Credit Cases

Reg, Zyra Ann N.
Credit Transaction
JD – III
1. G.R. No. 195166

SPOUSES SALVADOR ABELLA AND ALMA ABELLA, Petitioners,vs.SPOUSES
ROMEO ABELLA AND ANNIE ABELLA, Respondents.
The principle of solutio indebiti as provided by Article 2154 of
the Civil Code 64 applies. The quasi-contract of solutio indebiti
harks back to the ancient principle that no one shall enrich
himself unjustly at the expense of another. It applies where (1) a
payment is made when there exists no binding relation between the
payor, who has no duty to pay, and the person who received the
payment, and (2) the payment is made through mistake, and not
through liberality or some other cause.
2. G.R. No. 174581

ATTY. LEO N. CAUBANG, Petitioner, vs. JESUS G. CRISOLOGO and
NANETTE B. CRISOLOGO, Respondents.
Notices are given to secure bidders and prevent a sacrifice of the
property. Therefore, statutory provisions governing publication of
notice of mortgage foreclosure sales must be strictly complied
with and slight deviations therefrom will invalidate the notice
and render the sale, at the very least, voidable. Caubang never
made an effort to inquire as to whether the Oriental Daily
Examiner was indeed a newspaper of general circulation, as
required by law. It was shown that the Oriental Daily Examiner is
not even on the list of newspapers accredited to publish legal
notices, as recorded in the RTC Davao’s Office of the Clerk of
Court. It also has no paying subscribers and it would only publish
whenever there are customers. Since there was no proper
publication of the notice of sale, the Spouses Crisologo, as well
as the rest of the general public, were never informed that the
mortgaged property was about to be foreclosed and auctioned.
3. G.R. No. 205838

JOSEPH HARRY WALTER POOLE-BLUNDEN, Petitioner vs. UNION BANK OF
THE PHILIPPINES, Respondent
Banks are required to observe a high degree of diligence in their
affairs. This encompasses their dealings concerning properties
offered as security for loans.In actions to void such sales, banks
cannot hide under the defense that a sale was made on an as-is-
where-is basis.
4 G.R. No. 192934,

SECURITY BANK CORPORATION, Petitioner, v. SPOUSES RODRIGO AND
ERLINDA MERCADO, Respondents.
5. G.R. No. 197010, June 27, 2018
SPOUSES RODRIGO AND ERLINDA MERCADO, Petitioner, v. SECURITY BANK
AND TRUST COMPANY, Respondent.
The principle of mutuality of Contract
SPOUSES SALVADOR ABELLA AND ALMA ABELLA, Petitioners, -versus-
SPOUSES ROMEO ABELLA AND ANNIE ABELLA, Respondents. G.R. No.
195166
Reg, Zyra Ann N. Credit Transaction
JD – III
Article 1956 of the Civil Code spells out the basic rule that
"[n]o interest shall be due unless it has been expressly
stipulated in writing." On the matter of interest, the text of the
acknowledgment receipt is simple, plain, and unequivocal. It
attests to the contracting parties' intent to subject to interest
the loan extended by petitioners to respondents. The controversy,
however, stems from the acknowledgment receipt's failure to state
the exact rate of interest. It remains that where interest was
stipulated in writing by the debtor and creditor in a simple loan
or mutuum, but no exact interest rate was mentioned, the legal
rate of interest shall apply.
6. G.R. No. 156162
CCC INSURANCE CORPORATION, Petitioner, -versus- KAWASAKI STEEL
CORPORATION, F.F. MAÑACOP CONSTRUCTION CO., INC., and FLORANTE F.
MAÑACOP, Respondents.
The Court cannot give any additional meaning to the plain language
of the undertakings in the Surety and Performance Bonds. The
extent of a surety's liability is determined by the language of
the suretyship contract or bond itself. Article 1370 of the Civil
Code provides that "[i]f the terms of a contract are clear and
leave no doubt upon the intention of the contracting parties, the
literal meaning of its stipulations shall control."
7. G.R. No. 173864

BANGKO SENTRAL NG PILIPINAS, Petitioner, -versus- AGUSTIN LIBO-ON,
Respondent.
An assignment of credit is an agreement by virtue of which the
owner of a credit, known as the assignor, by a legal cause, such
as sale, dation in payment, exchange or donation, and without the
consent of the debtor, transfers his credit and accessory rights
to another, known as the assignee, who acquires the power to
enforce it to the same extent as the assignor could enforce it
against the debtor. It may be in the form of sale, but at times it
may constitute a dation in payment, such as when a debtor, in
order to obtain a release from his debt, assigns to his creditor a
credit he has against a third person." As a dation in payment, the
assignment of credit operates as a mode of extinguishing the
obligation; the delivery and transmission of ownership of a thing
(in this case, the credit due from a third person) by the debtor
to the creditor is accepted as the equivalent of the performance
of the obligation. The mere pledge and deposit of the mortgage
contract, transfer certificate of title and promissory note
executed by the the Rural Bank of Hinigaran in favor o'f BSP, does
not produce the effect of giving BSP the authority to intervene
with the transaction between the Spouses Libo-on and the Rural
Bank of Hinigaran, much less foreclose the mortgaged property of
the Spouses Libo-on. In the absence of a notarized deed of
assignment, BSP cannot be considered as an assignee who can
proceed against the Spouses Libo-on's property
8. G.R. No. 206343

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LAND BANK OF THE PHILIPPINES, Petitioner, -versus- LORENZO MUSNI,

EDUARDO SONZA and SPOUSES IRENEO AND NENITA SANTOS, Respondents.
The rule on "innocent purchasers or mortgagees for value" is
applied more strictly when the purchaser or the mortgagee is a
bank. Banks are expected to exercise higher degree of diligence in
their dealings, including those involving lands. Banks may not
rely simply on the face of the certificate of title. What further
militates against the claim of Land Bank's good faith in this case
is the fact that TCT No. 304649 which was mortgaged to the bank,
was issued by virtue of a Decision of the Department of Agrarian
Reform Adjudication Board Region III dated December 29,1997. The
said Decision was, however, inscribed only on February 25, 1998,
after the issuance of TCT No. 304649 on February 8, 1998. In
addition, the property was mortgaged to Land Bank a few days after
the inscription of the alleged Decision of the Department of
Agrarian Reform Adjudication Board. This circumstance should have
aroused a suspicion on the part of Land Bank and anyone who
deliberately ignores a significant fact that would create
suspicion in an otherwise reasonable person cannot be considered
as a mortgagee in good faith.
9. G.R. No. 233974
CATALINA F. ISLA, ELIZABETH ISLA, AND GILBERT F. ISLA,
Petitioners, -versus- GENEVIRA P. ESTORGA, Respondent.
Anent monetary interest, the parties are free to stipulate their
preferred rate. However, courts are allowed to equitably temper
interest rates that are found to be excessive, iniquitous,
unconscionable, and/or exorbitant. In such, the legal rate of
interest prevailing at the time the agreement was entered into is
applied by the Court. In this case, the stipulated interest of 10%
per month was found to be unconscionable, and thus, the courts a
quo struck down the same and pegged a new monetary interest of 12%
per annum, which was the prevailing legal rate of interest for
loans and forbearances of money at the time the loan was
contracted on December 6, 2004.
10. G.R. No. 156162
CCC INSURANCE CORPORATION, Petitioner, vs. KAWASAKI STEEL
CORPORATION, F.F. MAÑACOP CONSTRUCTION CO., INC., and FLORANTE F.
MAÑACOP, Respondents.
The principle of relativity of contracts provides that contracts
can only bind the parties who entered into it. "which provides
that contracts can only bind the parties who entered into it, and
it cannot favor or prejudice a third person, even if he is aware
of such contract and has acted with knowledge thereof.
11. G.R. No. 194152

MAKILITO B. MAHINAY, Petitioner vs. DURA TIRE & RUBBER INDUSTRIES,
INC., Respondent
Mortgagor's right of redemption
The right of redemption being statutory,61 the mortgagor may
compel the purchaser to sell back the property within the one
(1 )-year period under Act No. 3135. If the purchaser refuses to
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sell back the property, the mortgagor may tender payment to the
Sheriff who conducted the foreclosure sale.
12. G.R. No. 205578

GEORGIA OSMEÑA-JALANDONI, Petitioner vs CARMEN A. ENCOMIENDA,
Respondent
The principle of unjust enrichment finds application in this case.
Unjust enrichment exists when a person unfairly retains a benefit
to the loss of another, or when a person retains money or property
of another against the fundamental principles of justice, equity,
and good conscience.
13. G.R. No. 213286

MAMERTA LOPEZ CLAUDIO, EDUARDO L. CLAUDIO, ASUNCION CLAUDIO-
CONTEGINO, ANA CLAUDIO-ISULAT, DOLORES CLAUDIO-MABINI, AND FERMIN
L. CLAUDIO, Petitioners, v. SPOUSES FEDERICO AND NORMA SARAZA,
Respondent.
The Court finds that Spouses Saraza are not mortgagees in good
faith. ... This is the doctrine of "the mortgagee in good faith"
based on the rule that all persons dealing with property covered
by a Torrens Certificate of Title, as buyers or mortgagees, are
not required to go beyond what appears on the face of the title.
14. G.R. No. 209245

PROVINCE OF CEBU, Petitioner, - versus - WT CONSTRUCTION, INC.,
Respondent.
Forbearance of money, goods, or credit refers to arrangements
other than loan agreements where a person acquiesces to the
temporary use of his money, goods or credits pending the happening
of certain events or fulfilment of certain conditions such that if
these conditions are breached, the said person is entitled not
only to the return of the principal amount given, but also to
compensation for the use of his money equivalent to the legal
interest since the use or deprivation of funds is akin to a loan.
15. G.R. No. 209544
SPOUSES ELLIS R. MILES and CAROLINA RONQUILLO-MILES, Petitioners -
versusBONNIE BAUTISTA LAO, Respondent.
Indeed, a mortgagee has a right to rely in good faith on the
certificate of title of the mortgagor of the property given as
security, and in the absence of any sign that might arouse
suspicion, the mortgagee has no obligation to undertake further
investigation. This doctrine presupposes, however, that the
mortgagor, who is not the rightful owner of the property, has
already succeeded in obtaining Torrens title over the property in
his name and that, after obtaining the said title, he succeeds in
mortgaging the property to another who relies on what appears on
the title.
16. G.R. No. 169407, March 25, 2015
BANK OF THE PHILIPPINE ISLANDS, Petitioner, v. AMADOR
DOMINGO, Respondent.
JD – III
It should be noted that in order to give novation its legal

effect, the law requires that the creditor should consent to the
substitution of a new debtor. This consent must be given expressly
for the reason that, since novation extinguishes the personality
of the first debtor who is to be substituted by a new one, it
implies on the part of the creditor a waiver of the right that he
had before the novation, which waiver must be express under the
principle that renuntiatio non praesumitor, recognized by the law
in declaring that a waiver of right may not be performed unless
the will to waive is indisputably shown by him who holds the
right.
17. G.R. No. 192602
SPOUSES MAY S. VILLALUZ and JOHNNY VILLALUZ, JR., Petitioners
vs.
LAND BANK OF THE PHILIPPINES and the REGISTER OF DEEDS FOR DAVAO
CITY, Respondents
The law creates a presumption that an agent has the power to
appoint a substitute. The consequence of the presumption is that,
upon valid appointment of a substitute by the agent, there ipso
jure arises an agency relationship between the principal and the
substitute, i.e., the substitute becomes the agent of the
principal. As a result, the principal is bound by the acts of the
substitute as if these acts had been performed by the principal's
appointed agent. Concomitantly, the substitute assumes an agent's
obligations to act within the scope of authority, to act in
accordance with the principal's instructions, and to carry out the
agency, among others. In order to make the presumption inoperative
and relieve himself from its effects, it is incumbent upon the
principal to prohibit the agent from appointing a substitute.
18. G.R. No. 217044

