@ "n$

9. t("t t(e p"rties e4press#1 "%ree$ to !onsi$er t(e e&&e!ts o& t(e e4tr"or$in"r1in"tion or $e"tion.=

Despite t(e $ev"#"tion o& t(e peso, t(e BSP never $e!#"re$ " sit"tion o&e4tr"or$in"r1 in"tion. Moreover, "#t(o%( t(e o/#i%"tion in t(is inst"n!e "rose ot o& "!ontr"!t, t(e p"rties $i$ not "%ree to re!o%ni-e t(e e&&e!ts o& e4tr"or$in"r1 in"tion 'or$e"tion).== T(e RTC never entione$ t("t t(ere 0"s " s!( stip#"tion eit(er in t(e

proissor1 note or #o"n "%reeent. T(ere&ore, respon$ents s(o#$ p"1 t(eir $o##"r6$enoin"te$ #o"ns "t t(e e4!("n%e r"te &i4e$ /1 t(e BSP on t(e $"te o& "trit1.=8

THE A?ARD O* MORAL AND EEMPLARY DAMAGES LACKED BASIS


62/189

Mor"# $""%es "re in t(e !"te%or1 o& "n "0"r$ $esi%ne$ to !opens"te t(e!#"i"nt &or "!t"# in2r1 s&&ere$, not to ipose " pen"#t1 to t(e 0ron%$oer.=it"/#e t(e interest $e on*e/r"r1


63/189

Respon$ents in$ee$ $e&"#te$ on t(eir o/#i%"tion. *or t(is re"son, E>it"/#e ("$t(e option to e4er!ise its #e%"# ri%(t to set6o&& or !opens"tion. Ho0ever, t(e RTCist"3en#1 'or, "s it no0 "ppe"rs, $e#i/er"te#1) !on!#$e$ t("t E>it"/#e "!te$&r"$#ent#1 or in /"$ &"it( or in 0"nton $isre%"r$ o& its !ontr"!t"# o/#i%"tions $espitet(e "/sen!e o& proo&. T(e n$eni"/#e &"!t 0"s t("t, 0("tever $""%e respon$ents

sst"ine$ 0"s pre#1 t(e !onse>en!e o& t(eir &"i#re to p"1 t(eir #o"ns. T(ere 0"st(ere&ore "/so#te#1 no /"sis &or t(e "0"r$ o& or"# $""%es to t(e.

Neit(er 0"s t(ere re"son to "0"r$ e4ep#"r1 $""%es. Sin!e respon$ents 0erenot entit#e$ to or"# $""%es, neit(er s(o#$ t(e1 /e "0"r$e$ e4ep#"r1 $""%es.8it"/#e PCI B"n3 t(e prin!ip"# "ont o& t(eir $o##"r6 "n$ peso6$enoin"te$ #o"ns5


64/189

:. or$erin% respon$ents N% S(en% N%or, $oin% /siness n$er t(e n"e"n$ st1#e o& Ken M"r3etin%, Ken App#i"n!e Division, In!. "n$ Ben2"in E. Go to p"1petitioner E>it"/#e PCI B"n3 interest "t

") 7:. p.". 0it( respe!t to t(eir $o##"r6$enoin"te$ #o"ns &ro J"n"r17;, :;;7 to J#1


65/189

6 verss 6

E+ITABLE PCI BANK '&orer#1 THE PHILIPPINE COMMERCIAL INTERNATIONALBANK),

Respon$ent.

G.R. No. 7


66/189

CARPIO, J.

T(e C"se

PAN PACI*IC SERFICE CONTRACTORS, INC. AND RICARDO *. DEL

ROSARIO 'PETITIONERS) *ILED THIS PETITION *OR REFIE?7 ASSAILING THECO+RT O* APPEALS 'CA) DECISION: DATED 9; J+NE :;;@ IN CA6G.R. CF NO.9


67/189

pri!e "$2stent. To s(o0 %oo$0i##, P"n P"!i&i! re$!e$ t(e pri!e "$2stent toP,8@8,@8.=.77

