"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
the delivery of the object of the contract."
A loan contract is a real
contract, not consensual, and, as such, is perfected only upon the delivery of
the object of the contract.21
In
this case, the objects of the contract are the loan proceeds which Queaño would
enjoy only upon the encashment of the checks signed or indorsed by Naguiat. If
indeed the checks were encashed or deposited, Naguiat would have certainly
presented the corresponding documentary evidence, such as the returned checks
and the pertinent bank records. Since Naguiat presented no such proof, it
follows that the checks were not encashed or credited to Queaño’s account.1awphi1.nét
Xxx
More fundamentally, whatever was
the true relationship between Naguiat and Ruebenfeldt is irrelevant in the face
of the fact that the checks issued or indorsed to Queaño were never encashed or
deposited to her account of Naguiat.
All told, we find no compelling
reason to disturb the finding of the courts a quo that the lender did not remit
and the borrower did not receive the proceeds of the loan. That being the case,
it follows that the mortgage which is supposed to secure the loan is null and
void. The consideration of the mortgage contract is the same as that of the principal
contract from which it receives life, and without which it cannot exist as an
independent contract.28 A
mortgage contract being a mere accessory contract, its validity would depend on
the validity of the loan secured by it.29
X x x x
Based on the above jurisprudence, the Court finds that the 24% per
annum interest rate, provided for in the subject mortgage contracts for a loan
of P225,000.00, may not be
considered unconscionable. Moreover, considering that the mortgage agreement
was freely entered into by both parties, the same is the law between them and they
are bound to comply with the provisions contained therein.26
Clearly, jurisprudence establish that the 24% p.a. stipulated
interest rate was not considered unconscionable, thus, the 23% p.a. interest
rate imposed on petitioners' loan in this case can by no means be considered
excessive or unconscionable.
We also do not find the stipulated 12% p.a. penalty charge
excessive or unconscionable.
In Ruiz v. CA,27 we held:
The 1% surcharge on the principal loan for every month of default
is valid.1âwphi1 This surcharge or penalty stipulated in a loan agreement in case of
default partakes of the nature of liquidated damages under Art. 2227 of the New
Civil Code, and is separate and distinct from interest payment. Also referred
to as a penalty clause, it is expressly recognized by law. It is an accessory
undertaking to assume greater liability on the part of an obligor in case of
breach of an obligation. The obligor would then be bound to pay the stipulated
amount of indemnity without the necessity of proof on the existence and on the
measure of damages caused by the breach. x x x28 And in Development Bank of the Philippines v. Family Foods
Manufacturing Co., Ltd.,29 we
held that:
x x x The enforcement of the penalty can be demanded by the
creditor only when the non-performance is due to the fault or fraud of the
debtor. The non-performance gives rise to the presumption of fault; in order to
avoid the payment of the penalty, the debtor has the burden of proving an
excuse - the failure of the performance was due to either force majeure or the
acts of the creditor himself.30
Here, petitioners defaulted in the payment of their loan obligation
with respondent bank and their contract provided for the payment of 12% p.a.
penalty charge, and since there was no showing that petitioners' failure to
perform their obligation was due to force majeure or to respondent bank's acts,
petitioners cannot now back out on their obligation to pay the penalty charge.
A contract is the law between the parties and they are bound by the
stipulations therein.
THIRD
DIVISION
G.R. No. 197861
June 5, 2013
SPOUSES FLORENTINO T. MALLARI and AUREA V. MALLARI, Petitioners,
vs.
PRUDENTIAL BANK (now BANK OF THE PHILIPPINE ISLANDS), Respondent.
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The
interest rates imposed and indicated in the 2nd up to the 26th Promissory Notes
are DECLARED NULL AND VOID, and such notes shall instead be subject to interest
at the rate of twelve percent (12%) per annum up to June 30, 2013, and starting
July 1, 2013, six percent (6%) per annum until full satisfaction.
SECOND
DIVISION
G.R. No. 181045
July 2, 2014
SPOUSES EDUARDO and LYDIA SILOS, Petitioners,
vs.
PHILIPPINE NATIONAL BANK, Respondent.