SPOUSES RAINIER JOSE M. YULO AND JULIET L. YULO, Petitioners
vs.
BANK OF THE PHILIPPINE ISLANDS, Respondent
The creation an acceptance of the relationship of agency whereby
one party, called the principal (mandante), authorizes another,
called the agent (mandatario), to act for find (sic) in his behalf
in transactions with third persons. The essential elements of
agency are: (1) there is consent, express or implied, of the
parties to establish the relationship; (2) the object is the
execution of a juridical act in relation to a third person; (3)
the agents (sic) acts as a representative and not for himself; and
(4) the agent acts within the scope of his authority.
19. G.R. No. 209370
FORT BONIFACIO DEVELOPMENT CORPORATION, Petitioner,
vs.
VALENTIN L. FONG, Respondent.
Obligations arising from contracts have the force of law between
the contracting parties and should be complied with in good
faith. As such, the stipulations in contracts are binding on them
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unless the contract is contrary to law, morals, good customs,

public order or public policy.
The same principle on obligatory force applies by extension to the
contracting party’s assignees, in turn, by virtue of the principle
of relativity of contracts which is fleshed out in Article 1311 of
the Civil Code.
20. G.R. No.178407

METROPOLITAN BANK AND TRUST COMPANY, Petitioner,
vs.
S.F. NAGUIAT ENTERPRISES, Respondent.
The special preferred credits enumerated in Articles 2241 (with
respect to movable property) and 2242 (with respect to immovable
property) are considered as mortgages or pledges of real or
personal property, or liens within the purview of Act No.
1956. These credits, which enjoy preference with respect to a
specific movable or immovable property, exclude all others to the
extent of the value of the property. If there are two or more
liens on the same specific property, the lienholders divide the
value of the property involved pro rata, after the taxes on the
same property are fully paid.
"Credits which are specially preferred because they constitute
liens (tax or non-tax) in turn, take precedence over ordinary
preferred credits so far as concerns the property to which the
liens have attached. The specially preferred credits must be
discharged first out of the proceeds of the property to which they
relate, before ordinary preferred creditors may lay claim to any
part of such proceeds.
21. G.R. No. 181426

GAMES AND GARMENTS DEVELOPERS, INC., Petitioner,
vs.
ALLIED BANKING CORPORATION, Respondent.
A contract of surety is an accessory promise by which a person
binds himself for another already bound, and agrees with the
creditor to satisfy the obligation if the debtor does not. A
contract of guaranty, on the other hand, is a collateral
undertaking to pay the debt of another in case the latter does not
pay the debt.
22. G.R. No. 191174

PARADIGM DEVELOPMENT CORPORATION OF THE PHILIPPINES, Petitioner
vs.
BANK OF THE PHILIPPINE ISLANDS, Respondent
A dragnet clause is a stipulation in a REM contract that extends
the coverage of a mortgage to advances or loans other than those
already obtained or specified in the contract. Where there are
several advances, however, a mortgage containing a dragnet clause
will not be extended to cover future advances, unless the document
evidencing the subsequent advance refers to the mortgage as
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providing security therefor or unless there are clear and

supportive evidence to the contrary.
23. G.R. No. 183486

THE HONGKONG & SHANGHAI BANKING CORPORATION, LIMITED, Petitioner,
vs.
NATIONAL STEEL CORPORATION and CITYTRUST BANKING CORPORATION (NOW
BANK O
A letter of credit is a commercial instrument developed to address
the unique needs of certain commercial transactions. It is
recognized in our jurisdiction and is sanctioned under Article
5676of the Code of Commerce and in numerous jurisprudence defining
a letter of credit, the principles relating to it, and the
obligations of parties arising from it.F THE PHILIPPINE
ISLANDS), Respondents.
24. G.R. No. 195166
SPOUSES SALVADOR ABELLA AND ALMA ABELLA, Petitioners,
vs.
SPOUSES ROMEO ABELLA AND ANNIE ABELLA, Respondents.
The quasi-contract of solutio indebiti harks back to the ancient
principle that no one shall enrich himself unjustly at the expense
of another. It applies where (1) a payment is made when there
exists no binding relation between the payor, who has no duty to
pay, and the person who received the payment, and (2) the payment
is made through mistake, and not through liberality or some other
cause.
25. G.R. No. 227990, March 07, 2018

CITYSTATE SAVINGS BANK, Petitioner, v. TERESITA TOBIAS AND
SHELLIDIE VALDEZ, Respondents.
The doctrine of apparent authority does not apply and absolved the
bank from liability resulting from the alteration by its branch
manager of the terms of a mortgage contract which secures a loan
obtained from the bank. In so ruling, this Court found "[n]o proof
of the course of business, usages and practices of the bank about,
or knowledge that the board had or is presumed to have of its
responsible officers' acts regarding the branch manager's apparent
authority" to cause such alteration. Further, "[n]either was there
any allegation, much less proof" that the bank ratified its
manager's acts or is estopped to make a contrary claim.
26. G.R. No. 201892

NORLINDA S. MARILAG, Petitioner,
vs.
MARCELINO B. MARTINEZ, Respondent.
The underlying principle of litis pendentia is the theory that a
party is not allowed to vex another more than once regarding the
same subject matter and for the same cause of action. This theory
is founded on the public policy that the same subject matter
should not be the subject of controversy in courts more than once,
in order that possible conflicting judgments may be avoided for
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the sake of the stability of the rights and status of persons, and
also to avoid the costs and expenses incident to numerous
suits. 32 Consequently, a party will not be permitted to split up a
single cause of action and make it a basis for several suits as
the whole cause must be determined in one action.
27. G.R. No. 209605

NEIL B. AGUILAR and RUBEN CALIMBAS, Petitioners,
vs.
LIGHTBRINGERS CREDIT COOPERATIVE, Respondent.
The PNB checks issued to the petitioners proved the existence of
the loan transactions. Their receipts of the loan were proven by
their signatures appearing on the dorsal portions of the checks as
well as on the cash disbursement vouchers. As a matter of
practice, banks would allow the encashment of checks only by the
named payee and subject to the presentation of proper
identification.
28.
G.R. No. 156162 CCC INSURANCE
CORPORATION, Petitioner,
vs.
KAWASAKI STEEL CORPORATION, F.F. MAÑACOP CONSTRUCTION
CO., INC., and FLORANTE F. MAÑACOP, Respondents.
A surety's liability is determined strictly by the terms of
contract of suretyship, in relation to the principal contract
between the obligor and the obligee. Hence, the Court looks at the
Surety and Performance Bonds, in relation to the Consortium
Agreement.
According to the principle of relativity of contracts in Article
1311 of the Civil Code, a contract takes effect only between the
parties, their assigns, and heirs; except when the contract
contains a stipulation in favor of a third person, which gives
said person the right to demand fulfillment of said stipulation.
29.WT Construction, Inc., vs. The province of Cebu

G.R. No. 208984
Forbearance of money, goods, or credit refers to arrangements
other than loan agreements where a person acquiesces to the
temporary use of his money, goods, or credits pending the
happening of certain events or fulfillment of certain conditions
such that if these conditions are breached, the said person is
entitled not only to the return of the principal amount given, but
also to compensation for the use of his money equivalent to the
legal interest since the use or deprivation of funds is akin to
loan.
30. Gilat Satellite Networks, LTD vs. United Coconut
Planters Bank GR. No. 189563
Nevertheless, although the contract of a surety is in essence
secondary only to a valid principal obligation, its liability to
the creditor or “promise” of the principal is said to be direct,
primary and absolute; in other words, a surety is directly and
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equally bound with the principal. The acceptance of a surety

agreement does not change in any material way the creditor’s
relationship with the principal debtor nor does it make the surety
an active party to the principal creditor-debtor relationship.
31.
Dario Nacar vs. Gallery Frames and/or Felipe
Bordey, Jr. G.R. No. 189871,
In concrete terms, the question is whether a re-computation in the
course of execution of the labor arbiter’s original computation of
the awards made, pegged as of the time the decision was rendered
and confirmed with modification by a final CA decision, is legally
proper. The question is posed, Given that the petitioner did not
immediately pay the awards stated in the original labor arbiter’s
decision, it delayed payment because it continued with the
litigation until final judgment at the CA level. That the amount
respondent shall now pay has greatly increased is a consequence
that it cannot avoid it is the risk that it ran when it continued
to seek recourses against the Labor Arbiter’s decision.
32. Spouses Salvador Abella and Alma Abella vs. Spouses

Romeo Abella and Annie Abella G.R. No. 195166
No interest shall be due unless it has been expressly stipulated
in writing.
33. Ruiz vs. Dimailig G.R. no. 204280
No valid mortgage will arise unless the mortgagor has a valid
title or ownership over the mortgaged property.
34.Repuela vs Estate of the Spouses Otillo Larawan and

Juliana Bacus G.R. No. 219638,
For a presumption of an equitable mortgage to arise, two
requisites must first be satisfied, namely: that the parties
entered into a contract denominated as a contract of sale and that
their intention was to secure on existing debt by way of mortgage.
35. Cotoner-Zacarias vs. Revilla G.R. No. 190901,

Antichresis requires delivery of the property to the antichresis
creditor, but the latter cannot ordinarily acquire this immovable
property in his or her possession by prescription.
White Marketing Development Corporation vs. Grandwood Furniture
and Woodwork Inc G.R. No. 222407.
In an assignment of credit, the assignee is subrogated to the
rights of the original creditor, such that he acquires the power
to enforce it, to the same extent as the assignor could have
enforced it against the debtor.
36. Prudential Guarantee and Assurance Inc. Vs. Anscor

land Inc. G.R. No. 177240,
A guarantee or a surety contract under Article 2047 of the civil
code of the Philippines is an accessory contract because it is
dependent for its existence upon the principal obligation
guaranteed by it; The performance bond become liable for the
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completion of the construction project in the event KRDC fails in

its contractual undertaking.
37. FGU Insurance Corporation vs. Roxas G.R. No.
189526,
Liability under a surety bond is “limited to the amount of the
bond” and is determined strictly in accordance with the particular
terms and conditions set out in this bond.
38. Limso vs. PNB G.R. No. 158622, anuary 27, 2016
There is no mutuality of contracts when the
determination or imposition of interest rate is at the
sole discretion of a party to the contract. Further,
escalation clauses in contracts are void when they allow
the creditor to unilaterally adjust the interest rates
without the consent of the debtor.
39. Gaerlan vs. PNB G.R. No. 217356, September 7, 2016

It must be emphasized that a surety is bound equally and
absolutely with the principal and his liability is
immediate and direct. The Court has no alternative but
to enforce the contractual stipulations in the manner
they have been agreed upon and written.
40. Repuela vs. Estate of the Spouses Otillo larawan

and Juliana Bacus G.R. No. 219638, December 7, 2016 For
a presumption of an equitable mortgage to arise, two
requisites must first be satisfied, namely: that the
parties entered into a contract denominated as a
contract of sale and that their intention was to secure
an existing debt by way of mortgage.
41. Spouses Palada vs. Solidbank Corporation G.R. No.