On :8 Apri# 7


68/189

Respon$ent stoo$ &ir t("t it 0o#$ not re#e"se "n1 "ont o& t(e pri!e "$2stent toP"n P"!i&i! /t it 0o#$ o&&set t(e pri!e "$2stent 0it( P"n P"!i&i!s otst"n$in%/"#"n!e o& P9,::,78.;7, representin% t(e #o"n, interests, pen"#ties "n$ !o##e!tion!("r%es.7=

P"n P"!i&i! re&se$ t(e o&&settin% /t "%ree$ to re!eive t(e re$!e$ "ont o&P9,=9;,


69/189


70/189

Petitioners s/it t(is so#e isse &or or !onsi$er"tion ?(et(er t(e CA, in"0"r$in% t(e np"i$ /"#"n!e o& t(e pri!e "$2stent, erre$ in &i4in% t(e interest r"te "t7: inste"$ o& t(e 78 /"n3 #en$in% r"te.

R#in% o& t(e Cort

?e %r"nt t(e petition.

T(is Cort notes t("t respon$ent $i$ not "ppe"# t(e $e!ision o& t(e CA. Hen!e, t(ere isno #on%er "n1 isse "s to t(e prin!ip"# "ont o& t(e np"i$ /"#"n!e on t(e pri!e"$2stent, 0(i!( t(e CA !orre!t#1 !opte$ "t P7,@7,;7@.;=. T(e on#1 re"inin%isse is t(e interest r"te "pp#i!"/#e &or respon$ents $e#"1 in t(e p"1ent o& t(e /"#"n!eo& t(e pri!e "$2stent.

T(e CA $enie$ petitioners !#"i &or t(e "pp#i!"tion o& t(e /"n3 #en$in% r"te o& 78

!opon$e$ "nn"##1 re"sonin%, to 0it

Anent t(e 78 interest r"te !opon$e$ "nn"##1, 0(i#e it is tre t("t t(e !ontr"!tprovi$es &or "n interest "t t(e !rrent /"n3 #en$in% r"te in !"se o& $e#"1 in p"1ent /1t(e O0ner, "n$ t(e proissor1 note !("r%e$ "n interest o& 78, t(e s"i$ proviso $oesnot "t(ori-e p#"inti&&s to ni#"ter"##1 r"ise t(e interest r"te 0it(ot t(e ot(er p"rt1s!onsent. +n#i3e t(eir re>est &or pri!e "$2stent on t(e /"si! !ontr"!t pri!e, p#"inti&&snever in&ore$ nor so%(t t(e "pprov"# o& $e&en$"nt &or t(e iposition o& 78 intereston t(e "$2ste$ pri!e. To ni#"ter"##1 in!re"se t(e interest r"te o& t(e "$2ste$ pri!e

0o#$ /e vio#"tive o& t(e prin!ip#e o& t"#it1 o& !ontr"!ts. T(s, t(e Cort "int"inst(e #e%"# r"te o& t0e#ve per!ent per "nn st"rtin% &ro t(e $"te o& 2$i!i"# $e"n$.A#t(o%( t(e !ontr"!t provi$es &or t(e perio$ 0(en t(e re!oen$"tion o& t(e TCGIEn%ineers "s to t(e pri!e "$2stent 0o#$ /e /in$in% on t(e p"rties, it 0"sest"/#is(e$, (o0ever, t("t p"rt o& t(e "$2ste$ pri!e $e"n$e$ /1 p#"inti&&s 0"s "#re"$1$is/rse$ "s e"r#1 "s :8 *e/r"r1 7


71/189

In t(is "ppe"#, petitioners "##e%e t("t t(e !ontr"!t /et0een t(e p"rties !onsists o& t0op"rts, t(e A%reeent:: "n$ t(e Gener"# Con$itions,:9 /ot( o& 0(i!( provi$e &orinterest "t t(e /"n3 #en$in% r"te on "n1 np"i$ "ont $e n$er t(e !ontr"!t.Petitioners &rt(er !#"i t("t t(ere is not(in% in t(e !ontr"!t 0(i!( re>ires t(e !onsento& t(e respon$ent to /e %iven in or$er t("t petitioners !"n !("r%e t(e /"n3 #en$in% r"te.: Spe!i&i!"##1, petitioners invo3e Se!tion :.@ o& t(e A%reeent "n$ Se!tion ;.7; o&t(e Gener"# Con$itions "s &o##o0s

