PNB v CA

FACTS:
-

Province of Isabela issued several checks drawn against its account with PNB
(P) in favor of Ibarrola (R), as payments for the purchase of medicines.
The checks were delivered to Rs agents who turned them over to R, except 23
checks amounting to P98k.
Due to failure to receive full amount, R filed case against P
LC, CA and SC ordered PNB to pay however, all 3 courts failed to specify the
legal rate of interest 6% or 12%

ISSUE: WoN the rate to be used is 6%

SC: YES!
-

This case does not involve a loan, forbearance of money or judgment involving a
loan or forbearance of money as it arose from a contract of sale whereby R did
not receive full payment for her merchandise.
When an obligation arises from a contract of purchase and sale and not from a
contract of loan or mutuum, the applicable rate is 6% per annum as provided in
Art. 2209 of the NCC
6% from filing of complaint until full payment before finality of judgment
12% from finality of judgment

PNB v SAYO, JR.

FACTS
-

Noahs Ark Sugar Refinery (Noahs) issued several warehouse receipts

(quedans), which were negotiated to Rosa, RNS and St. Therese (vendees),
which were again negotiated to Luis and Cresencia, which they (Luis and
Cresencia) endorsed to PNB as security for 2 loan agreements.
o Transfer of quedans Noahs Rosa, RNS and St. Therese Luis and
Cresencia PNB
Luis and Cresencia failed to pay their loans hence PNB demanded delivery of
sugar stocks, however, Noahs Ark refused, alleging ownership thereof.
Noahs Ark contended that the agreement made by them with the vendees was
stopped since the bank dishonored the payments made by the vendees to
Noahs Ark. As such, the vendees and the endorsers of the quedans never
acquired ownership thereof.
Noahs Ark claimed for warehousemans lien for the storage of the goods.
LC granted lien
PNB appealed

ISSUE: WoN PNB is entitled to the stocks of sugar as the endorsee of the quedans,
without paying the lien
SC: YES
-

While PNB is entitled to the stocks of sugar as the endorsee of the quedans,
delivery to it shall be effected only upon payment of the storage fees.
The warehouseman is entitled to the warehousemans lien that attaches to the
goods invokable against anyone who claims a right of possession thereon.
However, in this case, the lien was lost when R refused to deliver the goods,
which were not anchored to a valid excuse (i.e. non satisfaction of W/Hman Lien)
but on an adverse claim of ownership.
The loss of W/H Mans lien does not necessarily mean the extinguishment of the
obligation to pay the W/H fees and charges which continues to be a personal
liability of the owners, PNB in this case. However, such fees and charges have
ceased to accrue from the date of the rejection by Noahs Ark to heed the lawful
demand for the release of the goods.

DBPvs.CA449SCRA57
DEVELOPMENT BANK OF THE PHILIPPINES, petitioner vs. Court of Appeals and the ESTATE OF
THE LATE JUAN B. DANS, represented by CANDIDA G. DANS, and the DBP MORTGAGE
REDEMPTION INSURANCE POOL, respondents.

FACTS: Juan B. Dans, 76 years of age, together with his family, applied for a loan worth Php 500, 000 at
the Development Bank of the Philipppines on May 1987. The loan was approved by the bank dated
August 4, 1987 but in the reduced amount of Php 300, 000. Mr. Dans was advised by DBP to obtain a
mortgage redemption insurance at DBP MRI pool. DBP deducted the amount to be paid for MRI Premium
that is worth Php 1476.00. The insurance of Mr. Dans, less the DBP service fee of 10%, was credited by
DBP to the savings account of DBP MRI-Pool. Accordingly, the DBP MRI Pool was advised of the credit.
On September 3, 1987, Mr. Dans died of cardiac arrest. DBP MRI notified DBP was not eligible
for the coverage of insurance for he was beyond the maximum age of 60. The wife, Candida, filed a
complaint to the Regional Trial Court Branch I Basilan against DBP and DBP MRI pool for Collection of
Sum of Money with Damages. Prior to that, DBP offered the administratrix (Mrs. Dans) a refund of the
MRI payment but she refused for insisting that the family of the deceased must receive the amount
equivalent of the loan. DBP also offered and ex gratia for settlement worth Php 30, 000. Mrs. Dans
refused to take the offer. The decision of the RTC rendered in favor of the family of the deceased and
against DBP. However, DBP appealed to the court.