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In addition, pursuant to Circular No. 799, series of 2013, issued
by the Office of the Governor of the Bangko Sentral ng Pilipinas on 21 June
2013, and in accordance with the ruling of the Supreme Court in the recent case
of Dario Nacar v. Gallery Frames and/or Felipe Bordey, Jr.,20 effective 1 July 2013, the rate of
interest for the loan or forbearance of any money, goods or credits and the
rate allowed in judgments, in the absence of an express contract as to such
rate of interest, shall be six percent (6%) per annum. Accordingly, the rate of
interest of 12% per annum on petitioners-spouses’ obligation shall apply from
20 May 2011 – the date of default – until 30 June 2013 only. From 1 July 2013
until fully paid, the legal rate of 6% per annum shall be applied to
petitioners-spouses’ unpaid obligation.
IN VIEW OF THE FOREGOING, the Petition is DENIED and the Judgment
of the Court of Appeals in CA-G.R. CV No. 91250 is AFFIRMED with the
MODIFICATION that the 12% interest per annum shall be applied from the date of
default until 30 June 2013 only, after which date and until fully paid, the
outstanding obligation of petitioners-spouses shall earn interest at 6% per annum.
Let the records of this case be remanded to the trial court for the proper
computation of the amount of liability of petitioners Spouses Bayani H. Andal
and Gracia G. Andal, in accordance with the pronouncements of the Court herein
and with due regard to the payments previously made by petitioners-spouses.
SECOND
DIVISION
G.R. No. 194201
November 27, 2013
SPOUSES BAYANI H. ANDAL AND GRACIA G. ANDAL, Petitioners,
vs.
PHILIPPINE NATIONAL BANK REGISTER OF DEEDS OF BATANGAS CITY JOSE C. CORALES, Responden
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The nature of simple loan is defined in Articles 1933 and 1953 of
the Civil Code.
Art. 1933. — By the contract of
loan, one of the parties delivers to another, either something not consumable
so that the latter may use the same for a certain time and return it, in which
case the contract is called a commodatum; or money or other consumable thing
upon the condition that the same amount of the same kind and quality shall be
paid, in which case the contract is simply called a loan or mutuum.
Commodatum is essentially
gratuitous.
Simple loan may be gratuitous or
with a stipulation to pay interest.
In commodatum the bailor retains
the ownership of the thing loaned, while in simple loam ownership passes to the
borrower.
Art. 1953. — A person who receives
a loan of money or any other fungible thing acquires the ownership thereof, and
is bound to pay to the creditor an equal amount of the same kind and quality.
SECOND
DIVISION
G.R. No. L-50550-52 October 31, 1979
CHEE KIONG YAM, AMPANG MAH, ANITA YAM JOSE Y.C.
YAM AND RICHARD YAM, petitioners,
vs.
HON. NABDAR J. MALIK, Municipal Judge of Jolo, Sulu (Branch I), THE PEOPLE
OF THE PHILIPPINES, ROSALINDA AMIN, TAN CHU KAO and LT. COL. AGOSTO SAJOR respondents.
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Art.
1953 of the Civil Code. — A person who receives a loan of money or any other
fungible thing acquires the ownership thereof, and is bound to pay to the
creditor an equal amount of the same kind and quality.
Xxxx
As
we have explained earlier, the true nature of the contract between petitioner
and private respondents was that of a simple loan. In such a contract, the
debtor promises to pay to the creditor an equal amount of money plus interest
if stipulated. 23 It
is true that private respondents failed to fulfill their promise to petitioner
to return his money plus interest at the end of one month. However, mere
non-compliance of a promise to perform a thing does not constitute deceit 24 because
it is hard to determine and infer a priori the criminal intent to the person
promising. 25 In
other words, deceit should be proved and established by acts distinct from and
independent of, the non-compliance of the promise, 26 and this, petitioner failed to do.
SECOND
DIVISION
G.R. No. 106671 March 30,
2000
HARRY TANZO, petitioner,
vs.
HON. FRANKLIN M. DRILON, in his capacity as Secretary of Justice, MANUEL J.
SALAZAR and MARIO J. SALAZAR, respondents.
