ESTERA, EUNICE JED MANALO

OBLICON-UBLC

I_ CASE DIGEST.
NUNELON R. MARQUEZ, petitioner VS ELISAN CREDIT CORPORATION,
respondent.
GR NO. 194642
APRIL 06, 2015

FACTS:

Petitioner, Marquez obtained a first loan from the respondent corporation, Elisan Credit
Corporation amounting to Php. 53,000.00 and payable in 180 days. Marquez signed a
promissory note stating that it is payable in weekly installments and subjected to 26% annual
interest and that in case of non-payment the former has to pay 10% monthly penalty based on
the unpaid amount and another 25% for attorney’s fees and other judicial and extrajudicial
expenses and then Marquez issued a chattel mortgage over a motor vehicle. Thereafter,
Marquez obtained a second loan amounting to Php. 55,000.00 pesos on June 15, 1992 and with
a promissory note with the same conditions as the first loan.

Upon maturity of the payment, petitioner Marquez was only able to pay Php. 29,960.00 and
upon the acceding to the request of Marquez, respondent agreed for Marquez to pay in daily
installments thus 21 months after the 2nd loan’s maturity, Marquez has already paid Php. 56,
440.00 and then respondent filed a complaint for judicial foreclosure of the chattel mortgage for
petitioner’s failure to pay the 2nd loan despite the demand of the latter and failure to accede the
terms stated on the promissory note and a writ of replevin.

The MTC ruled in favour of the petitioner, stating that the 2 nd loan has been extinguished and
asked for the motor vehicle to be returned to Marquez. The RTC affirmed the ruling of the
MTC but after acting on the motion for reconsideration filed by responded and reversed its
decision. Later on, CA also affirmed the decision of the RTC and denied petitioner’s motion for
reconsideration. Which now leads to Marquez seeking to reverse CA’s decision and that he has
fully paid his obligation.

Issue:
 Whether or not the respondent acted lawfully when it credited the daily payments against the
interest instead of the principal?

Held:  Yes. The Supreme Court ruled that the fact that the official receipts did not indicate
whether the payments were made for the principal or the interest does not prove that the creditor
waived the interest and that there is no presumption of waiver of interest without any evidence
showing that the creditor accepted the daily instruments as payments for the principal. And
even if it was not indicated in the receipts whether the payments were applied to the principal or
the interest should not be taken against the respondent corporation. As stated under Article 1253
of the Civil Code, if the debt produces interest, payment of the principal will not be deemed to
have been made until the interests have been paid. Therefore the creditor in this case has a right
to credit the payments to the interest first.
Yulim International Company LTD., JAMES YU, JONATHAN YU, AND ALMERICK
TIENG LIM vs International Exchange Bank

GR No. 203133, February 18, 2015

Facts:
Respondent Bank granted the petitioner a credit facility in the form of an Omnibus Loan Line
for Php. 5,000,000.00 and so a chattel mortgaged over Yulim’s inventories in its merchandise
warehouse, insisting it to be worth around Php. 500,000.00 was also secured as a guarantee by
credit of agreement. Due to the latter defaulting from the consolidated promissory note and the
unsuccessful demand of the payment, the former filed a complaint for Sum of Money with
Replevin. The Court granted the application for replevin but the seized items amounts only to
Php. 140,000.00. After the trial on merits RTC ruled that only Yulim International Company
Ltd. should be held liable and pay respondent Bank Php 4,246,310.00 with interest at 16.50%
per annum. Petitioner filed for motion reconsideration and respondent back filed for a partial
reconsideration but was both denied. Yulim then filed a partial appeal to CA, contending that
the loan has been extinguished due to the execution of a deed of assignment of their
condominium. Respondent bank as well questions the solidary liability of petitioners James,
Jonathan and Almerick.

CA denied the petitioners and ruled that they failed to prove that they have already paid
Yulim’s consolidated loan obligations amounting Php. 4,246,310.00 and that the so called
assignment of the condominium was nothing but a mere temporary arrangement to provide
securities to the loan, while Respondent bank’s appeal was partially granted because regardless
of whether the loan benefited the family of the individual petitioner, they signed as sureties and
respondent bank sought to enforce the obligation to them as sureties of Yulim.