A%reeent

:.@ I* ANY PAYMENT IS DELAYED, THE CONTRACTOR MAY CHARGEINTEREST THEREON AT THE C+RRENT BANK LENDING RATES, ?ITHO+T

PREJ+DICE TO O?NERS RECO+RSE TO ANY OTHER REMEDY AFAILABLE+NDER EISTING LA?.:@

GENERAL CONDITIONS

;.7; TIME *OR PAYMENT

THE AMO+NT D+E TO THE CONTRACTOR +NDER ANY INTERIM CERTI*ICATEISS+ED BY THE ENGINEER P+RS+ANT TO THIS CLA+SE, OR TO ANY TERM O*THE CONTRACT, SHALL, S+BJECT TO CLA+SE =, BE PAID BY THE O?NER TOTHE CONTRACTOR ?ITHIN :8 DAYS A*TER S+CH INTERIM CERTI*ICATE HASBEEN DELIFERED TO THE O?NER, OR, IN THE CASE O* THE *INALCERTI*ICATE RE*ERRED TO IN S+B6CLA+SE ;.8, ?ITHIN @ DAYS, A*TERS+CH *INAL CERTI*ICATE HAS BEEN DELIFERED TO THE O?NER. IN THEEFENT O* THE *AIL+RE O* THE O?NER TO MAKE PAYMENT ?ITHIN THETIMES STATED, THE O?NER SHALL PAY TO THE CONTRACTOR INTEREST ATTHE RATE BASED ON BANKING LOAN RATES PREFAILING AT THE TIME O* THESIGNING O* THE CONTRACT +PON ALL S+MS +NPAID *ROM THE DATE BY?HICH THE SAME SHO+LD HAFE BEEN PAID. THE PROFISIONS O* THIS S+B6CLA+SE ARE ?ITHO+T PREJ+DICE TO THE CONTRACTORS ENTITLEMENT+NDER CLA+SE


72/189

Petitioners t(s s/it t("t it is "to"ti!"##1 entit#e$ to t(e /"n3 #en$in% r"te o& interest&ro t(e tie "n "ont is $eterine$ to /e $e t(ereto, 0(i!( respon$ent s(o#$("ve p"i$. T(ere&ore, "s petitioners ("ve "#re"$1 proven t(eir entit#eent to t(e pri!e"$2stent, it ne!ess"ri#1 &o##o0s t("t t(e /"n3 #en$in% interest r"te o& 78 s("## /e"pp#ie$.:=

On t(e ot(er ("n$, respon$ent insists t("t n$er t(e provisions o& =;.7 "n$ =;.: o& t(eGener"# Con$itions, it is stip#"te$ t("t "n1 "$$ition"# !ost s("## /e $eterine$ /1 t(eEn%ineer "n$ s("## /e "$$e$ to t(e !ontr"!t pri!e "&ter $e !ons#t"tion 0it( t(e O0ner,(erein respon$ent. Hen!e, t(ere /ein% no prior !ons#t"tion 0it( t(e respon$entre%"r$in% t(e "$$ition"# !ost to t(e /"si! !ontr"!t pri!e, it n"tr"##1 &o##o0s t("trespon$ent 0"s never !ons#te$ or in&ore$ o& t(e iposition o& 78 interest r"te!opon$e$ "nn"##1 on t(e "$2ste$ pri!e.:8

A pers"# o& t(e "ss"i#e$ $e!ision s(o0s t("t t(e CA "$e " $istin!tion /et0een t(e

!onsent %iven /1 t(e o0ner o& t(e pro2e!t &or t(e #i"/i#it1 &or t(e pri!e "$2stents, "n$t(e !onsent &or t(e iposition o& t(e /"n3 #en$in% r"te. T(s, 0(i#e t(e CA (e#$ t("tpetitioners !ons#te$ respon$ent &or pri!e "$2stent on t(e /"si! !ontr"!t pri!e,petitioners, nonet(e#ess, "re not entit#e$ to t(e iposition o& 78 interest on t(e"$2ste$ pri!e, "s petitioners never in&ore$ or so%(t t(e "pprov"# o& respon$ent &ors!( iposition.:


73/189

T(ere s("## /e "$$e$ to or $e$!te$ &ro t(e Contr"!t Pri!e s!( ss in respe!t o&rise or &"## in t(e !ost o& #"/or "n$or "teri"#s or "n1 ot(er "tters "&&e!tin% t(e !ost o&t(e e4e!tion o& t(e ?or3s "s "1 /e $eterine$.