172227, June 29, 2011 A mortgagor is allowed to take a
second or subsequent mortgage on a property already
mortgage, subject to the prior rights of the previous
mortgages.
42. PNB vs. Heirs of Benedicto and Azucena Alonday G.R.
No. 171865, October 12, 2016 In order for all the all-
embracing or dragnet clauses to secure future and other
loans, the loans thereby secured must be sufficiently
described in the mortgage contract.
43. Spouses Palada vs. Solidbank Corporation G.R. No.

172227, June 29, 2011 A mortgagor is allowed to take a
second or subsequent mortgage on a property already
mortgage, subject to the prior rights of the previous
mortgages.
44. DBP vs. Guarina Agricultural Dev. Corp. G.R. No.

160758,
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Debtors are entitled to receive the total loan amount as agreed

upon and not an incomplete amount.
45.
Spouses Ramon Sy and Anita Ng vs. Westmont bank
G.R. No. 201074,
A simple loan or mutuum is a contract where one of the parties
delivers to another, either money or other consummable thing, upon
the condition that the same amount of the same kind and quality
shall be paid. A simple loan is a real contract and it shall not
be perfected until the delivery of the object of the contract.
46. Spouses Rabat vs. Philippine National Bank G.R. No.

158755,
The inadequacy of the bid price in an extrajudicial foreclosure
sale of mortgaged properties will not invalidate the sale and the
foreclosing mortgagee is entitled to recover the deficiency should
the proceeds of the sale be sufficient to cover the entire debt.
47.
Teresita Buenaventura vs. Metrobank G.R. No.
167082,
A contract of guaranty cannot be presumed, but must be express and
in writing to be enforceable.
48.
Georgina Osmena - Jalandoni vs. Carmen A.
Encomienda G.R. No. 205578,
In case of loans between friends and relatives, the absence of
acknowledgement receipts or promissory notes is more natural and
real. The law is explicit that contracts shall be obligatory in
whatever form they may have been entered into, provided all the
essential requisites for their validity are present. In this case,
Encomienda immediately offered a helping hand when friend asked
for it. But this does not mean that she had already waived her
right to collect in the future.
49.
Spouses Nilo Ramos and Eliadora Ramos vs. Raul
Obispo G.R. No. 193804,
It bears stressing that an accommodation mortgagor, ordinarily, is
not himself a recipient of the loan, otherwise that would be
contrary to his designation as such. It is not always necessary
that the accommodation mortgagor be apprised beforehand of the
entire amount of the loan nor should it first be determined before
the execution of the Special Power of Attorney in favor of the
debtor. This is especially true when the words used by the parties
indicate that the mortgage serves as a continuing security for
credit obtained as well as future loan availments.
50. BSP vs. Agustin Libo- on G.R. No. 173864,

An assignment of credit is an agreement by virtue of which the
owner of a credit, known as the assignor, by legal cause, such as
sale, dation in payment, exchange, or donation and without the
consent of the debtor, transfers his credit and accessory rights
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to another, known as the assignee, who acquires the power to

enforce it to the same extent as the assignor could enforce it
against the debtor.
51.
Land bank of the Philippines vs. Lorenzo Musni et
al G.R. No. 206343,
The rule on “innocent purchasers or mortgagees for value” is
applied more strictly when the purchaser or the mortgagee is a
bank. Banks are expected to exercise higher degree of diligence in
their dealings, including those involving lands. Banks may not
rely simply on the face of the certificate of title.
52. Spouses Ellis R. Miles and Carolina Ronquillo-Miles

vs. Bonnie Bautista Lao G.R. No. 209522,
Indeed, a mortgagee has a right to rely in good faith on the
certificate of title of the mortgagor of the property given as
security, and in the absence of any sign that might arouse
suspicion, the mortgagee has no obligation to undertake further
investigation. This doctrine presupposes, however, that the
mortgagor, who is not the rightful owner of the property, has
already succeeded in obtaining Torrens title over the property in
his name and that, after obtaining the said title, he succeeds in
mortgaging the property to another who relies on what appears on
the title.
53. Spouses Francisco Yap and Whelma S. Yap vs. Spouses
Zosimo Dy Sr. And Natividad Chiu Dy et al G.R. No.
171868
A debtor who has paid a part of the debt cannot ask for the
proportionate extinguishment of the mortgage as long as the debt
is not completely satisfied. However, this rule does not apply
where the aggregate number of the lots which comprise the
collateral for the mortgage had already been foreclosed and sold
at a public auction.
54. BPI vs Cynthia L. Reyes G.R. No. 182769,

In a recent case of BPI vs Avenido, the Court reiterated the well-
entrenched rule that a creditor is not precluded from recovering
any unpaid balance on the principal obligation if the
extrajudicial foreclosure sale of the property subject of the real
estate mortgage results in a deficiency.
55. Catalina F. Isla et al vs. Genevira P. Estorga G.R.

No. 233974,
Anent monetary interest, the parties are free to stipulate their
preferred rate. However, courts are allowed to equitably temper
interest rates that are found to be excessive, iniquitious,
unconscionable, and/or exorbitant. In such, the legal rate of
interest prevailing at the time the agreement was entered into is
applied by the Court.
JD – III
56.Benjamin Evangelista vs. Screenex Inc. G.R. No.

211562,
The acceptance of a check implies an undertaking of due diligence
in presenting it for payment, and if he from whom it is received
sustains loss by want of such diligence, it will be held to
operate as actual payment of the debt or obligation for which it
was given.
57. G.R. No. 211564

BENJAMIN EVANGELISTA, Petitioner
vs.
SCREENEX, INC., represented by ALEXANDER G, YU, Respondent
The delivery of promissory notes payable to order, or bills of

exchange or other mercantile documents shall produce the effect of
payment only when they have been cashed, or when through the fault
of the creditor they have been impaired.
58. G.R. No. 174581

ATTY. LEO N. CAUBANG, Petitioner,
vs.
JESUS G. CRISOLOGO and NANETTE B. CRISOLOGO, Respondents.
The principal object of a notice of sale in a foreclosure of

mortgage is not so much to notify the mortgagor as to inform the
public generally of the nature and condition of the property to be
sold, and of the time, place, and terms of the sale. Notices are
given to secure bidders and prevent a sacrifice of the property.
Therefore, statutory provisions governing publication of notice of
mortgage foreclosure sales must be strictly complied with and
slight deviations therefrom will invalidate the notice and render
the sale, at the very least, voidable. Certainly, the statutory
requirements of posting and publication are mandated and imbued
with public policy considerations. Failure to advertise a mortgage
foreclosure sale in compliance with the statutory requirements
constitutes a jurisdictional defect, and any substantial error in
a notice of sale will render the notice insufficient and will
consequently vitiate the sale.
59. G.R. No. 176986

NISSAN CAR LEASE PHILS., INC., Petitioner,
vs.
LICA MANAGEMENT, INC. and PROTON PILIPINAS, INC., Respondents.
The Contract of Lease shows that the parties did not stipulate an
applicable interest rate in case of default in the payment of
rentals. Thus, and following this Court’s ruling in Nacar v.
Gallery Frames, the foregoing amount of rental arrearages shall
earn interest at the rate of six percent (6%) per annum computed
from October 18, 1996, the date of LMI’s extrajudicial
demand, until the date of finality of this judgment. The total
JD – III
amount shall thereafter earn interest at the rate of six percent

(6%) per annum from such finality of judgment until its
satisfaction.
60. G.R. No. 216714

SPOUSES GODFREY and MA. TERESA TEVES, Petitioners
vs
INTEGRATED CREDIT & CORPORATE SERVICES, CO. (now CAROL AQUI),
Respondent
It should be emphasized that an ex-parte petition for issuance of

a writ of possession is a non-litigious proceeding authorized in
an extrajudicial foreclosure proceeding pursuant to Act 3135 2
amended. Unlike a judicial foreclosure of real estate mortgage
under Rule 68 of the Rules of Court, any property brought within
the ambit of the act is foreclosed by the filing of a petition,
not with any Court of justice, but with the office of the sheriff
of the province where sale is to be made.
61. G.R. No. 177382

VIVA SHIPPING LINES, INC., Petitioner,
vs.
KEPPEL PHILIPPINES MINING, INC., METROPOLITAN BANK & TRUST
COMPANY, PILIPINAS SHELL PETROLEUM CORPORATION, CITY OF BATANGAS,
CITY OF LUCENA, PROVINCE OF QUEZON, ALEJANDRO OLIT, NIDA MONTILLA,
PIO HERNANDEZ, EUGENIO BACULO, and HARLAN BACALTOS, Respondents.
Equity is the principle by which substantial justice may be
attained in cases where the prescribed or customary forms of
ordinary law are inadequate.
62. G.R. No. 183804
S.C. MEGAWORLD CONSTRUCTION and DEVELOPMENT
CORPORATION, Petitioner,
vs.
ENGR. LUIS U. PARADA, represented by ENGR. LEONARDO A. PARADA of
GENLITE INDUSTRIES, Respondent.
Novation is a mode of extinguishing an obligation by changing its
objects or principal obligations, by substituting a new debtor in
place of the old one, or by subrogating a third person to the
rights of the creditor. It is "the substitution of a new contract,
debt, or obligation for an existing one between the same or
different parties." Article 1293 of the Civil Code defines
novation as follows:
Art. 1293. Novation which consists in substituting a new debtor in
the place of the original one, may be made even without the
knowledge or against the will of the latter, but not without the
consent of the creditor. Payment by the new debtor gives him
rights mentioned in Articles 1236and 1237.
Thus, in order to change the person of the debtor, the former
debtor must be expressly released from the obligation, and the
third person or new debtor must assume the former’s place in the
contractual relation. Article 1293 speaks of substitution of the
JD – III
debtor, which may either be in the form of expromision or

delegacion, as seems to be the case here. In both cases, the old
debtor must be released from the obligation, otherwise, there is
no valid novation.
63. G.R. No. 194507
FEDERAL BUILDERS, INC., Petitioner,
vs.
FOUNDATION SPECIALISTS, INC., Respondent,
x - - - - - - - - - - - - - - - - - - - - - - - x
G.R. No. 194621
FOUNDATION SPECIALISTS, INC., Petitioner,
vs.
FEDERAL BUILDERS, INC., Respondent.
A review of similar jurisprudence would tell us that this Court
had repeatedly recognized this distinction and awarded interest at
a rate of 6% on actual or compensatory damages arising from a
breach not only of construction contracts, such as the one subject
ofthis case, but also of contracts wherein one of the parties
reneged on its obligation to perform messengerial
services, deliver certain quantities of molasses,undertake the
reforestation of a denuded forest land, as well as breaches of
contracts of carriage,and trucking agreements. We have explained
therein that the reason behind such is that said contracts do not
partake of loans or forbearance of money but are more in the
nature of contracts of service.
64. G.R. No. 205578
GEORGIA OSMEÑA-JALANDONI, Petitioner
vs
CARMEN A. ENCOMIENDA, Respondent
Unjust enrichment exists when a person unfairly retains a benefit
to the loss of another, or when a person retains money or property
of another against the fundamental principles of justice, equity,
and good conscience. There is unjust enrichment under Article 22
of the Civil Code when (1) a person is unjustly benefited, and (2)
such benefit is derived at the expense of or with damages to
another. The principle of unjust enrichment essentially
contemplates payment when there is no duty to pay, and the person
who receives the payment has no right to receive it.
65. G.R. No. 182769
BANK OF THE PHILIPPINE ISLANDS, AS SUCCESSOR-IN-INTEREST OF FAR
EAST BANK & TRUST COMPANY, Petitioner,
vs.
CYNTHIA L. REYES, Respondent.
It is settled that if "the proceeds of the sale are insufficient

to cover the debt in an extrajudicial foreclosure of mortgage, the
mortgagee is entitled to claim the deficiency from the debtor.
While Act No. 3135, as amended, does not discuss the mortgagee’s
right to recover the deficiency, neither does it contain any
provision expressly or impliedly prohibiting recovery. If the
legislature had intended to deny the creditor the right to sue for
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any deficiency resulting from the foreclosure of a security given

to guarantee an obligation, the law would expressly so provide.
Absent such a provision in Act No. 3135, as amended, the creditor
is not precluded from taking action to recover any unpaid balance
on the principal obligation simply because he chose to
extrajudicially foreclose the real estate mortgage.
66. G.R. No. 233974

