RAFAEL C. UY (CABANGBANG STORE) vs.

ESTATE OF VIPA
FERNANDEZ
G.R. No. 200612. April 5, 2017. Reyes, J.
In Nacar v. Gallery Frames, et al., the Court pointed out that pursuant to Resolution No. 796 of the Bangko Sentral
ng Pilipinas Monetary Board, the interest rate of loans or forbearance of money, in the absence of stipulation shall
be six percent (6%) effective only from July 1, 2013.

FACTS:
Vipa Fernandez (Vipa) who is married to Levi owns a parcel of land in Iloilo City, which
was rented by Uy. In 1994, Vipa died. In June 1998, Uy stopped paying rents. So in 2003, the
Estate of Vipa, through Vipa’s child, Grace Joy as de facto administratrix, filed a complaint. for
unlawful detainer with MTCC-Iloilo. Uy claimed that he consigned the payment with RTC-Iloilo
because he did not know who to give it to. MTCC ordered Uy to pay because it found that from
1994 until 1998, Rafael was paying the rent to Grace; that the consignations made are not valid
since there was no prior tender of payment. RTC reversed the MTCC ruling finding that after
Vipa's death, Levi became entitled to 1/2 of the property since their conjugal partnership was
terminated, and that he sold his share in this property to Uy which made Uy a co-owner, having
the right to possess it. CA reversed the RTC holding that Uy raised the issue of ownership of the
subject property for the first time in his appeal and agreed with the MTCC that Uy's consignation
is ineffective.

ISSUE:
WON Levi may validly sell his share

HELD:
YES. Under the regime of CPG, the spouses are co-owners. Thus, upon the termination
of the CPG due to the death of either spouse, the surviving spouse has an actual and vested 1/2
undivided share of the properties, which does not consist of determinate and segregated
properties until liquidation and partition of the conjugal partnership. Upon Vipa's death, half of
the property was automatically reserved to Levi. The other half, Vipa's share, was transmitted to
Vipa's heirs – Grace Joy, Jill Frances, and Levi

A co-owner could sell his undivided share; hence, Levi had the right to freely sell his. Uy
became a co-owner of the property in 2005, when Levi sold undivided share to Uy, giving him
the right to possess the property. Thus, Uy could no longer be directed to vacate the subject
property since he is already a co-owner thereof. Nevertheless, Rafael is still bound to pay
reasonable rent for the use and occupancy of the subject property from May 2003 until he bought
the share.

Accordingly, Rafael could no longer be directed to vacate the subject property since he is
already a co-owner thereof. Nevertheless, Rafael is still bound to pay the unpaid rentals from
June 1998 until April 2003 in the amount of P271,150.00. Pursuant to Resolution No. 796 of the
Bangko Sentral ng Pilipinas Monetary Board, the interest rate of loans or forbearance of money,
in the absence of stipulation shall be six percent (6%) effective only from July 1, 2013. Thus,
prior to July 1, 2013, the rate of interest on loans or forbearance of money, in the absence of
stipulation, is still 12%. Accordingly, the amount of P271,150.00, representing the unpaid rentals
shall earn interest at the rates of 12% per annum from the date of the last demand on May 3,
2003 until June 30, 2013 and 6% per annum from July 1, 2013 until fully paid.

Further, Rafael is likewise bound to pay reasonable rent for the use and occupancy of the
subject property from May 2003 until December 28, 2005 at the rate of P3,000.00 per month
with interest at the rate of 12% per annum from the date of the last demand, i.e., the filing of the
complaint with the MTCC on June 12, 2003, until June 30, 2013 and 6% per annum from July 1,
2013 until fully paid.

WHEREFORE, in view of the foregoing disquisitions, the petition for review

on certiorari is PARTIALLY GRANTED. The Decision dated November 26, 2010 and
Resolution dated January 24, 2012 issued by the Court of Appeals in CA-G.R. SP No. 04481 are
hereby REVERSED and SET ASIDE. Petitioner Rafael C. Uy is hereby directed to pay the
Estate of Vipa Fernandez the following:

1. The amount of P271,150.00, representing the unpaid rentals, with interest at the rates of
twelve percent (12%) per annum from the date of the last demand on May 3, 2003 until
June 30, 2013, and six percent (6%) per annum from July 1, 2013 until fully paid;
2. Reasonable rent for the use and occupancy of the subject property from May 2003 until
December 28, 2005 at the rate of P3,000.00 per month with interest at the rates of twelve
percent (12%) per annum from the date of the last demand, i.e., the filing of the
complaint for unlawful detainer on June 12, 2003, until June 30, 2013, and six percent
(6%) per annum from July 1, 2013 until fully paid; and
3. The amount of P20,000.00 as attorney's fees.

