PCIB vs CA (GR No.
121989) Atlas had already fulfilled its obligation when PCIB
FACTS:
• PCIB and, Manila Banking Corporation (MBC)
were joint bidders in a foreclosure sale of
assorted mining machinery and equipment
previously mortgaged to them by the Philippine
Iron Mines, Inc. (PIM).
• Atlas purchase some of these properties owned
jointly by PCIB and MBC as evidenced by a Deed
of Sale, with the parties agreeing therein to an
initial down payment of 12M and the balance of
18M payable in 6 monthly installments. It was
also stipulated that Atlas should be free from all
claims and incidental actions of the National
Mines and Allied Workers Union (NAMAWU).
• NAMAWU claim stemmed from a labor dispute
where it obtained a favorable judgment against
PIM in the amount of P4,298,307.77.
• FEB 12, 79: Atlas issued HK and Shanghai Bank
Check in the amount of 12M as down payment,
payable to both PCIB and MBC.
• The total purchase price of the properties
bought by Atlas was P29,630,000.00. Of this
amount, PCIB claims that it is entitled to receive
from Atlas the total of P18,713,685.77 or
63.1579% of the purchase price, pursuant to the
letter dated 7 March 1979 of the 12M down
payment made by Atlas to PCIB and MBC.
• PCIB acknowledged that it had received
P6,819,766.10. PCIB also admitted having
received P8,650,543.18 as its share from the
subsequent installment payments made by.
• Atlas paid to NAMAWU the amount of
P4,298,307.77. It also made (6) monthly
payments in 1979 totaling P13,696,692.22.
Atlas claims to have paid a total of 30M, of
which P370,000.00 was an overpayment. Atlas
sued PCIB to obtain reimbursement of the
alleged overpayment.
ISSUE:
1. WON PCIB should receive 63.1579% of the down
payment.
2. WON Atlas should be fully credited for the
amount of P4,298,307.77 it had paid to
NAMAWU.
HELD:
1. NO. PCIB cannot demand from Atlas more than
what it got from MBC out of the down payment
remitted by Atlas to both PCIB and MBC.
received the issued HK Shanghai Bank Check in the
sum of 12M with PCIB and MBC as joint payees as
down payment of the purchase price. It was
received by PCIB Vice-President and then deposited
in MBC account. Therefore, the amount received by
PCIB came from MBC.
When Atlas paid the down payment, it was not
aware of the percentage of payment to be remitted
to PCIB and MBC. Thus, whatever deficiency PCIB is
entitled from the 12M down payment had become
an internal matter between it and MBC.
2. YES. Atlas overpaid NAWAMU however;
overpayment amounting to P601,260.00 should
be recovered from NAMAWU applying the
principle that no person can unjustly enrich
himself at the expense of another.
PCIB is the debtor and Atlas is the third party who
paid the said amount without consulting PCIB. Since
Atlas readily paid NAMAWU without the knowledge
and consent of PCIB, Atlas may only recover from
PCIB only the amount of payment which has
benefited the latter according to ART 1236.
JOINT OBLIGATION: an obligation where there is a
concurrence of several creditors, or of several
debtors, or of several creditors and debtors, by
virtue of which each of the creditors has a right to
demand, and each of the debtors is bound to render,
compliance with his proportionate part of the
prestation which constitutes the object of the
obligation.
Article 1208 of the Civil Code mandates the equal
sharing of creditors in the payment of debt in the
absence of any law or stipulation to the contrary.
Article 1236 of the Civil Code: whoever pays for
another may demand from the debtor what he has
paid, except that if he paid without the knowledge
or against the will of the debtor, he can recover only
insofar as the payment has been beneficial to the
debtor.
Generally, the third person who paid another's debt
is entitled to recover the full amount he had paid.
The law, however, limits his recovery to the amount
by which the debtor has been benefited, if the
debtor has no knowledge of, or has expressed his
opposition to such payment.
THE HEIRS OF POE vs MALAYAN INSURANCE (GR
No. 156302)

FACTS: George was killed when he was hit by the

truck driven by Willie, an employee of Rhoda; and
the truck is insured with respondent MICI.

ISSUES: Who is liable for damages for the death of

George.

HELD: Rhoda and MICI are solidary or joint and

several obligation.

solidary or joint and several obligation: one in

which each debtor is liable for the entire obligation,
and each creditor is entitled to demand the whole
obligation.