CATALINA F. ISLA, ELIZABETH ISLA, AND GILBERT F.
ISLA, Petitioners, v. GENEVIRA* P. ESTORGA, Respondent.
The legal rate of interest is an affirmation of the contracting

parties' intent; that is, by their contract's silence on a
specific rate, the then prevailing legal rate of interest shall be
the cost of borrowing money. This rate, which by their contract
the parties have settled on, is deemed to persist regardless of
shifts in the legal rate of interest. Stated otherwise, the legal
rate of interest, when applied as conventional interest, shall
always be the legal rate at the time the agreement was executed
and shall not be susceptible to shifts in rate.
67.
GR No. 1959622018-04-18 PRESIDENTIAL COMMISSION ON
GOOD GOVERNMENT v. Office OF OMBUDSMAN
On 8 October 1992, then President Fidel V. Ramos issued
Administrative Order No. 13 creating the Presidential Ad Hoc Fact-
Finding Committee on Behest Loans. The Committee was tasked to
perform the following functions: 1. Inventory all behest loans;
identify the lenders and borrowers, including the principal
officers and stockholders of the borrowing firms, as well as the
persons responsible for granting the loans or who influenced the
grant thereof; 3. Determine the courses of action that the
government should take to recover these loans, and to recommend
appropriate actions of the Office of the President within sixty
(60) days from date of its creation. x x x On 9 November 1992,
President Ramos further issued Memorandum Order No. 61 expanding
the functions of the Committee to include in its investigation,
inventory and study, all non-performing loans, whether behest or
non-behest. Moreover, the said Memorandum Order provided the
following criteria as reference in determining whether a loan was
behest or not, to wit:
68.
GR No. 2136172018-04-18 ARCH. EUSEBIO B. BERNAL v.
DR. VIVENCIO VILLAFLORREYES,
Once this judgment becomes final and executory, the award equates
to a loan or forbearance of money and from such time, the legal
rate of interest begins to apply. Petitioner's insistence on an
increase in the interest rate from such time to 12% per annum is
erroneous; his reference to jurisprudence prior to 2013 is
misplaced. In Circular No. 799 issued on June 21, 2013 by the
Bangko Sentral ng Pilipinas, the legal rate of interest on loans
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and forbearance of money was reduced from 12% to 6% per annum from
the time of the circular's effectivity on July 1, 2013.
69.
GR No. 1991612018-04-18 PHILIPPINE NATIONAL BANK v.
JAMES T. CUAMARTIRES,
James learned that he had a loan obligation with PNB which had
allegedly become due and demandable. He maintained, however, that
although he had pre-signed loan documents for pre-arranged loans
with his time deposit as collateral, he had never availed of its
proceeds. Sometime in September 2004, to see if his dollar time
deposit was still existing and in order to revive his cash-
strapped machine shop business, James requested from PNB the
release of P500,000.00 to be secured by CTD No. B-630178. To his
surprise, PNB rejected his loan application which refusal, he
claims, caused damage and prejudice in terms of lost business
opportunity and loss of income in the amount of more or less
P1,000,000.00 James inquired about the reason for the denial of
his application. In a letter-reply dated 17 November 2004, PNB,
through its vice president, explained that his dollar time deposit
had been applied in payment to the loans he had with the bank, in
accordance with the loan application and other documents he had
executed. In its Answer,[4] PNB admitted that James had applied
for a loan. Contrary to his claim, however, he already made use of
his hold-out facility with PNB and received the proceeds of his
loan. PNB further denied James' allegation that he merely pre-
signed the loan documents in order to have a stand-by loan. As its
affirmative defense, PNB claimed that James, in fact, applied for
and was extended four (4) separate loans including one on 14
February 2001 as evidenced by Promissory Note (PN) No.
0011628152240004 dated 14 February 2001. On 26 February 2002, the
parties renewed the 14 February 2001 loan for which James executed
PN No. 0011628152240006 dated 26 February 2002. PNB further
explained that James was considered as one of its valued clients
such that when he came to the bank on said dates inquiring if he
could use the hold-out loan facilities of the bank, the latter
gladly obliged. Hence, immediately after James applied for the
respective loans, the same were granted on the very same day, and
the proceeds released in the form of manager's checks.
70.
GR No. 2112322018-04-11 COCA-COLA BOTTLERS PHILS.
v. SPS. EFREN AND LOLITA
The aforecited pronouncements by this Court, however, relate to
the issue on whether the subject realty of the REM was bound by
the additional loans executed between the parties. The validity of
the said REM was not put into question in the said case. Thus, in
the present case, the CA erred in relying on the said
pronouncements.
71. GR No. 1983932018-04-04 REPUBLIC v. RODOLFO

Secured loans and financial assistance fro[m] government financial
institutions without sufficient collateral, in contravention of
JD – III
banking laws and sound banking practices, and other terms and
conditions manifestly disadvantageous to said government
institutions, the plaintiff and the Filipino people. Defendant
Panfilo O. Domingo, as director and president of one of these
government financial institutions – the Philippine National Bank,
abetted, facilitated and collaborated in the illegal execution.
72. G.R. No. 208984,
WT CONSTRUCTION, INC., Petitioner, v. THE PROVINCE OF
CEBU, Respondent.
G.R. No. 209245
PROVINCE OF CEBU, Petitioner, v. WT CONSTRUCTION,

INC., Respondent.
A loan or forbearance of money, the interest due should be that
which may have been stipulated in writing. Furthermore, the
interest due shall itself earn legal interest from the time it is
judicially demanded. In the absence of stipulation, the rate of
interest shall be 12% per annum to be computed from default, i.e.,
from judicial or extrajudicial demand under and subject to the
provisions of Article 1169 of the Civil Code.
73. G.R. No. 156162

CCC INSURANCE CORPORATION, Petitioner,
vs.
KAWASAKI STEEL CORPORATION, F.F. MAÑACOP CONSTRUCTION CO., INC.,
and FLORANTE F. MAÑACOP, Respondents.
"A surety's liability is joint and several, limited to the amount
of the bond, and determined strictly by the terms of contract of
suretyship in relation to the principal contract between the
obligor and the obligee. It bears stressing, however, that
although the contract of suretyship is secondary to the principal
contract, the surety's liability to the obligee is nevertheless
direct, primary, and absolute."
74. G.R. No. 193804

SPOUSES NILO RAMOS and ELIADORA RAMOS, Petitioners,
vs.
RAUL OBISPO and FAR EAST BANK AND TRUST COMPANY, Respondents.
The validity of an accommodation mortgage is allowed under Article
2085 of the Civil Code which provides that "[t]hird persons who
are not parties to the principal obligation may secure the latter
by pledging or mortgaging their own property." An accommodation
mortgagor, ordinarily, is not himself a recipient of the loan,
otherwise that would be contrary to his designation as such.
75. G.R. No. 189061

MIDWAY MARITIME AND TECHNOLOGICAL FOUNDATION, represented by its
Chairman/President PhD in Education DR. SABINO M.
JD – III
MANGLICMOT, Petitioner,
vs.
MARISSA E. CASTRO, ET AL., Respondents.
The improvements are to be considered so incorporated only if so
owned by the mortgagor is a rule that can hardly be debated since
a contract of security, whether real or personal, needs as an
indispensable element thereof the ownership by the pledgor
ormortgagor of the property pledged or mortgaged. The rationale
shouldbe clear enough — in the event of default on the secured
obligation, the foreclosure sale of the property would naturally
be the next step that can expectedly follow. A sale would result
in the transmission of title to the buyer which is feasible only
if the seller can be in a position to convey ownership of the
thing sold (Article 1458, Civil Code). It is to say, in the
instant case, that a foreclosure would be ineffective unless the
mortgagor has title to the property to be foreclosed.20 (Citations
omitted and emphasis ours) The rule is that "when a decision
becomes final and executory, it becomes valid and binding upon the
parties and their successors in interest.
76. GEORGIA OSMEÑA-JALANDONI, Petitioner, - versus -

CARMEN A. ENCOMIENDA, Respondent. G.R. No. 205578
“In case of loans between friends and relatives, the

absence of acknowledgment receipts or promissory notes is
more natural and real. The law is explicit that contracts
shall be obligatory in whatever form they may have been
entered into, provided all the essential requisites for their
validity are present. In this case, Encomienda immediately
offered a helping hand when a friend asked for it. But this
does not mean that she had already waived her right to
collect in the future.”
77. WT CONSTRUCTION, INC., Petitioner, - versus - THE

PROVINCE OF CEBU, Respondent. G.R. No. 208984, FIRST
DIVISION, September 16, 2015, PERLAS-BERNABE, J.
PROVINCE OF CEBU, Petitioner, - versus - WT
CONSTRUCTION, INC., Respondent. G.R. No. 209245,
“Forbearance of money, goods, or credit refers to

arrangements other than loan agreements where a person
acquiesces to the temporary use of his money, goods or
credits pending the happening of certain events or fulfilment
of certain conditions such that if these conditions are
breached, the said person is entitled not only to the return
of the principal amount given, but also to compensation for
the use of his money equivalent to the legal interest since
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the use or deprivation of funds is akin to a loan. In this

case, the Court finds that the liability of the Province of
Cebu to WTCI is not in the nature of a forbearance of money
as it does not involve an acquiescence to the temporary use
of WTCI's money, goods or credits. Rather, this case involves
WTCI's performance of a particular service.”
78. EASTERN SHIPPING LINES, INC., Petitioner, -versus-

