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1. EULALIO M. RUIZ and ILUMINADA RUIZ, petitioners,vs. HON. DOROTEO N. CANEBA, THE CITY SHERIFF OF MANILA AND/OR HIS DEPUTIES, ZENAIDA SANGALANG and ADOLFO CRUZ, respondents.
G.R. No. 84884. December 3, 1990 Judgments; Interest; Where the court judgment which did not
provide for interest is already final, there is no reason to add interest in the judgment.Anent the Ruizes claim of interest as aforementioned, it has been held in the case of Santulan v. Fule, 133 SCRA 762 (1984) that where the court judgment which did not provide for interest is already final, there is no reason to add interest in the judgment. Interest was not demanded by the Ruizes when the case was pending before the lower court, hence, there is no reason for this Court to grant such claim. As ruled by this Court, such claim is groundless since the decision and orders sought to be enforced do not direct the payment of interest and have long become final (Canonizado v. Ordoez-Benitez, 149 SCRA 555 [1987]).
Appeals; An issue which was not raised in the lower court cannot
be raised for the first time on appeal as it would be offensive to the basic rules of fair play, justice and due process.Finally, as to Sangalangs claim for P1,500.00 as monthly rental for Door No. 2, the records show that such claim was never raised in the trial court. The issue of additional rentals was brought up by Sangalang only when the motion for execution of par. 3 of the dispositive portion of the decision was filed by the Ruiz spouses (Rollo, p. 189). It is a basic rule that an issue which was not raised in the court below cannot be raised for the first time on appeal as it would be offensive to the basic rules of fair play, justice and due process (Matienzo v. Servidad, 107 SCRA 276 [1981]; De la Santa v. CA, 140 SCRA 44, [1985]; Dihiansan v. CA, 157 SCRA 434 [1987]; Anchuelo v. CA, 147 SCRA 434 [1987]; Dulos Realty and Devt. Corp. v. CA, 157 SCRA 425 [1988]; Ramos v. IAC., G.R. No. 78282, July 5, 1989; Filipino Merchants vs. CA, GR No. 85141, Nov. 28, 1989). Consequently, Sangalangs claim cannot be granted.
Judgments; The respondent judge exceeded his authority when he
modified the terms of a final and executory judgment.Hence, since
the May 15, 1986 decision has long become final and executory and in fact has been partly executed, the respondent judge had lost its jurisdiction thereon (Marcopper Mining Corp. vs. Briones, G.R. 77210, Sept. 19, 1988; Baclayon et al. v. CA, G.R. No. 89132, Feb. 26, 1990). He has exceeded his authority, considering that the trial court has no authority to modify or vary the terms and conditions of a final and executory judgment (Vda. de Nabong v. Sadang, 167 SCRA 232 [1988]; Commercial Credit Corporation vs. CA, 169 SCRA 1 [1989]; Christian Literature Crusade v. NLRC, 171 SCRA 712 [1989]). What remains in his authority in relation thereto is purely the ministerial enforcement or execution of the judgment. (Christian Lit. Crusade, supra: Baclayan vs. CA, supra.) Therefore, for having substantially affected the final and executory judgment such Order of the respondent judge dated July 27, 1988 is null and void for lack of jurisdiction, including the entire proceedings held for the purpose (Marcopper Mining vs. Briones, supra).
2. EASTERN SHIPPING LINES, INC., petitioner, vs. HON. COURT OF
APPEALS AND MERCANTILE INSURANCE COMPANY, INC.
G.R. No. 97412. July 12, 1994.
Common Carriers; Obligations; Presumption of Fault; When the
goods shipped either are lost or arrive in damaged condition, a
presumption arises against the carrier of its failure to observe that
requisite diligence, and there need not be an express finding of
negligence to hold it liable.The common carriers duty to observe the
requisite diligence in the shipment of goods lasts from the time the
articles are surrendered to or unconditionally placed in the possession
of, and received by, the carrier for transportation until delivered to, or
until the lapse of a reasonable time for their acceptance by, the person
entitled to receive them (Arts. 1736-1738, Civil Code; Ganzon vs. Court
of Appeals, 161 SCRA 646; Kui Bai vs. Dollar Steamship Lines, 52 Phil.
863). When the goods shipped either are lost or arrive in damaged
condition, a presumption arises against the carrier of its failure to
observe that diligence, and there need not be an express finding of
negligence to hold it liable (Art. 1735, Civil Code; Philippine National
Railways vs. Court of Appeals, 139 SCRA 87; Metro Port Service vs.
Court of Appeals, 131 SCRA 365). There are, of course, exceptional
cases when such presumption of fault is not observed but these cases,
enumerated in Article 1734 of the Civil Code, are exclusive, not one of
which can be applied to this case.
Same; Same; Arrastre Operator; Carrier and arrastre operator
liable in solidum for the proper delivery of the goods to the consignee.
The question of charging both the carrier and the arrastre operator
with the obligation of properly delivering the goods to the consignee
has, too, been passed upon by the Court. In Firemans Fund Insurance
Co. vs. Metro Port Service, Inc. (182 SCRA 455), we have explained, in
holding the carrier and the arrastre operator liable in solidum, thus:
The legal relationship between the consignee and the arrastre
operator is akin to that of a depositor and warehouseman (Lua Kian v.
Manila Railroad Co., et al., 19 SCRA 5 [1967]. The relationship between
the consignee and the common carrier is similar to that of the
consignee and the arrastre operator (Northern Motors, Inc. v. Prince
Line, et al., 107 Phil. 253 [1960]). Since it is the duty of the ARRASTRE to
take good care of the goods that are in its custody and to deliver them
in good condition to the consignee, such responsibility also devolves
upon the CARRIER. Both the ARRASTRE and the CARRIER are therefore
charged with the obligation to deliver the goods in good condition to
the consignee.
Same; Same; Same; The Supreme Court is not implying, however,
that the arrastre operator and the customs broker are themselves
always and necessarily liable solidarily with the carrier, or vice-versa,
nor that attendant facts in a given case may not vary the rule.We do
not, of course, imply by the above pronouncement that the arrastre
operator and the customs broker are themselves always and
necessarily liable solidarily with the carrier, or vice-versa, nor that
attendant facts in a given case may not vary the rule. The instant
petition has been brought solely by Eastern Shipping Lines which, being
the carrier and not having been able to rebut the presumption of fault,
is, in any event, to be held liable in this particular case. A factual finding
of both the court a quo and the appellate court, we take note, is that
there is sufficient evidence that the shipment sustained damage while
in the successive possession of appellants (the herein petitioner
among them). Accordingly, the liability imposed on Eastern Shipping
Lines, Inc., the sole petitioner in this case, is inevitable regardless of
whether there are others solidarily liable with it.
Damages; Interest Rates; Rules of thumb for future guidance in the
award of damages and interest rates.The ostensible discord is not
difficult to explain. The factual circumstances may have called for
different applications, guided by the rule that the courts are vested
with discretion, depending on the equities of each case, on the award
of interest. Nonetheless, it may not be unwise, by way of clarification
and reconciliation, to suggest the following rules of thumb for future
guidance.