There is solidary liability only when the obligation

expressly so states.

RHODA: based on tort

rd
MICI: based on contract (insurance policy); The 3
party liability of the insurer is only up to the extent
of the insurance policy and that required by law; and
it cannot be held solidarily liable for anything beyond
that amount. Any award beyond the insurance
coverage would already be the sole liability of the
insured and/or the other parties at fault.

The insurance policy was never presented by MICI to

ascertain the supposed limited liability of
respondent MICI under said policy.

MICI that it is the insurer of the truck involved in the

accident that killed George, and in the absence of
proof to establish both the existence and the
extent/amount of the alleged limited liability of
MICI as insurer (insurance policy), the Court could
only conclude tha MICI had agreed to fully indemnify
third-party liabilities. Consequently, there is no more
difference in the amounts of damages which
petitioners can recover from Rhoda or MICI; heirs of
Poe can recover the said amounts in full from either
of them, thus, making their liabilities solidary or
joint and several.
ALLIED BANK vs LIM SIO WAN (GR No. 133179)
FACTS: Lim Sio Wan deposited a money market
placement in Allied Bank. Before its maturity, an
impostor call an Allied officer instructing her to pre-
terminate Lim Sio Wan’s money market placement
and to issue a manager’s check which will be picked
up by Santos.
The check was issued to Santos and deposited in the
account of Filipinas Cement Corporation (FCC) at
Metrobank with Wan’s forged signature as indorser.
The deposit was said to be the Producer Bank’s
payment of its obligation to FCC.
Upon the maturity date of the money market
placement, Wan went to Allied bank to withdraw it.
Allied refused to pay her, thus, she filed a complaint.
ISSUE: Who is liable to pay Wan?
HELD: ALLIED and METROBANK.
ALLIED: Their relationship is one of debtor (bank) –
creditor (Wan).
Art. 1953. A person who receives a loan of money or
any other fungible (capable of mutual substitution)
thing acquires the ownership thereof, and is bound
to pay to the creditor an equal amount of the same
kind and quality. MUTUUM.
Art. 1980. Fixed, savings, and current deposits of
money in banks and similar institutions shall be
governed by the provisions concerning simple loan.
A money market is a market dealing in standardized
short-term credit instruments (involving large
amounts) where lenders and borrowers do not deal
directly with each other but through a middle man
or dealer in open market. In a money market
transaction, the investor is a lender who loans his
money to a borrower through a middleman or
dealer.
Lim Sio Wan, as creditor of the bank for her money
market placement, is entitled to payment upon her
request, or upon maturity of the placement, or until
the bank is released from its obligation as debtor.
Until any such event, the obligation of Allied to Lim
Sio Wan remains unextinguished.
Lim Sio Wan did not authorize the release of her
money market placement to Santos and the bank
had been negligent in so doing, thus, the obligation
of Allied to pay Lim Sio Wan had not been
extinguished. “Payment made by the debtor to a
wrong party does not extinguish the obligation as to
the creditor, if there is no fault or negligence which
can be imputed to the latter.”
The reason why the bank or institution which issued
the check was held partially liable for the amount of
the check was because of the negligence of these
parties which resulted in the issuance of the checks.
In this case, the trial court correctly found Allied
negligent in issuing the managers check and in
transmitting it to Santos without even a written
authorization.
METROBANK: A collecting bank which indorses a
check bearing a forged indorsement and presents it
to the drawee bank guarantees all prior
indorsements, including the forged indorsement
itself, and ultimately should be held liable therefor.
When Metrobank indorsed the check in compliance
with the PCHC Rules and Regulations without
verifying the authenticity of Lim Sio Wans
indorsement and when it accepted the check despite
the fact that it was cross-checked payable to payees
account only, its negligent and inconsiderate
indorsement contributed to the easier release of Lim
Sio Wans money and perpetuation of the fraud.
THUS, ALLIED AND METROBANK ARE BOTH LIABLE.
60-40 ratio.
FCC: no participation in the negotiation
PRODUCERS BANK: It is liable to Allied and
Metrobank. It was unjustly enriched and therefore, it
must reimburse Allied and Metrobank whatever
judgment may be rendered against them
It was unjustly enriched when the check deposited
to it was used to extinguish it obligation to FCC at
expense of Wan.
 BPI vs ROYECA (GR No. 176664)

FACTS: Spouses Royeca executed and delivered a

promissory note to Toyota Shaw and to secure the
payment of this promissory note, they executed a
Chattel mortgage over a motor vehicle. However,
Toyota transferred the title and rights of this vehicle
to Far East Bank and Trust Company (FEBTC). FEBTC
filed a Complaint for Replevin and Damages against
the Royecas for refusing to pay the monthly
amortizations.

