Tayug Rural Bank vs. Central Bank of the Phils. (G.R. No. L-46158, Nov.

28, 1986)
FACTS: Tayug Rural is a bank in Pangasinan which took out 13 loans from Central Bank in 1962 and
1963, all covered by promissory notes, amounting to 813k. In late 1964, Central Bank released a
circular; Memorandum Circular No. DLC-8 thru the Director of Loans and Credit. This circular all
informed all rural banks that an additional 10% per annum penalty interest would be assessed on all
past
due loans beginning 1965. This was enforced beginning July 1965.
In 1969, the outstanding balance of Tayug was at 444k. Tayug Rural filed a case in CFI Manila to
recover the 10% penalty it paid up to 1968, amounting to about 16k, and to restrain Central bank from
further imposing the penalty. Central Bank filed a counterclaim for the outstanding balance including
the
10% penalty, stating that it was legally imposed under the Rules and Regulations Governing Rural
Banks promulgated by the Monetary Board on 1958, under RA 720.
Tayugs defense was that the counterclaim should be dismissed since the unpaid obligation of Tayug
was
due to Central Banks flexible and double standard policy of its rediscounting privileges to Tayug Rural
and its subsequent arbitrary and illegal imposition of the 10% penalty. Tayug Rural contends that no
such 10% penalty starting from 1965 was included in the promissory notes covering the loans.
A judgment was rendered by CFI Manila in favor of Central Bank ordering Tayug Rural Bank to pay
10% penalty in the amount of around 19k pesos for loans up to July 1969, and to pay nothing for the
next remaining loans.
Tayugs claim in the case was however successful, and so Tayug was also ordered to pay 444k, with
interest to the Central Bank for the overdue accounts with respect to the promissory notes. Central
Bank appealed to the CA, but also lost on the ground that only a legal question had been raised in the
pleadings. The case was then raised to the SC, with each party arguing in the following manner:
CFI rules that the circulars retroactive effect on past due loans impairs the obligation of contracts and
deprives Tayug Rural of property without due process of law.
Central Bank reasons that Tayug Rural, despite the loans, should have known that rules and
regulations
authorize the Central Bank to impose additional reasonable penalties.

ISSUE: WON The Central Bank can validly impose the 10% penalty via Memorandum Circular
No. DLC-8
HELD: NO. A reading of the circular and pertinent provisions, including that of RA 720, shows that
nowhere therein is the authority given to the Monetary Board to mete out additional penalties to the
rural banks on past due accounts with the Central Bank. As said by the CFI, while the Monetary
Board possesses broad supervisory powers, nonetheless, the retroactive imposition of
administrative penalties cannot be taken as a measure SUPERVISORY in character.
Administrative rules have the force and effect of law. There are, however, limitations in the rulemaking
power of administrative agencies. All that is required of administrative rules and regulations is to
implement given legislation by not contradicting it and conform to the standards prescribed by law.
Rules and regulations cannot go beyond the basic law. Since compliance therewith can be enforced
by a
penal sanction, an administrative agency cannot implement a penalty not provided in the law
authorizing
it, much less one that is applied retroactively.
The new clause imposing an additional penalty was not part of the promissory notes when Tayug

Rural
took out its loans. The law cannot be given retroactive effect. More to the point, the Monetary Board
revoked the additional penalty later in 1970, which clearly shows an admission that it had no power to
impose the same. The Central bank hoped to rectify the defect by revising the DLC Form later.
However, Tayug Rural must pay the additional 10% in case of suit, since
in the promissory notes, 10% should be paid in attorneys fees and costs
of suit and collection. Judgment AFFIRMED with modification.

