Garcia v Thio

Facts: Thio borrowed $100,000 from Garcia on February 1995. Thio received a crossed check
which Garcia issued payable to the order of one Santiago. On June 1995, Thio again borrowed from
Garcia, this time she borrowed Php 500,000, again Thio received a crossed check which Garcia issued
payable to the order of one Santiago. Thereafter, Garcia received payments from Thio every month
until some time, the latter ceased payment. Allegedly, Thio instructed Garcia that both checks be
made payable to Santiago and that the checks be delivered to her so she can could deliver the same
to Santiago. Since the principal amounts of the loan was never fully paid, Garcia filed an action to
collect funds.

Issue: Who between Thio and Santiago borrowed from Garcia?

Held: Thio is the one who borrowed from Garcia.

*This case is decided by the Supreme Court based on the facts as an exception to the rule that only questions of law may
be raised in a petition for review on certiorari.

Delivery is the act by which the res or substance thereof is placed within the actual or
constructive possession or control of another. Although respondent did not physically receive the
proceeds of the checks, these instruments were placed in her control and possession under an
arrangement whereby she actually re-lent the amounts to Santiago.

These factors support this conclusion:

1. It was highly improbable that petitioner would grant two loans to a complete stranger without
requiring as much as promissory notes or any written acknowledgment of the debt considering that
the amounts involved were quite big. Respondent, on the other hand, already had transactions with
Santiago at that time.

2. One of the witnesses testified that Thio’s plan was for Garcia to lend her money at a monthly
interest rate of 3%, after which shet would lend the same amount to Santiago at a higher rate of 5%
and realize a profit of 2%.

3. Thio issued her own checks to cover the payments for the loan. Although she claimed that
Santiago would replace her checks with cash. The court does not believe that she would put herself in
a position where she would be compelled to pay for a loan from her own funds which she did not
contract.

4. In Santiago’s petition for insolvency, Thio was listed as one of her creditors and not Garcia.

5. Thio never presented Santiago to corroborate her story. The presumption is that evidence
willfully suppressed will be adverse if produced. Thio was not able to overturn this presumption.
Saura Import v. Development Bank of the Philippines

Facts: Saura applied to the Rehabilitation Finance Corporation(now DBP) RFC for brevity, an
industrial loan of Php 500,000 to be used for the construction of a factory building for the
manufacture of jute sacks, to pay the balance of the purchase price of the jute mill machinery, and as
additional working capital. RFC passed Resolution No. 145 approving the loan application for
P500,000.00, to be secured by a first mortgage on the factory building to be constructed, the land site
thereof, and the machinery and equipment to be installed.

Thereafter, the corresponding mortgage was executed and registered. However, because of acts
attributable to petitioner, ie. intended to rely on the importation of jute which was not in line with
RFCs principle in approving the loan, the loan was not released. Saura did not pursue the load further
and requested for the cancellation of the mortgage. The cancellation was requested to make way for
the registration of a mortgage contract, executed on August 6, 1954, over the same property in favor
of the Prudential Bank and Trust Co., the latter having issued Saura letter of credit for the release of
the jute machinery. As security, Saura execute a trust receipt in favor of the Prudential. For failure of
Saura to pay said obligation, Prudential sued Saura.

Later, petitioner instituted an action for damages against RFC alleging failure of RFC to comply
with its obligation to release the proceeds of the loan applied for and approved, thereby preventing
the plaintiff from completing or paying contractual commitments it had entered into, in connection
with its jute mill project.

Issue: Whether or not there was a perfected consensual contract between Saura Inc. and RFC

Held: Yes there was indeed a perfected consensual contract, as recognized in Article 1934 of the
Civil Code, which provides:

ART. 1954. 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 perferted
until the delivery of the object of the contract.

