Credit Case Reviewer.docx

Producers Bank v. CA Vives was asked by his neighbour to loan money to a certain Doronilla. The purpose of this loan was to make it appear Doronilla had the necessary capital so that she may incorporate under the style of Sterela Marketing and Services. They agreed to deposit the money in a bank with the stipulation that the money would not be touched. Doronilla withdrew the money and stated it was her right as the contract between the two was a mutuum. Held: General Rule is that a loan of money is indeed a mutuum. However in the case at bar the purpose of the loan was not to actually loan money so that Doronilla may make use of the same. CC says that consumables may be the subject of a commodatum if the purpose is not to consume the same but for some other purpose. To determine the type of contract of the parties one must look at the intent of the two. If the intent is unclear then the court would look at the subsequent acts of the parties to determine the intent of the parties. Garcia v. Thio Thio received a loan from Garcia. The money was transferred by way of crossed checks payable to a certain Santiago. Thio did not pay back the principal amount. However Thio alleges that it was Santiago who was the actual recipient of the loan, and thus the one who should be liable. Court found for Garcia. Held: Commodatum and Mutuum are real contracts, and as such are only perfected upon actual delivery. The delivery of the checks to Thio gave to her control and possession over the checks, notwithstanding the fact that the checks were in the name of Santiago. Since she had control and possession over the checks the loan was between Thio and Garcia.

PBM v. CA Ching, the VP of PBM signed a Deed of Suretyship in his personal capacity for the present and future debts of PBM in favour of Traders Inc. After the signing of the Suretyship, PBM accrued other loans and eventually defaulted on the same. Traders now wishes to hold Ching liable for the loans entered into by PBM after the signing of the Deed. Held: Ching may be held liable. Art. 2053 allows for suretyship for future debts. This is known as a Continuing Suretyship/Guaranty. Ong v. Roban Lending Corp. Ong loaned P 4M from Loban. It was secured by a real estate mortgage of Ongs’ properties. Later the parties entered into a dacion en pago and a MOA, where it was agreed that the Ongs will assign their mortgaged properties to Roban in settlement of the obligation and that the dacion en pago itself will be enforced if the Ongs fail to pay the restructured loan of P 5M within a year. Ongs assailed the the dacion en pago and MOA for being pactum commisorium.

Held: Not a true Dacion En Pago. A dacion en Pago extinguishes a previous debt. Looking at the agreement between the two parties the Alienation of the properties was a mortgage as it acted as a security for a loan. Reiterated the 2 elements of a pactum commisorium: 1. There should be a property mortgaged as security for the payment of the principal obligation. 2. There should be a stipulation for automatic appropriation by the creditor of the thing mortgaged in case of non-payment of the principal obligation within the stipulated period. Paray v. Rodriguez Pursuant to a court order allowing foreclosure, the spouses Paray foreclosed the pledged constituted to secure the loans of the respondents. Before the foreclosure sale, the respondents tried to tender payment, but the same was not accepted, and foreclosure was made. Respondents sued the spouses Paray. CA ruled that the tender of payment must be treated as redemption following the policy of liberal interpretation/construction of redemption rules. CA also said that the buyer of a foreclosed thing pledged does not become ipso facto the owner of the thing. Held: There is no right to redemption in a pledge. The only issue that should be taken cognizance of was WON the payment of the amount was sufficient. In this case it was not. While Respondents did indeed pay the principal amount they did not pay for the interest. According to Art. 2105 the pledgor may not ask for the return of the thing until he has paid for his debt and any interest that may have accrued. Medida v. CA Sps. Dolino had a previous loan secured by a mortgage. They defaulted and the same was sold at a foreclosure sale. Wanting to avail of their right to redemption, they secured another loan with Private Respondent Cebu City Savings and Loan Association, the security being a mortgage over the above foreclosed property. They defaulted in payment to the Association. Association foreclosed the property. Sps. Dolino petitioned against the foreclosure. RTC held mortgage valid but the subsequent sale void. CA stated Mortgage void as at the time Sps. Dolino were no longer the absolute owners of the property, the same being already sold during the foreclosure sale. Held: Subsequent mortgage valid. The Sps. Were still the absolute owners of the property. Even though the property was foreclosed, they are still the absolute owners until the period to exercise their right to redemption lapses and a TCT is issued in favour of the new owner.