Garcia vs Thio Credit Digest

Carolyn M. Garcia
-vs-
Rica Marie S. Thio
GR No. 154878, 16 March 2007

FACTS
Respondent Thio received from petitioner Garcia two crossed checks which
amount to US$100,000 and US$500,000, respectively, payable to the order of Marilou
Santiago. According to petitioner, respondent failed to pay the principal amounts of the
loans when they fell due and so she filed a complaint for sum of money and damages
with the RTC. Respondent denied that she contracted the two loans and countered that
it was Marilou Satiago to whom petitioner lent the money. She claimed she was merely
asked y petitioner to give the checks to Santiago. She issued the checks for P76,000 and
P20,000 not as payment of interest but to accommodate petitioner’s request that
respondent use her own checks instead of Santiago’s.

RTC ruled in favor of petitioner. CA reversed RTC and ruled that there was no
contract of loan between the parties.

ISSUE
(1) Whether or not there was a contract of loan between petitioner and respondent.
(2) Who borrowed money from petitioner, the respondent or Marilou Santiago?

HELD
(1) The Court held in the affirmative. A loan is a real contract, not
consensual, and as such I perfected only upon the delivery of the object of the contract.
Upon delivery of the contract of loan (in this case the money received by the debtor when
the checks were encashed) the debtor acquires ownership of such money or loan
proceeds and is bound to pay the creditor an equal amount. It is undisputed that the
checks were delivered to respondent.

(2) However, the checks were crossed and payable not to the order of the
respondent but to the order of a certain Marilou Santiago. Delivery is the act by which
the res or substance is thereof placed within the actual or constructive possession or
control of another. Although respondent did not physically receive the proceeds of the
checks, these instruments were placed in her control and possession under an
arrangement whereby she actually re-lent the amount to Santiago.

Petition granted; judgment and resolution reversed and set aside.

Saura Import vs DBP Credit Digest

Saura Import & Export Co., Inc.
-vs-
DBP
GR No. L-24968, 27 April 972
44 SCRA 445

FACTS
Saura applied to the Rehabilitation Finance Corporation (RFC), before its conversion into
DBP, for an industrial loan to be used for construction of factory building, for payment of the
balance of the purchase price of the jute machinery and equipment and as additional working
capital. In Resolution No.145, the loan application was approved to be secured first by
mortgage on the factory buildings, the land site, and machinery and equipment to be
installed.

The mortgage was registered and documents for the promissory note were executed. The
cancellation of the mortgage was requested to make way for the registration of a mortgage
contract over the same property in favor of Prudential Bank and Trust Co., the latter having
issued Saura letter of credit for the release of the jute machinery. As security, Saura execute
a trust receipt in favor of the Prudential. For failure of Saura to pay said obligation, Prudential
sued Saura.

After 9 years after the mortgage was cancelled, Saura sued RFc alleging failure to comply
with tits obligations to release the loan proceeds, thereby prevented it from paying the
obligation to Prudential Bank.

The trial court ruled in favor of Saura, ruling that there was a perfected contract between the
parties ad that the RFC was guilty of breach thereof.

ISSUE
Whether or not there was a perfected contract between the parties.

HELD
The Court held in the affirmative. Article 1934 provides: An accepted promise to deliver
something by way of commodatum or simple loan is binding upon the parties, but the
commodatum or simple loan itself shall not be perfected until delivery of the object of the
contract.

There was undoubtedly offer and acceptance in the case. When an application for a loan of
money was approved by resolution of the respondent corporation and the responding
mortgage was executed and registered, there arises a perfected consensual contract.

Credit Transactions Case Digest: BPI

Investment Corp V. CA (2002)
G.R. No. 133632 February 15, 2002

Lessons Applicable: Simple Loan

Laws Applicable:

Facts:

 Frank Roa obtained a loan with interest rate of 16 1/4%/annum from Ayala Investment and
Development Corporation (AIDC), the predecessor of BPI Investment Corp. (BPIIC), for the
construction of a house on his lot in New Alabang Village, Muntinlupa.
 He mortgaged the house and lot to AIDC as security for the loan.
 1980: Roa sold the house and lot to ALS Management & Development Corp. and Antonio
Litonjua for P850K who paid P350K in cash and assumed the P500K indebtness of ROA with
AIDC.
 AIDC proposed to grant ALS and Litonjua a new loan for P500K with interested rate of
20%/annum and service fee of 1%/annum on the outstanding balance payable within 10 years
through equal monthly amortization of P9,996.58 and penalty interest of 21%/annum/day from
the date the amortization becomes due and payable.
 March 1981: ALS and Litonjua executed a mortgage deed containing the new stipulation with the
provision that the monthly amortization will commence on May 1, 1981
 August 13, 1982: ALS and Litonjua paid BPIIC P190,601.35 reducing the P500K principal loan
to P457,204.90.
 September 13, 1982: BPIIC released to ALS and Litonjua P7,146.87, purporting to be what was
left of their loan after full payment of Roa’s loan
 June 1984: BPIIC instituted foreclosure proceedings against ALS and Litonjua on the ground
that they failed to pay the mortgage indebtedness which from May 1, 1981 to June 30, 1984
amounting to P475,585.31
 August 13, 1984: Notice of sheriff's sale was published
 February 28, 1985: ALS and Litonjua filed Civil Case No. 52093 against BPIIC alleging that they
are not in arrears and instead they made an overpayment as of June 30, 1984 since the P500K
loan was only released September 13, 1982 which marked the start of the amortization and
since only P464,351.77 was released applying legal compensation the balance of P35,648.23
should be applied to the monthly amortizations
 RTC: in favor of ALS and Litonjua and against BPIIC that the loan granted by BPI to ALS and
Litonjua was only in the principal sum of P464,351.77 and awarding moral damages, exemplary
damages and attorneys fees for the publication
 CA: Affirmed reasoning that a simple loan is perfected upon delivery of the object of the contract
which is on September 13, 1982
ISSUE: W/N the contract of loan was perfected only on September 13, 1982 or the second release
of the loan?
HELD: YES. AFFIRMED WITH MODIFICATION as to the award of damages. The award of moral
and exemplary damages in favor of private respondents is DELETED, but the award to them of
attorney’s fees in the amount of P50,000 is UPHELD. Additionally, petitioner is ORDERED to pay
private respondents P25,000 as nominal damages. Costs against petitioner.
 obligation to pay commenced only on October 13, 1982, a month after the perfection of the
contract
 contract of loan involves a reciprocal obligation, wherein the obligation or promise of each party
is the consideration for that of the other. It is a basic principle in reciprocal obligations that
neither party incurs in delay, if the other does not comply or is not ready to comply in a proper
manner with what is incumbent upon him. Consequently, petitioner could only demand for the
payment of the monthly amortization after September 13, 1982 for it was only then when it
complied with its obligation under the loan contract.
 BPIIC was negligent in relying merely on the entries found in the deed of mortgage, without
checking and correspondingly adjusting its records on the amount actually released and the date
when it was released. Such negligence resulted in damage for which an award of nominal
damages should be given
 SSS where we awarded attorney’s fees because private respondents were compelled to litigate,
we sustain the award of P50,000 in favor of private respondents as attorney’s fees

PANTALEON VS AMERICAN EXPRESS

Posted by kaye lee on 11:30 PM
G.R. No. 174269, May 8 2009 [Credit Transaction]

FACTS:

After the Amsterdam incident that happened involving the delay of American Express Card to approve his credit
card purchases worth US$13,826.00 at the Coster store, Pantaleon commenced a complaint for moral and exemplary
damages before the RTC against American Express. He said that he and his family experienced inconvenience and
humiliation due to the delays in credit authorization. RTC rendered a decision in favor of Pantaleon. CA reversed
the award of damages in favor of Pantaleon, holding that AmEx had not breached its obligations to Pantaleon, as the
purchase at Coster deviated from Pantaleon's established charge purchase pattern.

ISSUE:
1. Whether or not AmEx had committed a breach of its obligations to Pantaleon.
2. Whether or not AmEx is liable for damages.

RULING:
1. Yes. The popular notion that credit card purchases are approved “within seconds,” there really is no strict, legally
determinative point of demarcation on how long must it take for a credit card company to approve or disapprove a
customer’s purchase, much less one specifically contracted upon by the parties. One hour appears to be patently
unreasonable length of time to approve or disapprove a credit card purchase.

The culpable failure of AmEx herein is not the failure to timely approve petitioner’s purchase, but the more
elemental failure to timely act on the same, whether favorably or unfavorably. Even assuming that AmEx’s credit
authorizers did not have sufficient basis on hand to make a judgment, we see no reason why it could not have
promptly informed Pantaleon the reason for the delay, and duly advised him that resolving the same could take some
time.

2. Yes. The reason why Pantaleon is entitled to damages is not simply because AmEx incurred delay, but because
the delay, for which culpability lies under Article 1170, led to the particular injuries under Article 2217 of the Civil
Code for which moral damages are remunerative. The somewhat unusual attending circumstances to the purchase at
Coster – that there was a deadline for the completion of that purchase by petitioner before any delay would redound
to the injury of his several traveling companions – gave rise to the moral shock, mental anguish, serious anxiety,
wounded feelings and social humiliation sustained by Pantaleon, as concluded by the RTC.