ISSUE: Whether or not the DBP MRI Pool should be held liable on the ground that the contract was
already perfected.

HELD: No. DBP MRI Pool is not liable. Though the power to approve the insurance is lodged to the pool,
the DBP MRI Pool did not approve the application of the deceased. There was no perfected contract
between the insurance pool and Mr. Dans.
DBP was wearing two legal hats: as a lender and insurance agent. As an insurance agent, DBP
made believed that the family already fulfilled the requirements for the said insurance although DBP had a
full knowledge that the application would never be approved. DBP acted beyond the scope of its authority
for accepting applications for MRI. If the third person who contracted is unaware of the authority
conferred by the principal on the agent and he has been deceived, the latter is liable for damages. The
limits of the agency carries with it the implication that a deception was perpetratedArticles 19-21 come
into play.

However, DBP is not entitled to compensate the family of the deceased with the entire value of
the insurance policy. Speculative damages are too remote to be included in the cost of damages. Mr.
Dans is entitled only to moral damages. Such damages do not need a proof of pecuniary loss for
assessment. The court granted only moral damages (Php 50, 000) plus attorney feess (Php 10, 000) and
the reimbursement of the MRI fees with legal interest from the date of the filing of the complaint until fully
paid.

Government Service Insurance System v. CA

G.R. No. 40824
February 23, 1989
When Instrument is Payable to Order
FACTS: Respondents Spouses Racho together with
Spouses
Lagasca executed 2 deeds of mortgage on November 13,
1957
and April 14, 1958 respectively, in favor of petitioner
Government
Service Insurance System (GSIS). At the same time, they
gave a
parcel of land as security covered by a TCT and executed
a
promissory note. Lasagca Spouses executed an
instrument,
Assumption of Mortgage wherein they obligated to
assume the
aforesaid obligation to the GSIS and to secure the release
of the
mortgage covering the land owned by private respondent
which
was mortgaged to the GSISall of which was not fulfilled.
Respondent failed to comply with the conditions of the
mortgage,
particularly the amortizations, that led GSIS
extrajudicially
foreclose the mortgage and sell the same though public
auction.
After two years, respondents filed a complaint against
petitioner
and the Lagasca spouses praying that the extrajudicial
foreclosure

made on their property be declared null and void and to

be able to
recover the property and/or GSIS to pay them the value
and/or be
allowed to repurchase the land. They also ask for moral
damages
and attorneys fees.
ISSUE/S: Whether or not the extrajudicial foreclosure
made by
GSIS was null and void.
HELD: Both parties relied on Section 29 of the Negotiable
Instruments Law that provides an accommodation party
is one
who has signed an instrument as maker, drawer, acceptor
of
indoors without receiving value therefor, but is held liable
on the
instrument to a holder for value although the latter knew
him to be
only an accommodation party. The promissory note as
well as the
mortgage deeds are not negotiable instruments since
they do not
comply with the fourth requisite (Section 1)neither one
are
payable to order nor to bearer. Said note is payable to a
specified
party, GSIS. Respondents signed the documents only to
give their
consent to the mortgage with GSIS having full knowledge
that
loans are secured solely for the benefit of the Lagasca
spouses.

There is no information that the respondents executed

the
instruments for a consideration, confirming that they did
such to
their original agreement. The parol evidence rule cannot
be used
by the petitioner for it is clear that there was no objection
in the
court below regarding the admissibility of the testimony
and
documents presented to prove that private respondents
signed
the mortgage papers to accommodate their co-owners,
the
respondents. However, contrary to the respondent court,
it cannot
be said that respondents are without liability under the
mortgage
contracts. Under Art. 2085, the effect that third persons
who are
not parties to the principal obligation may secure the
latter by
pledging or mortgaging their own property.