Same; Same; Same; When an obligation is breached, the
contravenor can be held liable for damages.When an obligation,
regardless of its source, i.e., law, contracts, quasi-contracts, delicts or
quasi-delicts is breached, the contravenor 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.
Same; Same; Same; Interests in the Concept of Actual and
Compensatory Damages; In a loan or forbearance of money, the
interest due should be that stipulated in writing, and in the absence
thereof, the rate shall be 12% per annum.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: 1. 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.
Same; Same; Same; Same; In case of other obligations, the interest
on the amount of damages may be imposed at the discretion of the
court at the rate of 6% per annum.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 thediscretion 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) 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.
Same; Same; Same; Same; When the judgment of the court
awarding a sum of money becomes final and executory, the rate of
legal interest 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.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.
3. CENTRAL BANK OF THE PHILIPPINES as Liquidator of the FIDELITY
SAVINGS BANK, petitioner, vs.HONORABLE JUDGE JESUS P. MORFE, as
Presiding Judge of Bran ch XIII, Court of First Instance of Manila,
Spouses AUGUSTO and ADELAIDA PADILLA and Spouses MARCELA
and JOB ELIZES, respondents.
G.R. No. L-38427. March 12, 1975.*
Mercantile law; Banks; Deposits; Loans; Bank deposits are simple
loans.It should be noted that fixed, savings, and current deposits of
money in banks and similar institutions are not true deposits. They are
considered simple loans and, as such, are not preferred credits.
Same; Same; Same; Central Bank Act; Insolvency laws;Preference
of credits; Where a suit for recovery of a bank deposit was filed after
the bank has been declared insolvent by the Central Bank, a judgment in
favor of the depositor cannot be considered a preferred credit under
Article 22H(H)(b ) of the Civil Code.The Board in its Resolution No. 350
dated February 18, 1969 banned the Fidelity Savings Bank from doing
business. It took charge of the banks assets. Evidently , one purpose in
prohibiting the insolvent bank from doing business is to prevent some
depositors from having an undue or fraudulent preference over other
creditors and depositors. That purpose would be nullified if, as in this
case, after the bank is declared insolvent, suits by some depositors
could be maintained and judgments would be rendered for the
payment of their deposits and then such judgments would be
considered preferred credits under article 2244(14)(b) of the Civil Code.
Same; Same; Same; Same; Same; A non-preferred credit cannot be
raised to that category simply because a depositor, taking advantage of
long interval of time between declaration of insolvency and filing of
judicial assistance, was able to secure a judgment for payment of his
deposit.Considering that the deposits in question, in their inception,
were not preferred credits, it does not seem logical and just that they
should be raised to the category of preferred credits simply because
the depositors, taking advantage of the long interval between the
declaration of insolvency and the filing of the petition for judicial
assistance and supervision, were able to secure judgments for the pay
ment of their time deposits.
4. ANTONIO R. BANZON and ROSA BALMACEDA,
petitioners, vs. COURT OF APPEALS, MAXIMO R. STA. MARIA and
VALERIANA R. STA. MARIA, respondents.
G.R. No. 47258. July 13, 1989.*
Civil Law; Guaranty; Law and Equity; General Rule that a
guarantor must first pay the outstanding amounts before it can exact
payment from the principal debtor; Since Associated had not paid nor
compelled private respondent to pay the bank, it had no right in law or
equity to execute judgment against the indemnitor; Case at Bar.What
appears to us as error is the trial courts conclusion that private
respondents are responsible for the prejudice caused petitioners. This
conclusion is in opposition to our clear and unequivocal
pronouncement in said Banzon vs. Cruz case that the wrongful taking of
petitioners two lots was the direct result of three premature acts, to
wit: 1) the action of Associated Insurance and Surety, Inc. against
petitioner Banzon; 2) the execution of the 1957 judgment in Civil Case
No. 31237; 3) the act of the Sheriff of Caloocan City in demolishing the
improvements on one of the lots. These acts do not fall under any of
the situations provided for in Article 2071 of the Civil Code wherein the
guarantor even before paying may proceed against the principal
debtors. Otherwise stated, as a general rule, the guarantor must first
pay the outstanding amounts due before it can exact payment from the
principal debtor. Hence, since Associated had not paid nor compelled
private respondent to pay the bank, it had no right in law or equity to
so execute the judgment against Banzon as indemnitor. Coming back to
the issue, the appellate court exhibited a higher degree of perception
when it held: In the first place, it was well established that it was not
the defendants who started the series of litigations but the Associated.
Instead of fulfilling its obligations to discharge, as a surety, the Sta.
Marias indebtedness, Associated instituted the premature court action
against its indemnitors, including Sta. Maria. This premature action of
the Associated consequently resulted in the levy and sale of the two
lots thereby depriving plaintiffs of their property.
Same; Same; Damages; Principle that moral damages may be
recovered if they are the proximate result of the defendants wrongful
acts or omission; Case at bar.While ideally this debacle could have
been avoided by private respondents payment of their obligations to
PNB, such fact of non-payment alone, without Associateds premature
action and subsequent fraudulent acts, could not possibly have resulted
in the prejudice and damage complained of. Thus, while private
respondents non-payment was admittedly the remote cause or the
factor which set in motion the ensuing events, Associateds premature
action and execution were the immediate and direct causes of the
damage and prejudice suffered by petitioners. In other words, active
supervening events, consisting of said premature and fraudulent acts of
the Associated Insurance and Surety, Inc. had broken the causal
connection between the fact of non-payment and the damage suffered
by petitioners, so that their claim should be directed not against private
respondents but against Associated. Parenthetically, this right of action
against Associated had been reserved in petitioners favor in
the Banzon vs. Cruz case.
Same; Same; Same; Bad faith; The failure of private respondents
to pay their obligation with the PNB was not attended by bad faith to
cause injury to petitioners; Reasons.We are convinced that the failure
of private respondents to pay their obligations with the PNB was not
attended by bad faith or wilfull intent to cause injury to petitioners. For
as found in Banzon vs. Cruz, supra: x x x It should be noted therefore,
that the debtor Sta. Maria had been making payments all along to the
bank on account of his crop loans so much so that by 1963, the total
principal due and amount outstanding thereon amounted only to
P15,446.44. This amounts to practically one-half of the advance
judgment for the total amount of P30,257.86, excluding interests,
obtained by Associated six (6) years earlier in 1957 against Banzon for
the benefit of the Philippine National Bank allegedly as the amount due
from Sta. Maria and which Associated as surety would have to pay the
bank, and which as it turns out, Associated never paid to the bank.
Consequently, Associated, in not discharging its liability
notwithstanding that it had already executed its 1957 judgment against
Banzon as indemnitor and taken in execution Banzons two properties
committed rank fraud.
Same; Same; Same; Rule that damages for which a defendant may
be held liable are those which are the natural and probable
consequence of the act or omission complained of; Case at bar.
Moreover, under the Civil Code, the damages for which a defendant
may be held liable are those which are the natural and probable
consequences of the act or omission complained of. As above
explained, the prejudice caused petitioners cannot be said to be the
natural and probable consequence of private respondents mere failure
to pay their crop loans as such prejudice arose due to active
supervening forces or events.
