BPI INVESTMENT CORP VS CA

Facts: Frank Roa obtained a loan at an interest rate of 16 % per annum from Ayala Development Corp,
predecessor of BPIIC, for the construction of his house and lot. Said house and lot was mortgaged to
AIDC to secure the loan. In 1980, Roa sold the house to private respondent ALC and Litonjua. They paid
some in cash and assumed the remaining balance of 500K balance of Roas indebtedness to AIDC.
However, AIDC will not extend to them the same interest rate and wants to grant a new loan of 500K
with 20% interest per annum and 1% per annum on the outstanding principal.

Private respondents executed a mortgage deed containing all those stipulations. They then updated
Roas arrearages by paying BPIIC.

BPIIC instituted foreclosure proceedings against private respondents on the ground that they failed to
pay the mortgage indebtedness. A notice of sheriffs sale was published.

Respondents filed a Civil case alleging that they were not arrears in their payment and in fact, made an
overpayment. They alledged that they should not be made to pay amortization before the Actual release
of the 500K and that out of the 500k, only 464,351.77 was released. Hence, the balance should be
applied to the initial monthly amortization for the loan.

RTC: Favored private respondents. Both filed an appeal to CA but appeal of private respondent was
dismissed for non payment of docket fees.

CA: Affirmed RTC decision reasoning that simple loan is perfected only upon the delivery of the object of
the contract.

ISSUE: WON a contract of loan is a consensual contract as laid down in Bonnevie vs CA

SC: Agrees with Private respondents. A loan contract is not a consensual contract but a real contract. It is
perfected only upon the delivery of the object of the contract. Petitioner misapplied Bonnevie. The
contract in Bonnevie is a perfected consensual contract. It is an accepted promise to deliver something
by way of simple loan.

A perfected consensual contract, can give rise to an action for damages. However, said contract does
not constitute a real contract of loan which requires the delivery of the object for its perfection. A
contract of loan also involves reciprocal obligation where the obligation or promise of each party is the
consideration for that of the other. Only when a party has performed his part of the contract can he
demand that the other also fulfills his own obligation and if the latter fails, default sets in.

PANTALEON VS AMERICAN EXPRESS INTERNATIONAL INC.

Facts: Petitioner and his family joined an escorted tour of Western Europe organized by Trafalgar Tours
of Europe. They went to Coster Diamond House in Amsterdam where Mrs. Pantaleon decided to buy a
2.5 karat diamond brilliant cut and a pendant and a chain which totaled to 13,826.00. To pay for these
purchases, Pantaleon presented his American Express credit card and passport. 10 minutes later,
Pantaleon was informed that his Amex Card had not yet been approved. As they were already worried
for inconveniencing the other tour members, Pantaleon asked to cancel the sale but manager asked him
to wait for few more minutes. After 15 mins., store manager informed that respondent is asking for
bank references. Pantaleon did.
Coster decided to release the items even without respondents approval of the purchase. It appeared
that the approval code was only sent to the Amsterdams office several minutes after petitioner had
already left Coster and 78 minutes from the time the purchases were electronically transmitted by
Coster to the respondents Amsterdam office.

They family went to US before returning to Manila. While in US, Pantaleon continued using his AmEX
card several times without hassle or delay but with two other incidents similar to the Amsterdam event.
He ended up borrowing money from a fried to avoid the delays.

After coming back to Manila, he sent a letter to AmEX demanding for an apology for the inconvenience
and humiliation that his family suffered. The respondent stated that the delay at Costers was due to the
fact that the purchases was out of the usual charge purchase pattern. Pantaleon filed an action for
damages at the RTC.

RTC: favored Pantaleon

CA: reversed the decision holding that the respondent did not breached its obligation

Issue: WON respondent committed breach in its obligations.

SC: The relationship with between a credit card provider and holder is generally, creditor-debtor with
the card company as creditor extending loans and credit to the card holder. Petitioner is asking the court
to again shift perspectives and see the credit card company as the debtor insofar as it has the obligation
to the customer to act promptly in its purchases on credit.

In order for the court to appreciate that respondent is in mora solvendi, it needs to recognize that there
is an obligation to act on petitioners purchases with timely dispatch. (2009 case)

AMEX filed an MR

SC: Granted the MR. A credit card is defined as any card, plate, coupon book or other credit devise
existing for the purpose of the obtaining money, goods, property, labor or services or anything of value
on credit.