Issue: Whether or not petitioners are liable to pay respondent bank.

Held: The Supreme Court denied the petition of the petitioners stating that it is bereft of merit
and that under the Continuing Surety Agreement; it clearly stated that the petitioners agreed to
be “jointly and severally with the Principal Yulim, hereby unconditionally and irrevocably
guarantee full and complete payment when due, whether at stated maturity, acceleration or
otherwise of any and all credit accommodations that have been granted to Yulim” by the
respondent Bank. And that under Article 2047 (2) of the Civil Code these words describes a
contract of suretyship, therefore the petitioners are liable to pay the respondent bank
Spouses Roberto and Adelaida Pen, vs. Spouses Santos and Linda Julian
G.R. No. 160408, January 11, 2016

Facts: The respondent spouses Julian obtained a loan amounting to Php. 60,000.00 from the
petitioner Adelaida Pen and then there’s an extended loans in the amount of fifty thousand
pesos and ten thousand pesos. The respondents in favor of Adelaida executed two promissory
notes. The first is dated from April 9, 1986 and payable on June 15, 1986. The second one is
dated on May 22, 1986 payable on June 15, 1986. Both loans were charged interest at 6% per
month and as security sps. Julian executed a Real Estate Mortgage over their property. When
the loans became due and respondents failed to pay upon several demands of the petitioner, the
latter opt for foreclosure of the property but were prevailed by the former due to the cost of
litigation and that it would cause her embarrassment as the proceedings will be announced in
public places at the City Hall so respondent Linda offered their mortgaged property as payment
in kind and was agreed by Adelaida and required the respondent to sign an absolute deed of
sale. Which was said to not have contain any consideration, undated, unfilled and un-notarized.
On December 1992 Linda offered to pay Php.150,000.00 but was refused by the petitioner and
demanded Php.250,000.00, which wasn’t met by the respondent and then she requested to see
the land title she conveyed to the petitioner but was denied. When the respondent went to the
Registry of Deeds of Quezon City, she found out that the title to the mortgaged property had
already been registered in the name of the petitioner.

The respondent filed a complaint against the petitioner after finding out the bad faith and
maliciously typed, unilaterally filled up and fraudulent transfer of the title to the petitioner. Both
the RTC and CA ruled that the deed of sale to the petitioner is void.

ISSUE: Whether or not the Court of Appeals erred in their decision.

Held:

Yes, the CA ruled correctly in their decision since under Article 2088 of the New Civil Code,
the Deed of Sale is void and inexistent. Because according to the said article, it prohibits the
creditor from appropriating the things given by way of pledge or mortgage, or from disposing
them and any stipulation contrary to it is null and void. In this case, Linda’s deed of sale had
been executed simultaneously with the real estate mortgage that has been conditioned on the
non-payment of the debt by the respondent and it is quite obvious that the lack of consideration
from the deed of sale, one of the requisites in a contract of sale did not transpire and that such
transaction constitutes pactum commissorium and not dacion en pago as claimed by the
petitioner since the alienation of the property did not extinguish the debt of the respondents.
MOBIL OIL PHILIPPINES INC VS CA AND FERNANDO A. PEDROSA
G.R. NO. L-58122, DECEMBER 29,1989

Facts: The respondent Pedrosa filed an action for damages against the petitioner Mobil Oil
Philippines Inc. for the allegations of deliberately delaying the delivery of gasoline despite the
former’s down payment on February 14,1974 to be delivered the next day. Pedrosa is a dealer
of the latter’s petroleum products and accessories under the name of Anne Marie Mobil Service
Station. The respondent made a pre-paid order of 8,000-premium gasoline and 2,000 liters of
regular gasoline and paid a check of Php. 4,610.00, which was received and accepted by
petitioner’s clerk. The reason as to why the order was held back until 19 th of February is
because there was a price increase the day before and had prioritize recalling the invoices for
the re-pricing. The respondent refused to pay the price differential of Php. 2,880.00 but despite
this petitioner delivered on March 6 and contended that the increased rates should apply thus
leaving the respondent to pay the remaining outstanding obligation. Pedrosa disagrees by the
alleging that MOBIL incurred delay deliberately and breached the contract despite having the
agreed due date on February 15. Both the RTC and the CA ruled in favor of the respondent,
ordering the petitioner to pay the damages incurred by the respondent thus the petitioner filed a
case contending that there is no breach of contract or deliberate delay since there was no
perfected contract of sale between it and Pedrosa therefore he cannot be made liable for any
damage.