5. ATOK FINANCE CORPORATION, petitioner, vs. COURT OF APPEALS,
SANYU CHEMICAL CORPORATION, DANILO E. ARRIETA, NENITA B.
ARRIETA, PABLITO BERMUNDO and LEOPOLDO HALILI, respondents.
G.R. No. 80078. May 18, 1993.*
Contracts; Suretyship; Guaranty; Obligations; While a contract of
suretyship or guarantee is an accessory contract, it may be readily
entered into to warranty debts to be incurred or created in the future
yet.We consider that the Court of Appeals here was in serious error.
It is true that a guaranty or a suretyship agreement is an accessory
contract in the sense that it is entered into for the purpose of securing
the performance of another obligation which is denominated as the
principal obligation. It is also true that Article 2052 of the Civil Code
states that a guarantee cannot exist without a valid obligation. This
legal proposition is not, however, like most legal principles, to be read
in an absolute and literal manner and carried to the limit of its logic.
This is clear from Article 2052 of the Civil Code itself: Art. 2052. A
guaranty cannot exist without a valid obligation. Nevertheless, a
guaranty may be constituted to guarantee the performance of a
voidable or an unenforceable contract. It may also guarantee
a natural obligation. (Emphases supplied) Moreover, Article 2053 of the
Civil Code states: Art. 2053. A guaranty may also be given as security
for future debts, the amount of which is not yet known; there can be no
claim against the guarantor until the debt is liquidated. A conditional
obligation may also be secured.
Same; Same; Same; Same; Same.It is clear to us that theRizal
Commercial Banking Corporation and the NARIC cases rejected the
distinction which the Court of Appeals in the case at bar sought to
make with respect to Article 2053, that is, that the future debts
referred to in that Article relate to debts already existing at the time of
the constitution of the agreement but the amount [of which] is
unknown, and not to debts not yet incurred and existing at that time.
Of course, a surety is not bound under any particular principal
obligation until that principal obligation is born. But there is no
theoretical or doctrinal difficulty inherent in saying that the suretyship
agreement itself is valid and binding even before the principal
obligation intended to be secured thereby is born, any more than there
would be in saying that obligations which are subject to a condition
precedent are valid and binding before the occurrence of the condition
precedent.
Same; Same; Same; Same; Same.Comprehensive or continuing
surety agreements are in fact quite commonplace in present day
financial and commercial practice. A bank or a financing company
which anticipates entering into a series of credit transactions with a
particular company, commonly requires the projected principal debtor
to execute a continuing surety agreement along with its sureties. By
executing such an agreement, the principal places itself in a position to
enter into the projected series of transactions with its creditor; with
such suretyship agreement, there would be no need to execute a
separate surety contract or bond for each financing or credit
accommodation extended to the principal debtor. As we understand it,
this is precisely what happened in the case at bar.
Same; Same; Same; Same; Prescription; The period of limitations
in Art. 1629 of the New Civil Code does not apply where there is no
breach of warranty of solvency but the creation of solidary liability as
per agreement of the sureties with the creditor when principal
defaults.Article 1629 of the Civil Code invoked by private
respondents and accepted by the Court of Appeals is not, in the case at
bar, material. The liability of Sanyu Chemical to Atok Finance
rests not on the breach of the warranty of solvency; the liability of
Sanyu Chemical was not ex lege (ex Article 1629) but rather ex
contractu. Under the Deed of Assignment, the effect of non-payment by
the original trade debtors was a breach of warranty of solvency by
Sanyu Chemical, resulting in turn in the assumption of solidary liability
by the assignor under the receivables assigned.In other words, the
assignor Sanyu Chemical becomes a solidary debtor under the terms of
the receivables covered and transferred by virtue of the Deed of
Assignment. And because assignor Sanyu Chemical became, under the
terms of the Deed of Assignment, solidary obligor under each of the
assigned receivables, the other private respondents (the Arrieta
spouses, Pablito Bermundo and Leopoldo Halili), became solidarily
liable for that obligation of Sanyu Chemical, by virtue of the operation
of the Continuing Suretyship Agreement. Put a little differently, the
obligations of individual private respondent officers and stockholders of
Sanyu Chemical under the Continuing Suretyship Agreement, were
activated by the resulting obligations of Sanyu Chemical as solidary
obligor under each of the assigned receivables by virtue of the
operation of the Deed of Assignment. That solidary liability of Sanyu
Chemical is not subject to the limiting period set out in Article 1629 of
the Civil Code.
6. INTEGRATED REALTY CORPORATION and RAUL L. SANTOS, petitioners, vs. PHILIPPINE NATIONAL BANK, OVERSEAS BANK OF MANILA and THE HON. COURT OF APPEALS, respondents.
G.R. No. 60705. June 28, 1989.*
OVERSEAS BANK OF MANILA, petitioner, vs. COURT OF APPEALS, INTEGRATED REALTY CORPORATION, and RAUL L. SANTOS, respondents.
G.R. No. 60907. June 28, 1989.*
Civil Law; Credit Transactions; Pledge; Deed of Assignment; The
deed of assignment in the instant case is actually a pledge.For all
intents and purposes, the deed of assignment in this case is actually a
pledge. Adverting again to the Courts pronouncements in Lopez,
supra, we quote therefrom: The character of the transaction between
the parties is to be determined by their intention, regardless of what
language was used or what the form of the transfer was. If it was
intended to secure the payment of money, it must be construed as a
pledge; but if there was some other intention, it is not a pledge.
However, even though a transfer, if regarded by itself, appears to have
absolute, its object and character might still be qualified and explained
by contemporaneous writing declaring it to have been a deposit of the
property as collateral security. It has been said that a transfer of
property by the debtor to a creditor, even if sufficient on its face to
make an absolute conveyance, should be treated as a pledge if the debt
continues in existence and is not discharged by the transfer, and that
accordingly, the use of the terms ordinarily importing conveyance, of
absolute ownership will not be given that effect in such a transaction if
they are also commonly used in pledges and mortgages and therefore
do not unqualifiedly indicate a transfer of absolute ownership, in the
absence of clear and unambiguous language or other circumstances
excluding an intent to pledge.
Same; Same; Same; Requisites of a Contract of Pledge.The facts
and circumstances leading to the execution of the deed of assignment,
as found by the court a quo and the respondent court, yield said
conclusion that it is in fact a pledge. The deed of assignment has
satisfied the requirements of a contract of pledge (1) that it be
constituted to secure the fulfillment of a principal obligation; (2) that
the pledgor be the absolute owner of the thing pledged; (3) that the
persons constituting the pledge have the free disposal of their
property, and in the absence thereof, that they be legally authorized for
the purpose. The further requirement that the thing pledged be placed
in the possession of the creditor, or of a third person by common
agreement was complied with by the execution of the deed of
assignment in favor of PNB.
Same; Same; Loans; A contract of simple loan or mutuum is
created when Santos invested his money in time deposit with petitioner-
bank.Thus, when PNB demanded from OBM payment of the amounts
due on the two time deposits which matured on January 11, 1968 and
February 6, 1968, respectively, there was as yet no obstacle to the
faithful compliance by OBM of its liabilities thereunder. Consequently,
for having incurred in delay in the performance of its obligation, OBM
should be held liable for damages. When respondent Santos invested
his money in time deposits with OBM, they entered into a contract of
simple loan ormutuum, not a contract of deposit.
