RECTO LAW argues that even if the act is valid, the court should

MACONDRAY & CO. V. EUSTAQUIO, G.R. NO. have ordered the defendant to pay at least the interest,
43683 attorney's fees, and costs.

FACTS: There are three remedies available to a vendor who

sells personal property on an installment plan:
The plaintiff had sold a De Soto Sedan to the
(1) He has the option to demand the fulfillment of the
defendant for 595 pesos. On May 22, 1934, the
obligation.
defendant signed a promissory note agreeing to pay
(2) If the buyer has not paid two or more installments,
for the car in 12 monthly installments at 12% annual
the seller can terminate the agreement.
interest. He also agreed that if he missed a payment,
(3) If the buyer does not make payment of two or more
the remaining balance would become due
installments, the seller has the right to foreclose on the
immediately, along with a 20% fee on the principal
mortgage if it was given on the property.
for attorney's fees, collection expenses, and costs. To
secure this agreement, the defendant mortgaged the The law states that if the vendor forecloses the
car to the plaintiff under the same conditions. The mortgage, they cannot take further action against the
mortgage was registered on June 11, 1934, in Rizal buyer for any unpaid balance, including interest,
Province. On June 22, the defendant made a payment attorney's fees, and costs. This means that once the
of 43.75 pesos on the first installment but did not mortgaged item is sold at auction, the vendor cannot
make any further payments. demand any remaining debt from the buyer.

Following the terms of the mortgage, the plaintiff Therefore, the plaintiff's claim is invalid.
asked the sheriff to take possession of the car, but the
defendant refused. The plaintiff then sued for
recovery of the said car and successfully gained
possession of the car by buying at the public auction.
The car was sold at a public auction to the plaintiff for
250 pesos, and the plaintiff incurred legal expenses of
10.68 pesos. According to the plaintiff's calculations,
the defendant still owed 342.20 pesos, plus 12%
interest from November 20, 1934, 110.25 pesos in
attorney's fees, and court costs.

ISSUE:

Is the plaintiff’s complaint to use Act No. 4122 to

dismiss the case valid?

RULINGS:

Act No. 4122 is considered invalid due to its second

argument, as it confiscates property without proper
legal process, violates equal protection rights, and
impacts contractual obligations. The plaintiff also
DOUBLE SALE CA RULINGS:
ROMAN CATHOLIC CHURCH V. PANTE, G.R.
NO. 174118 Pante appealed to the Court of Appeals (CA), which
reversed the RTC's decision on May 18, 2006. The CA
FACTS: viewed the contract between Pante and the Church as a
sale, not just an agreement to sell, because the Church
The Archbishop of Caceres, representing the Roman didn't explicitly reserve ownership until full payment.
Catholic Church, possessed a 32-square meter They also stated that Pante fulfilled the contract's
property in Barangay Dinaga, Canaman, Camarines conditions by paying the balance within the agreed
Sur. In 1992, the Church made an agreement with three-year period. Thus, they ruled in favor of Pante.
Regino Pante to sell the lot, assuming that Pante was
the rightful resident. The agreement specified a ISSUE:
buying cost of ₱11,200.00, requiring an initial Whether fraud and misrepresentation are sufficient
payment of ₱1,120.00 and the rest of the amount to be grounds to annul the sale.
settled within 3 years.
COURT'S RULING:
Later, in 1994, the Church sold a bigger parcel of land
to Nestor and Fidela Rubi, which contained the part The Church alleged it was deceived into selling the lot
they had previously sold to Pante. The Rubi spouses to Pante, who misrepresented himself as an occupant,
caused a disagreement by erecting a fence that contrary to their residency policy. However, the trial
blocked Pante's entrance. Pante filed a lawsuit revealed the Church's residency policy was not strictly
alleging that the sale to the Rubi spouses should be enforced.
voided as it contained the portion he had purchased.
Moreover, the Church consulted occupants before
The Church claimed that Pante had deceived them by selling lots, and the parish priest knew Pante wasn't a
acting like a resident when he was actually just resident but still endorsed the sale. Thus, Pante likely
passing through the land. They claimed that they didn't intentionally mislead the Church, especially
typically only sold land to those who were currently given the Church's awareness.
living on it, therefore the Rubi spouses should be seen
as the legitimate purchasers as they had resided on the As there's no evidence of misled consent, the contract
land. between the Church and Pante stands. Also, Pante's
payment delay doesn't void the contract, lacking a
RTC RULINGS: provision for ownership retention until full payment.
On July 30, 1999, the Church was granted victory by
the Regional Trial Court (RTC). They discovered that Pante asserted he had used the lot as a passage with
Pante had falsely claimed to be a resident of the land Church permission since 1963, even after buying it in
he purchased from the Church. As the Church only 1992 until the Rubi spouses fenced it in 1994. This
sold to current residents, they canceled the agreement ongoing use supports Pante's ownership prior to the
with Pante. Rubis' claim.