Every credit card transaction involves three contracts: a. Sales between the credit card holder and
merchant or business establishment, B. Loan between credit card issuer and holder C. Promise to pay
between the credit card issuer and store.

When a company gives the holder the privilege of charging items at tn establishment, when does the
relationship begin? Our jurisdiction generally adhere too the Gray vs Amex ruling, that the cad
membership agreement is in itself a binding contract between the issuer and the card holder. It is
governed by the terms and conditions found in the agreement.

It is also a contract of adhesion since the terms are prepared solely by the credit card issuer with
cardholder merely affixing his signature to signify adhesion. Contracts of adhesion are binding.

However, there is a distinction between the contractual relationship between the issuer and the holder
upon the acceptance of the agreement and the contractual relationship which only arises after the
credit card issuer has approved the holders request to purchase. The latter involves the actual credit on
loan agreement involving the three contracts.
From the agreement perspective, the contractual relationship begins to exist only upon the meeting of
the offer and acceptance of the parties involve. When holders use their cards to pay, they merely offer
to enter into loan agreements with the company. Only after the latter approves the purchase requests
that the parties enter into binding loan contracts. Before the credit card issuer accepts this offer, no
obligation relating to the loan agreement exists between them.

PRODUCERS BANK OF THE PHIL VS CA

Facts: Franklin Vives was asked by his neighbor and friend Angeles Sanchez to help her friend and
townmate, Col. Doronilla in incorporating his business, Sterela. Sanchez asked Vives to deposit in a bank
a certain amount of money in the bank account of Sterela for purposes of its incorporation. She assured
private respondent that he could withdraw the money in a months time.

Relying on the representations of Sanchez and Doronilla, respondent issued a check amounting to
200,000 pesos in favor of Sterela. His wife, Sanchex and a certain Dumagpi went to the bank to open an
account for Sterela under an authorization letter from respondent.

Respondent learned that Sterela no longer holds office in the address given to him. Alarmed, they went
to the bank and they found out that only 90K was left in the Savings Account and that they could not
withdraw it because it had to answer for some postdated checks issued by Doronilla. Doronilla opened a
current account and obtained a loan of 175000 from the bank. To cover payment, Doronilla issued three
postdated checks, all of which are dishonored.

Dornilla issued a postdated check amounting to 212K in favor of the respondents but it was dishonored
twice.

Respondent instituted an action for recovery of sum of money in the RTC.

RTC: Court ordered Doronilla, Dumagpo and Producers Bank to pay vives jointly and severally

CA: Affirmed in toto the ruling of RTC.

SC: There is no merit in the petition. No error was committed by the CA when it ruled that the
transaction was a COMMODATUM and not a MUTUUM. Commodatum is essentially gratuitous. Simple
loan may be gratuitous or with interest. In commodatum, bailor retains ownership while in simple loan,
ownership passes to the borrower.

If the subject is a consumable thing, such as money, contract would be a muttum. However, there are
instances where a commodatum may have money for its object. If consumable goods are loaned only
for purposes of exhibition, and the intent of the parties is to have the very same goods returned at the
end, the loan is a commodatum not a mutuum.

The intention of the parties shall be accorded primordial consideration in determining the actual
character of a contract. The interest of 12K does not covert the transaction to muttum because because
such was not the intent. It only corresponds to the fruits of lending the money. Art. 1935, the bailee of
the commodatum acquires the use of the thing but not its fruits.
PAJUYO VS CA

Facts: Pajuyo paid 400 pesos to Perez for the rights over a 250 sq.m. lot where the formed constructed a
house made of light materials.

Pajuyo executed an agreement with Guevarra allowing him to live in the house for free provided that
Guevarra would maintain cleanliness and orderliness. Guevarra promised that he would vacate the
premises voluntarily upon Pajuyos demand.

9 years later, Pajuyo demanded Guevarra to vacate as he needs the house. The latter refused.

Pajuyo filed an ejectment case in the MTC

Guevarra claimed that Pajuyo did not have the valid title or right of possession over the lot since the lot
is within the 150 hectares set aside by Proclamation No 137 for socialized housing.

MTC: favored Pajuyo ordered Guevarra to vacate the house.

RTC: affirmed MTC decision in toto

CA reversed the decision of the court a quo.

SC: We do not subscribe to the CA theory that the Kasunduan is one of commodatum.