Same; Obligations and Contracts; Default; Damages; Legal interest
in the nature of damages for non-compliance with an obligation to pay
a sum of money is recoverable even if not expressly stipulated in
writing.While it is true that under Article 1956 of the Civil Code no
interest shall be due unless it has been expressly stipulated in writing,
this applies only to interest for the use of money. It does not
comprehend interest paid as damages. OBM contends that it had
agreed to pay interest only up to the dates of maturity of the
certificates of time deposit and that respondent Santos is not entitled
to interest after the maturity dates had expired, unless the contracts
are renewed. This is true with respect to the stipulated interest, but the
obligations consisting as they did in the payment of money, under
Article 1108 of the Civil Code he has the right to recover damages
resulting from the default of OBM, and the measure of such damages is
interest at the legal rate of six percent (6%) per annum on the amounts
due and unpaid at the expiration of the periods respectively provided in
the contracts. In fine, OBM is being required to pay such interest, not as
interest income stipulated in the certificates of time deposit, but as
damages for failure and delay in the payment of its obligations which
thereby compelled IRC and Santos to resort to the courts. The
applicable rule is that legal interest, in the nature of damages for non-
compliance with an obligation to pay a sum of money, is recoverable
from the date judicial or extrajudicial demand is made, which latter
mode of demand was made by PNB, after the maturity of the
certificates of time deposit, on March 1, 1968. The measure of such
damages, there being no stipulation to the contrary, shall be the
payment of the interest agreed upon in the certificates of deposit
which is six and one-half percent (6-1/2%). Such interest due or accrued
shall further earn legal interest from the time of judicial demand.
Banking; Interest on Deposits; The banks obligation to pay
interest on the deposit ceases the moment its operation is completely
suspended by the Central Bank.On the issue of whether OBM should
be held liable for interests on the time deposits of IRC and Santos from
the time it ceased operations until it resumed its business, the answer
is in the negative. We have held in The Overseas Bank of Manila vs.
Court of Appeals and Tony D. Tapia,that: It is a matter of common
knowledge which We take judicial notice of, that what enables a bank
to pay stipulated interest on money deposited with it is that thru the
other aspects of its operation it is able to generate funds to cover the
payment of such interest. Unless a bank can lend money, engage in
international transactions, acquire foreclosed mortgaged properties or
their proceeds and generally engage in other banking and financing
activities from which it can derive income, it is inconceivable how it can
carry on as a depository obligated to pay stipulated interest.
Conventional wisdom dictates this inexorable fair and just conclusion.
And it can be said that all who deposit money in banks are aware of
such a simple economic proposition. Consequently, it should be
deemed read into every contract of deposit with a bank that the
obligation to pay interest on the deposit ceases the moment the
operation of the bank is completely suspended by the duly constituted
authority, the Central Bank.
7. DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. COURT OF
APPEALS, CELEBRADA MANGUBAT and ABNER MANGUBAT,
respondents.
G.R. No. 110053. October 16, 1995.*
Civil Law; Contracts; If both parties have no fault or are not guilty,
the restoration of what was given by each of them to the other is consequently in order.The Court of Appeals, after an extensive discus sion, found that there had been no bad faith on the part of either party, and this remains uncontroverted as a fact in the case at bar. Correspondingly, respondent court correctly applied the rule that if both parties have no fault or are not guilty, the restoration of what was given by each of them to the other is consequently in order. This is because the declaration of nullity of a contract which is voidab initio operates to restore things to the state and condition in which they were found before the execution thereof.
Same; Same; Purchaser is entitled to recover the money paid by
him where the contract is set aside by reason of the mutual material mistake of the parties as to the identity or quantity of the land sold.Therefore, the purchaser is entitled to recover the money paid by him where the contract is set aside by reason of the mutual material mistake of the parties as to the identity or quantity of the land sold. And where a purchaser recovers the purchase money from a vendor who fails or refuses to deliver the title, he is entitled as a general rule to interest on the money paid from the time of payment.
Same; Same; The contract of loan executed between the parties is
entirely different and discrete from the deed of sale they entered into.In its legal context, the contract of loan executed between the parties is entirely different and discrete from the deed of sale they entered into. The annulment of the sale will not have an effect on the existence and demandability of the loan. One who has received money as a loan is bound to pay to the creditor an equal amount of the same kind and quality.
Same; Same; Fact that the annulment of the sale will also result in the invalidity of the mortgage does not have an effect on the validity and efficacy of the principal obligation.The fact that the annulment of the sale will also result in the invalidity of the mortgage does not have an effect on the validity and efficacy of the principal obligation, for even an obligation that is unsupported by any security of the debtor may also be enforced by means of an ordinary action. Where a mortgage is not valid, as where it is executed by one who is not the owner of the property, or the consideration of the contract is simulated or false, the principal obligation which it guarantees is not thereby rendered null and void. That obligation matures and becomes demandable in accordance with the stipulations pertaining to it.
Same; Damages; Actual or compensatory damages cannot be
presumed but must be duly proved and so proved with a reasonable degree of certainty.In order that damages may be recovered, the best evidence obtainable by the injured party must be presented. Actual or compensatory damages cannot be presumed, but must be duly proved, and so proved with a reasonable degree of certainty. A court cannot rely on speculation, conjecture or guesswork as to the fact and amount of damages, but must depend upon competent proof that they have been suffered and on evidence of the actual amount thereof. If the proof is flimsy and unsubstantial, no damages will be awarded.
8. LUCIO ROBLES, EMETERIA ROBLES, ALUDIA ROBLES and EMILIO
ROBLES, petitioners, vs. COURT OF APPEALS, Spouses VIRGILIO
SANTOS and BABY RUTH CRUZ, RURAL BANK OF CARDONA, Inc.,
HILARIO ROBLES, ALBERTO PALAD, JR. in his capacity as Director of
Lands, and JOSE MAULEON in his capacity as District Land Officer of
the Bureau of Lands, respondents.
G.R. No. 123509. March 14, 2000.*
Remedial Law; Quieting of Title; An action to quiet title is a
common-law remedy for the removal of any cloud or doubt or
uncertainty on the title to real property.Based on the above
definition, an action to quiet title is a common-law remedy for the
removal of any cloud or doubt or uncertainty on the title to real
property. It is essential for the plaintiff or complainant to have a legal
or an equitable title to or interest in the real property which is the
subject matter of the action. Also, the deed, claim, encumbrance or
proceeding that is being alleged as a cloud on plaintiffs title must be
shown to be in fact invalid or inoperative despite its prima facie
appearance of validity or legal efficacy.
Civil Law; Property; Co-ownership; It is a fundamental principle
that a co-owner cannot acquire by prescription the share of the other
co-owners, absent any clear repudiation of the co-ownership; Requisites
in order that the title may prescribe in favor of a coowner.Contrary to
the disquisition of the Court of Appeals, Hilario effected no clear and
evident repudiation of the co-ownership. It is a fundamental principle
that a co-owner cannot acquire by prescription the share of the other
co-owners, absent any clear repudiation of the co-ownership. In order
that the title may prescribe in favor of a co-owner, the following
requisites must concur: (1) the co-owner has performed unequivocal
acts of repudiation amounting to an ouster of the other co-owners; (2)
such positive acts of repudiation have been made known to the other
co-owners; and (3) the evidence thereof is clear and convincing.
