SOLANGON VS. SALAZAR We have held that a Central Bank Circular cannot repeal a law.

Onl a law can repeal another law.! "onente# $u%tice SAN&OVAL'G()*+RR+Z, -../ 0AC)S#"etitioner% e1ecuted a real e%tate 2ort3a3e o4 a parcel o4 land to private re%pondent to %ecure pa 2ento4 a loan o4 "5.,...... pa a6le in 7 2onth%, with 58 intere%t per 2onth.)he 4ollowin3 ear, petitioner% e1ecuted another real e%tate 2ort3a3e o4 the %a2e parcel o4 land toprivate re%pondent to %ecure pa 2ent o4 a loan o4 "/95,:/-... pa a6le in / ear, with intere%t thereonat the le3al rate ;the 2a1i2u2 intere%t rate, %et 6 %tatute that 2a 6e char3ed on a loan<.)he 4ollowin3 ear, petitioner% e1ecuted another real e%tate 2ort3a3e o4 the %a2e parcel o4 land toprivate re%pondent to %ecure pa 2ent o4 a loan o4 "-9.,...... pa a6le in 7 2onth%, with intere%tthereon at the le3al rate.)he action wa% initiated 6 the petitioner% to prevent the 4oreclo%ure o4 the 2ort3a3ed propert . )he contend that the o6tained onl one loan 4ro2 re%pondent 4or the a2ount o4 "5.,......= and that the%u6%e>uent 2ort3a3e% were 2erel continuation% o4 the 4ir%t one, which i% null and void 6ecau%e itprovided 4or uncon%ciona6le rate o4 intere%t. ?oreover, private re%pondent a%%ured the2 that he willnot 4oreclo%e the 2ort3a3e a% lon3 a% the pa the %tipulated intere%t upon 2aturit or within area%ona6le ti2e therea4ter."rivate re%pondent alle3e that there were three %eparate loan%, and that the 4ir%t two wa% paid, 6ut thela%t wa% not. @e denied havin3 %aid that he will not 4oreclo%e the 2ort3a3e. *SS(+S#WAN the intere%t rate o4 58 per annu2 i% valid. &+C*S*ON#)he Court a44ir2ed the deci%ion o4 the Court o4 Appeal% and 2odi4ied the intere%t rate o4 B-8 perannu2 to /-8 per annu2. Supplemental Information )he (%ur Law i% Act -5::, a% a2ended 6 "& //5, provide% that in the a6%ence o4 e1pre%% contract a% tothe rate o4 intere%t in loan%A2ort3a3e%, it %hall 6e %et in de4ault at /-8 per annu2. An a2ount ine1ce%% o4 that 4i1ed 6 the law i% con%idered u%uriou%, there4ore unlaw4ul. @owever, pur%uant to Central Bank Circular No. 905, the Supreme Court declared that the Usury law is now le!ally ine"istent#. *t%hould 6e clari4ied that CB Circular No. C.: did not repeal nor in an wa a2end the (%ur Law 6ut%i2pl %u%pended the latterD% e44ectivit . *ntere%t can now 6e char3ed a% lender and 6orrower 2a a3reeupon ;Source#http$%%ph&ar.or!%wikilaw%inde".php' title(Usury) *n the ca%e at 6ar, the court held that the (%ur Law ceilin3 on intere%t rate% wa% li4ted 6 C.B. CircularNo. C.:, nothin3 in the %aid circular 3rant% lender% carte &lanche authorit to rai%e intere%t rate% tolevel% which will either en%lave their 6orrower% or lead to a he2orrha3in3 o4 their a%%et%.*n the ca%e at 6ar, the 58 intere%t rate per 2onth cannot 6e con%idered u%uriou%= neverthele%% it i%de4initel outra3eou% and inordinate ;e1ceedin3 rea%ona6le li2it%<

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*+ No. ,,-./0 Consolidated Bank 1s C2, *+ No. ,,-./0, ,9 2pril .00,, 350 SC+2 04, -70+B 0AC)S Continental Cement Corp o&tained from Consolidated Bank letter of credit used to purchased 500,000 liters of &unker fuel oil. +espondent Corporation made a mar!inal deposit to petitioner. 2 trust receipt was e"ecuted &y respondent corporation, with respondent *re!ory 5im as si!natory. Claimin! that respondents failed to turn o1er the !oods or proceeds, petitioner filed a complaint for sum of money &efore the +6C of 7anila. In their answer, respondents a1er that the transaction was a simple loan and not a trust receipt one, and tht the amount claimed &y petitioner did not take into account payments already made &y them. 6he court dismissed the complaint, C2 affirmed the same. *SS(+ 8hether or not the mar!inal deposit should not &e deducted outri!ht from the amount of the letter of credit. @+L& No. petitioner ar!ues that the mar!inal deposit should &e considered only after computin! the principal plus accrued interest and other char!es. It could &e onerous to compute interest and other char!es on the face 1alue of the letter of credit which a &ank issued, without first creditin! or settin! off the mar!inal deposit which the &orrower paid to it9compensation is proper and should take effect &y operation of law &ecause the re:uisited in 2rt. ,.49 are present and should e"tin!uish &oth de&ts to the concurrent amount. Unjust enrichment.

999999999999999999999999999999999999999999999999999999 RCBC v. CA ' Insurance ;roceeds -EC SCRA -C- ;/CCE< 0act%# < *=>U applied for credit facilities and accommodations with +CBC. 2fter due e1aluation, a credit facility in the amount of ;30 million was initially !ranted. Upon *=>U?s application increased *=>U?s credit facility to ;50 million, then to ;90 million, and finally to ;,,4 million < 2s security for its credit facilities with +CBC, *=>U e"ecuted two +@7 and two C7 in fa1or of +CBC, which were re!istered with the +e!istry of Aeeds at. Under each of these four mort!a!e contracts, *=>U committed itself to insure the mort!a!ed property with an

insurance company appro1ed &y +CBC, and su&se:uently, to endorse and deli1er the insurance policies to +CBC. < *=>U o&tained in its name a total of ,0 insurance policies from 7IC=. In Be&ruary ,99., 2lchester Insurance 2!ency, Inc., the insurance a!ent where *=>U o&tained the 7alayan insurance policies, issued nine endorsements in fa1or of +CBC seemin!ly upon instructions of *=>U < =n 2pril .4, ,99., one of *=>U?s factory &uildin!s in CalenDuela was !utted &y fire. Conse:uently, *=>U su&mitted its claim for indemnity. < 7IC= denied the claim on the !round that the insurance policies were either attached pursuant to writs of attachments%!arnishments issued &y 1arious courts or that the insurance proceeds were also claimed &y other creditors of *=>U alle!in! &etter ri!hts to the proceeds than the insured. < *=>U filed a complaint for specific performance and dama!es. +CBC, one of *=>U?s creditors, also filed with 7IC= its formal claim o1er the proceeds of the insurance policies, &ut said claims were also denied for the same reasons that 2*C= denied *=>U?s claims. < Eowe1er, &ecause the endorsements do not &ear the si!nature of any officer of *=>U, the trial court, as well as the Court of 2ppeals, concluded that the endorsements are defecti1e and held that +CBC has no ri!ht o1er the insurance proceeds.