=;.: S/se>ent Le%is#"tion

I&, "&ter t(e $"te :8 $"1s prior to t(e #"test $"te o& s/ission o& ten$ers &or t(eContr"!t t(ere o!!r in t(e !ontr1 in 0(i!( t(e ?or3s "re /ein% or "re to /e e4e!te$!("n%es to "n1 N"tion"# or St"te St"tte, Or$in"n!e, De!ree or ot(er L"0 or "n1re%#"tion or /1e6#"0 'si!) o& "n1 #o!"# or ot(er $#1 !onstitte$ "t(orit1, or t(eintro$!tion o& "n1 s!( St"te St"tte, Or$in"n!e, De!ree, L"0, re%#"tion or /1e6#"0'si!) 0(i!( !"ses "$$ition"# or re$!e$ !ost to t(e !ontr"!tor, ot(er t("n n$er S/6C#"se =;.7, in t(e e4e!tion o& t(e Contr"!t, s!( "$$ition"# or re$!e$ !ost s("##,"&ter $e !ons#t"tion 0it( t(e O0ner "n$ Contr"!tor, /e $eterine$ /1 t(e En%ineer"n$ s("## /e "$$e$ to or $e$!te$ &ro t(e Contr"!t Pri!e "n$ t(e En%ineer s("## noti&1

t(e Contr"!tor "!!or$in%#1, 0it( " !op1 to t(e O0ner.97

In t(is !"se, t(e CA "#re"$1 sett#e$ t("t petitioners !ons#te$ respon$ent on t(eiposition o& t(e pri!e "$2stent, "n$ (e#$ respon$ent #i"/#e &or t(e /"#"n!e o&P7,@7,;7@.;=. Respon$ent $i$ not "ppe"# &ro t(e $e!ision o& t(e CA5 (en!e,respon$ent is estoppe$ &ro !ontestin% s!( &"!t.

Ho0ever, t(e CA 0ent /e1on$ t(e intent o& t(e p"rties /1 re>irin% respon$ent to %iveits !onsent to t(e iposition o& interest /e&ore petitioners !"n (o#$ respon$ent #i"/#e &orinterest "t t(e !rrent /"n3 #en$in% r"te. T(is is erroneos. A revie0 o& Se!tion :. o&t(e A%reeent "n$ Se!tion ;.7; o& t(e Gener"# Con$itions s(o0s t("t t(e !onsent o&t(e respon$ent is not nee$e$ &or t(e iposition o& interest "t t(e !rrent /"n3 #en$in%r"te, 0(i!( o!!rs pon "n1 $e#"1 in p"1ent.

?(en t(e ters o& " !ontr"!t "re !#e"r "n$ #e"ve no $o/t "s to t(e intention o& t(e!ontr"!tin% p"rties, t(e #iter"# e"nin% o& its stip#"tions %overns. In t(ese !"ses, !orts

("ve no "t(orit1 to "#ter " !ontr"!t /1 !onstr!tion or to "3e " ne0 !ontr"!t &or t(ep"rties. T(e Corts $t1 is !on&ine$ to t(e interpret"tion o& t(e !ontr"!t 0(i!( t(ep"rties ("ve "$e &or t(ese#ves 0it(ot re%"r$ to its 0is$o or &o##1 "s t(e !ort!"nnot spp#1 "teri"# stip#"tions or re"$ into t(e !ontr"!t 0or$s 0(i!( it $oes not!ont"in. It is on#1 0(en t(e !ontr"!t is v"%e "n$ "/i%os t("t !orts "re peritte$ toresort to !onstr!tion o& its ters "n$ $eterine t(e intention o& t(e p"rties.9:


74/189

T(e es!"#"tion !#"se st /e re"$ in !on2n!tion 0it( Se!tion :.@ o& t(e A%reeent"n$ Se!tion ;.7; o& t(e Gener"# Con$itions 0(i!( pert"in to t(e tie o& p"1ent. On!et(e p"rties "%ree on t(e pri!e "$2stent "&ter $e !ons#t"tion in !op#i"n!e 0it( t(eprovisions o& t(e es!"#"tion !#"se, t(e "%reeent is in e&&e!t "n "en$ent to t(eori%in"# !ontr"!t, "n$ %ives rise to t(e #i"/i#it1 o& respon$ent to p"1 t(e "$2ste$ !osts.

+n$er Se!tion ;.7; o& t(e Gener"# Con$itions, t(e respon$ent s("## p"1 s!( #i"/i#it1 tot(e petitioner 0it(in :8 $"1s &ro iss"n!e o& t(e interi !erti&i!"te. +pon respon$ents&"i#re to p"1 0it(in t(e tie provi$e$ ':8 $"1s), t(en it s("## /e #i"/#e to p"1 t(estip#"te$ interest.

T(is is t(e #o%i!"# interpret"tion o& t(e "%reeent o& t(e p"rties on t(e iposition o&interest. To provi$e " !ontr"r1 interpret"tion, "s one re>irin% " sep"r"te !onsent &ort(e iposition o& t(e stip#"te$ interest, 0o#$ ren$er t(e intentions o& t(e p"rtiesn%"tor1.

Arti!#e 7


75/189

!ontr"!t ("ve &"i#e$ to &i4 t(e r"te o& interest or 0(en s!( "ont is n0"rr"nte$ t("tt(e Cort 0i## "pp#1 t(e 7: interest per "nn on " #o"n or &or/e"r"n!e o& one1.9@

T(e 0ritten "%reeent entere$ into /et0een petitioners "n$ respon$ent provi$es &or "n

interest "t t(e !rrent /"n3 #en$in% r"te in !"se o& $e#"1 in p"1ent "n$ t(e proissor1note !("r%e$ "n interest o& 78.

To prove petitioners entit#eent to t(e 78 /"n3 #en$in% r"te o& interest, petitionerspresente$ t(e proissor1 note9 prep"re$ /1 respon$ent /"n3 itse#&. T(is proissor1note, "#t(o%( $e!#"re$ voi$ /1 t(e #o0er !orts /e!"se it $i$ not e4press t(e re"#intention o& t(e p"rties, is s/st"nti"# proo& t("t t(e /"n3 #en$in% r"te "t t(e tie o&$e&"#t 0"s 78 per "nn. A/sent "n1 evi$en!e o& &r"$, n$e inen!e or "n1 vi!eo& !onsent e4er!ise$ /1 petitioners "%"inst t(e respon$ent, t(e interest r"te "%ree$pon is /in$in% on t(e.9=

?HERE*ORE, 0e GRANT t(e petition. ?e SET ASIDE t(e De!ision "n$ Reso#tion o&t(e Cort o& Appe"#s in CA6G.R. CF No. 9


76/189

SPO+SES MAIMO LANDRITO AND PA LANDRITO, Represente$ /1 OILOLANDRITO, "s t(eir Attorne16in6*"!t,

Respon$ents.

G.R. No. 7


77/189

CHICO6NAARIO, J.

T(is is " petition &or Revie0 on Certior"ri n$er R#e @ o& t(e R#es o& Cort"ss"i#in% t(e De!ision o& t(e Cort o& Appe"#s,7 $"te$ 97 A%st :;;@, reversin% t(eDe!ision ren$ere$ /1 t(e tri"# !ort on 79 De!e/er 7"re eter #ot#o!"te$ in A#"/"n%, Mntin#p", !overe$ /1 Tr"ns&er Certi&i!"te o& Tit#e No. S68iv"#ent to &ive per!ent o& t(e prin!ip"# $e/t, "n$ P=,@;;.;; 0"s &rt(er $e$!te$ "sservi!e &ee. T(s, t(e1 "!t"##1 re!eive$ " net "ont o& P9:@,;;;.;;. T(e"%reeent, (o0ever, provi$e$ t("t t(e prin!ip"# in$e/te$ness e"rns interest "t t(e#e%"# r"te.