Moreover, the RTC pointed out that Pante did not Furthermore, the sale to Pante was through a notarized
fully settle the purchase price until September 1995, contract, a public document, reinforcing Pante's
which was three years later than the original ownership.
agreement (3 years delay). They considered this delay
significant, ruling that if Pante had paid on time, the Therefore, The Court rejects the petition.
Church wouldn't have sold the land to the Rubi
spouses. Since Pante admitted that the Rubi spouses
had occupied the land, the RTC upheld the sale to
them.
LAW ON SECRECY OF BANK DEPOSITS
JOSEPH VICTOR G. EJERCITO V. Yes. The law's protection is not absolute, as Section 2
SANDIGANBAYAN, G.R. NO. 157294-95 outlines specific exceptions. In this case, two
exceptions are relevant:
FACTS:
(1) a competent court can order the examination of
The Special Prosecution Panel submitted a request to bank accounts in cases of bribery or dereliction of
the Sandiganbayan for the issuance of a Subpoena duty by public officials, and
Duces Tecum (order that requires a witness to bring
documents, books or other items under his, her or (2) if the money deposited or invested is the
their control, that he she or they is bound by law to subject of the litigation. Cases of unexplained
produce into evidence.). This subpoena aimed to wealth are similar to bribery or dereliction of duty
direct the President of Export and Industry Bank and therefore should not be excluded from
(EIB, formerly Urban Bank) or an authorized scrutiny. The principle is that public office is a
representative to produce documents related to Joseph public trust, meaning public officials’ relevant
Victor G. Ejercito's Trust Account, Savings Account, activities are subject to public scrutiny. Since
and checking account. plunder is similar to bribery, the exception for
bribery in R.A. 1405 also applies to plunder.
In his Motion to Quash (reject or void) , Ejercito
argued that his bank accounts were protected under Regarding the petitioner’s argument that the money in
R.A. No. 1405, The Secrecy of Bank Deposits Law his bank accounts is not the "subject matter of the
and did not fall under any of the law’s exceptions. He litigation," the interpretation of this phrase in R.A.
further asserted that the detailed identification of 1405 is provided in Union Bank of the Philippines v.
documents in the subpoenas, including specific dates Court of Appeals.
and amounts, must have resulted from an earlier
illegal disclosure by EIB and the Philippine Deposit
Insurance Corporation (PDIC), the receiver of the
former Urban Bank. Ejercito concluded that because
the disclosure was illegal, the prosecution should not
be allowed to use the information.

Before the Sandiganbayan resolved the Motion to

Quash, the prosecution filed another request for a
Subpoena Duces Tecum/Ad Testificandum on
January 31, 2003. This request again directed the
President of EIB to produce the same documents
during hearings scheduled for February 3 and 5, 2003,
with the exception of a Bank of Commerce Manager's
Check for ₱2,000,000, which was replaced with a
request for a Manager's Check for ₱200,000,000.

The Sandiganbayan issued the requested subpoenas

on January 31, 2003.

