SAURA IMPORT and EXPERT CO., INC.
, vs DBP  ·Article 1934 provides: An accepted promise to deliver something by way
[G.R. No. L-24968, April 27, 1972] MAKALINTAL, J.
FACTS:
 In July 1952, Saura, Inc., applied to Rehabilitation Finance Corp.,
now DBP, for an industrial loan of P500,000 to be used for the
construction of a factory building, to pay the balance of the jute
mill machinery and equipment and as additional working capital.
In Resolution No.145, the loan application was approved to be
secured first by mortgage on the factory buildings, the land site,
and machinery and equipment to be installed.
 The mortgage was registered and documents for the promissory
note were executed. But then, later on, was cancelled to make
way for the registration of a mortgage contract over the same
property in favor of Prudential Bank and Trust Co., the latter
having issued Saura letter of credit for the release of the jute
machinery. As security, Saura execute a trust receipt in favor of
the Prudential. For failure of Saura to pay said obligation,
Prudential sued Saura.
 After almost 9 years, Saura Inc, commenced an action against
RFC, alleging failure on the latter to comply with its obligations to
release the loan applied for and approved, thereby preventing
the plaintiff from completing or paying contractual commitments
it had entered into, in connection with its jute mill project.
 The trial court ruled in favor of Saura, ruling that there was a
perfected contract between the parties and that the RFC was
guilty of breach thereof.
ISSUE: Whether or not there was a perfected contract between the
parties. YES. There was indeed a perfected consensual contract.
HELD:
of commodatum or simple loan is binding upon the parties, but the
commodatum or simple loan itself shall not be perfected until delivery of
the object of the contract.
· There was undoubtedly offer and acceptance in the case. The
application of Saura, Inc. for a loan of P500,000.00 was approved by
resolution of the defendant, and the corresponding mortgage was
executed and registered. The defendant failed to fulfill its obligation and
the plaintiff is therefore entitled to recover damages.
· When an application for a loan of money was approved by resolution of
the respondent corporation and the responding mortgage was
executed and registered, there arises a perfected consensual contract.
· However, it should be noted that RFC imposed two conditions
(availability of raw materials and increased production) when it restored
the loan to the original amount of P500,000.00.
· Saura, Inc. obviously was in no position to comply with RFC’s
conditions. So instead of doing so and insisting that the loan be released
as agreed upon, Saura, Inc. asked that the mortgage be cancelled.The
action thus taken by both parties was in the nature of mutual
desistance which is a mode of extinguishing obligations. It is a concept
that derives from the principle that since mutual agreement can create
a contract, mutual disagreement by the parties can cause its
extinguishment.
·WHEREFORE, the judgment appealed from is reversed and the
complaint dismissed.
Bonnevie V. CA (1983)  A contract of loan being a consensual contract is perfected at the
same time the contract of mortgage was executed. The
G.R. No. L-49101 October 24, 1983
promissory note executed on December 12, 1966 is only an
evidence of indebtedness and does not indicate lack of
Lessons Applicable: Simple Loan
consideration of the mortgage at the time of its execution.
Laws Applicable:  Respondent Bank had every right to rely on the certificate of
title. It was not bound to go behind the same to look for flaws in
Facts: the mortgagor's title, the doctrine of innocent purchaser for
value being applicable to an innocent mortgagee for value. 
 December 6, 1966: Spouses Jose M. Lozano and Josefa P. Lozano
secured their loan of P75K from Philippine Bank of Commerce  Thru certificate of sale in favor of appellee was registered on
(PBC) by mortgaging their property September 2, 1968 and the one year redemption period expired
on September 3, 1969. It was not until September 29, 1969 that
 December 8, 1966: Executed Deed of Sale with Mortgage
Honesto Bonnevie first wrote respondent and offered to redeem
to Honesto Bonnevie where P75K is payable to PBC and P25K is
the property. 
payable to Spouses Lanzano.
 loan matured on December 26, 1967 so when respondent Bank
 April 28, 1967 to July 12, 1968:   Honesto Bonnevie paid a total
applied for foreclosure, the loan was already six months overdue.
of P18,944.22 to PBC
Payment of interest on July 12, 1968 does not make the earlier act
 May 4, 1968:  Honesto Bonnevie assigned all his rights under the of PBC inequitous nor does it ipso facto result in the renewal of
Deed of Sale with Assumption of Mortgage to his brother, the loan. In order that a renewal of a loan may be effected, not
intervenor Raoul Bonnevie only the payment of the accrued interest is necessary but also
the payment of interest for the proposed period of renewal as
 June 10, 1968:  PBC applied for the foreclosure of the mortgage, well. Besides, whether or not a loan may be renewed does not
and notice of sale was published  solely depend on the debtor but more so on the discretion of the
 January 26, 1971: Honesto Bonnevie filed in the CFI of Rizal bank. 
against Philippine Bank of Commerce for the annulment of the
Deed of Mortgage dated December 6, 1966 as well as the
extrajudicial foreclosure made on September 4, 1968.
 CFI: Dismissed the complaint with costs against the Bonnevies
 CA: Affirmed
ISSUE: W/N the forclosure on the mortgage is validly executed.

