Cases Fo Credit

7/28/2019 Cases Fo Credit

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G.R. No. L-19190November 29, 1922

THE PEOPLE OF THE PHILIPPINE ISLANDS,Plaintiff-Appellee , vs. VENANCIOCONCEPCION,Defendant-Appellant.

MALCOLM,J.:chanroblesvirtuallaw library

By telegrams and a letter of confirmation to the manager of the Aparri branch of the PhilippineNational Bank, Venancio Concepcion, President of the Philippine National Bank, between April 10,1919, and May 7, 1919, authorized an extension of credit in favor of "Puno y Concepcion, S. en C." inthe amount of P300,000. This special authorization was essential in view of the memorandum order ofPresident Concepcion dated May 17, 1918, limiting the discretional power of the local manager atAparri, Cagayan, to grant loans and discount negotiable documents to P5,000, which, in certain cases,could be increased to P10,000. Pursuant to this authorization, credit aggregating P300,000, wasgranted the firm of "Puno y Concepcion, S. en C.," the only security required consisting of six demandnotes. The notes, together with the interest, were taken up and paid by July 17, 1919. chanroblesvirtualawlibrarychanroblesvirtuallaw library

"Puno y Concepcion, S. en C." was a copartnership capitalized at P100,000. Anacleto Concepcioncontributed P5,000; Clara Vda. de Concepcion, P5,000; Miguel S. Concepcion, P20,000; ClementePuno, P20,000; and Rosario San Agustin, "casada con Gral. Venancio Concepcion," P50,000. MemberMiguel S. Concepcion was the administrator of the company. chanroblesvirtualawlibrarychanroblesvirtuallaw library

On the facts recounted, Venancio Concepcion, as President of the Philippine National Bank and asmember of the board of directors of this bank, was charged in the Court of First Instance of Cagayanwith a violation of section 35 of Act No. 2747. He was found guilty by the Honorable Enrique V.Filamor, Judge of First Instance, and was sentenced to imprisonment for one year and six months, topay a fine of P3,000, with subsidiary imprisonment in case of insolvency, and the costs. chanroblesvirtualawlibrarychanroblesvirtuallaw library

Section 35 of Act No. 2747, effective on February 20, 1918, just mentioned, to which reference musthereafter repeatedly be made, reads as follows: "The National Bank shall not, directly or indirectly,grant loans to any of the members of the board of directors of the bank nor to agents of the branch

banks." Section 49 of the same Act provides: "Any person who shall violate any of the provisions ofthis Act shall be punished by a fine not to exceed ten thousand pesos, or by imprisonment not toexceed five years, or by both such fine and imprisonment." These two sections were in effect in 1919when the alleged unlawful acts took place, but were repealed by Act No. 2938, approved on January30, 1921.chanroblesvirtualawlibrarychanroblesvirtuallaw library

Counsel for the defense assign ten errors as having been committed by the trial court. These errorsthey have argued adroitly and exhaustively in their printed brief, and again in oral argument.Attorney-General Villa-Real, in an exceptionally accurate and comprehensive brief, answers theproposition of appellant one by one. chanroblesvirtualawlibrarychanroblesvirtuallaw library

The question presented are reduced to their simplest elements in the opinion which follows: chanroblesvirtuallaw library

I. Was the granting of a credit of P300,000 to the copartnership "Puno y Concepcion, S. en C." byVenancio Concepcion, President of the Philippine National Bank, a "loan" within the meaning of section35 of Act No. 2747? chanroblesvirtuallaw library

Counsel argue that the documents of record do not prove that authority to make a loan was given, butonly show the concession of a credit. In this statement of fact, counsel is correct, for the exhibits inquestion speak of a "credito" (credit) and not of a " prestamo" (loan).chanroblesvirtualawlibrarychanroblesvirtuallaw library


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The "credit" of an individual means his ability to borrow money by virtue of the confidence or trustreposed by a lender that he will pay what he may promise. (Donnell vs. Jones [1848], 13 Ala., 490;Bouvier's Law Dictionary.) A "loan" means the delivery by one party and the receipt by the other partyof a given sum of money, upon an agreement, express or implied, to repay the sum loaned, with orwithout interest. (Payne vs. Gardiner [1864], 29 N. Y., 146, 167.) The concession of a "credit"necessarily involves the granting of "loans" up to the limit of the amount fixed in the "credit," chanroblesvirtuallaw library

II. Was the granting of a credit of P300,000 to the copartnership "Puno y Concepcion, S. en C.," byVenancio Concepcion, President of the Philippine National Bank, a "loan" or a "discount"? chanroblesvirtuallaw library

Counsel argue that while section 35 of Act No. 2747 prohibits the granting of a "loan," it does notprohibit what is commonly known as a "discount." chanroblesvirtuallaw library

In a letter dated August 7, 1916, H. Parker Willis, then President of the National Bank, inquired of theInsular Auditor whether section 37 of Act No. 2612 was intended to apply to discounts as well as toloans. The ruling of the Acting Insular Auditor, dated August 11, 1916, was to the effect that saidsection referred to loans alone, and placed no restriction upon discount transactions. It becomesmaterial, therefore, to discover the distinction between a "loan" and a "discount," and to ascertain ifthe instant transaction comes under the first or the latter denomination. chanroblesvirtualawlibrarychanroblesvirtuallaw library

Discounts are favored by bankers because of their liquid nature, growing, as they do, out of an actual,live, transaction. But in its last analysis, to discount a paper is only a mode of loaning money, with,however, these distinctions: (1) In a discount, interest is deducted in advance, while in a loan, interestis taken at the expiration of a credit; (2) a discount is always on double-name paper; a loan isgenerally on single-name paper.chanroblesvirtualawlibrarychanroblesvirtuallaw library

Conceding, without deciding, that, as ruled by the Insular Auditor, the law covers loans and notdiscounts, yet the conclusion is inevitable that the demand notes signed by the firm "Puno yConcepcion, S. en C." were not discount paper but were mere evidences of indebtedness, because (1)interest was not deducted from the face of the notes, but was paid when the notes fell due; and (2)they were single-name and not double-name paper. chanroblesvirtualawlibrarychanroblesvirtuallaw library

The facts of the instant case having relation to this phase of the argument are not essentially different

from the facts in the Binalbagan Estate case. Just as there it was declared that the operationsconstituted a loan and not a discount, so should we here lay down the same ruling. chanroblesvirtualawlibrarychanroblesvirtuallaw library

III. Was the granting of a credit of P300,000 to the copartnership, "Puno y Concepcion, S. en C." byVenancio Concepcion, President of the Philippine National Bank, an "indirect loan" within the meaningof section 35 of Act No. 2747? chanroblesvirtuallaw library

Counsel argue that a loan to the partnership "Puno y Concepcion, S. en C." was not an "indirect loan."In this connection, it should be recalled that the wife of the defendant held one-half of the capital ofthis partnership.chanroblesvirtualawlibrarychanroblesvirtuallaw library

In the interpretation and construction of statutes, the primary rule is to ascertain and give effect tothe intention of the Legislature. In this instance, the purpose of the Legislature is plainly to erect a

wall of safety against temptation for a director of the bank. The prohibition against indirect loans is arecognition of the familiar maxim that no man may serve two masters - that where personal interestclashes with fidelity to duty the latter almost always suffers. If, therefore, it is shown that the husbandis financially interested in the success or failure of his wife's business venture, a loan to partnership ofwhich the wife of a director is a member, falls within the prohibition. chanroblesvirtualawlibrarychanroblesvirtuallaw library