A&ter t(ree ont(s, 0(en t(e $e/t /e!"e $e "n$ $e"n$"/#e, t(e Sposes L"n$rito0ere n"/#e to p"1 t(e prin!ip"#, "n$ ("$ not /een "/#e to "3e "n1 interest p"1entsot(er t("n t(e "ont initi"##1 $e$!te$ &ro t(e pro!ee$s o& t(e #o"n. On :ent rene0"#s, t(e s"e ters "n$ !on$itions &on$ in t(e &irst "%reeent 0ereret"ine$. On :< J#1 7en!e, t(e Sposes Espirit &ore!#ose$ t(eort%"%e$ propert1 on 97 O!to/er 7


79/189

?HERE*ORE, "## t(e &ore%oin% preises !onsi$ere$, t(e (erein !op#"int is(ere/1 $isisse$ &ort(0it(.

?it(ot pronon!eents to !osts.

T(e Sposes L"n$rito "ppe"#e$ to t(e Cort o& Appe"#s prs"nt to R#e 7 o& t(e 7


80/189


81/189

"%ree$ on t(e interest "n$ !("r%es ipose$ in !onne!tion 0it( t(e #o"n, (eren$erener"te$

7. P7=,@;;.;; 0"s t(e interest !("r%e$ &or t(e &irst ont( "n$ P=,@;;.;; 0"s ipose$

"s servi!e &ee.

:. P9@,;;;.;; interest "n$ !("r%es, or t(e $i&&eren!e /et0een t(e P9@;,;;;.;;prin!ip"# in t(e Re"# Est"te Mort%"%e $"te$ @ Septe/er 7


82/189

Se!tion 7= o& t(e s"e #"0 iposes on "n1one 0(o 0i###1 vio#"tes t(eseprovisions, s"n!tions 0(i!( in!#$e !ivi# #i"/i#it1, "n$ " &ine "n$or iprisonent.

A#t(o%( "n1 "!tion see3in% to ipose eit(er !ivi# or !riin"# #i"/i#it1 ("$ "#re"$1

pres!ri/e$, t(is Cort &ro0ns pon t(e n$er("n$e$ "nner in 0(i!( t(e SposesEspirit ipose$ interest "n$ !("r%es, in !onne!tion 0it( t(e #o"n. T(is is "%%r"v"te$/1 t(e &"!t t("t one o& t(e !re$itors, oi#o Espirit, " #"01er, is ("r$#1 in " position top#e"$ i%nor"n!e o& t(e re>ireents o& t(e #"0 in !onne!tion 0it( t(e tr"nsp"ren!1 o&!re$it tr"ns"!tions. In "$$ition, t(e Civi# Co$e !#e"r#1 provi$es t("t

Arti!#e 7itos, "n$ n!ons!ion"/#e. In t(e!"se o& Me$e# v. Cort o& Appe"#s,78 t(e Cort $e!#"re$ "n interest r"te o& @.@ peront( on " P@;;,;;;.;; #o"n to /e e4!essive, ini>itos, n!ons!ion"/#e "n$e4or/it"nt. Even i& t(e p"rties t(ese#ves "%ree$ on t(e interest r"te "n$ stip#"te$ t(es"e in " 0ritten "%reeent, it nevert(e#ess $e!#"re$ s!( stip#"tion "s voi$ "n$or$ere$ t(e iposition o& " 7: 1e"r#1 interest r"te. In Sposes So#"n%on v. S"#"-"r,7ent#1 p"rties "re %iven " 0i$e #"tit$eto "%ree on "n1 interest r"te, not(in% in t(e s"i$ Cir!#"r %r"nts #en$ers !"rte /#"n!(e

"t(orit1 to r"ise interest r"tes to #eve#s 0(i!( 0i## eit(er ens#"ve t(eir /orro0ers or #e"$to " (eorr("%in% o& t(eir "ssets.:7

Stip#"tion "t(ori-in% ini>itos or n!ons!ion"/#e interests "re !ontr"r1 to or"#s, i&not "%"inst t(e #"0. +n$er A

credit mutuum deposit cases

Documents