*%%ue# 8hether or not +CBC has a ri!ht o1er the insurance proceeds. @eld# RCBC ha% a ri3ht over the in%urance proceed%. It is settled that a mort!a!or and a mort!a!ee ha1e separate and distinct insura&le interests in the same mort!a!ed property, such that each one of them may insure the same property for his own sole &enefit. 6here is no :uestion that *=>U could insure the mort!a!ed property for its own e"clusi1e &enefit. In the present case, althou!h it appears that *=>U o&tained the su&Fect insurance policies namin! itself as the sole payee, the intentions of the parties as shown &y their contemporaneous acts, must &e !i1en due consideration in order to &etter ser1e the interest of Fustice and e:uity.

It is to &e noted that 9 endorsement documents were prepared &y 2lchester in fa1or of +CBC. 6he Court is in a :uandary how 2lchester could arri1e at the idea of endorsin! any specific insurance policy in fa1or of any particular &eneficiary or payee other than the insured had not such named payee or &eneficiary &een specifically disclosed &y the insured itself. It is also si!nificant that *=>U 1oluntarily and purposely took the insurance policies from 7IC=, a

sister company of +CBC, and not Fust from any other insurance company. 2lchester would not ha1e found out that the su&Fect pieces of property were mort!a!ed to +CBC had not such information &een 1oluntarily disclosed &y *=>U itself. Ead it not &een for *=>U, 2lchester would not ha1e known of *=>U?s intention of o&tainin! insurance co1era!e in compliance with its undertakin! in the mort!a!e contracts with +CBC, and 1erify, 2lchester would not ha1e endorsed the policies to +CBC had it not &een so directed &y *=>U.

=n e:uita&le principles, particularly on the !round of estoppel, the Court is constrained to rule in fa1or of mort!a!or +CBC. +CBC, in !ood faith, relied upon the endorsement documents sent to it as this was only pursuant to the stipulation in the mort!a!e contracts. 8e find such reliance to &e Fustified under the circumstances of the case. *=>U failed to seasona&ly repudiate the authority of the person or persons who prepared such endorsements. =1er and a&o1e this, *=>U continued, in the meantime, to enFoy the &enefits of the credit facilities e"tended to it &y +CBC. 2fter the occurrence of the loss insured a!ainst, it was too late for *=>U to disown the endorsements for any ima!ined or contri1ed lack of authority of 2lchester to prepare and issue said endorsements. If there had not &een actually an implied ratification of said endorsements &y 1irtue of *=>U?s inaction in this case, *=>U is at the 1ery least estopped from assailin! their operati1e effects.

6o permit *=>U to capitaliDe on its non9confirmation of these endorsements while it continued to enFoy the &enefits of the credit facilities of +CBC which &elie1ed in !ood faith that there was due endorsement pursuant to their mort!a!e contracts, is to countenance !ra1e contra1ention of pu&lic policy, fair dealin!, !ood faith, and Fustice. Such an unFust situation, the Court cannot sanction. Under the peculiar circumstances o&tainin! in this case, the Court is &ound to reco!niDe +CBC?s ri!ht to the proceeds of the insurance policies if not for the actual endorsement of the policies, at least on the &asis of the e:uita&le principle of estoppel.

*=>U cannot seek relief under Section 53 of the Insurance Code which pro1ides that the proceeds of insurance shall e"clusi1ely apply to the interest of the person in whose name or for whose &enefit it is made. 6he peculiarity of the circumstances o&tainin! in the instant case presents a Fustification to take e"ception to the strict application of said pro1ision, it ha1in! &een sufficiently esta&lished that it was the intention of the parties to desi!nate +CBC as the party for whose &enefit the insurance policies were taken out. Consider thus the followin!$ ,. It is undisputed that the insured pieces of property were the su&Fect of mort!a!e contracts entered into &etween +CBC and *=>U in consideration of and for securin! *=>U?s credit facilities from +CBC. 6he mort!a!e contracts contained common pro1isions where&y *=>U, as mort!a!or, undertook to ha1e the mort!a!ed property properly co1ered a!ainst any loss &y an insurance company accepta&le to +CBC.

.. *=>U 1oluntarily procured insurance policies to co1er the mort!a!ed property from 7IC=, no less than a sister company of +CBC and definitely an accepta&le insurance company to +CBC. 3. @ndorsement documents were prepared &y 7IC=?s underwriter, 2lchester Insurance 2!ency, Inc., and copies thereof were sent to *=>U, 7IC= and +CBC. *=>U did not assail, until of late, the 1alidity of said endorsements. -. *=>U continued until the occurrence of the fire, to enFoy the &enefits of the credit facilities e"tended &y +CBC which was conditioned upon the endorsement of the insurance policies to &e taken &y *=>U to co1er the mort!a!ed properties.

6his Court can not o1er stress the fact that upon recei1in! its copies of the endorsement documents prepared &y 2lchester, *=>U, despite the a&sence written conformity thereto, o&1iously considered said endorsement to &e sufficient compliance with its o&li!ation under the mort!a!e contracts since +CBC accordin!ly continued to e"tend the &enefits of its credit facilities and *=>U continued to &enefit therefrom. Gust as plain too is the intention of the parties to constitute +CBC as the &eneficiary of the 1arious insurance policies o&tained &y *=>U. 6he intention of the parties will ha1e to &e !i1en full force and effect in this particular case. 6he insurance proceeds may, therefore, &e e"clusi1ely applied to +CBC, which under the factual circumstances of the case, is truly the person or entity for whose &enefit the policies were clearly intended. 99999999999999999999999999999999999999999999999999 RCBC v% CA GR No%. /-EE99, /-EE97, /-EE55, -. April /CCE -EC SCRA -C0AC)S *=>U was !ranted credit facilities and accommodations &y the +CBC initially in the amount of ; 30 million. Upon *=>UHs application, the credit was increased to ;50 7illion, then ;90 7illion, then ;,,4 7illion. 2s security, *=>U e"ecuted . +@7 and . C7 in fa1or of +CBC, which were re!istered with the +A. Under the - contracts, *=>U committed itself to insure the mort!a!ed properties with an insurance company appro1ed &y +CBC, and su&se:uently endorse and deli1er the insurance policies to +CBC. *=>U then o&tained ,0 policies from 7IC=. *=>UHs &uildin!s were !utted &y fire and it claimed indemnity from 7IC= &ut the latter denied the claim on the !round that the insurance policies were either attached pursuant to writs of attachments%!arnishments issued &y 1arious courts or that the proceeds were also claimed &y other creditors of *=>U. *=>U, alle!in! &etter ri!hts to the proceeds, filed for specific performance and dam!es &efore the +6C of 7anila Br 3. 6he trial court ruled in fa1or of *=>U for the fire loss claims &ut ordered it to pay +CBC its loan o&li!ations. =n appeal to the C2, it affirmed the rulin! with re!ard to the lia&ilities of 7IC= and +CBC. 6he trial court and appellate courts &oth held that, since the endorsements do not &ear the si!nature of any officer of *=>U, they concluded that the endorsements are