Various provisions of the Civil serve to establish the familiar relationship called a conjugal partnership.(Articles 1315, 1393, 1401, 1407, 1408, and 1412 can be specially noted.) A loan, therefore, to apartnership of which the wife of a director of a bank is a member, is an indirect loan to suchdirector.chanroblesvirtualawlibrarychanroblesvirtuallaw library


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That it was the intention of the Legislature to prohibit exactly such an occurrence is shown by theacknowledged fact that in this instance the defendant was tempted to mingle his personal and familyaffairs with his official duties, and to permit the loan P300,000 to a partnership of no establishedreputation and without asking for collateral security. chanroblesvirtualawlibrarychanroblesvirtuallaw library

In the case of Lester and Wife vs. Howard Bank ([1870], 33 Md., 558; 3 Am. Rep., 211), the SupremeCourt of Maryland said:

What then was the purpose of the law when it declared that no director or officer should borrow of thebank, and "if any director," etc., "shall be convicted," etc., "of directly or indirectly violating thissection he shall be punished by fine and imprisonment?" We say to protect the stockholders,depositors and creditors of the bank, against the temptation to which the directors and officers mightbe exposed, and the power which as such they must necessarily possess in the control andmanagement of the bank, and the legislature unwilling to rely upon the implied understanding that inassuming this relation they would not acquire any interest hostile or adverse to the most exact andfaithful discharge of duty, declared in express terms that they should not borrow, etc., of the bank.

In the case of People vs. Knapp ([1912], 206 N. Y., 373), relied upon in the Binalbagan Estatedecision, it was said:

We are of opinion the statute forbade the loan to his copartnership firm as well as to himself directly.The loan was made indirectly to him through his firm.

IV. Could Venancio Concepcion, President of the Philippine National Bank, be convicted of a violationof section 35 of Act No. 2747 in relation with section 49 of the same Act, when these portions of ActNo. 2747 were repealed by Act No. 2938, prior to the finding of the information and the rendition ofthe judgment? chanroblesvirtuallaw library

As noted along toward the beginning of this opinion, section 49 of Act No. 2747, in relation to section35 of the same Act, provides a punishment for any person who shall violate any of the provisions ofthe Act. It is contended, however, by the appellant, that the repeal of these sections of Act No. 2747by Act No. 2938 has served to take away the basis for criminal prosecution. chanroblesvirtualawlibrarychanroblesvirtuallaw library

This same question has been previously submitted and has received an answer adverse to suchcontention in the cases ofUnited Stated vs. Cuna ([1908], 12 Phil., 241); People vs.Concepcion ([1922], 43 Phil., 653); and Ong Chang Wing and Kwong Fokvs. United States ([1910],218 U. S., 272; 40 Phil., 1046). In other words, it has been the holding, and it must again be theholding, that where an Act of the Legislature which penalizes an offense, such repeals a former Actwhich penalized the same offense, such repeal does not have the effect of thereafter depriving thecourts of jurisdiction to try, convict, and sentenced offenders charged with violations of the oldlaw.chanroblesvirtualawlibrarychanroblesvirtuallaw library

V. Was the granting of a credit of P300,000 to the copartnership "Puno y Concepcion, S. en C." byVenancio Concepcion, President of the Philippine National Bank, in violation of section 35 of Act No.2747, penalized by this law? chanroblesvirtuallaw library

Counsel argue that since the prohibition contained in section 35 of Act No. 2747 is on the bank, andsince section 49 of said Act provides a punishment not on the bank when it violates any provisions ofthe law, but on a person violating any provisions of the same, and imposing imprisonment as a part ofthe penalty, the prohibition contained in said section 35 is without penal sanction. chanroblesvirtualawlibrarychanroblesvirtuallaw library

The answer is that when the corporation itself is forbidden to do an act, the prohibition extends to theboard of directors, and to each director separately and individually. (People vs. Concepcion, supra.) chanroblesvirtuallawlibrary


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VI. Does the alleged good faith of Venancio Concepcion, President of the Philippine National Bank, inextending the credit of P300,000 to the copartnership "Puno y Concepcion, S. en C." constitute a legaldefense? chanroblesvirtuallaw library

Counsel argue that if defendant committed the acts of which he was convicted, it was because he wasmisled by rulings coming from the Insular Auditor. It is furthermore stated that since the loans madeto the copartnership "Puno y Concepcion, S. en C." have been paid, no loss has been suffered by thePhilippine National Bank. chanroblesvirtualawlibrarychanroblesvirtuallaw library

Neither argument, even if conceded to be true, is conclusive. Under the statute which the defendanthas violated, criminal intent is not necessarily material. The doing of the inhibited act, inhibited onaccount of public policy and public interest, constitutes the crime. And, in this instance, as previouslydemonstrated, the acts of the President of the Philippine National Bank do not fall within the purviewof the rulings of the Insular Auditor, even conceding that such rulings have controlling effect. chanroblesvirtualawlibrarychanroblesvirtuallaw library

Morse, in his work, Banks and Banking, section 125, says:

It is fraud for directors to secure by means of their trust, and advantage not common to the otherstockholders. The law will not allow private profit from a trust, and will not listen to any proof ofhonest intent.

JUDGMENT chanroblesvirtuallaw library

On a review of the evidence of record, with reference to the decision of the trial court, and the errorsassigned by the appellant, and with reference to previous decisions of this court on the same subject,we are irresistibly led to the conclusion that no reversible error was committed in the trial of this case,and that the defendant has been proved guilty beyond a reasonable doubt of the crime charged in theinformation. The penalty imposed by the trial judge falls within the limits of the punitive provisions ofthe law.chanroblesvirtualawlibrarychanroblesvirtuallaw library

Judgment is affirmed, with the costs of this instance against the appellant. So ordered. chanroblesvirtualawlibrarychanroblesvirtuallaw library


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G.R. No. 154878 : March 16, 2007

CAROLYN M. GARCIA, Petitioner,v. RICA MARIE S. THIO,Respondent.

D E C I S I O N

CORONA, J.:

Assailed in this petition for review on certiorari1are the June 19, 2002 decision2and August 20, 2002resolution3of the Court of Appeals (CA) in CA-G.R. CV No. 56577 which set aside the February 28,1997 decision of the Regional Trial Court (RTC) of Makati City, Branch 58.

Sometime in February 1995, respondent Rica Marie S. Thio received from petitioner Carolyn M. Garciaa crossed check4dated February 24, 1995 in the amount of US$100,000 payable to the order of acertain Marilou Santiago.5Thereafter, petitioner received from respondent every month (specifically,on March 24, April 26, June 26 and July 26, all in 1995) the amount of US$3,0006and P76,5007onJuly 26,8August 26, September 26 and October 26, 1995.