HON. COURT OF APPEALS AND MERCANTILE INSURANCE
COMPANY, INC.,
Respondents. The Court laid down the following rules of

thumb for future guidance:
When an obligation, regardless of its source, i.e., law,

contracts, quasi-contracts, delicts or quasi-delicts is
breached, the contravener can be held liable for damages. The
provisions under Title XVIII on "Damages" of the Civil Code
govern in determining the measure of recoverable damages.
With regard particularly to an award of interest in the

concept of actual and compensatory damages, the rate of
interest, as well as the accrual thereof, is imposed, as
follows:
 When the obligation is breached, and it consists in

the payment of a sum of money, i.e., a loan or
forbearance of money, the interest due should be that
which may have been stipulated in writing.
Furthermore, the interest due shall itself earn legal
interest from the time it is judicially demanded. In
the absence of stipulation, the rate of interest shall
be 12% per annum to be computed from default, i.e.,
from judicial or extrajudicial demand under and
subject to the provisions of Article 1169 of the Civil
Code.
 When an obligation, not constituting a loan or

forbearance of money, is breached, an interest on the
amount of damages awarded may be imposed at the
discretion of the court at the rate of 6% per annum.
No interest, however, shall be adjudged on
unliquidated claims or damages except when or until
the demand can be established with reasonable
certainty. Accordingly, where the demand is
established with reasonable certainty, the interest
shall begin to run from the time the claim is made
judicially or extrajudicially (Art. 1169, Civil Code)
JD – III
but when such certainty cannot be so reasonably

established at the time the demand is made, the
interest shall begin to run only from the date the
judgment of the court is made (at which time the
quantification of damages may be deemed to have been
reasonably ascertained). The actual base for the
computation of legal interest shall, in any case, be
on the amount finally adjudged.
 When the judgment of the court awarding a sum of money

becomes final and executory, the rate of legal
interest, whether the case falls under paragraph 1 or
paragraph 2, above, shall be 12% per annum from such
finality until its satisfaction, this interim period
being deemed to be by then an equivalent to a
forbearance of credit.
79. HERMOJINA ESTORES, Petitioner, -versus- SPOUSES

ARTURO and LAURA SUPANGAN, Respondents.
Forbearance of money, goods or credits should therefore

refer to arrangements other than loan agreements, where a
person acquiesces to the temporary use of his money, goods or
credits pending happening of certain events or fulfillment of
certain conditions. In this case, the respondent-spouses
parted with their money even before the conditions were
fulfilled. They have therefore allowed or granted forbearance
to the seller (petitioner) to use their money pending
fulfillment of the conditions. They were deprived of the use
of their money for the period pending fulfillment of the
conditions and when those conditions were breached, they are
entitled not only to the return of the principal amount paid,
but also to compensation for the use of their money. And the
compensation for the use of their money, absent any
stipulation, should be the same rate of legal interest
applicable to a loan since the use or deprivation of funds is
similar to a loan.
80. DARIO NACAR, Petitioner, -versus-GALLERY FRAMES

AND/OR FELIPE BORDEY, JR., Respondents. G.R. No.
189871,
JD – III
The instant case is similar to the case of Session

Delights Ice Cream and Fast Foods v. Court of Appeals (Sixth
Division), wherein the issue submitted to the Court for
resolution was the propriety of the computation of the awards
made, and whether this violated the principle of immutability
of judgment. Like in the present case, it was a distinct
feature of the judgment of the Labor Arbiter in the
abovecited case that the decision already provided for the
computation of the payable separation pay and backwages due
and did not further order the computation of the monetary
awards up to the time of the finality of the judgment. Also
in Session Delights, the dismissed employee failed to appeal
the decision of the labor arbiter. The Court clarified, thus:
In concrete terms, the question is whether a re-computation
in the course of execution of the labor arbiter's original
computation of the awards made, pegged as of the time the
decision was rendered and confirmed with modification by a
final CA decision, is legally proper. The question is posed,
given that the petitioner did not immediately pay the awards
stated in the original labor arbiter's decision; it delayed
payment because it continued with the litigation until final
judgment at the CA level. That the amount respondents shall
now pay has greatly increased is a consequence that it cannot
avoid as it is the risk that it ran when it continued to seek
recourses against the Labor Arbiter's decision. Article 279
provides for the consequences of illegal dismissal in no
uncertain terms, qualified only by jurisprudence in its
interpretation of when separation pay in lieu of
reinstatement is allowed. When that happens, the finality of
the illegal dismissal decision becomes the reckoning point
instead of the reinstatement that the law decrees. In
allowing separation pay, the final decision effectively
declares that the employment relationship ended so that
separation pay and backwages are to be computed up to that
point.
81. SPOUSES SALVADOR ABELLA AND ALMA ABELLA,

Petitioners, -versus- SPOUSES ROMEO ABELLA AND ANNIE
ABELLA, Respondents. G.R. No. 195166
Article 1956 of the Civil Code spells out the basic rule
that "[n]o interest shall be due unless it has been expressly
stipulated in writing." On the matter of interest, the text
of the acknowledgment receipt is simple, plain, and
unequivocal. It attests to the contracting parties' intent to
subject to interest the loan extended by petitioners to
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respondents. The controversy, however, stems from the

acknowledgment receipt's failure to state the exact rate of
interest. it remains that where interest was stipulated in
writing by the debtor and creditor in a simple loan or
mutuum, but no exact interest rate was mentioned, the legal
rate of interest shall apply. At present, this is 6% per
annum, subject to Nacar's qualification on prospective
application. Applying this, the loan obtained by respondents
from petitioners is deemed subjected to conventional interest
at the rate of 12% per annum, the legal rate of interest at
the time the parties executed their agreement. Moreover,
should conventional interest still be due as of July 1, 2013,
the rate of 12% per annum shall persist as the rate of
conventional interest. This is so because interest in this
respect is used as a surrogate for the parties' intent, as
expressed as of the time of the execution of their contract.
In this sense, the legal rate of interest is an affirmation
of the contracting parties' intent; that is, by their
contract's silence on a specific rate, the then prevailing
legal rate of interest shall be the cost of borrowing money.
This rate, which by their contract the parties have settled
on, is deemed to persist regardless of shifts in the legal
rate of interest. Stated otherwise, the legal rate of
interest, when applied as conventional interest, shall always
be the legal rate at the time the agreement was executed and
shall not be susceptible to shifts in rate.
82. SPOUSES MARIANO and GILDA FLORENDO, petitioners,

vs. COURT OF APPEALS and LAND BANK OF THE PHILIPPINES,
respondents. G.R. No. 101771
Without such CB issuance, any proposed increased rate

will never become effective.
83. PHILIPPINE NATIONAL BANK, Petitioner, v. THE HON.

COURT OF APPEALS and AMBROSIO PADILLA, Respondents.
G.R. No. 88880
Removal of Usury Law Ceiling on interest rates does not

authorize banks to unilaterally and successively increase
interest rates.
84. PAULINO GULLAS, plaintiff-appellant, vs. THE

PHILIPPINE NATIONAL BANK, defendant-appellant. G.R.
No. L-43191,
JD – III
As to a depositor who has funds sufficient to meet

payment of a check drawn by him in favor of a third party, it
has been held that he has a right of action against the bank
for its refusal to pay such a check in the absence of notice
to him that the bank has applied the funds so deposited in
extinguishment of past due claims held against him. The
decision cited represents the minority doctrine, for on
principle it would seem that notice is not necessary to a
maker because the right is based on the doctrine that the
relationship is that of creditor and debtor. However this may
be, as to an indorser the situation is different, and notice
should actually have been given him in order that he might
protect his interests.
85. TEOFISTO GUINGONA, JR., ANTONIO I. MARTIN, and

TERESITA SANTOS, petitioners, vs. THE CITY FISCAL OF
MANILA, HON. JOSE B. FLAMINIANO, ASST. CITY FISCAL
FELIZARDO N. LOTA and CLEMENT DAVID, respondents. G.R.
No. L-60033
[W]hile it is true that novation does not extinguish

criminal liability, it may however, prevent the rise of
criminal liability as long as it occurs prior to the filing
of the criminal information in court. xxx In the case at bar,
there is no dispute that petitioners Guingona and Martin
executed a promissory note on June 17, 1981 assuming the
obligation of the bank to private respondent David; while the
criminal complaint for estafa was filed on December 23, 1981
with the Office of the City Fiscal. Hence, it is clear that
novation occurred long before the filing of the criminal
complaint with the Office of the City Fiscal. Consequently,
as aforestated, any incipient criminal liability would be
avoided but there will still be a civil liability on the part
of petitioners Guingona and Martin to pay the assumed
obligation.
86. SPS. FRANCISCO AND RUBY REYES, Petitioners, -

versus - BPI FAMILY SAVINGS BANK, INC., and MAGDALENA
L. LOMETILLO, in her capacity as ex-officio Provincial
Sheriff for Iloilo, Respondents. G.R. Nos. 149840-41
Thus, the well-settled rule is that, with respect to

obligations to pay a sum of money, the obligation is not
novated by an instrument that expressly recognizes the old,
changes only the terms of payment, adds other obligations not
incompatible with the old ones, or the new contract merely
supplements the old one. BPI-FSB and Transbuilders only
JD – III
extended the repayment term of the loan from one year to

twenty quarterly installments at 18% interest per annum.
There was absolutely no intention by the parties to supersede
or abrogate the old loan contract secured by the real estate
mortgage executed by petitioners in favor of BPI-FSB.
87. TRADERS INSURANCE and SURETY COMPANY, plaintiff-

appellant – versus - DY ENG GIOK, PEDRO LOPEZ DEE and
PEDRO E. DY-LIACCO, defendants-appellees. G.R. No. L-
9073,
In the absence of express stipulation, a guaranty or

suretyship operates prospectively and not retroactively; that
is to say, it secures only the debts contracted after the
guaranty takes effect This rule is a consequence of the
statutory directive that a guaranty is not presumed, but must
be express, and can not extend to more than what is
stipulated. (New Civil Code, Art. 2055). To apply the
payments made by the principal debtor to the obligations he
contracted prior to the guaranty is, in effect, to make the
surety answer for debts incurred outside of the guaranteed
period, and this can not be done without the express consent
of the guarantor. Note that the suretyship agreement, Annex
A, did not guarantee the payment of any outstanding balance
due from the principal debtor, Dy Eng Giok; but only that he
would turn over the proceeds of the sales to the "Destilleria
Lim Tuaco & Co., Inc.", and this he has done, since his
remittances during the period of the guaranty exceed the
value of his sales.
88. CCC INSURANCE CORPORATION, Petitioner, -versus-

KAWASAKI STEEL CORPORATION, F.F. MAÑACOP CONSTRUCTION
CO., INC., and FLORANTE F. MAÑACOP, Respondents. G.R.
No. 156162,
The Court cannot give any additional meaning to the

plain language of the undertakings in the Surety and
Performance Bonds. The extent of a surety's liability is
determined by the language of the suretyship contract or bond
itself. Article 1370 of the Civil Code provides that "[i]f
the terms of a contract are clear and leave no doubt upon the
intention of the contracting parties, the literal meaning of
its stipulations shall control." It is not disputed that
FFMCCI, due to financial difficulties, was unable to repay
the advance payment it received from Kawasaki and to finish
its scope of work in the Project, thus, FFMCCI defaulted on
JD – III
its obligations to Kawasaki. Given the default of FFMCCI,

CCCIC as surety became directly, primarily, and absolutely
liable to Kawasaki as the obligee under the Surety and
Performance Bonds.
89. DOMINADOR DIZON, doing business under the firm name