In a contract of commodatum, one party delivers to another something not consumable so the latter
may use it for a certain time and return it. An essential feature of commodatum is that it is gratuitous.
Another is that the use of the thing is for a certain period. Thus, the bailor cannot demand the return of
the thing loaned after expiration of the periodIf the use of the thing is merely tolerated by the bailor, he
can demand the return of it at will in which cases, the contractual relation is called a PRECARIUM. A
precarium is a kind of commodatum.

The kasunduan reveals that the accommodation accorded by Pajuyo was not essentially gratuitous. It
obligated him to maintain the property in good condition. The imposition of this obligation makes it
different from a commodatum.

Guevarra alleged that Pajuyo is a squatter and cannot enter into a contract involving a land they illegally
occupy. He cannot impugn the kasunduan after he had benefitted from it.

RP VS BAGTAS

Facts: Bagtas borrowed from RP through the Bureau of Animal Industry, three bulls for a period of 1 year
for breeding purposes subject to a government charge of breeding fee of 10% of the book value of the
bulls. Upon expiration, borrower sought renewal for another year. However, the Secretary of Agriculture
and Natural Resources only approved the renewal for 1 bull and asked to return the other two.

He expressed his desire to buy the three bulls with a deduction of yearly depreciation. The Director of
Animal Industry advised him that the book value of the three bulls could not be reduced and they must
either be returned or their book value paid not later than October 31, 1950. Bagtas failed to oay or
return them.
RP commenced an action against him for the return of the three bulls or payment of their book value in
the CFI. Bagtas reasoned that due to the bad peace and order situation in Cagayan Valley and pending
his appeal to the Secretary of Agriculture and President of Philippines, he could not return the bulls.

CFI: Sentenced him to pay the book value plus breeding fees with interests at a legal rate

A special sheriff was appointed to execute the writ. Jose Bagtas died so his wife, Felicidad Bagtas was
notified. She filed a motion alleging that the two bulls were already returned to the Bureau of Animal
Industry and the third bull died out of gunshot would inflicted during a Huk Raid amd such death is a
force majeure and she is relieved from the duty of returning the bull or paying its value.

SC: The contention is without merit. The loan by appellee of the three bulls was for breeding purposes
was for a period of 1 year. Later renewed for another year as regards with one bull. Appellant argues
that the contract is a commodatum. If so, he would still be liable because Art. 1942 provides that a
bailee in contract of commodatum is liable for the loss of the things even if it should be through a
fortuitous event if: he keeps it longer than the period stipulated.

The appellant kept and used the bulls for more than the period stipulated until when during a Huk raid,
it was killed by stray bullets. There was no stipulation at the time it was lent that in cases of fortuitous
event, the late appellant will be exempt.

QUINTOS VS ANSALDO

Facts: Defendant was a tenant of the plaintiff and occupied the latters house, upon novation of the
contrqact of lease, the plaintiff gratuitously granted her the use of the furniture subject to the condition
that defendant will return them upon the latters demand. Plaintiff sold the property to Maria Lopez and
Rosario Lopez, all of them notified defendant of the conveyance and asked her to vacate the premises.
The plaintiff also required defendant to return all the furnitures transferred to him in the house where
they were found.

Defendant did not return the gas heaters and electric lamps because she would use them until when the
lease was due to expire. Plaintiff refused to get it because of the fact that defendant declined to make a
delivery. Before vacating the house, defendant deposited the furnitures to the Sheriff and they are now
on deposit in a warehouse under the custody of the Sheriff.

SC: The contract entered into by the parties is a commodatum because under it, the plaintiff
gratuitously granted the use of the furniture to the defendant reserving for herself the ownership
thereof. The obligation voluntarily assumed by the defendant to return the furniture upon plaintiffs
demand means that he should return all of them at the latters residence. The defendant did not comply
with this obligation when he merely placed them at the disposal of the plaintiff and retained for his
benefit the three gas heaters and 4 electric lamps.

The defendant, as bailee, was not entitled to place the furniture on deposit nor was the plaintiff under a
duty to accept the offer to return because defendant wanted to retain the heaters and lamps.

Costs shall be borne by defendant as the one who breached the contract of commodatum
CASTRO VS PALENZUELA

Facts: Respondents Palenzuela et al owned several fishponds in Bulacan totaling 72 hectares. Through
their attorney-in-fact, they leased out these fishponds to SPS Castro. The lease was for 5 years.

When the period expired, petitioners did not vacate and continued to occupy and operate fishponds 41
days beyond the contract. Respondents sent a letter declaring petitioners as trespassers and demanding
the settlement of their obligations in the amount of 378,451.00.