In June 1995, respondent received from petitioner another crossed check9dated June 29, 1995 in the

amount ofP500,000, also payable to the order of Marilou Santiago.10

Consequently, petitioner receivedfrom respondent the amount of P20,000 every month on August 5, September 5, October 5 andNovember 5, 1995.11cra According to petitioner, respondent failed to pay the principal amounts of theloans (US$100,000 and P500,000) when they fell due. Thus, on February 22, 1996, petitioner filed acomplaint for sum of money and damages in the RTC of Makati City, Branch 58 against respondent,seeking to collect the sums of US$100,000, with interest thereon at 3% a month from October 26,1995 and P500,000, with interest thereon at 4% a month from November 5, 1995, plus attorney'sfees and actual damages.12cra Petitioner alleged that on February 24, 1995, respondent borrowed fromher the amount of US$100,000 with interest thereon at the rate of 3% per month, which loan wouldmature on October 26, 1995.13The amount of this loan was covered by the first check. On June 29,1995, respondent again borrowed the amount ofP500,000 at an agreed monthly interest of 4%, thematurity date of which was on November 5, 1995.14The amount of this loan was covered by thesecond check. For both loans, no promissory note was executed since petitioner and respondent wereclose friends at the time.15Respondent paid the stipulated monthly interest for both loans but on their

maturity dates, she failed to pay the principal amounts despite repeated demands.16

cra

Respondentdenied that she contracted the two loans with petitioner and countered that it was Marilou Santiago towhom petitioner lent the money. She claimed she was merely asked by petitioner to give the crossedchecks to Santiago.17She issued the checks for P76,000 and P20,000 not as payment of interest butto accommodate petitioner's request that respondent use her own checks instead of Santiago's.18cra Ina decision dated February 28, 1997, the RTC ruled in favor of petitioner.19It found that respondentborrowed from petitioner the amounts of US$100,000 with monthly interest of 3% and P500,000 at amonthly interest of 4%:20cra WHEREFORE, finding preponderance of evidence to sustain the instantcomplaint, judgment is hereby rendered in favor of [petitioner], sentencing [respondent] to pay theformer the amount of:

1. [US$100,000.00] or its peso equivalent with interest thereon at 3% per month from October 26,1995 until fully paid;

2. P500,000.00 with interest thereon at 4% per month from November 5, 1995 until fully paid.

3. P100,000.00 as and for attorney's fees; and

4. P50,000.00 as and for actual damages.

For lack of merit, [respondent's] counterclaim is perforce dismissed.
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With costs against [respondent].

IT IS SO ORDERED.21cra On appeal, the CA reversed the decision of the RTC and ruled that there wasno contract of loan between the parties: cra:nad

A perusal of the record of the case shows that [petitioner] failed to substantiate her claim that

[respondent] indeed borrowed money from her. There is nothing in the record that shows that[respondent] received money from [petitioner]. What is evident is the fact that [respondent]received a MetroBank [crossed] check dated February 24, 1995 in the sum of US$100,000.00, payableto the order of Marilou Santiago and a CityTrust [crossed] check dated June 29, 1995 in the amountof P500,000.00, again payable to the order of Marilou Santiago, both of which were issued by[petitioner]. The checks received by [respondent], being crossed, may not be encashed butonly deposited in the bank by the payee thereof, that is, by Marilou Santiago herself.

It must be noted that crossing a check has the following effects: (a) the check may not be encashedbut only deposited in the bank; (b) the check may be negotiated only once-to one who has an accountwith the bank; (c) and the act of crossing the check serves as warning to the holder that the checkhas been issued for a definite purpose so that he must inquire if he has received the check pursuant tothat purpose, otherwise, he is not a holder in due course.

Consequently, the receipt of the [crossed] check by [respondent] is not the issuance and delivery tothe payee in contemplation of law since the latter is not the person who could take the checks as aholder, i.e., as a payee or indorsee thereof, with intent to transfer title thereto. Neither could she bedeemed as an agent of Marilou Santiago with respect to the checks because she was merelyfacilitating the transactions between the former and [petitioner].

With the foregoing circumstances, it may be fairly inferred that there were really no contracts of loanthat existed between the parties. x x x (emphasis supplied)22cra Hence this petition.23cra As a rule, onlyquestions of law may be raised in a petition for review on certiorariunder Rule 45 of the Rules ofCourt. However, this case falls under one of the exceptions, i.e., when the factual findings of the CA(which held that there wereno contracts of loan between petitioner and respondent) and the RTC(which held that there were contracts of loan) are contradictory.24cra The petition is impressed withmerit.

A loan is a real contract, not consensual, and as such is perfected only upon the delivery of the objectof the contract.25This is evident in Art. 1934 of the Civil Code which provides: cra:nad

An accepted promise to deliver something by way of commodatum or simple loan is binding upon theparties, but the commodatum or simple loan itself shall not be perfected until the delivery ofthe object of the contract. (Emphasis supplied)

Upon delivery of the object of the contract of loan (in this case the money received by the debtorwhen the checks were encashed) the debtor acquires ownership of such money or loan proceeds andis bound to pay the creditor an equal amount.26cra It is undisputed that the checks were delivered torespondent. However, these checks were crossed and payable not to the order of respondent but tothe order of a certain Marilou Santiago. Thus the main question to be answered is: who borrowedmoney from petitioner - respondent or Santiago?cralaw

Petitioner insists that it was upon respondent's instruction that both checks were made payable toSantiago.27She maintains that it was also upon respondent's instruction that both checks weredelivered to her (respondent) so that she could, in turn, deliver the same to Santiago.28Furthermore,she argues that once respondent received the checks, the latter had possession and control of themsuch that she had the choice to either forward them to Santiago (who was already her debtor), toretain them or to return them to petitioner.29cra We agree with petitioner. Delivery is the act by whichthe res or substance thereof is placed within the actual or constructive possession or control ofanother.30Although respondent did not physically receive the proceeds of the checks, these
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the decision until it is fully paid, the amount due shall earn interest at 12%perannum, the interimperiod being deemed equivalent to a forbearance of credit.43cra The award of actual damages in theamount of P50,000 andP100,000 attorney's fees is deleted since the RTC decision did not explain thefactual bases for these damages.

WHEREFORE, the petition is hereby GRANTED and the June 19, 2002 decision and August 20, 2002resolution of the Court of Appeals in CA-G.R. CV No. 56577 are REVERSED and SET ASIDE. TheFebruary 28, 1997 decision of the Regional Trial Court in Civil Case No. 96-266 is AFFIRMED withthe MODIFICATION that respondent is directed to pay petitioner the amounts of US$100,000and P500,000 at 12%perannum interest from November 21, 1995 until the finality of the decision.The total amount due as of the date of finality will earn interest of 12% perannum until fully paid. Theaward of actual damages and attorney's fees is deleted.

SO ORDERED.
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BPI INVESTMENT CORPORATION,, Petitioner, v. HON. COURT OF APPEALS and ALS MANAGEMENT& DEVELOPMENT CORPORATION, Respondents.

D E C I S I O N

QUISUMBING,J.:

This petition for certiorariassails the decision dated February 28, 1997, of the Court of Appeals and itsresolution dated April 21, 1998, in CA-G.R. CV No. 38887. The appellate court affirmed the judgmentof the Regional Trial Court of Pasig City, Branch 151, in (a) Civil Case No. 11831, for foreclosure ofmortgage by petitioner BPI Investment Corporation (BPIIC for brevity) against private respondentsALS Management and Development Corporation and Antonio K. Litonjua,[1consolidated with (b) CivilCase No. 52093, for damages with prayer for the issuance of a writ of preliminary injunction by theprivate respondents against said petitioner.