defecti1e. 6he C2 then ordered *=>U to pay its o&li!ation to +CBC without any interest, surchar!es and penalties. *SS(+ 8hether or not the rulin! of the appellate court is correct. @+L& 6he Court held in the ne!ati1e. 6he essence or rationale for the payment of interest or cost of money is separate and distinct from that of surchar!es and penalties. 6he char!in! of interest for loans forms a 1ery essential and fundamental element of the &ankin! &usiness. ;etitions !ranted. 9999999999999999999999999999999999999999999999 ;NB 1s.C2I2m&rosio ;adillaJ,90SC+2530I,99,) 0act%# In ,9/., 2m&rosio ;adilla, herein pri1ate respondent,applied for, and was !ranted &y petitioner ;NB, acredit line of ;3.,./ million, secured &y a real estatemort!a!e, for a term of two years, with ,/K interestper annum. ;adilla e"ecuted in fa1or of the ;NB a Credit 2!reement, two J.) promissory notes in theamount of ;900,000.00 each, and a +eal @state7ort!a!e Contract. 6he ;romissory Notes, uniformlyauthoriDed the ;NB to increase the stipulated ,/Kinterest per annum L within the li2it% allowed 6 law at an ti2e dependin3 on whatever polic it M;NBN mayadopt in the futureI ;ro1ided, that, the interest rateon the note shall &e correspondin!ly decreased inthe e1ent that the applica&le ma"imum interest rateis reduced &y law or &y the 7onetary Board.LEowe1er, two years thereafter, when the ;,./ millioncredit line has matured on Guly -, ,9/-, ;NB withinthe period of only four months has increased the,/K interest rate on the &orrowerHs loan o&li!ationthree times$ Ja) to 3.K in Guly ,9/-,I J&) to -,K in=cto&er ,9/-I and Jc) to -/K in No1em&er ,9/-.Se1eral letters were sent &y ;adilla to ;NBre:uestin! the latter to increase the interest ratefrom ,/K &ut to &e fi"ed at .,K or .-K per annum.Eowe1er, ;NB despite the o&Fection of ;adilla andwithout authority from the 7onetary Board stilleffected such increases of interest rates within theaforesaid inter1enin! period. Bor this reason, ;adillawas compelled to file a complaint with the +6Cprayin! to declare that the unilateral increase of interest rates &y ;NB is ille!al and not 1alid nor&indin! upon ;adilla. It was also prayed that theamount paid representin! the e"cess interest &ereim&ursed to him. But the complaint was dismissed&y the lower court &ecause accordin! to the latterthe increase of interests was properly made. ;adillaappealed to the C2. 6he appellate court re1ersed the decision of the RTC, hence this petition forreview. Issue: Whether PNB, within the term of the loan which itgranted to Padilla, may unilaterally change orincrease the interest rate stipulated therein at willand as often as it pleased.

Held: The Court held in a negative. Those increases were null and void, for if the Monetary Board itself was not authori ed to ma!e such changesoftener once a year, even less so may a

"an!, which is su"ordinate tothe Board. While the de"tor did agree in the #eed of Real $stateMortgage that the interest rate may "e increased during the life of thecontract %to such increase within the rate allowed "y law, as the Boardof #irectors of the M&RT'('$$ may prescri"e% or %within the limitsallowed "y law,% no law was ever passed in )uly to Novem"er *+,-increasing the interest rates on loans or renewals thereof to ./0, -*0and -,0 per annum, and no documents were e1ecuted and delivered"y the de"tor to effectuate the increases. To unilaterally and successively increase the agreed rate of interest from *,0 to -,0within a span of four months is a clear violation of P# **2 which limitssuch changes to once every */ months. The Court further held, the unilateral action of the PNB in increasingthe interest rate on the private respondent3s loan, violated themutuality of contracts ordained in (rticle *.4, of the Civil Code5 %(RT.*.4,. The contract must "ind "oth contracting parties6 its validity orcompliance cannot "e left to the will of one of them.% ( contractcontaining a condition which ma!es its fulfillment dependente1clusively upon the uncontrolled will of one of the contracting partiesis void. 7i!ewise, the increases imposed "y PNB contravene (rt. *+82of the Civil Code which provides that no interest shall "e due unless ithas "een e1pressly stipulated. 9ere, the de"tor never agreed inwriting to pay the interest increases fi1ed "y PNB "eyond the /-0 perannum6 hence, he is not "ound to pay a higher rate than that. The petition for review was denied for lac! of merit ::::::::::::::::::::::::::::::::::::::::::: Francisco v. Gregorio GR No. L-59519 July 20, 1982 Facts: Petitioner Francisco, through her daughter, agreed to lease a piece o land !here a "uilding should "e constructed "y the or#er. $he contract provided, a#ong others: the deposit to the account o the lessor% petitioner the a#ount o 1&0' representing (0) good!ill #oney and 120) advanced rental and a stipulation that in case the parties !ill not agree as to the ter#s and conditions o the inal contract o lease, the pre%lease contract shall "e declared null and void and the petitioner shall return the deposit plus legal interest. *e ore inal occupancy, the petitioner declared the pre%lease contract null and void, leased the pre#ises to another lessee and o ered to return the 1&0) deposit. Private respondents re used to accept so that petitioner !as pro#pted to #a'e a consignation o the #oney !ith the +ourt. Private respondents then iled a co#plaint, hence respondent ,udge ruled in their avor !ith an order to pay the a#ount o deposit plus co#pensatory interests. -ssue: -s the petitioner lia"le or pay#ent o interest despite tender o pay#ent "e ore de#and. /eld: No. $he a!ard or interests in an action or the recovery o a su# o #oney parta'es o a nature o an a!ard or da#ages. $hus, 0rticle 2209 o the +ivil +ode provides: 10rt. 2209. - the o"ligation consists in the pay#ent o a su# o #oney, and the de"tor incurs in delay, the inde#nity or da#ages, there "eing no stipulation to the contrary, shall "e the pay#ent o the interest agreed upon, and in the a"sence o stipulation, the legal interest, !hich is si2 percent per annu#.3 +learly,

the inde#nity or interest on a #onetary o"ligation attaches only !hen the o"ligor incurs delay, that is, !hen he is in de ault, it "eing a unda#ental principle o la! that: 1$hose o"liged to deliver or to do so#ething incur in delay ro# the ti#e the o"ligee ,udicially or e2tra,udicially de#ands ro# the# the ul ill#ent o their o"ligation. 40rt. 1159, +ivil +ode.6 1 -n the case at "ar, it is not disputed that no de#ands, ,udicial or e2tra,udicial, !ere #ade "y private respondents on de endant *oiser 4Francisco6 or the return o the a#ount o P1&0,000.00. $here could not have "een any "ecause o the nature o the action iled "y private respondents, !hich is or speci ic per or#ance. /ence, there is no delay o the latter7s o"ligation, assu#ing that she "e eventually re8uired in the decision o the +ourt to return the sa#e. $hus, no interest is due !here there !as tender o pay#ent prior to any de#and to pay or per or# the agreed act. :::::::::::::::::::::::::::::::::::::::: *onnevie v. +0 GR No. 9%:9101 ;cto"er 2:, 198( Facts: <pouses 9o=ano #ortgaged their property to secure the pay#ent o a loan a#ounting to >&) !ith private respondent Philippine *an' o +o##unication 4P*+o#6. $he deed o #ortgage !as e2ecuted on 12%5% 55, "ut the loan proceeeds !ere received only on 12%12%55. $!o days a ter the e2ecution o the deed o #ortgage, the spouses sold the property to the petitioner *onnevie or and in consideration o 100'?2&) o !hich paya"le to the spouses and >&) as pay#ent to P*+o#. 0 ter!hich, *onnevie de aulted pay#ents to P*+o# pro#pting the latter to auction the property a ter *onnivie ailed to settle despite su"se8uent de#ands, in order to recover the a#ount loaned. $he latter no! assails the validity o the #ortgage "et!een 9o=ano and P"co# arguing that on the day the deed !as e2ecuted there !as yet no principal o"ligation to secure as the loan o P>&,000.00 !as not received "y the 9o=ano spouses, so that in the a"sence o a principal o"ligation, there is !ant o consideration in the accessory contract, !hich conse8uently i#pairs its validity and atally a ects its very e2istence. -ssue: @as there a per ected contract o loan. /eld: Aes. Fro# the recitals o the #ortgage deed itsel , it is clearly seen that the #ortgage deed !as e2ecuted or and on condition o the loan granted to the 9o=ano spouses. $he act that the latter did not collect ro# the respondent *an' the consideration o the #ortgage on the date it !as e2ecuted is i##aterial. 0 contract o loan "eing a consensual contract, the herein contract o loan !as per ected at the sa#e ti#e the contract o #ortgage !as e2ecuted. $he pro#issory note e2ecuted on