Issue: Whether or not there is a breach of contract and whether delay is intentional.

Held: The Court held that there is a breach of contract. As stated under paragraph 2 of the retail
agreement between the petitioner and respondent states: “Prices, Terms, Deliveries Seller
agrees to sell and Buyer agrees to purchase at Seller’s current wholesale/dealer’s price and/or
current dealer’s discounts prevailing on date and at point of delivery an in such quantities as the
Buyer may from time to time require and the Seller may approve at Seller’s option. All prices
are payable in cash at the time the order is placed, except to the extent credit is extended.” and
after further scrutiny of the court, they found out the words “February 15, 1974” and “rush” on
the prepaid order the was received and accepted by MOBIL’s credit man, Floro Marcella. By
actually delivering the product on March 6, the petitioner incurred breach of contract and delay.

Whether it is deliberate or not the Court ruled that there is intentional delay on the part of the
petitioner after giving out various excuses by the petitioner such as the coupon system for
rationing gasoline for the consumer caused the delay or that they don’t do deliveries over the
weekends or there was a backlog of deliveries but an invoice to Dioscoro Francos’ disproves
the excuses given out by the petitioner. The petitioner unreasonably incurred delayed due to
being enticed for additional profits therefore the Court dismissed the petition and gave a stern
warning to MOBIL.
PNB vs Lilibeth Chan

G.R. No. 206037. March 13, 2017

Facts:
Respondent, Lilibeth Chan owns a three-storey commercial building located in Manila and was
leasing it to PNB for a period of five years from December 15,1999 to December 14,2004 with
a monthly rental of Php. 76,160.00. After its expiration, PNB continued to occupy it with a
monthly rental of Php. 116,788.44 until they vacated the property on 2006. Initially, Chan
obtained a loan of Php. 1,500,000.00 from the petitioner and was secured by a Real Estate
Mortgage over the leased property. And then Chan executed a Deed of Assignment over the
rental payments in favor of the petitioner thus the Chan’s loan increased to 7.5 million pesos
resulting for PNB to execute an amendment to the real estate mortgage by substitution of
collateral. In this case the mortgage over the leased property was released and a different parcel
of land was substituted as the mortgage.

Later on, Chan filed a complaint for Unlawful Detainer before the MTC against the petitioner,
stating that the latter failed to pay its monthly rentals from October 2004 to January 2005. Then
the petitioner Bank contends that the lease payment from October 2004 to January 15, 2005
were used as payments for Chan’s outstanding loan, which became due and demandable on
October 2004. As for the remaining monthly rentals from January 16, 2005 until February 2006,
PNB contends that they received a demand letter from Lamberto Chua, claiming to be the new
owner of the leased property and requested to have the payments be paid directly to him and
that is the reason why PNB deposited the remaining rentals in a separate non-drawing account.

ISSUE: Whether or not there was a proper consignment?

HELD: No, there wasn’t a proper consignment done by the petitioner.

The Court stated that for consignation to be valid, the debtor must comply with the following
requirements under the law: a) there was a debt due; b) valid prior tender of payment, unless the
consignation was made because of some legal cause provided in Article 1256; c) previous
notice of the consignation has been given to the persons interested in the performance of the
obligation; d) the amount or thing due was placed at the disposal of the court; and, e) after the
consignation had been made and the persons interested were notified thereof.

In this case, (i)PNB had the obligation to pay Chan the respondent the monthly rental
amounting to Php. 1,348,643.92 from January 16, 2005 to March 23, 2006. (ii)Petitioner had
the option to pay the monthly rentals to respondent or to apply the same as payment for Chan’s
loan but PNB didn’t do it, (iii) PNB instead opened a non-drawing savings account to deposit
under the claims of Chua, however this is not the consignation contemplated under the law
because it does not place the same at the disposal of the court. Consignation is judicial in nature
and it is not allowed in venues other than the courts.

And lastly, when (iv) PNB consigned the total amount of lease payment to MeTC when PNB’s
obligation has already become due and demandable even it cosigned with the MeTC court.
Far East Bank Trust Company vs Diaz Realty Inc.

G.R. No. 138588. August 23,2001

Facts: In August 1973, Diaz and Co. contracted a loan from PaBC in the amount of Php.
720,000.00 with an interest of 12% per annum and was later increased from 12% to 20%. The
loan was secured with a real estate mortgage over two parcels of land in Davao, owned by the
respondent. Then in 1981, Allied Co. rented an office space in the mortgaged property and that
all of its rental payments shall be directly paid to PaBC. However around 1986, the petitioner
Bank purchased the credit of the respondent but it was only two years after when Diaz was
informed about it and his outstanding balance of Php. 1,447,142.03 and then later on Diaz
furnished a check in the amount of Php. 1,450,000 with a notation for the full settlement of the
loan but it wasn’t accepted by the petitioner. Then respondent asked to reduce the interest from
20% to 12% per annum but there was not reply from the petitioner. The check was later on
accepted by the petitioner but contends that it was only a deposit and it refuses to release the
mortgaged property, which lead to respondent to file a case to compel the bank to acknowledge
the tender of payment and release the mortgage. Both the RTC and CA ruled in favor of the
respondent and that upon its findings, it showed that there was a valid tender of payment.

Issue: Whether or not there is a valid tender of payment.

Held: Yes, there is a valid tender of payment even though under the law check is not
considered as a form of a valid legal tender but the findings showed that the petitioner bank
accepted the check of Diaz and was proven to be fully funded and honored by the drawee bank
and that these acts of the respondent shows his intent, ability and capability to fully settle and
extinguish its obligation to the petitioner.

And despite FeBTC’s defense that tender of payment extinguishes the obligation only after
proper consignation, however Diaz did not do so however the Court held that it is incumbent
upon the former to refuse or accept is as payment. In this case the petitioner, as the creditor
must have refused, without just cause for a proper consignation to happen but by accepting the
tendered check and converting it to money, there arises a presumption that FeBTC accepted it
as a form of payment.
Wolgrang Aurbach, John Griffin, David P. Whittingham and Charles Chamsay, vs.
Sanitary Wares Manufacturing Corporation

G.R. No.75875

Facts: Saniwares Corp. is a domestic corporation that manufactures and markets sanitary wares.
They entered into an agreement with ASI a foreign corporation and agreed to participate in the
ownership of an enterprise the focuses on manufacturing and business operations in the
Philippines, which would then be sold abroad under the respondent corporation. Then a
disagreement between the Filipino investors and foreign investors, the former wants to expand
but the latter doesn’t want to because they have other venture agreements. Due to this when a
meeting was said to be adjourned, the ASI group, Salazar and other stockholders who holds
around 53% of stocks resumed the meeting at the elevator lobby of the American Standard
Building and there they held an election which then led to the current consolidated case and if
the duly elected directors of Saniwares during its annual stockholder’s meeting held on March
1983 is a valid one. In order to confirm one of the issues discussed on this case it must first be
established their actual intention when they established Saniwares. As the ASI and the
petitioner contends that the actual intention should be strictly viewed under the agreement dated
on August 15,1962.

Issue: Whether or not there is a joint venture agreement?

Held: Yes. There is a joint venture agreement.

As a general rule, in an action at law, where there is evidence tending to prove that the parties
joined their efforts in furtherance of an enterprise for their joint profit, the question whether
they intended by their agreement to create a joint adventure, or to assume some other relation is
a question of fact for the jury. In this case after the Court’s deep scrutiny towards the provisions
of the Agreement and the testimonial evidence provided by Lagdameo and Young Group
showed that the intention of the parties is to establish a joint venture and not a corporation and
the fact that in its communications, ASI refers to the enterprise as a joint venture and with the
testimony of Baldwin Young, under Section 16 (c) of the Agreement it clearly stated that
“Nothing herein contained shall be construed to constitute any of the parties hereto partners or
joint ventures in respect of any transaction hereunder”
Naga Telephone Co., Inc. (Natelco) and Luciano M. Maggay
vs
CA and Camarines Sur II Electric Cooperative, Inc. (Casureco II)

G.R. No.

Facts: Natelco is a telephone company that renders local as well as long distance telephone
service in Naga City while respondent CASURECO II is a private corporation that operates
electric power service in Naga. They entered into a contract for the use of Natelco’s telephone
service and the electric light posts of CASURECO II. Then the former agreed to install, free of
charge 10 telephone connections for the private usage of the latter. Ten years later respondent
filed a reformation of the contract with damages against the petitioner at the RTC, alleging that
it is too one-sided in favor of Natelco and it is not in adherence with the guidelines of NEA and
that over the past 11 yeas the cables hanged on their posts has become heavier due to the
increase in their subscribers and that the contract must be reformed to abolish the inequities and
that since 1981, Natelco has been using 319 posts outside Naga City without contract and only
at the rate of 10 pesos per post. They also alleged that petitioner should pay them
Php.267,960.00 from 1981 June 2,1989 and that despite their constant demand they refused to
pay.

The RTC ruled in favor of the respondent and ordered that the contract between the two should
be reformed, after finding out that the usage of the posts outside of Naga City wasn’t stipulated
in the contract and ordered petitioner to pay the respondent for the compensation and usage of
their posts within and outside of Naga City and that respondent should pay the monthly bills for
the use of the telephones. The petitioner then filed an appeal to CA, CA affirmed the decision of
trial court but based on the applicability of Article 1267 of the New Civil Code and that the
contract between the two is subject to a potestative condition thus rendering the stipulated
condition void. Which now leads for the petitioner to filed a case on the SC, asserting that
Article 1267 of the NCC is not applicable because the contract does not involve the rendition of
service or a personal prestation nor is it for future service and since it wasn’t originally raised
by the respondent.

Issue: Whether or not Article 1267 of the New Civil Code is applicable?

Held: The Court ruled yes. Article 1267 is applicable and that CA did not erred in appling and
ruling under the said article because the rationale behind the term “service” should be
understood to be referring to the performance of the obligation. The prestation in this case is
apparent since the respondent allows the petitioner of the usage of their posts in Naga City and
it is not a requirement that the contract be for the future service with future unusual change.
II. Answer the following

1.Exception to the rule that in application of payments, there must be only one debtor and only
one creditor.

One of the requisite mentioned under Article 1252 is that there must be only one debtor and
creditor but it does not go against the possibility of extending the rules on application of
payment to solidary obligations because the solidary debtor who paid may have obligations in
favor of the creditor to whom payment is made nor does having only one creditor against the
first requisite of the said article. In case a person is indebted at the same time in separate and
demandable sums to a partnership and to the managing partner of partnership. As stated under
paragraph 2 of Article 1792, “The provisions of this article are understood to be without
prejudice to the right granted to the debtor by Article 1252 but only if the personal credit of the
partner should be more onerous to him”

2. Kinds of Payment by Cession

Payment by cession may be either contractual or judicial. The cession referred in Article 1255
of New Civil Code is contractual while the cession, which is regulated by the insolvency law,
and which may be voluntary or involuntary is judicial.

III. Explain the reason for consignation.

Consignation is necessary when the creditor refuses to accept the payment of the debtor without
just cause and by way of consignation the interest of the debtor is protected and constitutes that
the debtor is acting in good faith. Consignation is a special form of payment and it must
conform not only with all of the special requisites of a valid payment. Therefore it is important
to distinguish the general requisites and special requisites of a valid consignation. Consignation
is judicial in character and according to Article 1258, after a valid tender of payment the debtor
shall be released from the responsibility by the consignation of the thing due and that after the
debtor may petition to the judge to order the cancellation of the obligation.

It clearly indicates that consignation is important to supplement the tender of payment if

discharge of the obligation is to be obtained. Since consignation is considered as the principal
act which produces the effects of payment of the obligation and by way of Consignation the
debtor may extinguish the obligation if the amount deposited is of equal amount to the debt and
it can help in avoiding penalties.