The trial court had held that private respondents were not in default in the payment of their monthlyamortization, hence, the extrajudicial foreclosure conducted by BPIIC was premature and made in badfaith. It awarded private respondents the amount of P300,000 for moral damages, P50,000 forexemplary damages, and P50,000 for attorneys fees and expenses for litigation. It likewise dismissedthe foreclosure suit for being premature.

The facts are as follows:

Frank Roa obtained a loan at an interest rate of 16 1/4% per annum from Ayala Investment andDevelopment Corporation (AIDC), the predecessor of petitioner BPIIC, for the construction of a houseon his lot in New Alabang Village, Muntinlupa. Said house and lot were mortgaged to AIDC to securethe loan. Sometime in 1980, Roa sold the house and lot to private respondents ALS and AntonioLitonjua for P850,000. They paid P350,000 in cash and assumed the P500,000 balance of Roasindebtedness with AIDC. The latter, however, was not willing to extend the old interest rate to privaterespondents and proposed to grant them a new loan of P500,000 to be applied to Roas debt andsecured by the same property, at an interest rate of 20% per annum and service fee of 1% per annumon the outstanding principal balance payable within ten years in equal monthly amortizationof P9,996.58 and penalty interest at the rate of 21% per annum per day from the date the

amortization became due and payable.

Consequently, in March 1981, private respondents executed a mortgage deed containing the abovestipulations with the provision that payment of the monthly amortization shall commence on May 1,1981.

On August 13, 1982, ALS and Litonjua updated Roas arrearages by paying BPIIC the sumof P190,601.35. This reduced Roas principal balance to P457,204.90 which, in turn, was liquidatedwhen BPIIC applied thereto the proceeds of private respondents loan of P500,000.

On September 13, 1982, BPIIC released to private respondents P7,146.87, purporting to be what wasleft of their loan after full payment of Roas loan.

In June 1984, BPIIC instituted foreclosure proceedings against private respondents on the ground thatthey failed to pay the mortgage indebtedness which from May 1, 1981 to June 30, 1984, amounted toFour Hundred Seventy Five Thousand Five Hundred Eighty Five and 31/100 Pesos (P475,585.31). Anotice of sheriffs sale was published on August 13, 1984.

On February 28, 1985, ALS and Litonjua filed Civil Case No. 52093 against BPIIC. They alleged,among others, that they were not in arrears in their payment, but in fact made an overpayment asof June 30, 1984. They maintained that they should not be made to pay amortization before the actualrelease of the P500,000 loan in August and September 1982. Further, out of theP500,000 loan, onlythe total amount of P464,351.77 was released to private respondents. Hence, applying the effects of
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legal compensation, the balance of P35,648.23 should be applied to the initial monthly amortizationfor the loan.

On August 31, 1988, the trial court rendered its judgment in Civil Case Nos. 11831 and 52093, thus:

WHEREFORE, judgment is hereby rendered in favor of ALS Management and Development Corporation

and Antonio K. Litonjua and against BPI Investment Corporation, holding that the amount of loangranted by BPI to ALS and Litonjua was only in the principal sum of P464,351.77, with interest at 20%plus service charge of 1% per annum, payable on equal monthly and successive amortizations atP9,283.83 for ten (10) years or one hundred twenty (120) months. The amortization scheduleattached as Annex A to the Deed of Mortgage is correspondingly reformed as aforestated.

The Court further finds that ALS and Litonjua suffered compensable damages when BPI caused theirpublication in a newspaper of general circulation as defaulting debtors, and therefore orders BPI topay ALS and Litonjua the following sums:

a) P300,000.00 for and as moral damages;

b) P50,000.00 as and for exemplary damages;

c) P50,000.00 as and for attorneys fees and expenses of litigation.

The foreclosure suit (Civil Case No. 11831) is hereby DISMISSED for being premature.

Costs against BPI.

SO ORDERED.[2

Both parties appealed to the Court of Appeals. However, private respondents appeal was dismissed fornon-payment of docket fees.

On February 28, 1997, the Court of Appeals promulgated its decision, the dispositive portion reads:

WHEREFORE, finding no error in the appealed decision the same is hereby AFFIRMED in toto.

SO ORDERED.[3

In its decision, the Court of Appeals reasoned that a simple loan is perfected only upon the delivery ofthe object of the contract. The contract of loan between BPIIC and ALS & Litonjua was perfected onlyon September 13, 1982, the date when BPIIC released the purported balance of the P500,000 loanafter deducting therefrom the value of Roas indebtedness. Thus, payment of the monthly amortizationshould commence only a month after the said date, as can be inferred from the stipulations in thecontract. This, despite the express agreement of the parties that payment shall commence on May 1,1981. From October 1982 to June 1984, the total amortization due was only P194,960.43. Evidenceshowed that private respondents had an overpayment, because as of June 1984, they already paid a

total amount of P201,791.96. Therefore, there was no basis for BPIIC to extrajudicially foreclose themortgage and cause the publication in newspapers concerning private respondents delinquency in thepayment of their loan. This fact constituted sufficient ground for moral damages in favor of privaterespondents.

The motion for reconsideration filed by petitioner BPIIC was likewise denied, hence this petition, whereBPIIC submits for resolution the following issues:
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I. WHETHER OR NOT A CONTRACT OF LOAN IS A CONSENSUAL CONTRACT IN THE LIGHT OF THERULE LAID DOWN IN BONNEVIE VS. COURT OF APPEALS, 125 SCRA 122.

II. WHETHER OR NOT BPI SHOULD BE HELD LIABLE FOR MORAL AND EXEMPLARY DAMAGES ANDATTORNEYS FEES IN THE FACE OF IRREGULAR PAYMENTS MADE BY ALS AND OPPOSED TO THE RULELAID DOWN IN SOCIAL SECURITY SYSTEM VS. COURT OF APPEALS, 120 SCRA 707.

On the first issue, petitioner contends that the Court of Appeals erred in ruling that because a simpleloan is perfected upon the delivery of the object of the contract, the loan contract in this case wasperfected only on September 13, 1982. Petitioner claims that a contract of loan is a consensualcontract, and a loan contract is perfected at the time the contract of mortgage is executedconformably with our ruling in Bonnevie v. Court of Appeals, 125 SCRA 122. In the present case, theloan contract was perfected on March 31, 1981, the date when the mortgage deed was executed,hence, the amortization and interests on the loan should be computed from said date.

Petitioner also argues that while the documents showed that the loan was released only on August1982, the loan was actually released on March 31, 1981, when BPIIC issued a cancellation ofmortgage of Frank Roas loan. This finds support in the registration on March 31, 1981 of the Deed ofAbsolute Sale executed by Roa in favor of ALS, transferring the title of the property to ALS, and ALSexecuting the Mortgage Deed in favor of BPIIC. Moreover, petitioner claims, the delay in the release of

the loan should be attributed to private respondents. As BPIIC only agreed to extend a P500,000 loan,private respondents were required to reduce Frank Roas loan below said amount. According topetitioner, private respondents were only able to do so in August 1982.

In their comment, private respondents assert that based on Article 1934 of the Civil Code,[4a simpleloan is perfected upon the delivery of the object of the contract, hence a real contract. In this case,even though the loan contract was signed on March 31, 1981, it was perfected only on September 13,1982, when the full loan was released to private respondents. They submit that petitionermisread Bonnevie. To give meaning to Article 1934, according to private respondents, Bonnevie mustbe construed to mean that the contract to extend the loan was perfected on March 31, 1981 but thecontract of loan itself was only perfected upon the delivery of the full loan to private respondentson September 13, 1982.

Private respondents further maintain that even granting, arguendo, that the loan contract wasperfected on March 31, 1981, and their payment did not start a month thereafter, still no default tookplace. According to private respondents, a perfected loan agreement imposes reciprocal obligations,where the obligation or promise of each party is the consideration of the other party. In this case, theconsideration for BPIIC in entering into the loan contract is the promise of private respondents to paythe monthly amortization. For the latter, it is the promise of BPIIC to deliver the money. In reciprocalobligations, neither party incurs in delay if the other does not comply or is not ready to comply in aproper manner with what is incumbent upon him. Therefore, private respondents conclude, they didnot incur in delay when they did not commence paying the monthly amortization on May 1, 1981, as itwas only on September 13, 1982 when petitioner fully complied with its obligation under the loancontract.

We agree with private respondents. A loan contract is not a consensual contract but a real contract. Itis perfected only upon the delivery of the object of the contract.[5Petitioner misapplied Bonnevie. The

contract in Bonnevie declared by this Court as a perfected consensual contract falls under the firstclause of Article 1934, Civil Code. It is an accepted promise to deliver something by way of simpleloan.

In Saura Import and Export Co. Inc. vs. Development Bank of the Philippines, 44 SCRA 445, petitionerapplied for a loan of P500,000 with respondent bank. The latter approved the application through aboard resolution. Thereafter, the corresponding mortgage was executed and registered. However,because of acts attributable to petitioner, the loan was not released. Later, petitioner instituted anaction for damages. We recognized in this case, a perfected consensual contract which under normal


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circumstances could have made the bank liable for not releasing the loan. However, since the faultwas attributable to petitioner therein, the court did not award it damages.

A perfected consensual contract, as shown above, can give rise to an action for damages. However,said contract does not constitute the real contract of loan which requires the delivery of the object ofthe contract for its perfection and which gives rise to obligations only on the part of the borrower.[6

In the present case, the loan contract between BPI, on the one hand, and ALS and Litonjua, on theother, was perfected only onSeptember 13, 1982, the date of the second release of the loan. Followingthe intentions of the parties on the commencement of the monthly amortization, as found by theCourt of Appeals, private respondents obligation to pay commenced only on October 13, 1982, amonth after the perfection of the contract.[7

We also agree with private respondents that a contract of loan involves a reciprocal obligation,wherein the obligation or promise of each party is the consideration for that of the other.[8As averredby private respondents, the promise of BPIIC to extend and deliver the loan is upon the considerationthat ALS and Litonjua shall pay the monthly amortization commencing onMay 1, 1981, one monthafter the supposed release of the loan. It is a basic principle in reciprocal obligations that neither partyincurs in delay, if the other does not comply or is not ready to comply in a proper manner with what isincumbent upon him.[9Only when a party has performed his part of the contract can he demand that

the other party also fulfills his own obligation and if the latter fails, default sets in. Consequently,petitioner could only demand for the payment of the monthly amortization afterSeptember 13,1982 for it was only then when it complied with its obligation under the loan contract. Therefore, incomputing the amount due as of the date when BPIIC extrajudicially caused the foreclosure of themortgage, the starting date is October 13, 1982 and not May 1, 1981.

Other points raised by petitioner in connection with the first issue, such as the date of actual releaseof the loan and whether private respondents were the cause of the delay in the release of the loan,are factual. Since petitioner has not shown that the instant case is one of the exceptions to the basicrule that only questions of law can be raised in a petition for review under Rule 45 of the Rules ofCourt,[10factual matters need not tarry us now. On these points we are bound by the findings of theappellate and trial courts.

On the second issue, petitioner claims that it should not be held liable for moral and exemplarydamages for it did not act maliciously when it initiated the foreclosure proceedings. It merelyexercised its right under the mortgage contract because private respondents were irregular in theirmonthly amortization. It invoked our ruling in Social Security System vs. Court of Appeals, 120 SCRA707, where we said:

Nor can the SSS be held liable for moral and temperate damages. As concluded by the Court ofAppeals the negligence of the appellant is not so gross as to warrant moral and temperate damages,except that, said Court reduced those damages by only P5,000.00 instead of eliminating them. Neithercan we agree with the findings of both the Trial Court and respondent Court that the SSS had actedmaliciously or in bad faith. The SSS was of the belief that it was acting in the legitimate exercise of itsright under the mortgage contract in the face of irregular payments made by private respondents andplaced reliance on the automatic acceleration clause in the contract. The filing alone of the foreclosureapplication should not be a ground for an award of moral damages in the same way that a clearly

unfounded civil action is not among the grounds for moral damages.

Private respondents counter that BPIIC was guilty of bad faith and should be liable for said damagesbecause it insisted on the payment of amortization on the loan even before it was released. Further, itdid not make the corresponding deduction in the monthly amortization to conform to the actualamount of loan released, and it immediately initiated foreclosure proceedings when privaterespondents failed to make timely payment.
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But as admitted by private respondents themselves, they were irregular in their payment of monthlyamortization. Conformably with our ruling in SSS, we can not properly declare BPIIC in bad faith.Consequently, we should rule out the award of moral and exemplary damages.[11

However, in our view, BPIIC was negligent in relying merely on the entries found in the deed ofmortgage, without checking and correspondingly adjusting its records on the amount actually releasedto private respondents and the date when it was released. Such negligence resulted in damage toprivate respondents, for which an award of nominal damages should be given in recognition of theirrights which were violated by BPIIC.[12For this purpose, the amount of P25,000 is sufficient.

Lastly, as in SSS where we awarded attorneys fees because private respondents were compelled tolitigate, we sustain the award of P50,000 in favor of private respondents as attorneys fees.

WHEREFORE, the decision dated February 28, 1997, of the Court of Appeals and its resolutiondated April 21, 1998, are AFFIRMED WITH MODIFICATION as to the award of damages. The award ofmoral and exemplary damages in favor of private respondents is DELETED, but the award to them ofattorneys fees in the amount of P50,000 is UPHELD. Additionally, petitioner is ORDERED to pay privaterespondents P25,000 as nominal damages. Costs against petitioner.


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G.R. Nos. 173654-765 : August 28, 2008

PEOPLE OF THE PHILIPPINES,Petitioner,v.TERESITA PUIG and ROMEOPORRAS,Respondents.

D E D E C I S I O N

CHICO-NAZARIO,J.:

This is a Petition for Review under Rule 45 of the Revised Rules of Court with petitioner People of thePhilippines, represented by the Office of the Solicitor General, praying for the reversal of the Ordersdated 30 January 2006 and 9 June 2006 of the Regional Trial Court (RTC) of the 6 th Judicial Region,Branch 68, Dumangas, Iloilo, dismissing the 112 cases of Qualified Theft filed against respondentsTeresita Puig and Romeo Porras, and denying petitioner's Motion for Reconsideration, in CriminalCases No. 05-3054 to 05-3165.

The following are the factual antecedents: cra:nad

On 7 November 2005, the Iloilo Provincial Prosecutor's Office filed before Branch 68 of the RTC in

Dumangas, Iloilo, 112 cases of Qualified Theft against respondents Teresita Puig (Puig) and RomeoPorras (Porras) who were the Cashier and Bookkeeper, respectively, of private complainant Rural Bankof Pototan, Inc. The cases were docketed as Criminal Cases No. 05-3054 to 05-3165.

The allegations in the Informations1filed before the RTC were uniform and pro-forma, except for theamounts, date and time of commission, to wit:

INFORMATION

That on or about the 1st day of August, 2002, in the Municipality of Pototan, Province of Iloilo,Philippines, and within the jurisdiction of this Honorable Court, above-named [respondents],conspiring, confederating, and helping one another, with grave abuse of confidence, beingthe CashierandBookkeeperof the Rural Bank of Pototan, Inc., Pototan, Iloilo, without the

knowledge and/or consent of the management of the Bank and with intent of gain, did then and therewillfully, unlawfully and feloniously take, steal and carry away the sum of FIFTEEN THOUSAND PESOS(P15,000.00), Philippine Currency, to the damage and prejudice of the said bank in the aforesaidamount.

After perusing the Informations in these cases, the trial court did not find the existence of probablecause that would have necessitated the issuance of a warrant of arrest based on the followinggrounds:

(1) the element of 'taking without the consent of the owners' was missing on the ground that it isthe depositors-clients, and not the Bank, which filed the complaint in these cases, who are the ownersof the money allegedly taken by respondents and hence, are the real parties-in-interest; and

(2) the Informations are bereft of the phrase alleging "dependence, guardianship or vigilancebetween the respondents and the offended party that would have created a high degree ofconfidence between them which the respondents could have abused."

It added that allowing the 112 cases for Qualified Theft filed against the respondents to push throughwould be violative of the right of the respondents under Section 14(2), Article III of the 1987Constitution which states that in all criminal prosecutions, the accused shall enjoy the right to beinformed of the nature and cause of the accusation against him. Following Section 6, Rule 112 of theRevised Rules of Criminal Procedure, the RTC dismissed the cases on 30 January 2006 and refused toissue a warrant of arrest against Puig and Porras.
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A Motion for Reconsideration2was filed on 17 April 2006, by the petitioner.

On 9 June 2006, an Order3denying petitioner's Motion for Reconsideration was issued by the RTC,finding as follows:

Accordingly, the prosecution's Motion for Reconsideration should be, as it hereby, DENIED. The Order

dated January 30, 2006 STANDS in all respects.

Petitioner went directly to this Court via Petition for Review on Certiorariunder Rule 45, raising thesole legal issue of:

WHETHER OR NOT THE 112 INFORMATIONS FOR QUALIFIED THEFT SUFFICIENTLY ALLEGE THEELEMENT OF TAKING WITHOUT THE CONSENT OF THE OWNER, AND THE QUALIFYINGCIRCUMSTANCE OF GRAVE ABUSE OF CONFIDENCE.

Petitioner prays that judgment be rendered annulling and setting aside the Orders dated 30 January2006 and 9 June 2006 issued by the trial court, and that it be directed to proceed with Criminal CasesNo. 05-3054 to 05-3165.

Petitioner explains that under Article 1980 of the New Civil Code, "fixed, savings, and current depositsof money in banks and similar institutions shall be governed by the provisions concerning simpleloans." Corollary thereto, Article 1953 of the same Code provides that "a person who receives a loanof money or any other fungible thing acquires the ownership thereof, and is bound to pay to thecreditor an equal amount of the same kind and quality." Thus, it posits that the depositors who placetheir money with the bank are considered creditors of the bank. The bank acquires ownership of themoney deposited by its clients, making the money taken by respondents as belonging to the bank.

Petitioner also insists that the Informations sufficiently allege all the elements of the crime of qualifiedtheft, citing that a perusal of the Informations will show that they specifically allege that therespondents were the Cashier and Bookkeeper of the Rural Bank of Pototan, Inc., respectively, andthat they took various amounts of money with grave abuse of confidence, and without the knowledgeand consent of the bank, to the damage and prejudice of the bank.

Parenthetically, respondents raise procedural issues. They challenge the petition on the ground that aPetition for Review on Certiorari via Rule 45 is the wrong mode of appeal because a finding of probablecause for the issuance of a warrant of arrest presupposes evaluation of facts and circumstances, whichis not proper under said Rule.

Respondents further claim that the Department of Justice (DOJ), through the Secretary of Justice, isthe principal party to file a Petition for Review on Certiorari, considering that the incident wasindorsed by the DOJ.

We find merit in the petition.

The dismissal by the RTC of the criminal cases was allegedly due to insufficiency of the Informationsand, therefore, because of this defect, there is no basis for the existence of probable cause which will

justify the issuance of the warrant of arrest. Petitioner assails the dismissal contending that theInformations for Qualified Theft sufficiently state facts which constitute (a) the qualifying circumstanceofgrave abuse of confidence; and (b) the element of taking, with intent to gain and without theconsent of the owner, which is the Bank.

In determining the existence of probable cause to issue a warrant of arrest, the RTC judge found theallegations in the Information inadequate. He ruled that the Information failed to state factsconstituting the qualifying circumstance ofgrave abuse of confidence and the element oftaking
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without the consent of the owner, since the owner of the money is not the Bank, but the depositorstherein. He also cites People v. Koc Song,4in which this Court held:

There must be allegation in the information and proof of a relation, by reason of dependence,guardianship or vigilance, between the respondents and the offended party that has created a highdegree of confidence between them, which the respondents abused.

At this point, it needs stressing that the RTC Judge based his conclusion that there was no probablecause simply on the insufficiency of the allegations in the Informations concerning the factsconstitutive of the elements of the offense charged. This, therefore, makes the issue of sufficiency ofthe allegations in the Informations the focal point of discussion.

Qualified Theft, as defined and punished under Article 310 of the Revised Penal Code, is committed asfollows, viz:

ART. 310. Qualified Theft. - The crime of theft shall be punished by the penalties next higher by twodegrees than those respectively specified in the next preceding article, if committed by a domesticservant, or with grave abuse of confidence, or if the property stolen is motor vehicle, mail matter orlarge cattle or consists of coconuts taken from the premises of a plantation, fish taken from a fishpondor fishery or if property is taken on the occasion of fire, earthquake, typhoon, volcanic eruption, or

any other calamity, vehicular accident or civil disturbance. (Emphasis supplied.)

Theft, as defined in Article 308 of the Revised Penal Code, requires the physical taking of another'sproperty without violence or intimidation against persons or force upon things. The elements of thecrime under this Article are:

1. Intent to gain;

2. Unlawful taking;

3. Personal property belonging to another;

4. Absence of violence or intimidation against persons or force upon things.

To fall under the crime of Qualified Theft, the following elements must concur:

1. Taking of personal property;

2. That the said property belongs to another;

3. That the said taking be done with intent to gain;

4. That it be done without the owner's consent;

5. That it be accomplished without the use of violence or intimidation against persons, nor of forceupon things;

6. That it be done with grave abuse of confidence.

On the sufficiency of the Information, Section 6, Rule 110 of the Rules of Court requires, inter alia,that the information must state the acts or omissions complained of as constitutive of the offense.