Bece#"er 12, 1955 is only an evidence o inde"tedness and does not indicate lac' o consideration o the #ortgage at the ti#e o its e2ecution. %%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%%

::::::::::::::::::::::: ;(7$; #<'$;T=.. :::::::::::::::::::::::: San Miguel Properties vs. Huang (G.R. No. 137290) It is not the giving of earnest money, but the proof of the concurrence of all the essential elements of the contract of sale which establishes the existence of a perfected sale. Was it an earnest deposit? NO. At the time when petitioner accepted the terms of respondents offer of !arch "#, $##%, their contract had not yet been perfected. It does not satisfy Article $%&". 'he stages of a contract of sale are as follows( )$* negotiation, )"* perfection, and )+* consummation. 'he alleged ,indubitable evidence- of a perfected sale cited by the appellate court was nothing more than offers and counter.offers which did not amount to any final arrangement containing the essential elements of a contract of sale. While the parties already agreed on the real properties which were the ob/ects of the sale and on the purchase price, the fact remains that they failed to arrive at mutually acceptable terms of payment, despite the %0.day extension given by petitioner. 'here was also failure to agree on the manner of payment. 'he manner of payment of the purchase price is an essential element before a valid and binding contract of sale can exist. Although the 1ivil 1ode does not expressly state that the minds of the parties must also meet on the terms or manner of payment of the price, the same is needed, otherwise there is no sale.

Agreement on the manner of payment goes into the price such that a disagreement on the manner of payment is tantamount to a failure to agree on the price. :::::::::::::::::::::::::::::::::: ;an Miguel Properties vs. ;ps. 9uang >acts5 ;an Miguel Properties is engaged in the purchase and sale of real properties, of which includetwo parcels of land. These properties were offered for sale at P8/,*-4,444.44. ;uch offer was madeto (tty. #au on "ehalf of ;ps. 9uang. (tty. #au wrote ;an Miguel informing the respondents?interest to "uy the property and enclosed therein a chec! @P*,444,444.44A as earnest deposit su"Bectto certain conditions, to wit5 @*A that they "e given the e1clusive option to purchase the propertywithin .4 days from acceptance of the offer6 @/A that during the option period, the parties wouldnegotiate the terms and conditions of the purchase6 and @.A petitioner would secure the necessaryapprovals while respondents would handle the documentation. ;o"recarey, ;an Miguel Properties CPindicated his conformity to the offer6 signed the letter6 and accepted the earnest deposit. Byagreement of the parties, they agreed that respondents will "e given 2 months within which to pay.Dpon failure of respondents to pay despite the e1tension of time given, petitioner through its Pres EC$& 'on ales, wrote (tty. #au , that they are returning the earnest deposit. Respondent spousesthrough counsel, wrote petitioner demanding the e1ecution of a deed of conveyance in their favor.They attempted to return the earnest deposit "ut was refused "y ;an Miguel. Respondent spousesfiled a complaint for specific performance. Trial court, upon motion, dismissed the complaint, whichwas reversed "y the C(.(rguments5 ;an Miguel 5 the Court of (ppeals erred in finding that there was a perfected contract of sale"etween the parties "ecause the letter of respondents, which petitioner accepted, merely resulted inan option contract, al"eit it was unenforcea"le for lac! of a distinct consideration. Petitioner arguesthat the a"sence of agreement as to the mode of payment was fatal to the perfection of the contractof sale. Petitioner also disputes the appellate courts ruling that <sidro (. ;o"recarey had authority tosell the su"Bect real properties. ;ps. 9uang 5 (s held "y C(, there is a perfected contract of sale since the earnest money wasallegedly given "y respondents and accepted "y petitioner through its vice: president and operationsmanager, ;o"recarey. The Court holds that respondents did not give the P* million as %earnestmoney% as provided "y (rt. *-,/ of the Civil Code. They presented the amount merely as a depositof what would eventually "ecome the earnest money or downpayment should a contract of sale "emade "y them. The amount was thus given not as a part of the purchase price and as proof of theperfection of the contract of sale "ut only as a guarantee that respondents would not "ac! out of thesale. Respondents in fact descri"ed the amount as an %earnest:deposit. <ssue5W&N the earnest deposit could have "een given as earnest money contemplated in (rt. *-,/, andthus there was a perfected contract of sale 9eld5 No, hence, there was no perfected contract of sale.<n the present case, the P* million %earnest:deposit% could not have "een given as earnest money

as contemplated in (rt. *-,/ "ecause, at the time when petitioner accepted the terms of respondents?offer, their contract had not yet "een perfected. The first condition for an option period of .4 days sufficiently shows that a sale was never perfected. ;uch option giving respondents the e1clusiveright to "uy the properties within the period agreed upon is separate and distinct from the contractof sale which the parties may enter. :::::::::::::::::::::::::::::::::: Atkins Kroll & Co. vs. Cu Hian Tek Atkins Kroll & Co. vs. Cu Hian Tek 102 Phil 984 January 1958

ACT!" #n !e$te%&er 1'( 1951( $etitioner Atkins Kroll & Co. )Atkins* sent a letter to res$on+ent ,. Cu Hian Tek )Hian Tek* o--erin. )a* 400 /artons o- 0uneta &ran+ !ar+ines in To%ato !au/e 48 1 152o3. #vals at 48.25 $er /arton( )&* '00 /artons o0uneta &ran+ !ar+ines 5atural 48115 o3. talls at 46.25 $er /arton( an+ )/* '00 /artons o- 0uneta &ran+ !ar+ines in To%ato !au/e 100152o3. talls at 47.48 $er /arton( 8ith all o- the o--ers su&9e/t to re$ly &y !e$te%&er 2'( 1951. Hian Tek un/on+itionally a//e$te+ the sai+ o--er throu.h a letter +elivere+ on !e$te%&er 21( 1951( &ut Atkins -aile+ to +eliver the /o%%o+ities +ue to the shorta.e o- /at/h osar+ines &y the $a/kers in Cali-ornia.

Hian Tek( there-ore( -ile+ an a/tion -or +a%a.es in the C : o- ;anila 8hi/h .rante+ the sa%e in his -avor. <$on Atkins= a$$eal( the Court o- A$$eals a--ir%e+ sai+ +e/ision &ut re+u/e+ the +a%a.es to P'(240.15 re$resentin. unreali3e+ $ro-its. Atkins herein /onten+s that there 8as no su/h /ontra/t o- sale &ut only an o$tion to &uy( 8hi/h 8as not en-or/ea&le -or la/k o- /onsi+eration &e/ause it is $rovi+e+ un+er the 2n+ $ara.ra$h o- Arti/le 1479 o- the 5e8 Civil Co+e that >an a//e$te+ unilatateral $ro%ise to &uy or to sell a +eter%inate thin. -or a $ri/e /ertain is &in+in. u$on the $ro%isor i- the $ro%ise is su$$orte+ &y a /onsi+eration +istin/t -ro% the $ri/e.? Atkins also insiste+ that the o--er 8as a %ere o--er o- o$tion( &e/ause the >-ir% o--er> 8as a /ontinuin. o--er to sell until !e$te%&er 2'. @as there a /ontra/t o- sale &et8een the $arties or only a unilateral $ro%ise to

&uyA C#<BT B<0:5C"

The !u$re%e Court hel+ that there 8as a /ontra/t o- sale &et8een the $arties. Petitioner=s ar.u%ent assu%e+ that only a unilateral $ro%ise arose 8hen the res$on+ent a//e$te+ the o--er( 8hi/h is in/orre/t &e/ause a &ilateral /ontra/t to sell an+ to &uy 8as /reate+ u$on res$on+ent=s a//e$tan/e.