There was undoubtedly offer and acceptance in this case: the application of Saura, Inc. for a loan
of P500,000.00 was approved by resolution of the defendant, and the corresponding mortgage was
executed and registered. We recognized in this case, a perfected consensual contract which under
normal circumstances could have made the bank liable for not releasing the loan. However, since the
fault was attributable to petitioner therein, the court did not award it damages.
BPI Investment Corporation v CA

Facts:
Panteleon v. American Express

Facts: Panteleon and his family went to Amsterdam for a vacation where they joined a group tour.
On their last day in Amsterdam they visited Coster Diamond House, the group agreed that they will
only stay there for 30 minutes as they still have the rest of the day planned for the city tour. Mrs.
Panteleon selected for purchase a diamond pendant and a chain which totaled $13,826. To pay for
these purchases, Pantaleon presented his American Express credit card together with his passport to
the Coster sales clerk. Around 45 minutes after Pantaleon had presented his AmexCard, and 30
minutes after the tour group was supposed to have left the store, Coster decided to release the items
even without respondent’s approval of the purchase. As the spouses Pantaleon returned to the bust
their offers of apology were met by their tourmates with stony silence. Mrs. Pantaleon ended up
weeping, while her husband had to take a tranquilizer to calm his nerves. After coming back to Manila,
Pantaleon sent a letter through counsel to the respondent, demanding an apology for the
"inconvenience, humiliation and embarrassment he and his family thereby suffered" for respondent’s
refusal to provide credit authorization for the aforementioned purchases. In response, stating among
others that the delay in authorizing the purchase from Coster was attributable to the circumstance
that the charged purchase of US $13,826.00 "was out of the usual charge purchase pattern
established." Since respondent refused to accede to Pantaleon’s demand for an apology, the
aggrieved cardholder instituted an action for damages.

Issue: Whetheror not American express had committed a breach of its obligations to Panteleon.

Held: American Express is not in delay, Panteleon is not entitled to damages.

Use of credit card a mere offer to enter into loan agreements. When cardholders use their credit
cards to pay for their purchases, they merely offer to enter into loan agreements with the credit card
company. Only after the latter approves the purchase requests that the parties enter into binding
loan contracts. This view finds support in the reservation found in the card membership agreement
itself, particularly paragraph 10, which clearly states that AMEX reserve[s] the right to deny
authorization for any requested Charge. By so providing, AMEX made its position clear that it has no
obligation to approve any and all charge requests made by its card holders.

Since AMEX has no obligation to approve the purchase requests of its credit cardholders,
Pantaleon cannot claim that AMEX defaulted in its obligation. The three requisites for a finding of
default are: (a) that the obligation is demandable and liquidated; (b) the debtor delays performance;
and (c) the creditor judicially or extrajudicially requires the debtors performance.the first requisite is
no longer met because AMEX, by the express terms of the credit card agreement, is not obligated to
approve Pantaleons purchase request. Without a demandable obligation, there can be no finding of
default.
Producers Bank of the Philippines v. CA and Vives

Facts: Franklin Vives was asked by his neighbor and friend Angeles Sanchez to help her friend and
townmate, Col. Arturo Doronilla, in incorporating his business, the Sterela Marketing and Services.
Sanchez asked private respondent to deposit in a bank a certain amount of money in the bank
account of Sterela for purposes of its incorporation. She assured private respondent that he could
withdraw his money from said account within a month’s time. Private respondent issued a check in
the amount of Two Hundred Thousand Pesos (P200,000.00) in favor of Sterela. Subsequently, private
respondent learned that Sterela was no longer holding office in the address previously given to him.
Alarmed, he and his wife went to the Bank to verify if their money was still intact. They found out that
part of the money had been withdrawn by Doronilla and that only P90,000.00 remained therein.

Issue: Whether or not the transaction between Vives and Doronilla is a mutuum.

Held: The transaction is commodatum. According to Art. 1933 of the Civil Code, if the subject of the
contract is a consumable thing, such as money, the contract would be a mutuum. However, there are
some instances where a commodatum may have for its object a consumable thing as embodied in
Article 1936. Thus, if consumable goods are loaned only for purposes of exhibition, or when the
intention of the parties is to lend consumable goods and to have the very same goods returned at the
end of the period agreed upon, the loan is a commodatum and not a mutuum. The rule is that the
intention of the parties thereto shall be accorded primordial consideration in determining the actual
character of a contract. In case of doubt, the contemporaneous and subsequent acts of the parties
shall be considered in such determination.