On the manner of how the Information should be worded, Section 9, Rule 110 of the Rules of Court, isenlightening:
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Section 9. Cause of the accusation. The acts or omissions complained of as constituting the offenseand the qualifying and aggravating circumstances must be stated in ordinary and concise languageand not necessarily in the language used in the statute but in terms sufficient to enable a person ofcommon understanding to know what offense is being charged as well as its qualifying andaggravating circumstances and for the court to pronounce judgment.

It is evident that the Information need not use the exact language of the statute in alleging the acts oromissions complained of as constituting the offense. The test is whether it enables a person ofcommon understanding to know the charge against him, and the court to render judgment properly.5cra

The portion of the Information relevant to this discussion reads:

A]bove-named [respondents], conspiring, confederating, and helping one another, with grave abuse of confidence, being the Cashier and

Bookkeeperof the Rural Bank of Pototan, Inc., Pototan, Iloilo, without the knowledge and/or consent of the management of the Bank x x x.

It is beyond doubt that tellers, Cashiers, Bookkeepers and other employees of a Bank who come intopossession of the monies deposited therein enjoy the confidence reposed in them by their employer.Banks, on the other hand, where monies are deposited, are considered the owners thereof. This isvery clear not only from the express provisions of the law, but from established jurisprudence. Therelationship between banks and depositors has been held to be that of creditor and debtor. Articles

1953 and 1980 of the New Civil Code, as appropriately pointed out by petitioner, provide as follows:

Article 1953. A person who receives a loan of money or any other fungible thing acquires theownership thereof, and is bound to pay to the creditor an equal amount of the same kind and quality.

Article 1980. Fixed, savings, and current deposits of money in banks and similar institutions shall begoverned by the provisions concerning loan.

In a long line of cases involving Qualified Theft, this Court has firmly established the nature ofpossession by the Bank of the money deposits therein, and the duties being performed by itsemployees who have custody of the money or have come into possession of it. The Court hasconsistently considered the allegations in the Information that such employees acted with grave abuseof confidence, to the damage and prejudice of the Bank, without particularly referring to it as owner of

the money deposits, as sufficient to make out a case of Qualified Theft. For a graphic illustration, wecite Roque v. People,6where the accused teller was convicted for Qualified Theft based on thisInformation:

That on or about the 16th day of November, 1989, in the municipality of Floridablanca, province ofPampanga, Philippines and within the jurisdiction of his Honorable Court, the above-named accusedASUNCION GALANG ROQUE, being then employed as tellerof the Basa Air Base Savings and LoanAssociation Inc. (BABSLA) with office address at Basa Air Base, Floridablanca, Pampanga, and as suchwas authorized and reposed with the responsibility to receive and collect capital contributions from itsmember/contributors of said corporation, and having collected and received in her capacity as teller ofthe BABSLA the sum of TEN THOUSAND PESOS (P10,000.00), said accused, with intent of gain, with

grave abuse of confidence and without the knowledge and consent of said corporation, didthen and there willfully, unlawfully and feloniously take, steal and carry away the amountof P10,000.00, Philippine currency, by making it appear that a certain depositor by the name ofAntonio Salazar withdrew from his Savings Account No. 1359, when in truth and in fact said AntonioSalazar did not withdr[a]w the said amount of P10,000.00 to the damage and prejudice of BABSLA inthe total amount of P10,000.00, Philippine currency.

In convicting the therein appellant, the Court held that:

[S]ince the teller occupies a position of confidence, and the bank places money in the teller'spossession due to the confidence reposed on the teller, the felony of qualified theft would becommitted.7
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Also in People v. Sison,8the Branch Operations Officer was convicted of the crime of Qualified Theftbased on the Information as herein cited:

That in or about and during the period compressed between January 24, 1992 and February 13, 1992,both dates inclusive, in the City of Manila, Philippines, the said accused did then and there wilfully,unlawfully and feloniously, with intent of gain and without the knowledge and consent of the ownerthereof, take, steal and carry away the following, to wit: cra:nad

Cash money amounting to P6,000,000.00 in different denominations belonging to the PHILIPPINECOMMERCIAL INTERNATIONAL BANK (PCIBank for brevity), Luneta Branch, Manila represented by itsBranch Manager, HELEN U. FARGAS, to the damage and prejudice of the said owner in the aforesaidamount of P6,000,000.00, Philippine Currency.

That in the commission of the said offense, herein accused acted with grave abuse of confidence andunfaithfulness, he being the Branch Operation Officerof the said complainant and as such he had freeaccess to the place where the said amount of money was kept.

The judgment of conviction elaborated thus:

The crime perpetuated by appellant against his employer, the Philippine Commercial and IndustrialBank (PCIB), is Qualified Theft. Appellant could not have committed the crime had he not been holdingthe position of Luneta Branch Operation Officer which gave him not only sole access to the bank vaultxxx. The management of the PCIB reposed its trust and confidence in the appellant as its LunetaBranch Operation Officer, and it was this trust and confidence which he exploited to enrich himself tothe damage and prejudice of PCIB x x x.9

From another end, People v. Locson,10in addition to People v. Sison, described the nature ofpossession by the Bank. The money in this case was in the possession of the defendant as receivingteller of the bank, and the possession of the defendant was the possession of the Bank. The Court heldtherein that when the defendant, with grave abuse of confidence, removed the money andappropriated it to his own use without the consent of the Bank, there was taking as contemplated inthe crime of Qualified Theft.11cra

Conspicuously, in all of the foregoing cases, where the Informations merely alleged the positions ofthe respondents; that the crime was committed with grave abuse of confidence, with intent to gainand without the knowledge and consent of the Bank, without necessarily stating the phrase beingassiduously insisted upon by respondents, "of a relation by reason of dependence, guardianshipor vigilance, between the respondents and the offended party that has created a highdegree of confidence between them, which respondents abused,"12and without employing theword "owner" in lieu of the "Bank" were considered to have satisfied the test of sufficiency ofallegations.

As regards the respondents who were employed as Cashier and Bookkeeper of the Bank in this case,there is even no reason to quibble on the allegation in the Informations that they acted with graveabuse of confidence. In fact, the Information which alleged grave abuse of confidence by accusedherein is even more precise, as this is exactly the requirement of the law in qualifying the crime ofTheft.

In summary, the Bank acquires ownership of the money deposited by its clients; and the employees ofthe Bank, who are entrusted with the possession of money of the Bank due to the confidence reposedin them, occupy positions of confidence. The Informations, therefore, sufficiently allege all theessential elements constituting the crime of Qualified Theft.

On the theory of the defense that the DOJ is the principal party who may file the instant petition, theruling in Mobilia Products, Inc. v. Hajime Umezawa13is instructive. The Court thus enunciated:
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In a criminal case in which the offended party is the State, the interest of the private complainant orthe offended party is limited to the civil liability arising therefrom. Hence, if a criminal case isdismissed by the trial court or if there is an acquittal, a reconsideration of the order of dismissal oracquittal may be undertaken, whenever legally feasible, insofar as the criminal aspect thereof isconcerned and may be made only by the public prosecutor; or in the case of an appeal, by the Stateonly, through the OSG. x x x.