Same; Same; Mortgages; In a real estate mortgage contract, it is
essential that the mortgagor be the absolute owner of the property to
be mortgaged; otherwise, the mortgage is void.In a real estate
mortgage contract, it is essential that the mortgagor be the absolute
owner of the property to be mortgaged; otherwise, the mortgage is
void. In the present case, it is apparent that Hilario Robles was not the
absolute owner of the entire subject property; and that the Rural Bank
of Cardona, Inc., in not fully ascertaining his title thereto, failed to
observe due diligence and, as such, was a mortgagee in bad faith.
Same; Same; Same; The rule that persons dealing with registered
lands can rely solely on the certificate of title does not apply to banks.
The bank should not have relied solely on the Deed of Sale purportedly
showing that the ownership of the disputed property had been
transferred from Exequiel Ballena to the Robles spouses, or that it had
subsequently been declared in the name of Hilario. Because it was
dealing with unregistered land, and the circumstances surrounding the
transaction between Hilario and his fatherin-law Exequiel were
suspicious, the bank should have exerted more effort to fully determine
the title of the Robleses. Rural Bank of Compostela v. Court of
Appeals invalidated a real estate mortgage after a finding that the bank
had not been in good faith. The Court explained: The rule that persons
dealing with registered lands can rely solely on the certificate of title
does not apply to banks.
Land Titles; Free Patents; Jurisprudence holds that a free patent
covering private land is null and void.In the light of their open,
continuous, exclusive and notorious possession and occupation of the
land, petitioners are deemed to have acquired, by operation of law, a
right to a grant, a government grant, without the necessity of a
certificate of title being issued. The land was segregated from the
public domain. Accordingly, the director of lands had no authority to
issue a free patent thereto in favor of another person. Verily,
jurisprudence holds that a free patent covering private land is null and
void.
9. BA FINANCE CORPORATION, petitioner, vs. HON. COURT OF APPEALS and ROBERTO M. REYES, respondents.
G.R. No. 102998. July 5, 1996.*
Actions; Replevin; Words and Phrases; Replevin, Explained; Replevin may refer either to the action itself, i.e., to regain the possession of personal chattels being wrongfully detained from the
plaintiff by another, or to the provisional remedy that would allow the plaintiff to retain the thing during the pendency of the action and hold it pendente lite.Replevin, broadly understood, is both a form of principal remedy and of a provisional relief. It may refer either to the action itself, i.e., to regain the possession of personal chattels being wrongfully detained from the plaintiff by another, or to the provisional remedy that would allow the plaintiff to retain the thing during the pendency of the action and hold it pendente lite. The action is primarily possessory in nature and generally determines nothing more than the right of possession.
Same; Same; Same; Same; Parties; As an action in rem, the gist
of the replevin action is the right of the plaintiff to obtain possession of
specific personal property by reason of his being the owner or of his
having a special interest therein and the person in possession of the
property sought to be replevied is ordinarily the proper and only
necessary party defendant and the plaintiff is not required to so join as
defendants other persons claiming a right on the property but not in
possession thereof.Replevin is so usually described as a mixed action,
being partly in rem and partly in personamin rem insofar as the
recovery of specific property is concerned, and in personam as regards
to damages involved. As an action in rem, the gist of the replevin
action is the right of the plaintiff to obtain possession of specific
personal property by reason of his being the owner or of his having a
special interest therein. Consequently, the person in possession of the
property sought to be replevied is ordinarily the proper and only
necessary party defendant, and the plaintiff is not required to so join as
defendants other persons claiming a right on the property but not in
possession thereof. Rule 60 of the Rules of Court allows an application
for the immediate possession of the property but the plaintiff must
show that he has a good legal basis, i.e., a clear title thereto, for
seeking such interim possession.
Same; Same; Same; Same; Same; Chattel Mortgage; Where the
right of the plaintiff to the possession of the specific property is so
conceded or evident, the action need only be maintained against him
who so possesses the property.Where the right of the plaintiff to the
possession of the specific property is so conceded or evident, the action
need only be maintained against him who so possesses the property. In
rem actio est per quam rem nostram quae ab alio possidetur petimus,
et semper adversus eum est qui rem possidet. InNorthern Motors, Inc.
vs. Herrera, the Court has said: There can be no question that persons
having a special right of property in the goods the recovery of which is
sought, such as a chattel mortgagee, may maintain an action for
replevin therefor. Where the mortgage authorizes the mortgagee to
take possession of the property on default, he may maintain an action
to recover possession of the mortgaged chattels from the mortgagor or
from any person in whose hands he may find them.
Same; Same; Same; Same; Same; Same; The mortgagee, upon the
mortgagors default, is constituted an attorney-in-fact of the mortgagor
enabling such mortgagee to act for and in behalf of the owner and the
fact that the defendant is not privy to the chattel mortgage is
inconsequential.In effect then, the mortgagee, upon the mortgagors
default, is constituted an attorney-in-fact of the mortgagor enabling
such mortgagee to act for and in behalf of the owner. Accordingly, that
the defendant is not privy to the chattel mortgage should be
inconsequential. By the fact that the object of replevin is traced to his
possession, one properly can be a defendant in an action for replevin. It
is here assumed that the plaintiffs right to possess the thing is not or
cannot be disputed.
Same; Same; Same; Same; Same; Same; In case the right of
possession on the part of the plaintiff, or his authority to claim such
possession or that of his principal, is put to great doubt, it could become
essential to have other persons involved and accordingly impleaded for
a complete determination and resolution of the controversy.In case
the right of possession on the part of the plaintiff, or his authority to
claim such possession or that of his principal, is put to great doubt (a
contending party might contest the legal bases for plaintiffs cause of
action or an adverse and independent claim of ownership or right of
possession is raised by that party), it could become essential to have
other persons involved and accordingly impleaded for a complete
determination and resolution of the controversy.
Same; Same; Same; Same; Same; Same; Where the mortgagees
right of possession is conditioned upon the actual fact of default which
itself may be controverted, the inclusion of other parties, like the debtor
or the mortgagor himself, may be required in order to allow a full and
conclusive determination of the casean adverse possessor, who is not
the mortgagor, cannot just be deprived of his possession, let alone be
bound by the terms of the chattel mortgage contract, simply because
the mortgagee brings up an action for replevin.A chattel mortgagee,
unlike a pledgee, need not be in, nor entitled to, the possession of the
property unless and until the mortgagor defaults and the mortgagee
thereupon seeks to foreclose thereon. Since the mortgagees right of
possession is conditioned upon the actual fact of default which itself
may be controverted, the inclusion of other parties, like the debtor or
the mortgagor himself, may be required in order to allow a full and
conclusive determination of the case. When the mortgagee seeks a
replevin in order to effect the eventual foreclosure of the mortgage, it
is not only the existence of, but also the mortgagors default on, the
chattel mortgage that, among other things, can properly uphold the
right to replevy the property. The burden to establish a valid
justification for that action lies with the plaintiff. An adverse possessor,
who is not the mortgagor, cannot just be deprived of his possession, let
alone be bound by the terms of the chattel mortgage contract, simply
because the mortgagee brings up an action for replevin.
10. DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. THE
NATIONAL LABOR RELATIONS COMMISSION, ONG PENG, ET AL.,
respondents.
G.R. Nos. 100264-81. January 29, 1993.*
Labor Laws; Separation Pay; Liability of foreclosing institution for
payment of workers' money claims; Due Process.DBP asserts that it
was deprived of due process since there was no formal order
impleading it in the complaints against RHI. Moreover, DBP points out,
the cases were never set for hearing thus depriving it of the
opportunity to peruse the documentary evidence of the complainants
and to confront the complainants' witnesses. Additionally, DBP was not
given an opportunity to present its own evidence. There is no merit to
this contention of DBP. Denial of due process means the total lack of
opportunity to be heard. There is no denial of due process where a
party is given an opportunity to be heard and to present his case. The
petitioner in this case filed an opposition to the motion to implead it as
a party defendant. It likewise filed a motion for reconsideration of the
labor arbiter's decision. Thereafter, DBP filed an appeal with the NLRC
and, later on, a motion for reconsideration of the NLRC decision. The
petitioner, thus, was given ample opportunity to present its case. It was
not denied due process.
Same; Same; Same.There is no merit to DBP's contention that
the workers are not entitled to separation pay. Despite the enormous
losses incurred by RHI due to the fire that gutted the sawmill in 1981
and despite the logging ban in 1983, the uncontroverted claims for
separation pay show that most of the private respondents still worked
up to the end of 1985 (See Rollo, p. 39). RHI would still have continued
its business had not the petitioner foreclosed all of its assets and
properties on September 24, 1985. Thus, the closure of RHI's business
was not primarily brought about by serious business losses. Such
closure was a consequence of DBP's foreclosure of RHI's assets. We
therefore apply Article 283 which provides: "x x x in cases of closures or
cessation of operations of establishment or undertaking not due to
serious business losses or financial reverses, the separation pay shall be
equivalent to one (1) month pay or at least one-half (1/2) month pay
for every year of service, whichever is higher. x x x"
Same;Worker preference in case of bankruptcy.We have
repeatedly stressed that before the workers' preference provided by
Article 110 may be invoked, there must first be a declaration of
bankruptcy or a judicial liquidation of the employer's business. xxx xxx
In DBP v. Santos, supra, the Court discussed the import of Article 110
and Section 10 of Rule VIII, Book III and stated: "It is quite clear from
the provisions that a declaration of bankruptcy or ajudicial
liquidation must be present before the worker's preference may be
enforced. Thus, Article 110 of the Labor Code and its implementing rule
cannot be invoked by the respondents in this case absent a formal
declaration of bankruptcy or a liquidation order.
Same; Same; Rule under amendment cannot be applied
retroactively.Article 110 of the Labor Code has been amended by R.A.
No. 6715 and now reads: "Article 110. Worker preference in case of
bankruptcy.In the event of bankruptcy or liquidation of an employer's
business, his workers shall enjoy first preference as regards their
unpaid wages and other monetary claims, any provision of law to the
contrary notwithstanding. Such unpaid wages, and monetary
claims shall be paid in full before the claims of the Government and
other creditors may be paid." (Italics ours.) We ruled in DBP v. NLRC,
supra, that the amendment "expands worker preference to cover not
only unpaid wages but also other monetary claims to which even claims
of the Government must be deemed subordinate." Hence, under the
new law, even mortgage credits are subordinate to workers' claims. In
this connection, respondent NLRC ruled: "Lastly, while we are cognizant
of the pronouncement of the Supreme Court with respect to Art. 110
and while we hold in respect said pronouncements, we are of the
earnest view that considering that Art. 110 has been amended by RA
6715, complainants' preference over government claims and other
creditors be adhered to." (Rollo, p. 65) R.A. No. 6715, however, took
effect only on March 21; 1989. The amendment cannot therefore be
retroactively applied to, nor can it affect, the mortgage credit which
was secured by the petitioner several years prior to its effectivity.
11. PHILIPPINE VETERANS BANK, petitioner, vs.BENJAMIN MONILLAS,
respondent.
G.R. No. 167098. March 28, 2008.*
Appeals; Questions of Law; Questions of Fact; Words and Phrases;
A party may directly appeal to the Supreme Court from a decision of the
trial court only on pure questions of law; A question of law lies, on one
hand, when the doubt or difference arises as to what the law is on a
certain set of facts; on the other hand, a question of fact exists when
the doubt or difference arises as to the truth or falsehood of the alleged
facts.On the procedural issue raised, we declare that the instant
petition, contrary to respondents contention, is the correct remedy to
question the challenged issuances. Under the Rules of Court, a party
may directly appeal to this Court from a decision of the trial court only
on pure questions of law. A question of law lies, on one hand, when the
doubt or difference arises as to what the law is on a certain set of facts;
on the other hand, a question of fact exists when the doubt or
difference arises as to the truth or falsehood of the alleged facts. Here,
the facts are not disputed; the controversy merely relates to the correct
application of the law or jurisprudence to the undisputed facts.
Land Titles; Real Estate Mortgages; Adverse Claims; Settled in this
jurisdiction is the doctrine that a prior registration of a lien creates a
preferencethe subsequent annotation of an adverse claim cannot
defeat the rights of the mortgagee, or the purchaser at the auction sale
whose rights were derived from a prior mortgage validly registered.
On the merits of the petition, the Court rules that the prior registered
mortgage of PVB and the foreclosure proceedings already conducted
prevail over respondents subsequent annotation of the notices of lis
pendens on the titles to the property. Settled in this jurisdiction is the
doctrine that a prior registration of a lien creates a preference; hence,
the subsequent annotation of an adverse claim cannot defeat the rights
of the mortgagee, or the purchaser at the auction sale whose rights
were derived from a prior mortgage validly registered. A contrary rule
will make a prior registration of a mortgage or any lien nugatory or
meaningless. It may not be amiss to point out, at this juncture, that the
doctrine applies with greater force in this case considering that the
annotation of the notice of lis pendens was made not only after the
registration of the mortgage, but also, and much later, after the
conclusion of the foreclosure sale. Furthermore, the mortgagee itself,
PVB, is the purchaser of the subject properties in the foreclosure sale.
Same; 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.
The Court also notes that PVB is an innocent mortgagee for value.
When the lots were mortgaged to it by Ireneo, the titles thereto were
in the latters name, and they showed neither vice nor infirmity. In
accepting the mortgage, petitioner was not required to make any
further investigation of the titles to the properties being given as
security, and could rely entirely on what is stated in the aforesaid titles.
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.
Same; Laches; Foreclosure of Mortgage; Laches, being a doctrine
in equity, cannot be invoked to resist the enforcement of a legal right;
Since foreclosure sale retroacts to the date of the registration of the
mortgage, it no longer matters that the annotation of the sheriffs
certificate of sale and the affidavit of consolidation of ownership was
made subsequent to the annotation of the notice of lis pendens.PVB
cannot even be considered to have slept on its rights when it only
registered the Sheriffs certificate of sale after the lapse of almost 15
years, because, as already discussed, it registered its prior mortgage
and had already foreclosed on the same. Petitioner, therefore, had
every reason to expect that its rights were amply protected. And the
mortgagor was even benefited by this late registration of the Sheriffs
Sale, because then, he would still have a chance to redeem the
property. Laches, being a doctrine in equity, cannot be invoked to resist
the enforcement of a legal right. Furthermore, oft-repeated is the rule
that the foreclosure sale retroacts to the date of the registration of the
mortgage. Thus, it no longer matters that the annotation of the sheriffs
certificate of sale and the affidavit of consolidation of ownership was
made subsequent to the annotation of the notice oflis pendens.
12. LUISA GUANCO, assisted by her husband, LEONARDO GUANCO,
petitioner, vs. ISIDRO ANTOLO, respondent.
G.R. No. 150852. July 31, 2006.*
Remedial Law; Mortgages; Foreclosures; Posting of a notice of the
foreclosure of the real estate mortgage in at least three of the most
conspicuous public places not only in the municipality but also in the
barrio where the land mortgaged is situated during the 60-day period
immediately preceding the public land auction is mandatory.Under
Section 5 of Republic Act No. 720, as amended by Rep. Act No. 7939,
the provincial sheriff is mandated to post a notice of the foreclosure of
the real estate mortgage in at least three of the most conspicuous
public places not only in the municipality but also in the barrio where
the land mortgaged is situated during the 60-day period immediately
preceding the public auction: The foreclosure of mortgages covering
loans granted by rural banks shall be exempt from the publication in
newspapers now required by law where the total amount of the loan,
including interests due and unpaid, does not exceed three thousand
pesos. It shall be sufficient publication in such cases if the notices of
foreclosure are posted in at least three of the most conspicuous public
places in the municipality and barrio where the land mortgaged is
situated during the period of sixty days immediately preceding the
public auction. Proof of publication as required herein shall be
accomplished by affidavit of the sheriff or officer conducting the
foreclosure sale and shall be attached with the records of the
case:Provided, That when a homestead or free patent land is
foreclosed, the homesteader or free patent holder, as well as their
heirs shall have the right to redeem the same within two years from the
date of foreclosure in case of a land not covered by a Torrens title or
two years from the date of the registration of the foreclosure in the
case of a land covered by a Torrens title: Provided, finally, That in case
of borrowers who are mere tenants the produce corresponding to their
share may be accepted as security.
Foreclosures; Unless it was made to appear that a sale at public
auction was conducted and that the requisite redemption period had
lapsed, no Torrens title over the property can be issued by the Register
of Deeds.Petitioner Luisa Guanco and the deputy sheriff made it
appear that a public auction sale took place on August 19, 1977, that
she purchased the property for P775.00 on said date, that respondent
failed to redeem the property within the requisite period, and,
consequently, a final deed of sale was executed on August 28, 1977.
The only conclusion is that Deputy Sheriff Alvior made it appear in the
certificate of sale that a sale at public auction was conducted on August
19, 1977, and that respondent failed to redeem the property within
one year from registration of the sale. This was clearly done to enable
petitioner Luisa Guanco to secure a Torrens title over the property in
her name. Unless it was made to appear that a sale at public auction
was conducted and that the requisite redemption period had lapsed,
no Torrens title over the property can be issued by the Register of
Deeds to and under the name of petitioner.
13. LORENZO PASCUAL and LEONILA TORRES, plaintiffs-
appellees, vs. UNIVERSAL MOTORS CORPORATION, defendant-
appellant.
G.R. No. L-27862. November 20, 1974.*
Sales; Chattel mortgage; Foreclosure of chattel mortgage
precludes any further action against the debtor and his guarantor.The
next contention is that what article 1484 withholds from the vendor is
the right to recover any deficiency from the purchaser after the
foreclosure of the chattel mortgage and not a recourse to the
additional security put up by a third party to guarantee the purchasers
performance of his obligation. A similar argument has been answered
by this Court in this wise: (T)o sustain appellants argument is to
overlook the fact that if the guarantor should be compelled to pay the
balance of the purchase price, the guarantor will in turn be entitled to
recover what she has paid from the debtor vendee (Art. 2066, Civil
Code); so that ultimately, it will be the vendee who will be made to
bear the payment of the balance of the price, despite the earlier
foreclosure of the chattel mortgage given by him. Thus, the protection
given by Article 1484 would be indirectly subverted, and public policy
overturned. (Cruz vs. Filipinas Investment & Finance Corporation, L-
24772, May 27, 1968; 23 SCRA 791).
14. INTERNATIONAL HARVESTER MACLEOD, INC., petitioner,
vs. MARIANO MEDINA, JR. and HON. TOMAS P. MADDELA, JR., in his
capacity as Presiding Judge of Branch XXXIV of the Court of First
Instance of Manila, respondents.
G.R. No. 53623. March 22, 1990.*
Commercial Law; Credit Transaction; Financing transaction that is
regulated by RA 5980 involves the buying, discounting, or factoring of
promissory notes and sales on credit or installments.Evidently, the
financing transaction that is regulated by R.A. 5980 involves the buying,
discounting, or factoring of promissory notes and sales on credit or
installment. IHMI did not purchase from itself the Retail Notes Analysis
executed by Medina. IHMI only extended credit to Medina by allowing
him to pay for the 24 truck engines in installment. While the increased
price of the sale included a financing charge, that charge was simply
another name for the interest to be paid by the installment buyer
(Medina) on the deferred payment of the purchase price of the vehicles
sold and delivered to him by IHMI.
Same; Same; Same; Use of the words finance charge,
financing or finance operation in the documents prepared and
letters sent by IHMI to Medina was in compliance with RA 3765 (Truth
in Lending Act).The use of the words finance charge, financing or
finance operation in the documents prepared, and letters sent, by
IHMI to Medina, was in compliance with R.A. 3765 (Truth in Lending
Act) which requires a creditor (or seller) to fully disclose to the debtor
(or buyer) the true cost of credit with a view of preventing the
uninformed use of credit to the detriment of the national economy.
Same; Same; Same; Same; IHMI transaction with Medina differs
from a financing transaction under RA 5980.IHMI correctly pointed
out that its transaction with Medina differs from a financing transaction
under R.A. 5980, in that there were only two parties in its transaction
with Medina, namely: IHMI and Medina, while in a financing
transaction under R.A. 3765, there are three (3) parties involved,
namely: (1) the installment buyer, (2) the seller, and (3) the financing
company. The buyer executes a note or notes for the unpaid balance of
the price of the thing purchased by him on installment. The seller
assigns the notes or discounts them with a financing company which is
subrogated in the place of the seller, as creditor of the installment
buyer.