Respondents instituted Civil Case for the collection of a sum of money with damages in the RTC of
Quezon City claiming that peititoners violated the lease agreement for non payment of rents, subletting
the fish ponds and refusal to vacate premises upon expiration.

Petitioner was held in default for not appearing.

RTC: Ruled that defendant pays damages to petitioners

CA: Sustained in toto the decision of the RTC

SC: On the matter of interest, back rentals in this case are equivalent to a loan or forbearance of money.

CONSOLIDATED BANK AND TRUST CORP VS CA

Facts: Solidbank is a domestic corporation organized and existing under Philippine laws. Private
respondent Diaz and Company is a professional partnership engaged in the practice of accounting.

Diaz opened a savings account with Solidbank. On August 14,1991, through his cashier, he filled up a
cash deposit slip for 990.00 and a savings deposit slip for 50.00. The messenger deposited the money
with Solidbank.

The teller acknowledged the receipt by returning the duplicate copies of the two deposit slips. Since the
transaction took time, the messenger left it with solidbank as he went to Allied bank to make another
deposit. When he returned, the teller informed him that somebody got the passbook.

The CEO called up Solidbank to stop any transaction using the same passbook until Diz could open a new
account. It was on the same day that Diaz learned about ab unauthorized withdrawal the day before of
300000. The withdrawal slip bore the signature of the authorized signatories but theydeny it. A certain
Noel Tamayo received the amount.

Diaz through his counsel demanded from Solidbank the return of its money. Diaz filed a complaint for
recovery of a sum of money against Solidbank with the RTC.

RTC: dismissed the complaint based on the rules on savings account written on the passbook which
states that possession of the book raises the presumption of ownership and that the burden of proof is
now with Diaz to prove that the signatures on the withdrawal slips were forged.

CA reversed the RTC decision. It ruled that the banks negligence was the proximate cause of the
unauthorized withdrawal. Raised the doctrine of last clear chance.
SC: Petition is partly meritorious.

Solidbank was liable for breach of contract due to negligence. The contract between the bank and its
depositors are governed by the Civil Code on simple loan. There is a debtor-creditor relationship
between the two. The bank is the debtor and the depositor is the creditor. The depositor lends money
to the bank and bank agrees to pay depositor on demand. The savings deposit agreement is the contract
that determines the rights and obligations.

The law imposes on banks high standards in view of the fiduciary nature of banking. RA 8791 requires
high standards of integrity and performance. Banks are under obligation to treat the accounts of its
depositors with meticulous care.

However, this fiduciary nature of a bank-depositor relationship does not convert the contract from a
simple loan to a trust agreement because banks do not accept deposits to enrich its depositors but to
earn money. Failure by the bank to pay its depositor is failure to pay a simple loan, not a breach of trust.

CITIBANK VS SABENIANO

Facts: FNCB Finance was an affiliate company of Citibank, handling money market placements for its
clients. Respondent Modesta Sabeniano is a client of both Citibank and FNCB Finance.

Respondents filed a complaint before the RTC. They claimed to have substantial deposits and money
market placements with the petitioners, and Ayala Investment and Development Corp. The proceeds of
which were supposedly deposited automatically and directly to respondents accounts with petitioner
Citibank. Respondent alleged that petitioner refused to return her deposits and proceeds despite
repeating demands.

Petitioners admitted that respondents had deposits and money placements with them including dollar
accounts in Citibank branch in Geneva. Petitioners further alleged that the respondent later obtained
several loans from Citibank where she executed Promissory Notes and secured a Declaration of Pledge
of her dollar accounts in Geneva and deeds of assignment of her money market placements with
petitioner FNCB Finance.

Ruling: Petitioner Citibank was the creditor of respondent for her outstanding loans. Respondent wa
also the creditor of respondent as far as her deposit account was concerned since bank deposits
whether fixed, savings, current should be considered as a simple loan or mutuum by the depositor to
the banking institution. Both debts consist in sums of money. By June 1979, all of respondent's PNs
in the second set had matured and became demandable, while respondent's savings account was
demandable anytime. Neither was there any retention or controversy over the PNs and the deposit
account commenced by a third person and communicated in due time to the debtor concerned.
Compensation takes place by operation of law,123 therefore, even in the absence of an expressed
authority from respondent, petitioner Citibank had the right to effect, on 25 June 1979, the partial
compensation or off-set of respondent's outstanding loans with her deposit account, amounting to
31,079.14.

Republic vs Sandiganbayan

Facts: