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G.R. No.

118375 October 3, perfected only upon the delivery of the Appeals, 193 SCRA 198 [1991] citing validity in the absence of a full, clear and
2003 object of the contract. Raneses vs. IAC, 187 SCRA 397 [1990] convincing evidence to overcome such
and Remalante vs. Tibe, 158 SCRA 138 presumption (Favor vs. Court of Appeals,
CELESTINA T. NAGUIAT, petitioner, It is an accepted promise to deliver [1988]). 194 SCRA 308 [1991] citing Antonio vs.
vs. something by way of simple loan. Estrella, 156 SCRA 68 [1987]). Merely
COURT OF APPEALS and AURORA 3. ID.; ID.; RESIDENCE CERTIFICATE; A preponderant evidence may not destroy
QUEAÑO, respondents. PUBLIC DOCUMENT. — A residence such presumption because strong
G.R. No. 96770. March 30, certificate, being a receipt prescribed by evidence is required to prove a defect of
1993. the government to be issued upon a public instrument.
The mere issuance of the checks did not
receipt of money for public purposes
result in the perfection of the contract of HERMENEGILDO AGDEPPA (Moran, Comments on the Rules of Court, G.R. No. 85909 February 9, 1993
loan. For the Civil Code provides that the (substituted by his heirs Vol. 6, 1980 ed., p. 101), is a public
delivery of bills of exchange and MAGDALENA S. AGDEPPA, document. TERESITA C. GERALES, CESAR DELA
mercantile documents such as checks EMMANUEL S. AGDEPPA, NELIA A.
shall produce the effect of payment only FUENTE, MARCELA GOLDING, MARIA
when they have been cashed. It is only EVANGELINE A. PIMENTEL, EDWIN S. CONTENTS OF RESIDENCE CERTIFICATE, TRIGERO, petitioners,
after the checks have produced the AGDEPPA EDNA A. AGDEPPA EDNA A. HOW PROVED. — As such, presentation vs.
effect of payment that the contract of ABELLA, JOCELYN A. VICUNA, MA. of the same document would suffice to HON. COURT OF APPEALS, ENRIQUE E.
loan may be deemed perfected. Art. THERESA S. AGDEPPA and VIVIANNE prove its contents. As part of the public PIMENTEL and LETICIA FIDELDIA,
1934 of the Civil Code provides: S. AGDEPPA, petitioners, vs. record, it may also be proved by the respondents.
EMILIANO IBE (substituted by her presentation of a copy attested by the
"An accepted promise to deliver husband FRUCTUOSO IBE and officer having legal custody of the
A notarized instrument is admissible in
something by way of commodatum or children LOLITA and CESAR IBE), duplicates (Sec. 25, Rule 132, Rules of evidence without further proof of its due
simple loan is binding upon the parties, BENJAMIN IBE and FERDINAND IBE, Court) if, as in this case, a certified copy execution and is conclusive as to the
but the commodatum or simple loan respondents. of the residence certificate itself cannot truthfulness of its contents, although not
itself shall not be perfected until the be presented. Exhibit F, upon which the absolute but rebuttable by clear and convincing
delivery of the object of the contract." Cabio and Rabanes Law Offices for trial court relied in nullifying the evidence to the contrary (Baranda v. Baranda,
petitioners. questioned documents, is, as correctly 150 SCRA 59 [1987], citing Antillon v. Barcelon,
A loan contract is a real contract, not pointed out by the Court of Appeals, 37 Phil. 148 [1917] and Mendezona v. Phil
Public Attorney's Office for private
consensual, and, as such, is perfected merely a secondary evidence. It is even Sugar Estate Development Corporation. 41
only upon the delivery of the object of respondents. based on the lost pages of an abstract of Phil. 475 [1921]). A public document executed
the contract the residence certificates issued by the and attested through the intervention of the
2. ID.; EVIDENCE; CREDIBILITY; FINDINGS municipal treasurer of Sinait. The notary public is evidence of the facts in clear,
OF FACT OF THE COURT OF APPEALS, evidentiary value of Exh. F is therefore
G.R. No. 133632 : February 15, 2002 unequivocal manner therein expressed. It has
GENERALLY CONCLUSIVE; EXCEPTIONS. — suspect. in its favor the presumption of regularity. To
The findings of fact of the Court of
BPI INVESTMENT CORPORATION,, contradict all these, there must be evidence
Appeals are conclusive upon this Court 5. ID.; ID.; NOTARIZED DEEDS OF
Petitioner, v. HON. COURT OF that is clear and convincing more than merely
(Ronquillo vs. Court of Appeals, 195 SCRA CONVEYANCES, PRESUMED VALID;
APPEALS and ALS MANAGEMENT & preponderant (Collantes v. Capuno, 123 SCRA
433 [1991]). However, there are PREPONDERANT EVIDENCE, NOT
exceptions to this rule such as when SUFFICIENT TO OVERCOME
Respondents. there is a conflict between the factual PRESUMPTION. — The questioned deeds
findings of the Court of Appeals and the G.R. No. L-24968 April 27, 1972
of conveyances, being public documents
A loan contract is not a consensual trial court. The resolution of such conflict as they are duly notarized (Moran,
contract but a real contract. It is requires the review of the same factual Comments on the Rules of Court, supra), SAURA IMPORT and EXPORT CO., INC.,
findings by this Court (Co vs. Court of therefore retain the presumption of plaintiff-appellee,
vs. THE HONORABLE COURT OF APPEALS properties being offered as a loan security. The It has been held that the elements of
DEVELOPMENT BANK OF THE and THE PHILIPPINE BANK OF recent rush of events where collaterals for usury are (1) a loan, express or implied;
PHILIPPINES, defendant-appellant. COMMERCE, respondents bank loans turn out to be non-existent or
(2) an understanding between the
grossly over-valued underscore the importance
of this responsibility. The mere reliance by parties that the money lent shall or may
The trial court rendered judgment for the A contract of loan being a consensual contract,
plaintiff, ruling that there was a perfected the herein contract of loan was perfected at the bank officials and employees on their be returned; that for such loan a greater
contract between the parties and that the same time the contract of mortgage was customer's representation regarding the loan rate or interest that is allowed by law
defendant was guilty of breach thereof. The executed. The promissory note executed on collateral being offered as loan security is a shall be paid, or agreed to be paid, as
defendant pleaded below, and reiterates in this December 12, 1966 is only an evidence of patent non-performance of this responsibility. If the case may be; and (4) a corrupt
appeal: (1) that the plaintiff's cause of action indebtedness and does not indicate lack of ever bank officials and employees totally reIy
intent to take more than the legal rate
had prescribed, or that its claim had been consideration of the mortgage at the time of its on the representation of their customers as to
the valuation of the loan collateral, the bank for the use of money loaned. Unless
waived or abandoned; (2) that there was no execution.
perfected contract; and (3) that assuming there shall bear the risk in case the collateral turn out these four things concur in every
was, the plaintiff itself did not comply with the the provision 2 of the contract of mortgage to be over-valued. transaction, it is safe to affirm that no
terms thereof. which prohibits the sale, disposition of, case of usury can be declared.
mortgage and encumbrance of the mortgaged G.R. No. L-48349 December 29, 1986
We hold that there was indeed a perfected properties, without the written consent of the CHINA BANKING CORPORATION, in
consensual contract, as recognized in Article mortgagee, as well as the additional proviso FRANCISCO HERRERA, plaintiff- substitution of Filipinas Compania de
1934 of the Civil Code, which provides: that if in spite of said stipulation, the mortgaged Seguros, Plaintiff-Appellee, v. FAUSTINO
property is sold, the vendee shall assume the
vs. LICHAUCO ET AL., Defendants-
ART. 1954. An accepted promise to deliver mortgage in the terms and conditions under
PETROPHIL Appellants.
something, by way of commodatum or simple which it is constituted. These provisions are
loan is binding upon the parties, but the expressly made part and parcel of the Deed of CORPORATION, defendant-appellee.
Sale with Assumption of Mortgage. Jose a. Espiritu for Appellants.
commodatum or simple loan itself shall not be
perferted until the delivery of the object of the The difference between a discount and
contract. G.R. No. L-45710 October 3, 1985 Feria & La O and P. J. Sevilla for Appellee.
a loan or forbearance is that the former
does not have to be repaid. The loan or
There was undoubtedly offer and acceptance CENTRAL BANK OF THE PHILIPPINES The interest due at the time of the filing of the
forbearance is subject to repayment and
in this case: the application of Saura, Inc. for a and ACTING DIRECTOR ANTONIO T. complaint for the recovery thereof, earns legal
loan of P500,000.00 was approved by is therefore governed by the laws on
CASTRO, JR. OF THE DEPARTMENT interest from said date, under article 1109 of
resolution of the defendant, and the usury. 10 the Civil Code, although the obligation is
corresponding mortgage was executed and silent on this point, and the action of the trial
registered. But this fact alone falls short of BANK, in his capacity as statutory
To constitute usury, "there must be loan court is in accordance with law, which
resolving the basic claim that the defendant receiver of Island Savings
or forbearance; the loan must be of includes in its judgment an order for the
failed to fulfill its obligation and the plaintiff is Bank, petitioners,
money or something circulating as payment of legal interest upon the interest due
therefore entitled to recover damages.. vs.
THE HONORABLE COURT OF money; it must be repayable absolutely on the amount claimed, at the time of the filing
APPEALS and SULPICIO M. and in all events; and something must of the complaint.
TOLENTINO, respondents be exacted for the use of the money in
G.R. No. L-49101 October 24, 1983 excess of and in addition to interest
It is the obligation of the bank's officials and allowed by law." 11 The consideration of the mortgage
RAOUL S.V. BONNEVIE and HONESTO V. employees that before they approve the loan contract is the same as that of the
BONNEVIE, petitioners, application of their customers, they must
principal contract from which it receives
vs. investigate the existence and evaluation of the
life, and without which it cannot exist as mortgage is
independent contract. nevertheless binding
between the parties.
G.R. No. L-68010 May 30, 1986
As regards the second assignment of
FILIPINAS MABLE error, we agree with the petitioner
CORPORATION, petitioner, that a mortgage is a mere accessory
vs. contract and, thus, its validity would
THE HONORABLE INTERMEDIATE depend on the validity of the loan
APPELLATE COURT, THE secured by it. We, however, reject
HONORABLE CANDIDO the petitioner's argument that since
VILLANUEVA, Presiding Judge of the chattel mortgage involved was
Br. 144, RTC, Makati, not registered, the same is null and
SYSTEMS CONTROL, INC. The petitioner cannot invoke the
(Bancom), DON FERRY, above provision to nullify the chattel
CASIMERO TANEDO, EUGENIO mortgage it executed in favor of
NORVELL R. LIM, respondents

Article 2125 of the Civil Code clearly

provides that the non-registration of
the mortgage does not affect the
immediate parties. It states:

Art. 2125. In addition

to the requisites stated
in article 2085, it is
indispensable, in order
that a mortgage may
be validly constituted
that the document in
which it appears be
recorded in the
Registry of Property. If
the instrument is not
recorded, the
appellants, chattels given cease to be the
vs. property of the former owner and
BENITO GONZALEZ SY becomes the property of the obligor
CHIAM, defendants-appellee. to be used according to his own will,
unless the contract itself expressly
It will be noted that said statute provides for a special or specific use
imposes a penalty upon a "loan" or of the same. At all events, the
forbearance of any money, goods, money, goods or chattels, the
chattels or credits, etc. The central moment the contract is executed,
idea of said statute is to prohibit a cease to be the property of the
rate of interest on "loans." A contract former owner and becomes the
of "loan," is very different contract absolute property of the obligor.
from that of "rent". A "loan," as that
term is used in the statute, signifies A contract of "loan" differs materially
the giving of a sum of money, goods from a contract of "rent." In a
or credits to another, with a promise contract of "rent" the owner of the
to repay, but not a promise to return property does not lose his ownership.
the same thing. To "loan," in general He simply loses his control over the
parlance, is to deliver to another for property rented during the period of
temporary use, on condition that the the contract. In a contract of "loan"
thing or its equivalent be returned; or the thing loaned becomes the
to deliver for temporary use on property of the obligor. In a contract
condition that an equivalent in kind of "rent" the thing still remains the
shall be returned with a property of the lessor. He simply
compensation for its use. The word loses control of the same in a limited
"loan," however, as used in the way during the period of the contract
statute, has a technical meaning. It of "rent" or lease. In a contract of
never means the return of the same "rent" the relation between the
thing. It means the return of an contractors is that of landlord and
equivalent only, but never the same tenant. In a contract of "loan" of
thing loaned. A "loan" has been money, goods, chattels or credits,
properly defined as an advance the relation between the parties is
payment of money, goods or credits that of obligor and obligee. "Rent"
upon a contract or stipulation to may be defined as the compensation
repay, not to return, the thing loaned either in money, provisions, chattels,
G.R. No. 26085 August at some future day in accordance or labor, received by the owner of
12, 1927 with the terms of the contract. Under the soil from the occupant thereof. It
the contract of "loan," as used in said is defined as the return or
SEVERINO TOLENTINO and statute, the moment the contract is compensation for the possession of
POTENCIANA MANIO, plaintiffs- completed the money, goods or some corporeal inheritance, and is a
profit issuing out of lands or representing the total sum of the five loans, with "acceptance", in the sense in which this . There is no doubt that the petitioner is
tenements, in return for their use. It interest. The transaction between the appellant and term is used in the Negotiable liable for both the stipulated monetary
is that, which is to paid for the use of the Bank of Taiwan, Ltd. was a series of five interest and the stipulated penalty
Instruments Law9 is not required for
contracts of simple loan of sums of money. "By a charge. The penalty charge is also
land, whether in money, labor or checks, for the same are payable on
contract of (simple) loan, one of the parties delivers called penalty or compensatory interest.
other thing agreed upon. A contract demand.10 Indeed, "acceptance" and
to another ... money or other consumable thing upon Having clarified the same, the next issue
of "rent" is a contract by which one the condition that the same amount of the same kind "payment" are, within the purview of to be resolved is whether interest may
of the parties delivers to the other and quality shall be paid." (Article 1933, Civil said Law, essentially different things, for accrue on the penalty or compensatory
some nonconsumable thing, in order Code) The obligation of the appellant under the five the former is "a promise to perform an interest without violating the provisions
that the latter may use it during a promissory notes evidencing the loans in questions of Article 1959 of the New Civil Code,
act," whereas the latter is the "actual
certain period and return it to the is to pay the value thereof; that is, to deliver a sum which provides that:
of money — a clear case of an obligation to deliver,
performance" thereof.11 In the words of
former; whereas a contract of "loan",
a generic thing. Article 1263 of the Civil Code the Law,12 "the acceptance of a bill is the
as that word is used in the statute, Without prejudice to the
provides: signification by the drawee of
signifies the delivery of money or provisions of Article 2212,
In an obligation to deliver a generic thing, the loss his assent to the order of the drawer," interest due and unpaid shall not
other consumable things upon or destruction of anything of the same kind does not which, in the case of checks, is the earn interest. However, the
condition of returning an equivalent extinguish the obligation.
amount of the same kind or quantity,
payment, on demand, of a given sum of contracting parties may by
The chattel mortgage on the crops growing on
money. Upon the other hand, actual stipulation capitalize the interest
in which cases it is called merely a appellant's land simply stood as a security for the
payment of the amount of a check due and unpaid, which as added
"loan." In the case of a contract of fulfillment of appellant's obligation covered by the
implies not only an assent to said order principal, shall earn new interest.
"rent," under the civil law, it is called five promissory notes, and the loss of the crops did
a "commodatum." not extinguish his obligation to pay, because the of the drawer and a recognition of the
account could still be paid from other sources aside According to the petitioner, there is no
drawer's obligation to pay the
from the mortgaged crops. legal basis for the imposition of interest
aforementioned sum, but, also, on the penalty charge for the reason
a compliance with such obligation. that the law only allows imposition of
G.R. No. L-20240 December interest on monetary interest but not the
31, 1965 charging of interest on penalty. He
claims that since there is no law that
allows imposition of interest on
penalties, the penalties should not earn
PHILIPPINES, plaintiff-appellee, interest. But as we have already
vs. explained, penalty clauses can be in the
form of penalty or compensatory
appellant. interest. Thus, the compounding of the
G.R. No. L-26001 October 29, penalty or compensatory interest is
The terms of the promissory notes and the chattel 1968 G.R. No. 116285 October 19, sanctioned by and allowed pursuant to
mortgage that the appellant executed in favor of the 2001 the above-quoted provision of Article
Bank of Taiwan, Ltd. do not support the claim of PHILIPPINE NATIONAL 1959 of the New Civil Code considering
appellant. The obligation of the appellant under the ANTONIO TAN, petitioner, that:
BANK, petitioner,
five promissory notes was not to deliver a vs.
vs. COURT OF APPEALS and the
determinate thing namely, the crops to be harvested First, there is an express stipulation in
from his land, or the value of the crops that would THE COURT OF APPEALS and CULTURAL CENTER OF THE the promissory note (Exhibit "A")
be harvested from his land. Rather, his obligation PHILIPPINE COMMERCIAL AND PHILIPPINES, respondents. permitting the compounding of interest.
was to pay a generic thing — the amount of money INDUSTRIAL BANK, respondents. The fifth paragraph of the said
promissory note provides that: "Any interest of twelve percent (12%) per TOLOMEO LIGUTAN and LEONIDAS
interest which may be due if not paid annum,11 in the absence of express DE LA LLANA, petitioners,
shall be added to the total amount when stipulation on the specific rate of vs.
due and shall become part thereof, the interest, as in the case at bar
whole amount to bear interest at the
maximum rate allowed by SECURITY BANK & TRUST
G.R. No. 138677 February 12,
law."10 Therefore, any penalty interest COMPANY, respondents.
not paid, when due, shall earn the legal