On the alleged wrong mode of appeal by petitioner, suffice it to state that the rule is well-settled thatin appeals bycertiorariunder Rule 45 of the Rules of Court, only errors of law may be raised,14andherein petitioner certainly raised a question of law.

As an aside, even if we go beyond the allegations of the Informations in these cases, a closer look atthe records of the preliminary investigation conducted will show that, indeed, probable cause exists forthe indictment of hereinRespondents. Pursuant to Section 6, Rule 112 of the Rules of Court, the judgeshall issue a warrant of arrest only upon a finding of probable cause after personally evaluating theresolution of the prosecutor and its supporting evidence.Soliven v. Makasiar,15as reiteratedinAllado v. Driokno,16explained that probable cause for the issuance of a warrant of arrest is theexistence of such facts and circumstances that would lead a reasonably discreet and prudent person tobelieve that an offense has been committed by the person sought to be arrested.17The recordsreasonably indicate that the respondents may have, indeed, committed the offense charged.

Before closing, let it be stated that while it is truly imperative upon the fiscal or the judge, as the casemay be, to relieve the respondents from the pain of going through a trial once it is ascertained that noprobable cause exists to form a sufficient belief as to the guilt of the respondents, conversely, it is alsoequally imperative upon the judge to proceed with the case upon a showing that there is aprimafacie case against the Respondents.

WHEREFORE, premises considered, the Petition for Review on Certiorariis hereby GRANTED. TheOrders dated 30 January 2006 and 9 June 2006 of the RTC dismissing Criminal Cases No. 05-3054 to05-3165are REVERSED and SET ASIDE. Let the corresponding Warrants of Arrest issue againstherein respondents TERESITA PUIG and ROMEO PORRAS. The RTC Judge of Branch 68, in Dumangas,Iloilo, is directed to proceed with the trial of Criminal Cases No. 05-3054 to 05-3165, inclusive, withreasonable dispatch. No pronouncement as to costs.

SO ORDERED
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BPI vs Court of Appeals, 538 SCRA 184, GR

No. 123498, November 23,2007Posted byPius MoradosonJanuary 12, 2012

(Negotiable Instruments Money as a medium of exchange)

Facts: Franco opened 3 accounts with BPI with the total amount of P2,000,000.00. The said amount used to open

these accounts is traceable to a check issued by Tevesteco. The funding for the P2,000,000.00 check was part of the

P80,000,000.00 debited by BPI from FMICs account (with a deposit of P100,000,000.00) and credited to Tevestecos

account pursuant to an Authority to Debit which was allegedly forged as claimed by FMIC.

Tevesteco effected several withdrawals already from its account amounting to P37,455,410.54 including the

P2,000,000.00 paid to Franco.

Franco issued two checks which were dishonoured upon presentment for payment due to garnishment of his account

filed by BPI.

BPI claimed that it had a better right to the amounts which consisted of part of the money allegedly fraudulently

withdrawn from it by Tevesteco and ending up in Francos account. BPI urges us that the legal consequence of

FMICs forgery claim is that the money transferred by BPI to Tevesteco is its own, and considering that it was able to

recover possession of the same when the money was redeposited by Franco, it had the right to set up its ownership

thereon and freeze Francos accounts.

Issue: WON the bank has a better right to the deposits in Francos account.

Held: No. Significantly, while Article 559 permits an owner who has lost or has been unlawfully deprived of a movable

to recover the exact same thing from the current possessor, BPI simply claims ownership of the equivalent amount of

money, i.e.,the value thereof, which it had mistakenly debited from FMICs account and credited to Tevestecos, and

subsequently traced to Francos account.Money bears no earmarks of peculiar ownership, and this characteristic is all the more manifest in the instant case

which involves money in a banking transaction gone awry. Its primary function is to pass from hand to hand as a

medium of exchange, without other evidence of its title. Money, which had been passed through various transactions

in the general course of banking business, even if of traceable origin, is no exception.
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G.R. No. 155223 : April 4, 2007

BOBIE ROSE V. FRIAS, represented by her Attorney-in-fact, MARIE F.FUJITA, Petitioner,v. FLORA SAN DIEGO-SISON,Respondent.

D E C I S I O N

AUSTRIA-MARTINEZ,J.:

Before us is a Petition for Review on Certiorarifiled by Bobie Rose V. Frias represented by herAttorney-in-fact, Marie Regine F. Fujita (petitioner) seeking to annul the Decision1dated June 18,2002 and the Resolution2dated September 11, 2002 of the Court of Appeals (CA) in CA-G.R. CV No.52839.

Petitioner is the owner of a house and lot located at No. 589 Batangas East, Ayala Alabang,Muntinlupa, Metro Manila, which she acquired from Island Masters Realty and DevelopmentCorporation (IMRDC) by virtue of a Deed of Sale dated Nov. 16, 1990.3The property is covered byTCT No. 168173 of the Register of Deeds of Makati in the name of IMRDC.4cra On December 7, 1990,petitioner, as the FIRST PARTY, and Dra. Flora San Diego-Sison (respondent), as the SECOND PARTY,

entered into a Memorandum of Agreement

5

over the property with the following terms:cra:nad

NOW, THEREFORE, for and in consideration of the sum of THREE MILLION PESOS (P3,000,000.00)receipt of which is hereby acknowledged by the FIRST PARTY from the SECOND PARTY, the partieshave agreed as follows:

1. That the SECOND PARTY has a period of Six (6) months from the date of the execution of thiscontract within which to notify the FIRST PARTY of her intention to purchase the aforementionedparcel of land together within (sic) the improvements thereon at the price of SIX MILLION FOURHUNDRED THOUSAND PESOS (P6,400,000.00). Upon notice to the FIRST PARTY of the SECONDPARTY's intention to purchase the same, the latter has a period of another six months within which topay the remaining balance of P3.4 million.

2. That prior to the six months period given to the SECOND PARTY within which to decide whether ornot to purchase the above-mentioned property, the FIRST PARTY may still offer the said property toother persons who may be interested to buy the same provided that the amount of P3,000,000.00given to the FIRST PARTY BY THE SECOND PARTY shall be paid to the latter including interest basedon prevailing compounded bank interest plus the amount of the sale in excess of P7,000,000.00should the property be sold at a price more than P7 million.

3. That in case the FIRST PARTY has no other buyer within the first six months from the execution ofthis contract, no interest shall be charged by the SECOND PARTY on the P3 million however, in theevent that on the sixth month the SECOND PARTY would decide not to purchase the aforementionedproperty, the FIRST PARTY has a period of another six months within which to pay the sum of P3million pesos provided that the said amount shall earn compounded bank interest for the last sixmonths only. Under this circumstance, the amount of P3 million given by the SECOND PARTY shall betreated as [a] loan and the property shall be considered as the security for the mortgage which can be

enforced in accordance with law.

x x x x.6

Petitioner received from respondent two million pesos in cash and one million pesos in a post-datedcheck dated February 28, 1990, instead of 1991, which rendered said check stale.7Petitioner thengave respondent TCT No. 168173 in the name of IMRDC and the Deed of Absolute Sale over theproperty between petitioner and IMRDC.
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