Ha+ ,. Cua Hian Tek &a/ke+ out a-ter a//e$tin.( &y re-usin. to .et the sar+ines an+ 1 or to $ay -or their $ri/e( he /oul+ also &e sue+. ,ut his letter2re$ly to Atkins in+i/ate+ that he a//e$te+ >the -ir% o--er -or the sale> an+ that >the un+ersi.ne+ &uyer has i%%e+iately -ile+ an a$$li/ation -or i%$ort li/ense.? A-ter a//e$tin. the $ro%ise an+ &e-ore he eDer/ises his o$tion( the hol+er o- the o$tion is not &oun+ to &uy. :n this /ase at &ar( ho8ever( u$on res$on+ent=s a//e$tan/e o- herein $etitionerEs o--er( a &ilateral $ro%ise to sell an+ to &uy ensue+( an+ the res$on+ent ha+ i%%e+iately assu%e+ the o&li.ations o- a $ur/haser. 222222222222222222222222222222222222222222222222222222222222222222222222 Acceptance F Option Contract Atkins, Kroll and Co. v. Cua Hian TekG.R. No. L-98 ! "anuar# $!, !9%8 &acts 5 Petitioner sent a letter to respondent dated ;eptem"er *., *+8* offering the latter certain goods with their respectiveprices until ;eptem"er /.. Respondent accepted the offer unconditionally and delivered the letter of acceptance on;eptem"er /*, *+8*. 9owever, petitioner failed to deliver the commodities it had offered due to shortage of catch of sardines.#ue to this failure, respondent sued petitioner. Petitioner was ordered "y the C>< of Manila to pay damages. &n appeal, theCourt of (ppeals upheld the ruling of the trial court with some modifications. Petitioner however argued that upon theacceptance of the offer, it "ecame an accepted unilateral promise to sell a determinate thing for price certain. 9ence, for petitioner, there was no contract of sale "ut merely an option to "uy which, though timely accepted, was not enforcea"le for lac! of a separate consideration. 'ssue 5 Whether there is a perfected contract of sale in the case at "arG Held 5 Hes, a contract of sale was perfected in this case. The assumption that only a unilateral promise was created upon theacceptance of the offer is incorrect. ( "ilateral contract to sell and to "uy was created upon acceptance. <n addition,

theoption, though not supported "y an independent consideration, o"ligates the offeror to !eep the offer open up to specifiedtime, in this case ;eptem"er /., *+8*. Moreover, while it is true that an option not supported "y a separate consideration can"e withdrawn "y the offeror, this can "e done only "efore acceptance and such withdrawal should "e communicated with theofferee as provided for "y (rt. *./-. The ;upreme Court affirmed the decision of the Court of (ppeals. ::::::::::::::::::::::::::::::::::::::: +?*L*A ?ANZANO 1s. ?*G(+L "+R+Z SR., L+ONC*O "+R+Z, ?ACAR*O "+R+Z,0LOR+NC*O "+R+Z, N+S)OR "+R+Z, ?*G(+L "+R+Z $R. and GLOR*A "+R+Z Co22odatu2 ;)he Bailor<0act%# ;etitioner @milia 7anDano alle!ed that she is the owner of a residential house and lotsituated at *eneral 5una St. 5a!una. In ,949, Nie1es 7anDano, sister of the petitioner &orrowedthe aforementioned property as collateral for a proFected loan.;ursuant to their understandin!, the petitioner e"ecuted two deeds of con1eyance for the sale of the residential lot and the house erected, &oth for a consideration of ;,.00 plus other 1alua&lesalle!edly recei1ed &y her from Nie1es 7anDano.Nie1es 7anDano, to!ether with her hus&and, respondent 7i!uel ;ereD, Sr. o&tained a loan fromthe +ural Bank of Infanta, Inc. in the sum of ;30,000.00.6o secure payment of theirinde&tedness, they e"ecuted a +eal @state 7ort!a!e o1er the su&Fect property in fa1or of the&ank.Nie1es 7anDano died on ,/ Aecem&er ,949 lea1in! her hus&and and children as heirs. 6heseheirs refused to return the su&Fect property to the petitioner e1en after the payment of their loanwith the +ural Bank.6he petitioner sou!ht the annulment of the deeds of sale and e"ecution of a deed of transfer orrecon1eyance of the su&Fect property in her fa1or, and award of dama!es.6he Court of 2ppeals ruled that it was not con1inced &y petitioner?s claim that there was asupposed oral a!reement of commodatum o1er the disputed house and lot. Eence, this petition. Contention o4 petitioner $ 6he petitioner alle!ed that properties in :uestion after they ha1e &eentransferred to Nie1es 7anDano, were mort!a!ed in fa1or of the +ural Bank of Infante, Inc tosecure payment of the loan. 6he documents co1erin! said properties which were !i1en to the&ank as collateral of said loan, upon payment and release to the pri1ate respondents, werereturned to petitioner &y Blorencio ;ereD. 6hese are a clear reco!nition &y respondents thatpetitioner is the owner of the properties in :uestion Contention o4 re%pondent%# the respondents countered that they are the owners of the propertyin :uestion &ein! the le!al heirs of Nie1es 7anDano who purchased the same from the petitionerfor 1alue and in !ood faith, as shown &y the deeds of sale which contain the true a!reements&etween the parties therein that e"cept for the petitioner?s &are alle!ations, she failed to show anyproof that the transaction she entered into with her sister was a loan and not a sale. Re%olution# 6he court ruled that petitioner has presented no con1incin! proof of her continuedownership of the su&Fect property. In addition to her own oral testimony, she su&mitted proof of payment of real property ta"es, &ut such payment was made only after her Complaint had already&een lod!ed &efore the trial court. Neither can the court !i1e wei!ht to her alle!ation thatrespondent?s possession of the su&Fect property was merely &y 1irtue of her tolerance.=ral

testimony cannot, as a rule, pre1ail o1er a written a!reement of the parties. In order to contradictthe facts contained in a notarial document, such as the two L Oasulatan n! Bilihan!6uluyanL there must &e clear and con1incin! e1idence that is more than merely preponderant. ;etitioner has failed to come up with e1en a preponderance of e1idence to pro1e her claim.Gurisprudence on the su&Fect matter, when applied thereto, points to the e"istence of a sale, nota commodatum o1er the su&Fect house and lot.8E@+@B=+@, the ;etition is here&y A@NI@A. 999999999999999999999999999999999999999999 The Case : Petition for certiorari and mandamus. Facts : Sometime in 1948 the defendants verbally sold to her the two parcels of land in question for P3 !!!.!! Pesos and inconsequence delivery thereof to"ether with the correspondin" transfer certificates of title #$%$& was made to her but no deed of sale was executed at the time because private respondents promised they would do so as soon as the titles which were then inthe name of their predecessor in interest were transferred to their names and that despite demands made by her for thee'ecution of such deed said respondents (without )ustifiable cause therefor adamantly failed and refused to comply with #such& )ust and valid demand.( *n their answer defendants denied that the transaction was a sale and alle"ed that it was merely a contractof antichresis whereby petitioner had loaned to them P1 +!!.!! for which she demanded the delivery of the lands in question andthe titles thereto as security with the ri"ht to collect or receive the income therefrom pendin" the payment of the loan. ,nd by wayof affirmative defenses respondents interposed #1& unenforceability by action of the alle"ed sale under the statute of frauds and#-& prescription of petitioner.s action the same havin" alle"edly accrued in 1948. Subsequently respondents reiterated their saidaffirmative defense of prescription in a formal motion to dismiss and as no opposition thereto was filed by petitioner on /uly 31 1901 respondent court issued the impu"ned order of dismissal readin" as follows:Submitted for resolution is a motion to dismiss filed counsel for the defendants to which no opposition has been filed despitethe fact that the plaintiff was furnished with a copy thereof. 2indin" the said motion to dismiss to be well3ta4en for the reasonsstated therein this %ourt "rants the same and the complaint dated 5ctober 10 1904 is hereby dismissed with costs a"ainstthe plaintiff.S5 5678687.Petitioner filed the complaint of 5ctober -! 1904

Issue: 9hether petitioners ri"ht to demand the e'ecution of the $%$s already prescribed. Held/Ruling :$he ri"ht to demand the e'ecution of the document required under ,rticle 13+8 1 is not imprescriptible.$he nature of petitioner s action may be said to be one founded on an oral contract which to be sure cannot be considered amon"those rendered unenforceable by the statute of frauds for the simple reason that it has already been from petitioners own point of view almost fully consummated by the delivery of the lands and the correspondin" titles to her. : : :. $he petitioners action basedas it is upon oral contract prescribes in 0 years accordin" to ,rtcle 114+ of the %ivil %ode. ,ssumin" otherwise the only otherpossibility is that petitioners case comes under ,rticle 1149 and the action prescribes in + years. *n either case since the cause of action of petitioner accrued in 1948 and the present suit was instituted in 1904 or si'teen years later and none interruptin"circumstances enumerated in ,rticle 11++ has been shown to have intervened it is un uestionable that petitioners action filed inthe court below has already prescribed! 1 "RT! #$%& . *f the law requires a document or other special form as in the acts and contracts enumerated in the followin" article the contractin" parties may compel each other to observe that form once the contract has been perfected. $his ri"ht may bee'ercised simultaneously with the action upon the contract. #1-19a&

::::::::::::::::::::::::::::::::::::::::: Levy Hermanos, Inc. v. Gervacio '.R. No. 7:-2.42 &cto"er /I, *+.+ Santos, J. Facts: 7evy 9ermanos, <nc. @ Levy

for "revityA sold to 7a aro Blas 'ervacio, a Pac!ard car. The latter, after ma!ing the initial payment, e1ecuted a promissory note for the "alance of P/,-44, paya"le on or "efore )une *8, *+.I, with interest at */0 per annum6 to secure thepayment of the note, he mortgaged said car to 7evy 'ervacio failed to pay the note it itsmaturity. 7evy foreclosed the mortgage and the car was sold at pu"lic auction, at whichplaintiff was the highest "idder for P*,,44. <t "rought an action to collect the "alance P*,244and interest @note that P/,-44 was the amount due from 'ervacioA. Issue: whether or not the cash payment made "y 'ervacio should "e considered as aninstallment in order to "ring the contract sued upon within the am"it of (rt. *-8-:( of theold Civil Code Held: No. (rticle *-8-:( of the Civil Code reads as follows5<n a contract for the sale of personal property paya"le in installments shall confer upon the vendor the right to cancel the sale or foreclose the mortgagei f o n e h a s " e e n g i v e n o n t h e p r o p e r t y , w i t h o u t r e i m " u r s e m e n t t o t h e purchaser of the installments already paid, if there "e an agreement to thiseffect.9owever, if the vendor has chosen to foreclose the mortgage he shall have nofurther action against the purchaser for the recovery of any unpaid "alanceowing "y the same and any agreement to the contrary shall "e null and void.<n order to apply the provisions of article *-8-:( of the old Civil Code it must appearthat there was a contract for the sale of personal property paya"le in installments and thatthere has "een a failure to pay two or more installments. The contract in this case, while asale of personal property, is not, however, one on installments, "ut on straight term, in which the "alance, after payment of the initial sum, should "e paid in its totality at the times p e c i f i e d i n t h e p r o m i s s o r y n o t e . T h e t r a n s a c t i o n i s n o t i s n o t , t h e r e f o r e , t h e o n e contemplated in (rticle *-8-:( and a c c o r d i n g l y t h e m o r t g a g e e i s n o t " o u n d " y t h e prohi"ition therein contained as to the right to the recovery of the unpaid "alance. :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: 7$CH 9$RM(N&;, <NC., plaintiff:appellant, vs. 7(J(R& B7(; '$RC(C<&, defendant: K &n March *8, *+.I, plaintiff 7evy 9ermanos, <nc., sold to defendant 7a aro Blas 'ervacio, a Pac!ardcar. K #efendant, after ma!ing the initial payment, e1ecuted a promissory note for the "alance of P/,-44, K to secure the payment of the note, he mortgaged the car to the plaintiff. #efendant failed to paythe note at its maturity6 K plaintiff foreclosed the mortgage and the car was sold at pu"lic auction, at which plaintiff was thehighest "idder for P,44. K The present action is for the collection of the "alance of P*,244 and interest.#efendant admittedthe allegations of the complaint, and with this admission, the parties su"mitted the case fordecision. K

The lower court applied the provisions of (ct No. -*//, inserted as articles *-8-:( of the Civil Code,and rendered Budgment in favor of the defendant. K Plaintiff appealed. K (rticle *-8-:( of the Civil Code reads as follows5%<n a contract for the sale of personal property paya"le in installments, failure t o pay twoo r m o r e i n s t a l l m e n t s s h a l l c o n f e r u p o n t h e v e n d o r t h e r i g h t t o c a n c e l t h e s a l e o r foreclose the mortgage if one has "een given on the prope rty, without reim"ursement to thepurchaser of the installments already paid, if there " e an agreement to this effect.%9owever, if the vendor has chosen to foreclose the mo rtgage he shall have no furtheraction against the purchaser for the recovery of any u npaid "alance owing "y the same,and any agreement to the contrary shall "e null and voi d.%<;;D$5 WLN the lower court correctly applied (rticle *-8-:( of the Civil Code9$7#5 K No. <n order to apply the provisions of article *-8-:( of the Civil Code it must appear that there wasa contract for the sale of personal property paya"le in installments and that there has "een a failureto pay two or more installments.% K The contract, in the instant case, while a sale of personal p r o p e r t y , i s n o t , h o w e v e r , o n e o n installments, "ut on straight term, in which the "alance, after payment of the initial sum, should "epaid in its totality at the time specified in the promissory note. K accordingly the mortgagee is not "ound "y the prohi"ition therein contained as to its right to therecovery of the unpaid "alance. K Dndou"tedly, the law is aimed at those sales where the price is paya"le in several installments, for,generally, it is in these cases that partial payments consist in relatively small amounts, constitutingthus a great temptation for improvident purchasers to "uy "eyond their means. K The suggestion that the cash payment made in this case should "e considered as an installment inorder to "ring the contract sued upon under the operation of the law, is completely untena"le. K ( cash payment cannot "e considered as a payment "y installment, and even if it can "e soconsidered, still the law does not apply, for it reMuires non: payment of two or more installments inorder that its provisions may "e invo!ed. 9ere, only one installment was unpaid. :::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::::: 2ales 1ases Phil Trust vs. National Bank

Facts Salvador Hermanos is a copartnership who then e ecuted to PNB ! promissory

notes, paya"le on demand, and each secured "y a #uedan or a warehouse receipt "y the $irm o$ Nieva, %ui& and 'ompany. (ach receipt is coupled with a collateral security )mostly piculs o$ copra* it moreover states that the non+per$ormance o$ the promise, or the non+$ul$illment o$ the o"li,ation will with or without notice $urnish satis$actory additional securities and $ull power and authority are here"y ,iven to said "ank to sell, assi,n, trans$er and deliver the whole o$ the said securities, or any property le$t in the possession o$ said "ank, or these properties may "e sold in a private or pu"lic sale option o$ the "ank. -emand, advertisement or notice o$ any kind is considered to "e waived. .t $urthermore stipulates that it is $ree $rom any ri,ht o$ redemption and such is a ne,otia"le warrant, such note is stamped in red ink across the $ace o$ each #uedan. Sometime in /010, the $irm withdrew with the "ank2s consent, 3 o$ its receipts. Such withdrawal was not in writin,, e cept in a $orm o$ receipt $rom the $irm stipulation the actual content o$ the "ode,a, as o$ the date it withdrew the said receipts. The $irm then $iled a petition $or insolvency, in its petition it stipulated that such receipts were in pled,ed "e$ore the PNB. Su"se#uently, the de$endant "ank sold all the personal properties held "y the warehouse receipts, e cept the properties descri"ed in the 3 warehouse receipts taken "y the $irm in /010. 4$terwhich, the court appointed Philippine Trust 'ompany as its assi,nee. .t then made a demand to PNB to surrender the receipts upon the "ank2s re$usal caused action to recover the value o$ Php 565,710.8/ claimin, that the $irm is the sole and e clusive owner o$ the property, and "y virtue o$ the petition $or insolvency $iled "y the $irm, the PNB unlaw$ully sold the personal property o$ the $irm.

.ssue 9hether or not the $irm trans$erred ownership o$ the personal property stipulated in the warehouse receipts to PNB:

Held The Supreme 'ourt held that the $irm trans$erred ownership o$ the personal property stipulated in the warehouse receipts to PNB upon its physical surrender o$ the receipt to the $irm. The e ecution o$ the notes, the physical possession o$ the ne,otia"le #uedan, or warehouse receipt, and the reco,nition o$ ownership "y the warehouse, le,ally carried with it the title and the possession o$ the property. Provided $or in 4rticle /!83 o$ the 'ivil 'ode that, ;it shall "e necessary, in order to constitute the contract o$ pled,e, that the pled,e "e placed in the possession o$ the creditor or o$ a third person, appointed "y common consent. 'ontrary to the

ar,ument o$ Phil Trust, a pu"lic instrument is not necessary to prove ownership o$ ,oods, trans$er o$ ownership "y delivery is enou,h in this case. <oreover, the note $urther stipulated that the $ull power and authority are here"y ,iven to said "ank to sell, assi,n, trans$er and deliver the whole o$ the said securities or any part thereo$ or any additions thereto, or any other securities or property ,iven unto or le$t in the possession o$ or herea$ter ,iven unto or le$t in the possession o$ the said "ank "y the undersi,ned. Thus, in this case, it is evident that the ownership is ,iven to PNB "y the $irm, even "e$ore the petition $or insolvency was $iled= there$ore, the sale o$ the personal property o$ PNB was valid. .n the case o$ the 3 warehouse receipts earlier mentioned, such receipts is ruled "y the court to still "e owned "y the $irm since its possession remained to the $irm. ::::::::::::::::::::::::::::::::::::::::::: SP !S"S #"S$I$!$ N N%$ petitioners, vs. $H" H N #%&L" IN$"#'"(I%$" %PP"LL%$" ) !#$ and IN*"S$ #+S FIN%N)") #P #%$I N respondents. G.#. No. L-,-1.1 Novem/er 00, 19.5 .nstalment Sales o$ <ova"les Facts: >n June 5!, /018, de$endant spouses %estituto Nonato and (ster Nonato purchased one unit o$ ?olkswa,enSak"ayan $rom the People@s 'ar, .nc., on installment "asis. To secure complete payment, the de$endants e ecuted a 1romissory note and a c2attel mort3a3e in $avor o$ People@s 'ar, .nc. The latter assi,ned its ri,hts and interests overthe note and mort,a,e in $avor o$ plainti$$ .nvestor@s Finance 'orporation ).F'*. For $ailure o$ de$endants to pay two ormore installments, despite demands, the car was repossessed "y plainti$$ on <arch 5A, /01!. -espite repossession,plainti$$ demanded $rom de$endants that they pay the "alance o$ the price o$ the car..n their answer, the spouses Nonato alle,ed "y way o$ de$ense that when the company repossessed the vehicle, it had, "ythat act, e$$ectively cancelled the sale o$ the vehicle. .t is there$ore "arred $rom e actin, recovery o$ the unpaid "alance o$ the purchase price, as mandated "y the provisions o$ %rticle 14.4 o5 t2e )ivil )ode . The trial court rendered a decisionin $avor o$ the .F' and a,ainst the Nonatos. The appellate court a$$irmed the Bud,ment. Issue: 9hether or not a vendor, or his assi,nee, who had cancelled the sale o$ a motor vehicle $or $ailure o$ the "uyer topay two or more o$ the stipulated installments, may also demand payment o$ the "alance o$ the purchase price. and "S$"# N N%$ ,

Held: No. The applica"le law in the case at "ar, involvin, as it does a sale o$ personal property on installment, is 4rticle/6!6 o$ the 'ivil 'ode. The meanin, o$ the provision has "een repeatedly enunciated in a lon, line o$ cases. ThusC Shouldthe vendee or purchaser o$ a personal property de$ault in the payment o$ two or more o$ the a,reed installments, thevendor or seller has the option to avail o$ any o$ these three remedies+either to e act $ul$illment "y the purchaser o$ theo"li,ation, or to cancel the sale, or to $oreclose the mort,a,e on the purchased personal property, i$ one was constituted. $2ese remedies 2ave /een reco3ni6ed as alternative, not cumulative, t2at t2e e7ercise o5 one 8ould /ar t2ee7ercise o5 t2e ot2ers. %espondent corporation $urther asserts that it repossessed the vehicle merely $or the purpose o$ appraisin, its current value. The alle,ation is untena"le, $or even a$ter it had noti$ied the Nonatos that the value o$ the car was not su$$icient tocover the "alance o$ the purchase price, there was no attempt at all on the part o$ the company to return the repossessedcar. 9H"#"F #" , the Bud,ment o$ the appellate court is here"y set aside and the complaint $iled "y respondent .nvestorsFinance 'orporation a,ainst petitioner in 'ivil 'ase should "e, as it is here"y, dismissed +++++++++++++++++++++++++++++++++++ SP>DS(S N>N4T> ?. .4' E .N?(ST>%@S F.N4N'( '>%P /6A S'%4 577 )/0!7* F !"S# In $#34, 2pouses 5estituto Nonato and 6ster Nonato purchased a vol7swagen from the 8eople s 1ar Inc on installment basis. $. ". +. %. 'o secure their complete payment, Nonato executed a promissory note and a chattel mortgage in favor of 8eople s 1ar Inc. 2ubse9uently, 8eople s 1ar Inc assigned its rights and interest over the note and mortagge in favor of Investor s :inance 1orp )I:1*. :or failure of the spouses to pay two or more installments, despite demands, the car was repossessed by I:1. ;espite repossession, I:1 still demanded from Nonato that they pay the balance of the price of the car. I:1, then, filed a complaint for the payment of the price of the car with damages Nonato, in their defense, argued that when the company repossessed the car, I:1 had, by that act, effectively cancelled the sale of the vehicle. As such, it was barred from exacting the recovery of the unpaid balance of the purchase price as mandated by Art $%&%.