SO ORDERED.

LAND BANK OF THE PHILIPPINES vs. WEST BAY COLLEGES,

INC., PBR MANAGEMENT AND DEVELOPMENT CORPORATION
and BCP TRADING CO., INC,
G.R. No. 211287, 17 APRIL 2017, J. Reyes

FACTS:
West Bay Colleges, Inc. (West Bay) is a domestic corporation engaged in the operation
of an educational institution; while PBR Management and Development Corporation (PBR) and
BCP Trading Company, Inc. (BCP) are domestic corporations engaged in the business of real
estate and construction, respectively. Together, West Bay, PBR and BCP form the Chiongbian
Group of Companies (CGC) (respondents).
In June 1996, West Bay applied for an interim financing with Land Bank for the construction of
a school building, which was approved in the amount of P125 Million. On December 22, 1997,
PBR availed of a P100-Million Term Loan from Land Bank for the construction of condominium
buildings.
On January 22, 1998, West Bay, as an accommodation mortgagor, executed a Real and Chattel
Mortgage over its training vessel to secure the loan of PBR with Land Bank.
On November 3, 2000, the mortgaged vessel sank during the typhoon Seniang. By agreement of
the parties, insurance proceeds in the amount of P21,980,000.00 net of shared expenses were
released to Land Bank on account of PBR’s loan.
Thereafter, West Bay proposed restructuring of its debts, it was provided therein that Land Bank
will reimburse West Bay with the insurance proceeds that it had previously received.
On March 13, 2012, West Bay filed an Urgent Motion with the RTC praying for the issuance of
an order directing Land Bank to reimburse to it the amount of P21,980,000.00 representing the
insurance proceeds. West Bay reasoned that the reimbursement was provided for in the
restructuring plan previously approved by Land Bank in the letter dated March 25, 2002 but was
not complied with. It alleged that although the RTC approved the rehabilitation plans authorizing
the application of the insurance proceeds to the obligations of West Bay, it was never
implemented.
RTC denied the Urgent Motion as it found no justifiable reason for the reimbudemnet of the
insurance proceeds to West Bay.
CA ordered to set aside the RTC order. Per the CA’s findings, Land Bank did not apply the
insurance proceeds to the remaining obligations of West Bay, PBR or BCP as there was no
statement of the settlement of the insurance proceeds in the context of the restructured loan.

ISSUE:
WHETHER WEST BAY IS ENTITLED TO THE REIMBURSEMENT OF THE
P21,980,000.00 INSURANCE PROCEEDS

HELD:
NO. After a judicious review of the records, the Court finds that there is no reversible
error on the part of the CA in ordering the reimbursement of P21,980,000.00 which is the
amount of the insurance proceeds previously received by Land Bank.
As the CA pointed out, despite several amendments to the rehabilitation plan which repeatedly
provided for the application of the insurance proceeds to the debts of West Bay, then to PBR and
BCP, there is no showing that Land Bank applied the amount thereof to the aforementioned
loans.36 The Court is inclined to uphold this finding - for if Land Bank had in fact deducted the
amount of the insurance proceeds from the loan obligations of either West Bay or PBR and BCP,
this information would have reflected on the rehabilitation plans of the CGC. In other words, if
the insurance proceeds were indeed applied to West Bay’s and PBR’s account in January and
June 2002 as Land Bank espoused, then P21,980,000.00 should have been subtracted from the
obligations of the said companies. Verily, Land Bank negated its own claim when it failed to
present evidence of reduction in the outstanding balances of the respondents, whether singly or
collectively.
Lastly, the Court deems it proper to impose interest on the amount of the insurance proceeds in
the concept of actual and compensatory damages. Article 2209 of the Civil Code provides that if
the obligation consists in the payment of a sum of money, and the debtor incurs in delay, the
indemnity for damages, there being no stipulation to the contrary, shall be the payment of the
interest agreed upon, and in the absence of stipulation, the legal interest, which is six percent
(6%) per annum. Since the obligation of Land Bank to reimburse the amount of insurance
proceeds does not constitute a forbearance of money, the interest rate of six percent (6%) is
applicable.
As to the reckoning period for the commencement of the running of the legal interest, it shall be
subject to the condition “that the courts are vested with discretion, depending on the equities of
each case, on the award of interest.”45Applying the guidelines in Nacar, another six percent (6%)
interest shall be imposed from the finality of this Resolution until its satisfaction as the interim
period, is considered to be, by then, equivalent to a forbearance of credit.

WHEREFORE, the petition is DENIED. The Decision dated September 30, 2013 and
Resolution dated February 10, 2014 of the Court of Appeals in CA-G.R. SP No. 127897
are AFFIRMED. The Land Bank of the Philippines is DIRECTED to reimburse West Bay
Colleges, Inc. the amount of P21,980,000.00 representing the insurance proceeds plus six percent
(6%) interest thereon from the issuance of the Stay Order on July 10, 2002 up to the date of
finality of this Resolution by way of actual or compensatory damages. From finality until full
satisfaction, the total amount due now compounded with interest due from July 10, 2002 up to
finality, shall likewise earn interest at six percent (6%) per annum until fully paid.

SO ORDERED.

BANKARD, INC., vs. LUZ P. ALARTE,

G.R. No. 202573. April 19, 2017. Del Castillo, J.
Facts:

Petitioner Bankard, Inc. (Bankard, now RCBC Bankard Services Corporation) is a duly
constituted domestic corporation doing business as a credit card provider, extending credit
accommodations to its member-cardholders for the purchase of goods and services obtained from
Bankard-accredited business establishments, to be paid later on by the member-cardholders following
billing.
 In 2007, petitioner filed a collection case against respondent Luz P. Alarte before the
Metropolitan Trial Court of Pasig City (MeTC). In its Complaint, petitioner alleged that respondent
applied for and was granted credit accommodations under Bankard myDream JCB Card.No. 3562-8688-
5155-1006; that respondent, using the said Bankard myDream JCB credit card, availed herself of credit
acconunodations by "purchasing various products"; that per Statement of Account dated July 9, 2006,
respondent's credit availments amounted to a total of ₱67,944.82, inclusive of unbilled monthly
installments, charges and penalties or at least the minimum amount due under the credit card; and that
respondent failed and refuses to pay her obligations despite her receipt of a written demand.

Thus, it prayed that respondent be ordered to pay the amount of ₱67,944.82, with interest,
attorney's fees equivalent to 25% of the sum due, and costs of suit. On July 15, 2009, the MeTC issued its
Decision dismissing the case for lack of preponderance of evidence or lack or "greater weight of the
credible evidence. Petitioner appealed before the Regional Trial Court (RTC) which, in a May 6, 2010
Decision, affirmed the MeTC based on the same ground.

Petitioner filed a Petition for Review before the Court of Appeals, but the same was denied and
dismissed for lack of preponderance of evidence. Petitioner moved to reconsider, but in a July 4, 2012
Resolution, the CA held its ground.

Issue:

Whether or not the petitioner, Bankard Inc. presented sufficient evidence to support its pecuniary
claim against respondent Luz P. Alarte.

Ruling:

No, the petitioner, Bankard Inc. did not present sufficient evidence to support its pecuniary claim
against respondent Luz P. Alarte. Upon perusal of the July 9, 2006 Statement of Account sent to
respondent would indeed show that it does not contain the particulars of purchase transactions into by the
latter; it merely contains the information of the previous statement balance, late and interest charges,
amounting to ₱67,944.82

However, the Court held that the manner in which the statement of account is worded indicates
that it is a running balance, a continuing and mounting bill of charges consisting of a combined principal
amount with finance and penalty charges imposed, which respondent appears to have failed to pay in the
past. This is shown by the fact that respondent has failed to pay a past bill amounting to ₱64,615.64 - the
"previous statement balance" in the very first line of the above-quoted statement of account.

This could mean that there really were no immediate purchase transactions made by respondent
for the month that needed to be specified in the July 9, 2006 Statement of Account; that instead, she
simply repeatedly failed and continues to fail to pay her credit card debt arising out of past credit card
purchase transactions to petitioner, which thus resulted in a mounting pile of charges imposed upon her
outstanding account as reflected in a statement or bill of charges or accounts regularly sent to her.

Moreover, the fault of Petitioner appears to lie in the fact that its Complaint was not well-
prepared, and its cause is not well-argued; for this reason, the courts below misunderstood both. The
Court cannot completely blame the MeTC, RTC, and CA for their failure to understand or realize the fact
that a monthly credit card statement of account does not always necessarily involve purchases or
transactions made immediately prior to the issuance of such statement.

While the Court believes that petitioner's claim may be well-founded, it is not enough as to allow
judgment in its favor on the basis of extant evidence. It must prove the validity of its claim; this it may do
by amending its Complaint and adducing additional evidence of respondent's credit history and proving
the loan transactions between them.

Therefore, the Petition is PARTIALLY GRANTED. The September 28, 2011 Decision and July 4, 2012
Resolution of the Court of Appeals are REVERSED and SET ASIDE. Further, Metropolitan Trial Court
of Pasig City, Branch 72 is ORDERED to conduct further proceedings in accordance with the foregoing
disquisition of the Court and allow petitioner Bankard, Inc. to amend its Complaint and/or present
additional evidence to prove its case.

SPS. CRISTINO AND EDNA CARBONELL VS. METROPOLITAN

BANK AND TRUST COMPANY
G.R. No. 178467. April 26, 2017. J. Bersamin
FACTS:

The petitioners alleged that they had experienced emotional shock, mental anguish,
public ridicule, humiliation, insults and embarrassment during their trip to Bangkok, Thailand
because of the respondent's release to them of five US$ 100 bills that turned out to be
counterfeit. They withdrew US$ l, 000.00 in US$ 100 notes from their dollar account at the
respondent's Pateros branch. While in Bangkok, they had exchanged five US$ 100 bills into
Baht, but only four of the US$ 100 bills had been accepted by the foreign exchange dealer
because the fifth one was "no good." Because of currency’s rejection, they had asked a
companion to exchange the same bill at Norkthon Bank in Bangkok, thereat the dollar bill was
declared “fake, and was confiscated by the bank teller. On the next day, they had been
confronted by the shop owner at the hotel lobby because their four US$ 100 bills had turned out
to be counterfeit after they had bought jewelry.

Upon the petitioners’ return to the Philippines, they had confronted the manager of the
respondent's Pateros branch on the fake dollar bills, but the latter had insisted that the dollar bills
she had released to them were genuine, for the bills were certified by Bangko Sentral ng
Pilipinas (BSP) after examination. They had demanded moral damages of ₱10 Million and
exemplary damages.

Prior to the filing of the suit in the RTC, the petitioners had two meetings with the
respondent's representatives. In the course of the two meetings, the latter's representatives
reiterated their sympathy and regret over the troublesome experience that the petitioners had
encountered, and offered to reinstate US$500 in their dollar account, and, in addition, to
underwrite a round-trip all-expense-paid trip to Hong Kong, but they were adamant and staged a
walk-out.

The RTC ruled in favor of the respondent. The petitioners appealed, but the CA
ultimately promulgated its assailed decision affirming the judgment of the RTC with the
modification of deleting the award of attorney's fees.
ISSUE:
Whether or not the CA gravely erred in affirming the judgment of the RTC.

HELD:
NO. No. The court affirmed the judgment of the RTC.
The relationship existing between the petitioners and the respondent that resulted from a
contract of loan was that of a creditor-debtor. Even if the law imposed a high standard on the
latter as a bank by virtue of the fiduciary nature of its banking business, bad faith or gross
negligence amounting to bad faith was absent. Hence, there simply was no legal basis for
holding the respondent liable for moral and exemplary damages. In breach of contract, moral
damages may be awarded only where the defendant acted fraudulently or in bad faith. That was
not true herein because the respondent was not shown to have acted fraudulently or in bad faith.
 The court does not agree with the petitioners. They insist that inasmuch as the business of
banking was imbued with public interest, the respondent's failure to exercise the degree of
diligence required in handling the affairs of its clients showed that it was liable not just for
simple negligence but for misrepresentation and bad faith amounting to fraud.
With the respondent having established that the characteristics of the subject dollar notes
had made it difficult even for the BSP itself as the country's own currency note expert to identify
the counterfeiting with ease despite adhering to all the properly laid out standard operating
procedure and precautions in the handling of US dollar bills, holding it liable for damages in
favor of the petitioners would be highly unwarranted in the absence of proof of bad faith, malice
or fraud on its part. That it formally apologized to them and even offered to reinstate the
USD$500.00 in their account as well as to give them the all-expense-paid round trip ticket to
Hong Kong as means to assuage their inconvenience did not necessarily mean it was liable. In
civil cases, an offer of compromise is not an admission of liability, and is inadmissible as
evidence against the offeror. The lack of malice in the conduct complained of precluded the
recovery of damages.
Here, although the petitioners suffered humiliation resulting from their unwitting use of
the counterfeit US dollar bills, the respondent, by virtue of its having observed the proper
protocols and procedure in handling the US dollar bills involved, did not violate any legal duty
towards them. Being neither guilty of negligence nor remiss in its exercise of the degree of
diligence required by law or the nature of its obligation as a banking institution, the latter was not
liable for damages. Given the situation being one of damnum absque injuria, they could not be
compensated for the damage sustained.

WHEREFORE, the Court AFFIRMS the decision promulgated on December 7,

2006; and ORDERS the petitioners to pay the costs of suit.
SO ORDERED.