Firestone Tire Company vs. Lariosa

GR no. 70479
February 27, 1987
FACTS: Carlos Lariosa work in Firestone as factory worker. When he was about to leave thecompany
premises, he was frisked by security guard because while his personal bag wasinspected, there were
16 wool flannel swabs all belonging to the company. As a result, he was terminated by firestone on the
ground of stealing company propertyand loss of trust. The company also files criminal complaint for
attempted theft. Lariosa, onother hand, filed a case for illegal dismissal Labor Arbiter found the
dismissal just bust theNLRC reversed the decision.Firestone contends that NLRC erred in not
dismissing Lariosas appeal for being late.
ISSUE:Whether or not the appeal filed by Lariosa n NLRC was filed late.
RULING: Lariosa filed his appeal on June 7, 1984 or after the lapse of 14 days from the notice of the
decision of the labor arbiter.Under the Labor Code, the reglementary period for which an appeal from
decision of labor arbiter may be filed to NLRC is within a period of ten days.The ten-day period has to
be interpreted to mean as ten calendar days and not ten workingdays

Gonzaga vs David
GR no. L-14858
December 29, 1960
FACTS: Mariano Gonzales, as owner of a cargo truck and passenger bus, registers the vehiclesand
pays the first installment for registration fees due on 1957. To cover the second installmentfor
registration fees, he remitted to the provincial treasurer of Cagayan, by registered mail, theamount of
P500.00, under postal money orders.The postal cancellation mark on the envelope containing the
remittance bears the date August 31, 1957. The registrar of the Motor Vehicle Office ruled that
pursuant to Revised Motor Vehicle Law, the second installment for registration fees was payable on or
before the lastworking day of August. The last working day of August 1957 was Friday, August 30,
1957. Andconsequently, the remittance of Gonzaga which bears cancellation mark dated August 31,
1957was made beyond time fixed by law.
ISSUE:Whether or not the remittance for second installment of registration fees was made beyond
thetime fixed by law.

RULING: The Motor Vehicle Office in Cagayan had no office on Saturday, August 31, 1957.However, it
was immaterial the last working day contemplated in the Revised Motor Vehicle Lawshould not
necessarily mean the last working day of Motor Vehicle Office. The fact that August31, 1957 was
declared a special public holiday did not have the effect of making the precedingday, August 30, the
last day for paying registration fees without penalty.Moreover, under the said law, for payment of
registration fees by mail, the date of cancellation of the postage stamps of the envelope containing the
remittance is considered thedate of application

Rural Bank of Caloocan vs CA

GR no. L-32116
April 21, 1981
FACTS: Maxima Castro, accompanied by Severino Valencia, went to Rural Bank of Caloocan toapply
for industrial loan. The loan was secured by a real estate mortgage on Castors house,after that, the
bank approved the loan of P3000. Valencia obtained from the bank an equalamount of loan affixing
Castros signature as co-maker without its knowledge. The sheriff then sent a notice announcing the
property would be sold at public auction tosatisfy the obligation. Upon request, the auction sale which
was scheduled for March 10, 1961was postponed for April 10, 1961. But April 10 was subsequently
declared a special holiday sothe sheriff sold the property on public auction on April 11, 1961 which was
the next succeedingbusiness day following the special holiday.Castro prayed for the annulment of sale
alleging that there was fraud on the part of Valencias who induced her to sign as co-maker of a
promissory note since she is a 70-year oldwidow who cannot read and write and it was only when she
receive the notice of sheriff, shelearned that the encumbrance on her property was P6000 and not for
P3000.
ISSUE:Whether or not the public auction sale was null and void for transferring the date already set
bylaw.
RULING: The sale is null and void for not having in accordance with Act 3135 which states thatthat a
notice shall be given by posting notices of sale for not less than 20 days in at least 3public places and
if the property is worth more than P400 such notice shall also be published for in a newspaper of
general circulation in the municipality or city once a week for 3 consecutiveweeks.The pretermission of
a holiday applies only where the day, or the last day for doing anyact required or permitted by law falls
on a holiday or when the last day of a given period for doing an act falls on holiday. It does not apply to
a day fixed by an office or officer of thegovernment for an act to be done.Since April 10, 1961 was not
the day or the last day set by law for the extrajudicialforeclosure sale, nor the last day of a given
period but a date fixed by deputy sheriff, the salecannot be legally made on the next succeeding
business day without the noticef the sale inaccordance with Act no. 3135