"Pawnshop of Dominador Dizon", petitioner, vs. LOURDES G.
SUNTAY, respondent. G.R. No. L-30817
As was put by Justice Labrador, "a person claimed to be

estopped must have knowledge of the fact that his voluntary
acts would deprive him of some rights because said voluntary
acts are inconsistent with said rights." In light of these,
Dizon cannot assert that his appeal finds support in the
doctrine of estoppel. Neither the promptings of equity nor
the mandates of moral right and natural justice come to his
rescue. He is engaged in a business where presumably ordinary
prudence would manifest itself to ascertain whether or not an
individual who is offering jewelry by way of a pledge is
entitled to do so.
90. SPOUSES NILO RAMOS and ELIADORA RAMOS, Petitioners,

vs. RAUL OBISPO and FAR EAST BANK AND TRUST COMPANY,
Respondents. G.R. No. 193804,
It bears stressing that an accommodation mortgagor,

ordinarily, is not himself a recipient of the loan, otherwise
that would be contrary to his designation as such. It is not
always necessary that the accommodation mortgagor be apprised
beforehand of the entire amount of the loan nor should it
first be determined before the execution of the Special Power
of Attorney in favor of the debtor. This is especially true
when the words used by the parties indicate that the mortgage
serves as a continuing security for credit obtained as well
as future loan availments. Here, Spouses Ramos as owners
signed the REM as mortgagors and there is no evidence adduced
that suggests fraud or irregularity in its execution. Spouses
Ramos are not contracting parties whom the law considers
ignorant or disadvantaged but former overseas workers with
sufficient education as to be well-aware of the consequences
of their personal decisions, consistent with the legal
presumption that a person takes ordinary care of his
concerns. Hence, it can be reasonably inferred from the facts
on record that it was more probable that Spouses Ramos
allowed Obispo to use their property as additional collateral
so as to avail of his existing credit line with FEBTC instead
of them directly applying for a separate loan.
JD – III
91. BANGKO SENTRAL NG PILIPINAS, Petitioner, -versus-

AGUSTIN LIBO-ON, Respondent. G.R. No. 173864
"An assignment of credit is an agreement by virtue of

which the owner of a credit, known as the assignor, by a
legal cause, such as sale, dation in payment, exchange or
donation, and without the consent of the debtor, transfers
his credit and accessory rights to another, known as the
assignee, who acquires the power to enforce it to the same
extent as the assignor could enforce it against the debtor.
It may be in the form of sale, but at times it may constitute
a dation in payment, such as when a debtor, in order to
obtain a release from his debt, assigns to his creditor a
credit he has against a third person." As a dation in
payment, the assignment of credit operates as a mode of
extinguishing the obligation; the delivery and transmission
of ownership of a thing (in this case, the credit due from a
third person) by the debtor to the creditor is accepted as
the equivalent of the performance of the obligation. The mere
pledge and deposit of the mortgage contract, transfer
certificate of title and promissory note executed by the the
Rural Bank of Hinigaran in favor o'f BSP, does not produce
the effect of giving BSP the authority to intervene with the
transaction between the Spouses Libo-on and the Rural Bank of
Hinigaran, much less foreclose the mortgaged property of the
Spouses Libo-on. In the absence of a notarized deed of
assignment, BSP cannot be considered as an assignee who can
proceed against the Spouses Libo-on's property.
92. LAND BANK OF THE PHILIPPINES, Petitioner, -versus-

LORENZO MUSNI, EDUARDO SONZA and SPOUSES IRENEO AND
NENITA SANTOS, Respondents. G.R. No. 206343
The rule on "innocent purchasers or mortgagees for value" is

applied more strictly when the purchaser or the mortgagee is
a bank. Banks are expected to exercise higher degree of
diligence in their dealings, including those involving lands.
Banks may not rely simply on the face of the certificate of
title. What further militates against the claim of Land
Bank's good faith in this case is the fact that TCT No.
304649 which was mortgaged to the bank, was issued by virtue
of a Decision of the Department of Agrarian Reform
Adjudication Board Region III dated December 29,1997. The
said Decision was, however, inscribed only on February 25,
1998, after the issuance of TCT No. 304649 on February 8,
1998. In addition, the property was mortgaged to Land Bank a
JD – III
few days after the inscription of the alleged Decision of the

Department of Agrarian Reform Adjudication Board. This
circumstance should have aroused a suspicion on the part of
Land Bank and anyone who deliberately ignores a significant
fact that would create suspicion in an otherwise reasonable
person cannot be considered as a mortgagee in good faith.
93. SPOUSES ELLIS R. MILES and CAROLINA RONQUILLO-MILES,

Petitioners -versusBONNIE BAUTISTA LAO, Respondent. G.R. No.
209544
Indeed, a mortgagee has a right to rely in good faith on

the certificate of title of the mortgagor of the property
given as security, and in the absence of any sign that might
arouse suspicion, the mortgagee has no obligation to
undertake further investigation. This doctrine presupposes,
however, that the mortgagor, who is not the rightful owner of
the property, has already succeeded in obtaining Torrens
title over the property in his name and that, after obtaining
the said title, he succeeds in mortgaging the property to
another who relies on what appears on the title. In this
case, the title of the property under the name of spouses
Ocampo was already registered as early as May 6, 1998, while
the real estate mortgage was executed December 16, 1998.
Hence, it is clear that respondent had every right to rely on
the TCT presented to her insofar as the mortgagors' right of
ownership over the subject property is concerned.
94. SPOUSES FRANCISCO D. YAP and WHELMA S. YAP,

petitioners, -versus- SPOUSES ZOSIMO DY, SR. and
NATIVIDAD CHIU DY, SPOUSES MARCELINO MAXINO and
REMEDIOS L. MAXINO, PROVINCIAL SHERIFF OF NEGROS
ORIENTAL and DUMAGUETE RURAL BANK, INC., respondents.
G.R. No. 171868 & G.R. No. 171991
A debtor who has paid a part of the debt cannot ask for
the proportionate extinguishment of the mortgage as long as
the debt is not completely satisfied. However, this rule does
not apply where the aggregate number of the lots which
comprise the collaterals for the mortgage had already been
foreclosed and sold at public auction. Nothing in the law
prohibits the piecemeal redemption of properties sold at one
foreclosure proceeding. Clearly, the Dys and Maxinos can
affect the redemption of even only two of the five properties
foreclosed. And since they can effect a partial redemption,
they are not required to pay the P216,040.93 considering that
JD – III
it is the purchase price for all the five properties

foreclosed.
95. MIDWAY MARITIME AND TECHNOLOGICAL FOUNDATION,

represented by its Chairman/President PhD in Education
DR. SABINO M. MANGLICMOT, petitioner, -versusMARISSA
E. CASTRO, ET AL., respondents. G.R. No. 189061
The petitioner is a lessee of a parcel of land and

disputes the title of the owners of the building built on the
land they are leasing. The Supreme Court ruled that it is
settled that "[o]nce a contact of lease is shown to exist
between the parties, the lessee cannot by any proof, however
strong, overturn the conclusive presumption that the lessor
has a valid title to or a better right of possession to the
subject premises than the lessee." Section 2(b), Rule 131 of
the Rules of Court prohibits a tenant from denying the title
of his landlord at the time of the commencement of the
relation of landlord and tenant between them.
96.PHILIPPINE NATIONAL BANK, PETITIONER, VS. SPOUSES BERNARD AND

CRESENCIA MARAÑON, RESPONDENTS. G.R. No. 189316
Rent is a civil fruit that belongs to the owner of the

property producing it by right of accession. The rightful
recipient of the disputed rent in this case should thus be the
owner of the subject lot at the time the rent accrued. It is
beyond question that Spouses Marañon never lost ownership over
the subject lot. This is the precise consequence of the final
and executory judgment in Civil Case No. 7213 rendered by the
RTC on June 3, 2006 whereby the title to the subject lot was
reconvened to them and the cloud thereon consisting of
Emilie’s fraudulently obtained title was removed.
97. PABLO P. GARCIA, PETITIONER, VS. YOLANDA VALDEZ

VILLAR, RESPONDENT. G.R. No. 158891, FIRST DIVISION
The following are the elements of pactum commissorium:
(1) There should be a property mortgaged by way of

security for the payment of the principal obligation;
JD – III
(2) And,There should be a stipulation for automatic

appropriation by the creditor of the thing mortgaged
in case of non- payment of the principal obligation
within the stipulated period.
98. CLAUDIO-ISULAT, DOLORES CLAUDIO-MABINI, AND FERMIN

L. CLAUDIO, Petitioners, - versus - SPOUSES FEDERICO
AND NORMA SARAZA, Respondent. G.R. No. 213286, SECOND
DIVISION
Based on the doctrine of "the mortgagee in good faith,"

all persons dealing with property covered by a Torrens
Certificate of Title, as buyers or mortgagees, are not
required to go beyond what appears on the face of the title.
The public interest in upholding the indefeasibility of a
certificate of title, as evidence of the lawful ownership of
the land or of any encumbrance thereon, protects a buyer or
mortgagee who, in good faith, relied upon what appears on the
face of the certificate of title.
99. ATTY. LEO N. CAUBANG, Petitioner, - versus - JESUS

G. CRISOLOGO and NANETTE B. CRISOLOGO, Respondents.
G.R. No. 174581
Notices are given to secure bidders and prevent a

sacrifice of the property. Therefore, statutory provisions
governing publication of notice of mortgage foreclosure sales
must be strictly complied with and slight deviations
therefrom will invalidate the notice and render the sale, at
the very least, voidable. Caubang never made an effort to
inquire as to whether the Oriental Daily Examiner was indeed
a newspaper of general circulation, as required by law. It
was shown that the Oriental Daily Examiner is not even on the
list of newspapers accredited to publish legal notices, as
recorded in the RTC Davao’s Office of the Clerk of Court. It
also has no paying subscribers and it would only publish
publication of the notice of sale, the Spouses Crisologo, as
well as the rest of the general public, were never informed
that the mortgaged property was about to be foreclosed and
auctioned.
100. ACME SHOE, RUBBER & PLASTIC CORPORATION and CHUA

PAC, petitioners, vs. HON. COURT OF APPEALS, BANK OF
THE PHILIPPINES and REGIONAL SHERIFF OF CALOOCAN CITY,
respondents. G.R. No. 103576, FIRST DIVISION,
JD – III
While a pledge, real estate mortgage, or antichresis may

exceptionally secure after-incurred obligations so long as
these future debts are accurately described, a chattel
mortgage, however, can only cover obligations existing at the
time the mortgage is constituted. Although a promise
expressed in a chattel mortgage to include debts that are yet
to be contracted can be a binding commitment that can be
compelled upon, the security itself, however, does not come
into existence or arise until after a chattel mortgage
agreement covering the newly contracted debt is executed
either by concluding a fresh chattel mortgage or by amending
the old contract conformably with the form prescribed by the
Chattel Mortgage Law. Refusal on the part of the borrower to
execute the agreement so as to cover the after-incurred
obligation can constitute an act of default on the part of
the borrower of the financing agreement whereon the promise
is written but, of course, the remedy of foreclosure can only
cover the debts extant at the time of constitution and during
the life of the chattel mortgage sought to be foreclosed
101. BPI FAMILY SAVINGS BANK, INC., Petitioner, -versus-

MA. AVRLYN T. AVENIDO & PACIFACIO A. AVENIDO,
Respondents. G.R. No. 175816
In Hulst v. PR Builders, Inc., we reiterated that:

[G]ross inadequacy of price does not nullify an execution
sale. In an ordinary sale, for reason of equity, a
transaction may be invalidated on the ground of inadequacy of
price, or when such inadequacy shocks one's conscience as to
justify the courts to interfere; such does not follow when
the law gives the owner the right to redeem as when a sale is
made at public auction, upon the theory that the lesser the
price, the easier it is for the owner to effect redemption.
When there is a right to redeem, inadequacy of price should
not be material because the judgment debtor may re-acquire
the property or else sell his right to redeem and thus
recover any loss he claims to have suffered by reason of the
price obtained at the execution sale. Thus, respondent stood
to gain rather than be harmed by the low sale value of the
auctioned properties because it possesses the right of
redemption.
102. BANK OF THE PHILIPPINE ISLANDS, AS SUCCESSOR-IN-

INTEREST OF FAR EAST BANK & TRUST COMPANY, petitioner,
-versus- CYNTHIA L. REYES, respondent. G.R. No. 182769
J.
JD – III
In the recent case of BPI Family Savings Bank, Inc. v.

Avenido, the Court reiterated the well-entrenched rule that a
creditor is not precluded from recovering any unpaid balance
on the principal obligation if the extrajudicial foreclosure
sale of the property subject of the real estate mortgage
results in a deficiency.
103. SPOUSES FRANCISCO and MERCED RABAT, Petitioners, -

versus- PHILIPPINE NATIONAL BANK, Respondent. G.R. No.
158755
Inadequacy of the bid price at a forced sale, unlike

that in an ordinary sale, is immaterial and does not nullify
the sale; in fact, in a forced sale, a low price is
considered more beneficial to the mortgage debtor because it
makes redemption of the property easier. The inadequacy of
the bid price in an extrajudicial foreclosure sale of
mortgaged properties will not per se invalidate the sale.
Additionally, the foreclosing mortgagee is not precluded from
recovering the deficiency should the proceeds of the sale be
insufficient to cover the entire debt.
104. JUANITA ERMITAÑO, represented by her Attorney-in-

Fact, ISABELO ERMITAÑO, vs. LAILANIE M. PAGLAS G.R.
No. 174436
The mere purchase and certificate of sale alone do not

confer any right to the possession or beneficial use of the
premises.25 In the instant case, there is neither evidence
nor allegation that respondent, as purchaser of the disputed
property, filed a petition and bond in accordance with the
provisions of Section 7 of Act No. 3135. In addition,
respondent defaulted in the payment of her rents. Thus,
absent respondent's filing of such petition and bond prior to
the expiration of the period of redemption, coupled with her
failure to pay her rent, she did not have the right to
possess the subject property.
105. GR No. 213617, Apr 18, 2018

ARCH. EUSEBIO B. BERNAL v. DR. VIVENCIO VILLAFLOR
Once this judgment becomes final and executory, the award equates
to a loan or forbearance of money and from such time, the legal
rate of interest begins to apply. Petitioner's insistence on an
increase in the interest rate from such time to 12% per annum is
JD – III
erroneous; his reference to jurisprudence prior to 2013 is

misplaced. In Circular No. 799 issued on June 21, 2013 by the
Bangko Sentral ng Pilipinas, the legal rate of interest
on loans and forbearance of money was reduced from 12% to 6% per
annum.
106. G.R. No. 211232, April 11, 2018

COCA-COLA BOTTLERS PHILS., INC., PETITIONER, V. SPOUSES EFREN AND
LOLITA SORIANO, RESPONDENTS.
Deeds, conveyances, encumbrances, discharges, powers of attorney

and other voluntary instruments, whether affecting registered or
unregistered land, executed in accordance with law in the form of
public instruments shall be registerable: Provided, that, every
such instrument shall be signed by the person or persons executing
the same in the presence of at least two witnesses who shall
likewise sign thereon, and shall acknowledged to be the free act
and deed of the person or persons executing the same before a
notary public or other public officer authorized by law to take
acknowledgment. Where the instrument so acknowledged consists of
two or more pages including the page whereon acknowledgment is
written, each page of the copy which is to be registered in the
office of the Register of Deeds, or if registration is not
contemplated, each page of the copy to be kept by the notary
public, except the page where the signatures already appear at the
foot of the instrument, shall be signed on the left margin thereof
by the person or persons executing the instrument and their
witnesses, and all the pages sealed with the notarial seal, and
this fact as well as the number of pages shall be stated in the
acknowledgment. Where the instrument acknowledged relates to a
sale, transfer, mortgage or encumbrance of two or more parcels of
land, the number thereof shall likewise be set forth in said
acknowledgment.
107. GR Nos. 217985-86, Mar 21, 2018

APO FRUITS CORPORATION v. APO FRUITS CORPORATION
Just compensation has been defined as "the full and fair
equivalent of the property taken from its owner by the
expropriator. The measure is not the taker's gain, but the owner's
loss. The word 'just' is used to qualify the meaning of the word
'compensation' and to convey thereby the idea that the amount to
be tendered for the property to be taken shall be real,
substantial, full and ample.
108. G.R. No. 208638

SPOUSES FRANCISCO ONG AND BETTY LIM ONG, AND SPOUSES JOSEPH ONG
CHUAN AND ESPERANZA ONG CHUAN, PETITIONERS, V. BPI FAMILY SAVINGS
BANK, INC., RESPONDENT.
JD – III
It is true that loans are often secured by a mortgage constituted

on real or personal property to protect the creditor's interest in
case of the default of the debtor. By its nature, however, a
mortgage remains an accessory contract dependent on the principal
obligation, such that enforcement of the mortgage contract will
depend on whether or not there has been a violation of the
principal obligation. While a creditor and a debtor could regulate
the order in which they should comply with their reciprocal
obligations, it is presupposed that in a loan the lender should
perform its obligation - the release of the full loan amount -
before it could demand that the borrower repay the loaned amount.
In other words, Guariña Corporation would not incur in delay
before DBP fully performed its reciprocal obligation.
109. GR No. 212024, Oct 12, 2020

BANCO DE ORO UNIBANK v. EDGARDO C. YPIL
In any case, guided by the conditions stated in Article 1279 of

the Civil Code and to supplement the findings of the CA, We
reiterate that there is no dispute that the Bank and CSTC are both
creditors and debtors of each other. Moreover, the debts consist
in or involve a sum of money, particularly CSTC's loan and its
deposit with the Bank. Notably, the Bank argues that CSTC's debts
became due given that it defaulted in its loan obligations even
without need of demand pursuant to the Promissory Note. Neither
CSTC nor Kho categorically refuted that CSTC indeed defaulted
110. SPOUSES NILO RAMOS and ELIADORA RAMOS, Petitioners,

vs.
RAUL OBISPO and FAR EAST BANK AND TRUST COMPANY, Respondents
G.R. No. 193804
The validity of an accommodation mortgage is allowed under Article
2085 of the Civil Code which provides that "[t]hird persons who
are not parties to the principal obligation may secure the latter
by pledging or mortgaging their own property." An accommodation
mortgagor, ordinarily, is not himself a recipient of the loan,
otherwise that would be contrary to his designation as such.
111. BANGKO SENTRAL NG PILIPINAS, Petitioner, v. AGUSTIN LIBO-

ON, Respondent.
G.R. No. 173864
Without a valid assignment of credit, as in this case, BSF has no
authority to foreclose the mortgaged property of the Spouses Libo-
tin to the Rural Bank of Hinigaran. Moreso, BSP could not possibly
sell the subject property without violating the prohibition
against pactum commissorium.
JD – III
112. SPOUSES CHARITO M. REYES and ROBERTO REYES, and SPOUSES VILMA
M. MARAVILLO and DOMINGO MARAVILLO, JR. , Petitioners,
vs.
HEIRS OF BENJAMIN MALANCE,* namely: ROSALINA M. MALANCE, BERNABE
M. MALANCE, BIENVENIDO M. MALANCE, and DOMINGA** M. MALANCE,
represented by BIENVENIDO M. MALANCE, Respondents.
G.R. No. 219071
Thus, antichresis involves an express agreement between parties
whereby : (a) the creditor will have possession of the debtor's
real property given as security; (b)such creditor will apply the
fruits of the said property to the interest owed by the debtor, if
any, then to the principal amount; c) the creditor retains
enjoyment of such property until the debtor has totally paid what
he owes; and (d) should the obligation be duly paid, then the
contract is automatically extinguished proceeding from the
accessory character of the agreement.
113. VIL-REY PLANNERS AND BUILDERS, Petitioners, v. LEXBER,

INC., Respondent.
G.R. No. 189401
What is the source of this right to full reimbursement by the
surety? We find the right under Article 2066 of the Civil Code,
which assures that "[t]he guarantor who pays for a debtor must be
indemnified by the latter," such indemnity comprising of, among
others, "the total amount of the debt." Further, Article 2067 of
the Civil Code likewise establishes that the guarantor.
114. SPOUSES ROBERTO and ADELAIDA PEN, Petitioners,

vs.
SPOUSES SANTOS and LINDA JULIAN, Respondents.
G.R. No. 160408
Article 2088 of the Civil Code prohibits the creditor from
appropriating the things given by way of pledge or mortgage, or
from disposing of them; any stipulation to the contrary is null
and void.
115. SPOUSES ROBERT ALAN L. and NANCY LEE LIMSO, Petitioners,

vs.
PHILIPPINE NATIONAL BANK and THE REGISTER OF DEEDS OF DAVAO
CITY, Respondents.
G.R. No. 158622
In determining whether the rate of interest is unconscionable, the
mechanical application of pre-established floors would be wanting.
The lowest rates that have previously been considered
unconscionable need not be an impenetrable minimum. What is more
crucial is a consideration of the parties’ contexts. Moreover,
JD – III
interest rates must be appreciated in light of the fundamental

nature of interest as compensation to the creditor for money lent
to another, which he or she could otherwise have used for his or
her own purposes at the time it was lent. It is not the default
vehicle for predatory gain. As such, interest need only be
reasonable. It ought not be a supine mechanism for the creditor’s
unjust enrichment at the expense of another.
116. G.R. No. 205838, November 29, 2017

JOSEPH HARRY WALTER POOLE-BLUNDEN, PETITIONER, V. UNION BANK OF
THE PHILIPPINES, RESPONDENT.
A seller is generally responsible for warranty against hidden
defects of the thing sold. As stated in Article 1561 of the New
Civil Code:
Article 1561. The vendor shall be responsible for warranty against
the hidden defects which the thing sold may have, should they
render it unfit for the use for which it is intended, or should
they diminish its fitness for such use to such an extent that, had
the vendee been aware thereof, he would not have acquired it or
would have given a lower price for it; but said vendor shall not
be answerable for patent defects or those which may be visible, or
for those which are not visible if the vendee is an expert who, by
reason of his trade or profession, should have known.
Article 1566, paragraph 2 states the seller's liability for hidden

defects shall be inapplicable if there is a stipulation made to
the contrary. However, a mere stipulation does not suffice. To be
fully absolved of liability, Article 1566, paragraph 2 also
requires a seller to be unaware of the hidden defects in the thing
sold.
117. ATALINA F. ISLA, ELIZABETH ISLA, AND GILBERT F. ISLA,