Same; Same; Same; Same; Same; Transaction between IHMI and
Medina did not involve any discounting, factoring or assignment of
IHMIs credit against Medina to a finance company.The transaction
between IHMI and Medina did not involve any discounting, factoring or
assignment of IHMIs credit against Medina to a finance company. The
transaction was bilateral, not trilateral. No financing company stepped
into the shoes of IHMI as assignee or purchaser of IHMIs credit against
Medina. Medina himself, not a financing company, paid IHMI for the
truck engines. Medina made his installment payments or amortizations
to IHMI, not to a financing company.
15. STATE INVESTMENT HOUSE, INC. and STATE FINANCING CENTER,
INC., petitioners, vs. CITIBANK, N.A., BANK OF AMERICA, NT & SA,
HONGKONG & SHANGHAI BANKING CORPORATION, and the COURT
OF APPEALS, respondents.
G.R. Nos. 79926-27. October 17, 1991.*
Corporation Law; Foreign Corporation; Attachment; A foreign
corporation licitly doing business in the Philippines, which is a defendant
in a civil suit, may not be considered a non-resident within the scope of
the legal corporation authorizing attachment against a defendant not
residing in the Philippine Islands.This Court itself has already had
occasion to hold that a foreign corporation licitly doing business in the
Philippines, which is a defendant in a civil suit, may not be considered
a non-residentwithin the scope of the legal provision authorizing
attachment against a defendant not residing in the Philippine
Islands; in other words, a preliminary attachment may not be applied
for and granted solely on the asserted fact that the defendant is a
foreign corporation authorized to do business in the Philippinesand is
consequently and necessarily, a party who resides out of the
Philippines. Parenthetically, if it may not be considered as a party not
residing in the Philippines, or as a party who resides out of the country,
then, logically, it must be considered a party who does reside in the
Philippines, who is a resident of the country. Be this as it may, this
Court pointed out that: x x Our laws and jurisprudence indicate a
purpose to assimilate foreign corporations, duly licensed to do business
here, to the status of domestic corporations. (Cf. Section 73, Act No.
1459, and Marshall Wells Co. vs. Henry W. Elser & Co., 46 Phil. 70, 76;
Yu; Cong Eng vs. Trinidad, 47 Phil. 385, 411) We think it would be
entirely out of line with this policy should we make a discrimination
against a foreign corporation, like the petitioner, and subject its
property to the harsh writ of seizure by attachment when it has
complied not only with every requirement of law made specially of
foreign corporations, but in addition with every requirement of law
made of domestic corporations. xx.
Same; Same; Insolvency Law; The law grants to a juridical person
as well as to natural persons the power to petition for the adjudication
of bankruptcy of any natural or judicial, provided it is a resident
corporation.Neither can the Court accept the theory that the
omission by the banks in their petition for involuntary insolvency of an
explicit and categorical statement that they are residents of the
Philippine Islands, is fatal to their cause. In truth, in light of the
concept of resident foreign corporations just expounded, when they
alleged in that petition that they are foreign banking corporations,
licensed to do business in the Philippines, and actually doing business in
this country through branch offices or agencies, they were in effect
stating that they are resident foreign corporations in the Philippines.
There is, of course, as petitioners argue, no substantive law explicitly
granting foreign banks the power to petition for the adjudication of a
Philippine corporation as a bankrupt. This is inconsequential, for
neither is there any legal provision expressly giving domestic banks the
same power, although their capacity to petition for insolvency can
scarcely be disputed and is not in truth disputed by petitioners. The law
plainly grants to a juridical person, whether it be a bank or not or it be a
foreign or domestic corporation, as to natural persons as well, such a
power to petition for the adjudication of bankruptcy of any person,
natural or juridical, provided that it is a resident corporation and joins
at least two other residents in presenting the petition to the
Bankruptcy Court.
1. EULALIO M. RUIZ and ILUMINADA RUIZ, petitioners,vs. HON. DOROTEO N. CANEBA, THE CITY SHERIFF OF MANILA AND/OR HIS DEPUTIES, ZENAIDA SANGALANG and ADOLFO CRUZ, respondents.2. EASTERN SHIPPING LINES, INC., petitioner, vs. HON. COURT OF APPEALS AND MERCANTILE INSURANCE COMPANY, INC.3. CENTRAL BANK OF THE PHILIPPINES as Liquidator of the FIDELITY SAVINGS BANK, petitioner, vs.HONORABLE JUDGE JESUS P. MORFE, as Presiding Judge of Bran ch XIII, Court of First Instance of Manila, Spouses AUGUSTO and ADELAIDA PADILLA and Spouses MARCE...4. ANTONIO R. BANZON and ROSA BALMACEDA, petitioners, vs. COURT OF APPEALS, MAXIMO R. STA. MARIA and VALERIANA R. STA. MARIA, respondents.5. ATOK FINANCE CORPORATION, petitioner, vs. COURT OF APPEALS, SANYU CHEMICAL CORPORATION, DANILO E. ARRIETA, NENITA B. ARRIETA, PABLITO BERMUNDO and LEOPOLDO HALILI, respondents.6. INTEGRATED REALTY CORPORATION and RAUL L. SANTOS, petitioners, vs. PHILIPPINE NATIONAL BANK, OVERSEAS BANK OF MANILA and THE HON. COURT OF APPEALS, respondents.OVERSEAS BANK OF MANILA, petitioner, vs. COURT OF APPEALS, INTEGRATED REALTY CORPORATION, and RAUL L. SANTOS, respondents.7. DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. COURT OF APPEALS, CELEBRADA MANGUBAT and ABNER MANGUBAT, respondents.8. LUCIO ROBLES, EMETERIA ROBLES, ALUDIA ROBLES and EMILIO ROBLES, petitioners, vs. COURT OF APPEALS, Spouses VIRGILIO SANTOS and BABY RUTH CRUZ, RURAL BANK OF CARDONA, Inc., HILARIO ROBLES, ALBERTO PALAD, JR. in his capacity as Director of Lands, and...9. BA FINANCE CORPORATION, petitioner, vs. HON. COURT OF APPEALS and ROBERTO M. REYES, respondents.10. DEVELOPMENT BANK OF THE PHILIPPINES, petitioner, vs. THE NATIONAL LABOR RELATIONS COMMISSION, ONG PENG, ET AL., respondents.11. PHILIPPINE VETERANS BANK, petitioner, vs.BENJAMIN MONILLAS, respondent.G.R. No. 167098.March 28, 2008.*12. LUISA GUANCO, assisted by her husband, LEONARDO GUANCO, petitioner, vs. ISIDRO ANTOLO, respondent.G.R. No. 150852.July 31, 2006.*13. LORENZO PASCUAL and LEONILA TORRES, plaintiffs-appellees, vs. UNIVERSAL MOTORS CORPORATION, defendant-appellant.14. INTERNATIONAL HARVESTER MACLEOD, INC., petitioner, vs. MARIANO MEDINA, JR. and HON. TOMAS P. MADDELA, JR., in his capacity as Presiding Judge of Branch XXXIV of the Court of First Instance of Manila, respondents.15. STATE INVESTMENT HOUSE, INC. and STATE FINANCING CENTER, INC., petitioners, vs. CITIBANK, N.A., BANK OF AMERICA, NT & SA, HONGKONG & SHANGHAI BANKING CORPORATION, and the COURT OF APPEALS, respondents.