0.

4.

'he trial court rendered in favor of I:1 and ordered the spouses Nonato pay the balance of the purchase price of the car with interest. 1A affirmed the same.

$SS%&# WON a vendor or his assignee, who had cancelled the sale of a motor vehicle for failure of the buyer to pay two or more of the stipulated installments, may also demand payment of the balance of the purchase price

H&'(# No. 'he applicable law in the case at bar is Art $%&% which provides that( <n a contract of sale of personal property the price of which is paya"le in installments, the vendor may e1ercise any of the following remedies5 @*A $1act fulfillment of the o"ligation, should the vendee fail to pay6 @/A Cancel the sale, should the vendee3s failure to pay cover two or more installments6 @.A >oreclose the chattel mortgage on the thing sold, if one has "een constituted, should the vendee3s failure to pay cover two or more installments. <n this case, he shall have no further action against the purchaser to recover any unpaid "alance of the price. (ny agreement to the contrary shall "e void. This provision means that should the vendee or the purchaser of a personal property default in the payment of two or more of the agreed installments, the vendor or the seller has the option to avail any of these . remediesNeither to e1act fulfillment "y the purchaser of the o"ligation, or to cancel the sale, or to foreclose the mortgage on the purchased personal property, if one was constituted. These remedies have "een recogni ed as an alternative, not cumulative, that the e1ercise of one should "ar the e1ercise of the others. <n the present case, it is not disputed that <>C had ta!en possession of the car purchased "y the Nonatos after the spouses defaulted in their payments. The defense of <>C that it the repossession of the vehicle was only for the purpose of appraising its value and for storage and safe!eeping pending full payment of the spouses is untena"le. The receipt issued "y <>C to the spouses when it too! possession of the vehicle that the vehicle could "e redeemed within *8 days. This could only mean that should the spouses fail to redeem the car within the period provided, <>C would retain permanent possession of the vehicle. <>C even notified the spouses Nonato that the value of the car was not sufficient to cover the "alance of the purchase price and there was no attempt at all on the part of the company to return the car.

The acts performed "y <>C are consistent with the conclusion that it had opted to cancel the sale of the vehicle. Therefore, it is "arred from e1acting payment from the petitioners of the "alance of the price of the vehicle which it had already repossessed @it cannot have its ca!e and eat it tooA :::::::::::::::::::::::::::::::::::::::::: :ayas, ;r. v. Luneta 'otor )om1any, et al. '.R. No. 7:.48,. &cto"er /., *+,/ *utierreD, Gr., G. Facts: $utropio Jayas, )r, purchased on installment "asis a motor vehicle from Mr. RoMue$scaOo of the $scaOo $nterprises in Cagayan de &ro City, dealer of respondent 7uneta MotorCompany , under the following terms and conditions5; e l l i n g p r i c e P I , 8 4 4 . 4 4 > i n a n c i n g c h a r g e P * , - / 2 . , / Total ;elling P r i c e P , , + / 2 . , / P a y a " l e o n # e l i v e r y P * , 4 4 2 . , / Paya"le in /months at */0 interest per annumPI,+/4.44 The motor vehicle was delivered to the petitioner who paid the initial payment in theamount of P*,442.,/, and e1ecuted a promissory note in the amount of PI,+/4.44, the" a l a n c e o f t h e t o t a l s e l l i n g p r i c e , i n f a v o r o f r e s p o n d e n t 7 u n e t a M o t o r C o m p a n y . T h e promissory note stated the amounts and dates of payment of /2 installments covering thePI,+/4.44 de"t. ;imultaneously with the e1ecution of the promissory note and to secure itspayment, the petitioner e1ecuted a chattel mortgage on the su"Bect motor vehicle in favorof the respondent. (fter paying a total amount of P.,*-,.44, the petitioner was una"le topay further monthly installments prompting the respondent 7uneta Motor Company to e1tra: Budicially foreclose the chattel mortgage. The motor vehicle was sold at pu"lic auction withthe respondent 7uneta Motor Company as the highest "idder in the amount of P8,444.44.;ince the payments made "y petitioner Jayas, )r. plus the P8,444.44 reali ed from theforeclosure of the chattel mortgage could not cover the total amount @PI,+/4.44A of thep r o m i s s o r y n o t e e 1 e c u t e d " y t h e p e t i t i o n e r i n f a v o r o f t h e r e s p o ndent 7uneta MotorCompany, the latter filed an action for the recovery of the "alance of P*,88*.Ip l u s interests. Issue: whether or not a deficiency amount after the motor vehicle, su"Bect of the chattelmortgage, has "een sold at pu"lic auction could still "e recovered "y respondent company Held: No. The main defense of respondent 7uneta Motor Company i s t h a t $ s c a O o $nterprises, Cagayan de &ro City from which petitioner Jayas, )r. purchased the su"Bectmotor vehicle was a distinct and different entity6 that the role of 7uneta Motor Company inthe said transaction was only to finance the purchase price of the motor vehicle6 and that inorder to protect its interest as regards the promissory note e1ecuted in its favor, a chattelmortgage covering the

same motor vehicle was also e1ecuted "y petitioner Jayas, )r. <n short, respondent 7uneta Motor Company maintains that the contract "etween the companyand the petitioner was only an ordinary loan removed from the coverage of (rticle *-,- of the New Civil Code. This is untena"le. The $scaOo $nterprises of Cagayan de &ro City was an agent of 7unetaMotor Company. (very significant evidence which proves the nature of the relationship"etween 7uneta Motor Company and $scaOo $nterprises is (nne1 P(Q of the petitioner?s&pposition to Drgent Motion for Reconsideration. (nne1 P(Q is a Certification from thec a s h i e r o f $ s c a O o $ n t e r p r i s e s o n t h e m o n t h l y i n s t a l l m e n t s p a i d "y Jayas, )r. <n thecertification, the promissory note in favor of 7u n e t a M o t o r C o m p a n y w a s s p e c i f i c a l l y mentioned. There was $scaOo $nterprises, a dealer of respondent 7uneta Motor Company,

was merely a collecting:agent as far as the purchase of the su"Bect motor vehicle wasconcerned. The principal and agent relationship is clear.But even assuming that the Pdistinct and independent entityQ theory of the privater e s p o n d e n t i s v a l i d , t h e n a t u r e o f t h e t r a n s a c t i o n a s a s a l e o f p e r s o n a l p r o p e r t y o n installment "asis remains. When, therefore, $scaOo $nterprises, assigned its rights vis:R:visthe sale to respondent 7uneta Motor Company, the nature of the transaction involving$scaOo $nterprises and Jayas, )r. did not change at all. (s assignee, respondent 7unetaMotor Company had no "etter rights than assignor $scaOo $nterprises under the samet r a n s a c t i o n . T h e t r a n s a c t i o n w o u l d s t i l l " e a s a l e o f p e r s o n a l p r o p e r t y i n i n s t a l l m e n t s covered "y (rticle *-,- of the New Civil Code ::::::::::::::::::::::::::::::