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SMALL CLAIMS
Section 4. Applicability - The Metropolitan Trial Courts, Municipal Trial Courts in Cities, Municipal
Trial Courts, and Municipal Circuit Trial Courts shall apply this Rule in all
actions which are; (a) purely civil in nature where the claim or relief prayed
for by the plaintiff is solely for payment or reimbursement of sum of money,
and (b) the civil aspect of criminal action, or reserved upon the filing of the
criminal action in court, pursuant to Rule of 111 of the Revised Rules of
Criminal Procedure.
These claims or demands may be;
(a) For money owned under any of
the following;
1. Contract of Lease;
2. Contract of Loan;
3. Contract of Services;
4. Contract of Sale; or
5. Contract of Mortgage;
(b) For damages arising from any
of the following;
1. Fault or negligence;
2. Quasi-contract; or
3. Contract;
(c) The enforcement of a barangay
amicable settlement or an arbitration award involving a money claim covered by
this Rule pursuant to Sec. 417 of Republic Act 7160, otherwise known as the
Local Government Code of 1991.
EN BANC
A.M. No. 08-8-7-SC
November 21, 2000
RE: THE
RULE OF PROCEDURE FOR SMALL CLAIMS CASES
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In
loan agreements, it cannot be denied that the rate of interest is a principal
condition, if not the most important component. Thus, any modification thereof
must be mutually agreed upon; otherwise, it has no binding effect. Moreover,
the Court cannot consider a stipulation granting a party the option to prepay
the loan if said party is not agreeable to the arbitrary interest rates
imposed. Premium may not be placed upon a stipulation in a contract which
grants one party the right to choose whether to continue with or withdraw from
the agreement if it discovers that what the other party has been doing all
along is improper or illegal.
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under Article 1354 of the Civil Code, it is presumed that consideration
exists and is lawful unless the debtor proves the contrary.
38 Moreover, under Section 3, Rule 131 of the
Rules of Court, the following are disputable presumptions: (1) private
transactions have been fair and regular; (2) the ordinary course of business
has been followed; and (3) there was sufficient consideration for a contract.
39 A presumption may operate against an
adversary who has not introduced proof to rebut it. The effect of a legal
presumption upon a burden of proof is to create the necessity of presenting
evidence to meet the legal presumption or the prima facie case created thereby,
and which, if no proof to the contrary is presented and offered, will prevail.
The burden of proof remains where it is, but by the presumption, the one who
has that burden is relieved for the time being from introducing evidence in
support of the averment, because the presumption stands in the place of
evidence unless rebutted.
40
In the present case, as proof of his claim of lack of consideration,
respondent denied under oath that he owed petitioner a single centavo. He added
that he did not apply for a loan and that when he signed the promissory notes,
they were all blank forms and all the blank spaces were to be filled up only if
the sale transaction over the subject properties would not push through because
of a possible adverse decision in the civil cases involving them (the
properties). He thus posits that since the sale pushed through, the promissory
notes did not become effective.
Contrary to the conclusions of the RTC and the CA, we find such proof
insufficient to overcome the presumption of consideration. The presumption that
a contract has sufficient consideration cannot be overthrown by the bare,
uncorroborated and self-serving assertion of respondent that it has no
consideration.
41 The alleged lack of consideration must be
shown by preponderance of evidence.
42
As it now appears, the promissory notes clearly stated that respondent
promised to pay petitioner
P1,520,000.00 and
P416,800.00, plus
interests and penalty charges, a year after their execution. Nowhere in the
notes was it stated that they were subject to a condition. As correctly
observed by petitioner, respondent is not only a lawyer but a law professor as
well. He is, therefore, legally presumed not only to exercise vigilance over
his concerns but, more importantly, to know the legal and binding effects of
promissory notes and the intricacies involving the execution of negotiable
instruments including the need to execute an agreement to document extraneous
collateral conditions and/or agreements, if truly there were such.
43 This militates against respondent’s claim
that there was indeed such an agreement. Thus, the promissory notes should be
accepted as they appear on their face.