HELD: YES. CA affirmed

 RULING:
Central Bank v. CA In reciprocal obligations, the obligation or promise of each party is the
consideration for that of the other and when one party has performed
G.R. No. L-45710, October 3, 1985, 139 SCRA 46
or is ready and willing to perform his part of the contract, the other
FACTS: party who has not performed or is not ready and willing to perform
incurs in delay (Art. 1169 of the Civil Code). The promise of Sulpicio M.
On April 28, 1965, Island Savings Bank, upon favorable recommendation Tolentino to pay was the consideration for the obligation of Island
of its legal department, approved the loan application for P80,000.00 of Savings Bank to furnish the P80,000.00 loan. When Sulpicio M.
Sulpicio M. Tolentino, who, as a security for the loan, executed on the Tolentino executed a real estate mortgage on April 28, 1965, he signified
same day a real estate mortgage over his 100-hectare land located in his willingness to pay the P80,000.00 loan. From such date, the
Cubo, Las Nieves, Agusan, and covered by TCT No. T-305, and which obligation of Island Savings Bank to furnish the P80,000.00 loan
mortgage was annotated on the said title the next day. The approved accrued. Thus, the Bank’s delay in furnishing the entire loan started on
loan application called for a lump sum P80,000.00 loan, repayable in April 28, 1965, and lasted for a period of 3 years or when the Monetary
semi-annual installments for a period of 3 years, with 12% annual interest. Board of the Central Bank issued Resolution No. 967 on June 14, 1968,
It was required that Sulpicio M. Tolentino shall use the loan proceeds which prohibited Island Savings Bank from doing further business. Such
solely as an additional capital to develop his other property into a prohibition made it legally impossible for Island Savings Bank to furnish
subdivision. The loan called for a lump sum of P80,000, repayable in the P63,000.00 balance of the P80,000.00 loan. The power of the
semi-annual installments for 3 yrs, with 12% annual interest. After the Monetary Board to take over insolvent banks for the protection of the
agreement, a mere P17,000 partial release of the loan was made by the public is recognized by Section 29 of R.A. No. 265, which took effect on
bank and Tolentino and his wife signed a promissory note for the June 15, 1948, the validity of which is not in question.
P17,000 at 12% annual interest payable w/in 3 yrs. An advance interest
was deducted fr the partial release but this prededucted interest was
refunded to Tolentino after being informed that there was no fund yet
for the release of the P63,000 balance.
On August 13, 1965, the Monetary Board of the Central Bank, after
finding Island Savings Bank was suffering liquidity problems, issued
Resolution No. 1049, which provides the prohibition of the bank from
making new loans and investments [except investments in government
securities] excluding extensions or renewals of already approved loans,
provided that such extensions or renewals shall be subject to review by
the Superintendent of Banks, who may impose such limitations as may
be necessary to insure correction of the bank’s deficiency as soon as
possible.
ISSUES:
Can the action of Sulpicio M. Tolentino for specific performance
prosper?
 HELD
BPI Investment Corporation The Court held in the negative. A loan contract is not a consensual
contract but a real contract. It is perfected only upon delivery of the
-vs-
object of the contract. A contract o loan involves a reciprocal obligation,
CA wherein the obligation or promise of each party is the consideration for
that of the other; it is a basic principle in reciprocal obligations that
GR No. 133632, 15 February 2002 neither party incurs in delay, if the other does not comply or is not ready
377 SCRA 117 to comply is a proper manner with what is incumbent upon him

FACTS
Frank Roa obtained a loan from Ayala Investment and Development
Corporation (AIDC), for the construction of his house. Said house and lot
were mortgaged to AIDC to secure the loan. Roa sold the properties to
ALS and Litonjua, the latter paid in cash and assumed the balance of
Roa’s indebtedness wit AIDC. AIDC was not willing to extend the old
interest to private respondents and proposed a grant of new loan of
P500,000 with higher interest to be applied to Roa’s debt, secured by
the same property. Private respondents executed a mortgage deed
containing the stipulation. The loan contract was signed on 31 March
1981 and was perfected on 13 September 1982, when the full loan was
released to private respondents.

BPIIC, AIDC’s predecessor, released to private respondents P7,146.87,

purporting to be what was left of their loan after full payment of Roa’s
loan. BPIIC filed for foreclosure proceedings on the ground that private
respondents failed to pay the mortgage indebtedness. Private
respondents maintained that they should not be made to pay
amortization before the actual release of the P500,000 loan. The suit
was dismissed and affirmed by the CA.

ISSUE
Whether or not a contract of loan is a consensual contract.