Integrated Realty Corp vs. PNB GR No.

60705, 28 June 1989 174 SCRA 295 FACTS Raul Santos made a time deposit with OBM in the amount of P500H and he was issued a certificate of time deposits. On another date, Santos again made a time deposit with OBM in the amount of P200H; he was again issued a CTD. IRC, thru its president Raul Santos, applied for a loan and/or credit line (P700H) with PNB. To secure such, Santos executed a Deed of Assignment of the 2 time deposits. After due dates of the time deposit certificates, OBM did not pay PNB. PNB then demanded payment from IRC and Santos, but they replied that the loan was deemed paid with the irrevocable assignment of the time deposit certificates. PB then filed with RTC to collect from IRC and Santos with interest. The trial court ruled in favor of PNB ordering IRC and Santos to pay PNB the total amount of P700H plus interest of 9% PA, 2% additional interest and 1& PA penalty interest. On appeal, the CA ordered OBM to pay IRC and Santos whatever amts they will to PNB with interest. IRC and Santos now claim that OBM should reimburse them for whatever amts they may be adjudged to pay PNB by way of compensation for damages incurred. ISSUE Whether or not the claim of IRC and Santos will prosper. HELD The Court held in the affirmative. The 2 time deposits matured on 11 January 1968 and 6 February 1968, respectively. However, OBM was not allowed and suspended to operate only on 31 July 1968 and resolved on 2 August 1968. There was a yet no obstacle to the faithful compliance by OBM of its liabilities. For having incurred in delay in the performance of its obligation, OBM should be held for damages. OBM contends that it had agreed to pay interest only up to the dates of maturity of the CTD and that Santos is not entitled to interest after maturity dates had expired. While it is true that under Article 1956 of the CC, 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 is being required to pay such interest, not as interest income stipulated in the CTD, but as damages fro 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 LI, in the nature of damages for noncompliance with an obligation to pay sum of money, is recoverable from the date judicially or extra-judicially demand is made.

Bataan Seedling vs Republic GR No. 141009, 2 July 2002 383 SCRA 590

FACTS Petitioner entered into a contract with respondent, represented by the DENR for the reforestation of a forest land within a period of 3 years. Petitioner undertook to report to DENR any event or condition which delays or may delay the project. With the contract was the release of mobilization fund but the fund was to be returned upon completion or deducted from periodic release of moneys to petitioner. Believing that petitioners failed to comply with their obligations, respondent sent a notice of cancellation. Petitioners failed to respond to the notice, thus, respondent filed a complaint for damages against petitioners. The RTC held that respondent had sufficient grounds to cancel the contract but saw no reason why the mobilization fund and the cash advances should be refunded or that petitioners are liable for liquidated damages. Both parties appealed to the CA, which affirmed the trial court and that the balance of the fund should be returned with 12% interest. ISSUE Whether the order to refund the balance of the fund with 12% interest pa is proper HELD No. Interest at the rate of 12% pa is impossible if there is no stipulation in the contract. Herein subject contract does not contain any stipulation as to interest. However, the amount due to respondent does not represent a loan or forbearance of money. The word forbearance is defined, within, the context of usury law, as a contractual obligation of lender or creditor to refrain, during given period of time, from requiring borrower or debtor to repay loan or debt then due and payable. In the absence of stipulation, the legal interest is 6% pa on the amount finally adjudged by the Court. Catungal vs Hao GR No. 134972, 22 March 2001 355 SCRA 29 FACTS The original owner Aniana Galang, leased a 3-storey building in Paraaque to BPI in 1972. During the lease period, BPI subleased the ground floor to Doris Hao. In 1984, Galang and Hao executed a lease contract on the 2nd and 3rd floors of the building. 2 years later, spouses Catungal bought the property from Galang. Upon expiration of the lease agreements, Catungal demanded Hao to vacate the building. The demand was unheeded so petitioners filed for ejectment before the MeTC, which ordered Hao to vacate the premises and pay P20,000 until she finally

vacates. Petitioners moved for clarificatory or amended judgment on the ground that although MeTC ordered defendant to vacate, it only awarded rent or compensation for the use of said property for the ground floor and not for the entire subject property. The MeTC amended the judgment but petitioners moved for reconsideration praying that respondent be ordered to pay P20,000 pm for the use and occupancy of the ground floor and P10,000 pm for the 2nd and 3rd floors. The case was referred to RTC which affirmed the decision. On appeal to the CA, the latter reduced the P20,000 to P8,000 and the P10,000 each to P5,000 each. ISSUE Whether or not the RTC decision should be reinstated HELD Yes. The plaintiff in an ejectment case is entitled to damages caused by his loss of the use and possession of the premises. Banco Filipino vs CA GR No. 129227, 30 May 2000 332 SCRA 241 FACTS Elsa and Calvin Arcilla secured, on 3 occasions, loan from petitioner as evidenced by promissory note. REM was also executed. Under said deeds, Banco Filipino may increase rate of interest on said loans, within the limits allowed by law. At that time, under Usury Law, the maximum rate of interest for loans secured by REM was 12% pa. Later, the Central bank issued Circular No. 494 providing for the maximum interest of 19% p a. Meanwhile, Skyli Builders, thru President Calvin Arcilla secured loans from BPI with FGU Insurance as surety. Banco Filipino issued an account statement with 17% pa as interest. The Arcillas filed for annulment of the loan contracts because the rate of interests charged were usurious. ISSUE Whether or not respondents are entitled to refund of the alleged interest overpayments. HELD Yes. Private respondents aver that they are entitled to the refund inasmuch as the escalation clause incorporated in the loan contracts do not have a corresponding de-escalation clause and is therefore, illegal. In Banco Filipino Savings & Mortgage Bank vs. Navarro, the Court ruled that Central Bank Circular 494, although it has the force and effect of law, is not a law and is not the law contemplated by the parties which authorizes the petitioner to unilaterally raise the interest rate of loan. The reliance on the circular was without any legal basis.