ISSUES:

1. WON Royecas were able to prove full payment of

their obligation
2. WON tender of checks constitutes payment.

HELD:

1. NO. As a general rule, one who pleads payment has

the burden of proving it. The debtor (Royecas) has
the burden of showing with legal certainty that the
obligation has been discharged by payment.
Acknowledgment Receipt was the only proof that
Royecas delivered the checks for payment. It was
not a sufficient proof of payment.

Moreover, Royecas had to present proof, not only

that they delivered the checks to the petitioner, but
also that the checks were encashed. They failed to
do so. Had the checks been actually encashed, they
could have easily produced the cancelled checks as
evidence to prove the same.

A promissory note in the hands of the creditor is a

proof of indebtedness rather than proof of payment.

2. NO. A check is not legal tender and, therefore,

cannot constitute a valid tender of payment. Since a
negotiable instrument is only a substitute for money
and not money, the delivery of such an instrument
does not, by itself, operate as payment. The
obligation is not extinguished and remains
suspended until the payment by commercial
document is actually realized.

Preponderance of evidence: evidence which is more

convincing to the court as worthy of belief than that
which is offered in opposition thereto.

REPLEVIN: an action to recover personal property

said or claimed to be unlawfully taken.
SPOUSES CINCO vs CA (GR No. GR No. 156302)
FACTS: Manuel Cinco (Manuel) obtained a
commercial loan from respondent Maasin Traders
Lending Corporation (MTLC) which was secured by a
real estate mortgage. To be able to pay the loan in
favor of MTLC, the spouses Go Cinco applied for a
loan with PNB and offered as collateral the same
properties they previously mortgaged to MTLC. It
was approved but the release of the amount was
conditioned on the cancellation of the mortgage in
favor of MTLC.
allow the cancellation of the mortgage. THUS, the
obligation is not yet extinguished.
A refusal without just cause is not equivalent to
payment; to have the effect of payment and the
consequent extinguishment of the obligation to pay,
the law requires the companion acts of tender of
payment and consignation.
Tender of payment: act of offering the creditor what
is due him or her, together with the demand that the
creditor accept the same.

Manuel executed a Special Power of Attorney (SPA)
authorizing Ester to collect the proceeds of his PNB
loan. Outraged that the spouses Go Cinco used the
same properties mortgaged to MTLC as collateral for
the PNB loan, Ester refused to sign the deed and did
not collect the P1.3 Million loan proceeds.
Consignation: the thing due is deposited and placed
at the disposal of the judicial authorities for the
creditor to collect.
There is a need to compel Ester to sign before the
obligation is extinguished.

ISSUES: WON Ester and MTLC unjustly refused the

payment of Cincos to extinguish their obligation to
MTLC.

HELD: YES.

There was an unjust refusal to accept the payment.

Ester refused to accept the payment by not signing
on the deed of release/cancellation of mortgage.
According to her, there was no consent before
offering the properties already mortgaged to her as
security for the PNB loan.

HOWEVER, there is nothing legally objectionable in a

mortgagors act of taking a second or subsequent
mortgage on a property already mortgaged; a
subsequent mortgage is recognized as valid by law
and by commercial practice, subject to the prior
rights of previous mortgages.

BUT THE OBLIGATION IS NOT YET EXTINGUISHED!

Manuel sought to pay Ester by authorizing her,
through an SPA, to collect the proceeds of the PNB
loan an act that would have led to payment if Ester
had collected the loan proceeds as authorized. The
SPA stood as an authority to collect the proceeds of
the already-approved PNB loan that, upon receipt by
Ester, would have constituted as payment of the
MTLC loan. Had Ester presented the SPA to the bank
and signed the deed of release/cancellation of
mortgage, the delivery of the sum of money would
have been effected and the obligation extinguished.
As the records show, Ester refused to collect and