PETITIONERS, V. GENEVIRA P. ESTORGA, RESPONDENT.
G.R. No. 233974
A written instrument fails to specify a rate. In Spouses Toring v.
Spouses Olan [(589 Phil. 362 [2008])], this court clarified the
effect of Article 1956 of the Civil Code and noted that the legal
rate of interest (then at 12%) is to apply: "In a loan or
forbearance of money, according to the Civil Code, the interest
due should be that stipulated in writing, and in the absence
thereof, the rate shall be 12% per annum."
118. MARCELINO REPUELA AND CIPRIANO REPUELA, SUBSTITUTED BY
CARMELA REPUELA, MERLINDA R. VILLARUEL, WILLIAM REPUELA, ROSITA P.
REPUELA, CRISTINA R. RAMOS, ORLANDO REPUELA, JUNNE REPUELA, AND
OSCAR REPUELA, Petitioners , v. ESTATE OF THE SPOUSES OTILLO
LARAWAN AND JULIANA BACUS, REPRESENTED BY NANCY LARAWAN MANCAO,
GALILEO LARAWAN AND SOCRATES LARAWAN, Respondents.
G.R. No. 219638
JD – III
A conveyance of land, accompanied by registration in the name of

the transferee and the issuance of a new certificate, is no more
secured from the operation of this equitable doctrine than the
most informal conveyance that could be devised. In an equitable
mortgage, title to the property in issue, which has been
transferred to the respondents actually remains or is transferred
back to the petitioner as owner-mortgagor, conformably to the
well-established doctrine that the mortgagee does not become the
owner of the mortgaged property because the ownership remains with
the mortgagor pursuant to Article 2088, of the Civil Code.
119. PRUDENTIAL GUARANTEE AND ASSURANCE INC., Petitioner,vs.

ANSCOR LAND, INC., Respondent.
G.R. No. 177240
As regards the first requirement, the Performance Bond issued by
the petitioner was meant to guarantee the supply of labor,
materials, tools, equipment, and necessary supervision to complete
the project. A guarantee or a surety contract under Article 2047.
120.PHILIPPINE NATIONAL BANK, Petitioner, v. HEIRS OF BENEDICTO

AND AZUCENA ALONDAY, Respondent.
G.R. No. 171865
Article 1956 of the Civil Code, which refers to monetary interest,
specifically mandates that no interest shall be due unless it has
been expressly stipulated in writing.
121. G.R. No. 246096, January 13, 2021

SPOUSES BENNY AND NORMITA ROL, PETITIONERS, VS. ISABEL URDAS
RACHO,* RESPONDENT.
Art. 493. Each co-owner shall have the full ownership of his part
and or the fruits and benefits pertaining thereto, and he may
therefore alienate, assign or mortgage it, and even substitute
another person in its enjoyment, except when personal rights are
involved. But the effect of the alienation or the mortgage, with
respect to the co-owners, shall be limited to the portion which
may be allotted to him in the division upon the termination of the
co-ownership.
122. GR No. 231936, Nov 25, 2020
FIL-ESTATE PROPERTIES v. HERMANA REALTY
The owner or developer shall deliver the title of the lot or unit
to the buyer upon full payment of the lot or unit. No fee, except
those required for the registration of the deed of sale in the
Registry of Deeds, shall be collected for the issuance of such
title. In the event a mortgage over the lot or unit is outstanding
at the time of the issuance of the title to the buyer, the owner
or developer shall redeem the mortgage or the corresponding
portion thereof within six months from such issuance in order that
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the title over any fully paid lot or unit may be secured and
delivered to the buyer in accordance herewith.
123. GR No. 239418, Oct 12, 2020

DANILO DECENA v. ASSET POOL
The creditor's possession of the evidence of debt is proof that
the debt has not been discharged by payment. A promissory note in
the hands of the creditor is a proof of indebtedness rather than
proof of payment. In an action for replevin by a mortgagee, it is
prima facie evidence that the promissory note has not been paid.
Likewise, [a non-canceled] mortgage in the possession of
the mortgagee gives rise to the presumption that the mortgage debt
is unpaid.
124. GR No. 204992, Sep 08, 2020
AURORA TENSUAN v. HEIRS OF MA. ISABEL M. VASQUEZ
Every decree of registration issued by the Commissioner shall bear

the date, hour and minute of its entry, and shall be signed by
him. It shall state whether the owner is married or unmarried, and
if married, the name of the husband or wife: Provided, however,
that if the land adjudicated by the court is conjugal property,
the decree shall be issued in the name of both spouses. If the
owner is under disability, it shall state the nature of
disability, and if a minor, his age. It shall contain a
description of the land as finally determined by the court, and
shall set forth the estate of the owner, and also, in such manner
as to show their relative priorities, all particular
estates, mortgages, easements, liens, attachments, and other
encumbrances, including rights of tenant-farmers, if any, to which
the land or owner's estate is subject, as well as any other
matters properly to be determined in pursuance of this Decree.
125. GR No. 226894, Sep 03, 2020

KAIZEN BUILDERS v. CA
To the enforcement of claims against sureties and other persons

solidarity liable with the debtor, and third party or
accommodation mortgagors as well as issuers of letters of credit,
unless the property subject of the third party or
accommodation mortgage is necessary for the rehabilitation of the
debtor as determined by the court upon recommendation by the
rehabilitation receiver;
126. GR No. 218628, Sep 06, 2017
EVERGREEN MANUFACTURING CORPORATION v. REPUBLIC
With respect to the amount of interest on the difference between

the initial payment and final amount of just compensation as
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adjudged by the court, we have upheld in Eastern Shipping Lines,

Inc. v. Court of Appeals,[45] and in subsequent cases thereafter,
[46] the imposition of 12% interest rate from the time of taking
when the property owner was deprived of the property, until 1 July
2013, when the legal interest on loans and forbearance of money
was reduced from 12% to 6% per annum by BSP Circular No. 799.
Accordingly, from 1 July 2013 onwards, the legal interest on the
difference between the final amount and initial payment is 6% per
annum.
127. G.R. No. 174581

ATTY. LEO N. CAUBANG, Petitioner, vs. JESUS G. CRISOLOGO and
NANETTE B. CRISOLOGO, Respondents.
Notices are given to secure bidders and prevent a sacrifice of the
property. Therefore, statutory provisions governing publication of
notice of mortgage foreclosure sales must be strictly complied
with and slight deviations therefrom will invalidate the notice
and render the sale, at the very least, voidable. Caubang never
made an effort to inquire as to whether the Oriental Daily
Examiner was indeed a newspaper of general circulation, as
required by law. It was shown that the Oriental Daily Examiner is
not even on the list of newspapers accredited to publish legal
notices, as recorded in the RTC Davao’s Office of the Clerk of
Court. It also has no paying subscribers and it would only publish
publication of the notice of sale, the Spouses Crisologo, as well
as the rest of the general public, were never informed that the
mortgaged property was about to be foreclosed and auctioned.
128. G.R. No. 189316

PHILIPPINE NATIONAL BANK, Petitioner, vs. SPOUSES BERNARD and
CRESENCIA MARANON, Respondents.
The doctrine of immutability and inalterability of a final
judgment has a two-fold purpose: (1) to avoid delay in the
administration of justice and thus, procedurally, to make orderly
the discharge of judicial business and (2) to put an end to
judicial controversies, at the risk of occasional errors, which is
precisely why courts exist. Controversies cannot drag on
indefinitely.
"The main role of the courts of justice is to assist in the
enforcement of the law and in the maintenance of peace and order
by putting an end to judiciable controversies with finality.
Nothing better serves this role than the long established doctrine
of immutability of judgments.
129. BPI vs Cynthia L. Reyes G.R. No. 182769,

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In a recent case of BPI vs Avenido, the Court reiterated the

well-entrenched rule that a creditor is not precluded from
recovering any unpaid balance on the principal obligation if
the extrajudicial foreclosure sale of the property subject
of the real estate mortgage results in a deficiency.
130. Hermojina Estores vs. Spouses Arturo and laura Supangan

G.R. No. 175139
Forbearance of money, goods, and credit should therefore

refer to arrangements other than loan agreements, where a
person acquiesces to the temporary use of his money, goods,
or credits pending happening of certain events or
fulfillment of certain conditions.
JD – III
JD – III

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Reg, Zyra Ann N.

1. G.R. No. 195166

2. G.R. No. 174581

3. G.R. No. 205838

4 G.R. No. 192934,

7. G.R. No. 173864

8. G.R. No. 206343

LAND BANK OF THE PHILIPPINES, Petitioner, -versus- LORENZO MUSNI,

11. G.R. No. 194152

12. G.R. No. 205578

13. G.R. No. 213286

14. G.R. No. 209245

It should be noted that in order to give novation its legal

18. G.R. No. 217044

unless the contract is contrary to law, morals, good customs,

20. G.R. No.178407

21. G.R. No. 181426

22. G.R. No. 191174

providing security therefor or unless there are clear and

23. G.R. No. 183486

25. G.R. No. 227990, March 07, 2018

26. G.R. No. 201892

27. G.R. No. 209605

29.WT Construction, Inc., vs. The province of Cebu

equally bound with the principal. The acceptance of a surety

32. Spouses Salvador Abella and Alma Abella vs. Spouses

34.Repuela vs Estate of the Spouses Otillo Larawan and

35. Cotoner-Zacarias vs. Revilla G.R. No. 190901,

36. Prudential Guarantee and Assurance Inc. Vs. Anscor

completion of the construction project in the event KRDC fails in

39. Gaerlan vs. PNB G.R. No. 217356, September 7, 2016

40. Repuela vs. Estate of the Spouses Otillo larawan

41. Spouses Palada vs. Solidbank Corporation G.R. No.

43. Spouses Palada vs. Solidbank Corporation G.R. No.

44. DBP vs. Guarina Agricultural Dev. Corp. G.R. No.

Debtors are entitled to receive the total loan amount as agreed

46. Spouses Rabat vs. Philippine National Bank G.R. No.

50. BSP vs. Agustin Libo- on G.R. No. 173864,

to another, known as the assignee, who acquires the power to

52. Spouses Ellis R. Miles and Carolina Ronquillo-Miles

54. BPI vs Cynthia L. Reyes G.R. No. 182769,

55. Catalina F. Isla et al vs. Genevira P. Estorga G.R.

56.Benjamin Evangelista vs. Screenex Inc. G.R. No.

57. G.R. No. 211564

The delivery of promissory notes payable to order, or bills of

58. G.R. No. 174581

The principal object of a notice of sale in a foreclosure of

59. G.R. No. 176986

amount shall thereafter earn interest at the rate of six percent

60. G.R. No. 216714

It should be emphasized that an ex-parte petition for issuance of

61. G.R. No. 177382

debtor, which may either be in the form of expromision or

It is settled that if "the proceeds of the sale are insufficient

any deficiency resulting from the foreclosure of a security given

66. G.R. No. 233974

The legal rate of interest is an affirmation of the contracting

71. GR No. 1983932018-04-04 REPUBLIC v. RODOLFO

G.R. No. 209245

PROVINCE OF CEBU, Petitioner, v. WT CONSTRUCTION,

73. G.R. No. 156162

74. G.R. No. 193804

75. G.R. No. 189061

76. GEORGIA OSMEÑA-JALANDONI, Petitioner, - versus -