5. CAROLYN M. GARCIA, Petitioner, vs. RICA MARIE S. THIO, Respondent.

[G.R. No. 154878, March 16, 2007 CORONA, J.:

TO!IC" Loa#$ G%#%ra& !ro'()(o#)
*OCTRINE" A &oa# () a r%a& co#+rac+, #o+ co#)%#),a&, a#- a) ),ch () .%r/%c+%- o#&0 ,.o#
+h% -%&('%r0 o/ +h% o12%c+ o/ +h% co#+rac+
3ACTS"
1. LOAN 1" Respondent Rica Marie S. Thio received from petitioner Carolyn M. Garcia a
crossed check dated Febrary !", 1##$ in the amont of %S&1'',''' payable to the
order of a certain Marilo Santia(o
a. )ith *+ interest per month and matres on ,ctober !-, 1##$
1. Garcia then received from Thio the amont of %S&*,''' and P.-,$'' every
month.
!. LOAN 2" Thio once a(ain received a cross check from Garcia in the amont of
P$'',''', also payable to the order of Marilo Santia(o
a. )ith "+ interest per month
1. )old matre on /ovember $, 1##$
c. Garcia the received from Thio the amont of P!',''' every month on 0(st $,
September $, ,ctober $ and /ovember $, 1##$.
*. Garcia filed a complaint for sm of money and dama(es in the RTC of Makati. Garcia
alle(ed the follo1in(2
a. Thio failed to pay the principal amont of the loans 1hen it fell de.
1. /o promissory note 1as e3ected since Thio and Garcia 1ere close friends
c. Thio paid the stiplated monthly interest for both loans bt on their matrity
dates, she failed to pay the principal amonts despite repeated demands.
". RTC rled in favor of Garcia findin( preponderance of evidence to sstain the complaint.
$. C0 reversed the decision of the RTC rlin( that there 1as no contract of loan bet1een
the parties.
a. C0 held that there () #o+h(#4 (# +h% r%cor- +ha+ )ho5) +ha+ Th(o r%c%('%-
6o#%0 /ro6 Garc(a
1. Th% ch%c7) r%c%('%- 10 Th(o 1%(#4 cro))%- 6a0 #o+ 1% %#ca)h%- 1,+ o#&0
-%.o)(+%- (# +h% 1a#7 10 +h% .a0%% 5ho () Mar(&o, Sa#+(a4o (# +h() ca)%.
(. TA8E NOTE IN *EALING 9ITH CROSSE* CHEC8S"
1. check may not be encashed bt only deposited in the bank
!. check may be ne(otiated only once4to one 1ho has an accont 1ith the
bank
*. act of crossin( the check serves as 1arnin( to the holder that the check
has been issed for a definite prpose so that he mst in5ire if he has
received the check prsant to that prpose, other1ise, he is not a
holder in de corse.
ii. The receipt of the checks by Thio is not the issance and delivery to the
payee in contemplation of la1 since the latter is not the person 1ho cold
take the checks as a holder 1ith intent to transfer title
1. Garcia cannot be deemed as an a(ent of Marilo Santia(o
becase she 1as merely facilitatin( the transactions bet1een
Santia(o and Thio
ISS:E" )hether there is a Contract of 6oan bet1een Garcia and Thio7
HEL*" Y%). Th(o &(a1&% /or +h% .r(#c(.a& a6o,#+ 1orro5%-. !%+(+(o# () h%r%10 GRANTE*
1. A &oa# () a r%a& co#+rac+, #o+ co#)%#),a&, a#- a) ),ch () .%r/%c+%- o#&0 ,.o# +h%
-%&('%r0 o/ +h% o12%c+ o/ +h% co#+rac+
a. %pon the delivery of the ob8ect of the contract of loan the debtor ac5ires
o1nership of sch money or loan proceeds and is bond to pay the creditor an
e5al amont
b. 9n the present case2 delivery 1as effected 1hen the money received by Thio
1hen the checks 1ere encashed.
!. *%&('%r0 () +h% ac+ 10 5h(ch +h% res or ),1)+a#c% +h%r%o/ () .&ac%- 5(+h(# +h%
ac+,a& or co#)+r,c+('% .o))%))(o# or co#+ro& o/ a#o+h%r.
a. I# +h% .r%)%#+ ca)%2 Garcia did not physically receive the proceeds of the
checks, these instrments 1ere placed in her control and possession nder an
arran(ement 1hereby she actally re:lent the amonts to Santia(o.
b. The follo1in( spport this conclsion2
i. Th(o a-6(++%- +ha+ Garc(a -(- #o+ .%r)o#a&&0 7#o5 Sa#+(a4o, bt the
former also admitted that she already had transactions 1ith Santia(o at
that time.
ii. 6eticia Ri;, a friend of both parties testified that (+ 5a) Th(o;) .&a# +o
1orro5 6o#%0 /ro6 Garc(a a+ <= (#+%r%)+ ra+% a#- &a+%r o# &%#- +h%
)a6% 6o#%0 +o Sa#+(a4o a+ a h(4h%r (#+%r%)+ ra+% o/ 5= so that she
1old (ain profit od !+. This e3plains 1hy Thio instrcted Garcia to
name the checks payable to Santia(o.
iii. Th(o;) c&a(6 +ha+ )h% ()),%- h%r o5# ch%c7) +o .a0 /or +h% (#+%r%)+
1%ca,)% Garc(a () #o+ ac>,a(#+%- 5(+h Sa#+(a4o, a#- +ha+ Sa#+(a4o
5o,&- &a+%r o# r%.&ac% h%r ch%c7) () (#cr%-(1&%. SC finds it hard to
believe that Thio 1old place herself in a position 1here she is not a privy
to the contract.
iv. The petition for insolvency filed by Santia(o, it 1as Th(o 5ho 5a) &()+%-
a) o#% o/ h%r cr%-(+or).
v. Th(o #%'%r .r%)%#+%- Sa#+(a4o a) a 5(+#%)) +o corro1ora+% h%r )+or0.
SC presmed that evidence 1illflly sppressed 1old be adverse if
prodced.<
*. SC fond that Th(o () #o+ &(a1&% /or +h% 6o#+h&0 (#+%r%)+ since there 1as no 1ritten
proof of the interest payable e3cept for the verbal a(reement that the loans 1old earn
the *+ and "+ monthly interest.
a. Ar+(c&% 1?56 o/ +h% C('(& Co-% provides that <=n>o interest shall be de nless it
has been e3pressly stiplated in 1ritin(.<
". HO9E@ER" there can be 6?G06 9/T?R?ST
a. 0rticle !!'# of the Civil Code2 )hen the obli(ation is breached, and it consists in
the payment of a sm of money the interest de shold be that 1hich may have
been stiplated in 1ritin(. Frthermore, +h% (#+%r%)+ -,% )ha&& (+)%&/ %ar# &%4a&
(#+%r%)+ /ro6 +h% +(6% (+ () 2,-(c(a&&0 -%6a#-%-.
b. I# +h% .r%)%#+ ca)%" Thio is liable for the payment of le(al interest per annm to
be compted from /ovember !1, 1##$, the date 1hen she received petitioner@s
demand letter.
i. From the finality of the decision ntil it is flly paid, the amont de shall
earn interest at 1!+ per annum, the interim period bein( deemed
e5ivalent to a forbearance of credit.