Respondent’s liability is not negated by the fact that he has uncollected
commissions from the sale of the Molino properties. As the records of the case
show, at the time of the execution of the promissory notes, the Molino
properties were subject of various court actions commenced by different
parties. Thus, the sale of the properties and, consequently, the payment of
respondent’s commissions were put on hold. The non-payment of his commissions
could very well be the reason why he obtained a loan from petitioner.
In Sierra v. Court of Appeals,44 we held that:
A promissory note is a solemn acknowledgment of a debt and a formal
commitment to repay it on the date and under the conditions agreed upon by the
borrower and the lender. A person who signs such an instrument is bound to
honor it as a legitimate obligation duly assumed by him through the signature
he affixes thereto as a token of his good faith. If he reneges on his promise
without cause, he forfeits the sympathy and assistance of this Court and
deserves instead its sharp repudiation.
Aside from the payment of the principal obligation of P1,936,800.00,
the parties agreed that respondent pay interest at the rate of 25% from
February 17, 1997 until fully paid. Such rate, however, is excessive and thus,
void. Since the stipulation on the interest rate is void, it is as if there was
no express contract thereon. To be sure, courts may reduce the interest rate as
reason and equity demand.45 In this case, 12% interest is reasonable.
The promissory notes likewise required the payment of a penalty charge of 3%
per month or 36% per annum. We find such rates unconscionable. This Court has
recognized a penalty clause as an accessory obligation which the parties attach
to a principal obligation for the purpose of ensuring the performance thereof
by imposing on the debtor a special prestation (generally consisting of the
payment of a sum of money) in case the obligation is not fulfilled or is
irregularly or inadequately fulfilled.46 However, a penalty charge of 3% per month is
unconscionable;47 hence, we reduce it to 1% per month or 12%
per annum, pursuant to Article 1229 of the Civil Code which states:
Art. 1229. The judge shall equitably reduce the penalty when the principal
obligation has been partly or irregularly complied with by the debtor. Even if
there has been no performance, the penalty may also be reduced by the courts if
it is iniquitous or unconscionable.48
Lastly, respondent promised to pay 25% of his outstanding obligations as
attorney’s fees in case of non-payment thereof. Attorney’s fees here are in the
nature of liquidated damages. As long as said stipulation does not contravene
law, morals, or public order, it is strictly binding upon respondent.
Nonetheless, courts are empowered to reduce such rate if the same is iniquitous
or unconscionable pursuant to the above-quoted provision.
49 This sentiment is echoed in Article 2227 of
the Civil Code, to wit:
Art. 2227. Liquidated damages, whether intended as an indemnity or a
penalty, shall be equitably reduced if they are iniquitous or unconscionable.
Hence, we reduce the stipulated attorney’s fees from 25% to 10%.
50
Respondent’s Counterclaim and Supplemental Counterclaim
The RTC, affirmed by the CA, granted respondent’s counterclaims as it
applied the doctrine of piercing the veil of corporate fiction. It is
undisputed that the parties to the contract of sale of the subject properties
are Pentacapital Realty as the buyer, CRDI as the seller, and respondent as the
agent of CRDI. Respondent insisted, and the RTC and the CA agreed, that
petitioner, as the parent company of Pentacapital Realty, was aware of the sale
transaction, and that it was the former who paid the consideration of the sale.
Hence, they concluded that the two corporations should be treated as one
entity.
SECOND
DIVISION
G.R. No. 171736
July 5, 2010
PENTACAPITAL INVESTMENT CORPORATION, Petitioner,
vs.
MAKILITO B. MAHINAY, Respondent.
x - - - - - - - - - - - - - - - - - - - - - -
-x
G.R. No. 181482
PENTACAPITAL INVESTMENT CORPORATION, Petitioner,
vs.
MAKILITO B. MAHINAY, Respondent.
VVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVVV
Respondent Makilito B. Mahinay is ordered to pay petitioner Pentacapital
Investment Corporation
P1,936,800.00 plus 12% interest per annum, and
12% per annum penalty charge, starting February 17, 1997. He
is likewise ordered to pay 10% of his outstanding obligation as attorney’s
fees. No pronouncement as to costs.
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