ISSUE:

Whether Ejercito's Trust Account and Savings

Account are exempt from the protections of R.A.
1405 (The Secrecy of Bank Deposits Law).

RULINGS:
INTELLECTUAL PROPERTY LAW RULINGS:
REPUBLIC GAS CORPORATION V. PETRON
CORPORATION, G.R. NO. 194062 The Department of Justice affirmed the dismissal,
stating that refilling empty cylinders is an acceptable
FACTS: business practice and not a crime. They emphasized
that the complainants did not supply the cylinder
Petron Corporation and Pilipinas Shell Petroleum contents as acknowledged by end-users. Moreover,
Corporation are leading LPG suppliers in the the Department emphasized the importance of having
Philippines. Petron owns GASUL and GASUL clear and convincing evidence in order to hold
Cylinders trademarks, granting exclusive authority individuals responsible for purported actions.
over GASUL LPG products. Similarly, Shell holds
SHELLANE and SHELL trademarks, with sole Afterwards, the petitioners filed a certiorari petition
rights to authorize resellers for SHELLANE LPG. with the Court of Appeals (CA), which was approved,
reversing the ruling of the Department of Justice. The
Directors and officers of Republic Gas Corporation CA rejected the petitioners' request for a
(REGASCO), authorized to refill and sell LPG, reconsideration.
faced accusations of unauthorized activities. Dealer
associations reported illegal refilling and selling of The petitioners were correctly observed by the
LPG cylinders bearing Petron and Shell trademarks. respondents to have been selling LPG cylinders using
their registered trademarks, possibly deceiving
Genesis Adarlo lodged a complaint with the customers into thinking the items were made by a
National Bureau of Investigation (NBI) on February different company. The CA also accepted that
5, 2004. An investigation by Senior Agent Marvin customers could mistakenly believe that the LPGs in
E. De Jemil discovered that LPG cylinders were containers labeled "GASUL" and "SHELLANE"
being refilled without authorization at REGASCO's were the petitioners' goods, even though they were
Malabon facility. not.

On February 19, 2004, during a test-buy operation, To conclude, there is enough evidence to take legal
there was observed an unauthorized refilling of action against the petitioners for violating trademarks
SHELLANE and GASUL-branded cylinders at and engaging in unfair competition. Despite Republic
REGASCO's facility. Therefore, on March 5, 2004, Gas Corporation being distinct from its officers and
De Jemil applied for search warrants due to directors, they can be held individually responsible if
REGASCO's breach of Batas Pambansa Blg. 33 involved. The Court of Appeals correctly noted that
(B.P. 33), with modifications by PD 1865. as individuals controlling the corporation, they likely
knew or should have known about the unauthorized
Judge Antonio M. Eugenio approved the search refilling of LPG cylinders bearing the respondents'
warrants following an examination of the evidence. marks, potentially constituting trademark
The warrants were carried out, leading to the infringement and unfair competition.
confiscation of different cylinders. Armando C.
Therefore, the petition is denied, and the Court of
Velasco, the Assistant City Prosecutor, suggested
Appeals' decision is upheld.
dropping the case against REGASCO even though
there was an NBI complaint about violating RA No.
8293, citing lack of evidence of their involvement
in trademark infringement or deceptive actions.

ISSUE:

Whether there's enough evidence to hold petitioners

liable for the crimes of trademark infringement and
unfair competition.
RECTO LAW RULING:
PCI LEASING AND FINANCE V. GIRAFFE-X The lease agreement between PCI and GIRAFFE is in
CREATIVE IMAGING, G.R. NO. 142618 reality a lease with an option to purchase preventing
PCI from pursuing further claims under the Recto
Law.
FACTS: This has been made manifest by the actions of the
On December 4, 1996, PCI Leasing and Finance, petitioner itself, foremost of which is the declarations
Inc. (PCI) and Giraff-X Creative Imaging, Inc. made in its demand letter to the respondent. There
(GIRAFFE) entered into a Lease Agreement, could be no other explanation than that if the
whereby the former leased out to the latter the: (1)1 respondent opted to pay the balance stated, then it
set of Silicon High Impact Graphics and accessories could keep the equipment for its own. Likewise, if
worth ₱3,900,00.00 and (2) 1 unit of Oxberry not, then it should return them. Since, the remedies
Cinescan 6400-10 worth ₱6,500,000.00. Forming provided for in Article 1484 of the Civil Code are
parts of the basic lease agreement were separate alternative, not cumulative. Thus, the exercise of one
documents described that GIRAFFE as the bars the exercise of the others. This limitation applies
“borrower” who acknowledged that it must pay to contracts purporting to be leases of personal
monthly for thirty-six (36) months. The agreement property with option to buy by virtue of the same
embodied a standard acceleration clause if Article 1485.
GIRAFFE fails to pay. Therefore, in this case, the lease agreement between
GIRAFFE defaulted after a year. Following a three- the parties are covered by Articles 1484 and 1485 of
month default, PCI sent a pay-or-surrender- the New Civil Code commonly referred to as the
equipment demand letter to GIRAFFE demanding Recto Law and it should apply. Hence, PCI in
payment of the rentals for the remaining term of the choosing to deprive GIRAFFE of the possession of
lease or surrender of the subject equipment. the equipment waived its right to bring an action to
GIRAFFE failed to comply with the demand letter. recover unpaid rentals, under par. 3 of Art. 1484.
Thus, PCI filed a complaint against GIRAFFE,
praying for the issuance of a writ of replevin for the
recovery of the leased property, and in addition, to
pay the balance of the rental obligation.
GIRAFFE sought for the dismissal of the case
arguing that PCI cannot seize the equipment
because their agreement is a lease of movables with
option to buy, and so that transaction fall pursuant
to the Art. 1484 and 1485 of the Civil Code on
installment sales of personal property, commonly
referred to as the Recto Law. Thus, PCI’s recovery
of the possession of the subject property was
tantamount to a foreclosure thereof which bars
recovery of the balance.

ISSUE:
Whether or not the Lease Agreement between the
parties are covered by Articles 1484 and 1485 of the
New Civil Code (Recto Law)?
MACEDA LAW when it had on several occasions accepted the delayed
SISKA DEVELOPMENT CORP. V. OFFICE OF payments of the respondent spouses?
THE PRESIDENT, G.R. NO. 93176
Third – Whether or not the respondent office of the
president committed a grave abuse of discretion in
FACTS: ordering the petitioner to accept the sum of P9,341.24
as full payment from the respondent spouses and
On April 28, 1967, Siska Development Corporation thereafter to issue the final deed of sale?
entered (SISKA) a petitioner entered into a Contract
to Sell with Guadalupe Sering for a lot in Mira-Nila
Subdivision, Quezon City. On August 16, 1968, RULING:
Guadalupe Sering transferred her rights to spouses,
Socorro Sering along with her husband Jose Sering, No. The Office of the President found that private
a private respondents assumed the transferor’s respondents never received the notice of rescission
obligation by paying the monthly amortizations for sent by petitioner. This is a finding of fact of an
the lot, with the petitioner’s consent. administrative agency which we shall not disturb.
While the contract was entered into before the
The respondents defaulted on several monthly effectivity of the Maceda Law, the rescission took
payments, but the petitioner accepted these late place when the said law was in full force and effect.
payments. On October 18, 1974, the petitioner sent But even before the effectivity of said law,
a notice of rescission due to delayed payments, jurisprudence made necessary a notice of rescission.
which was later canceled on November 12, 1974, Hence, jurisprudence requires that a written notice be
after the respondents updated their payments The sent to the defaulter informing him of the rescission.
petitioner imposed a condition that future defaults
would result in final rescission of the contract. No. The petitioner drafted and prepared the contract.
However, private respondents again defaulted in Private respondents, who were eager to acquire a lot
paying their monthly amortizations from January to upon which they could build a home, affixed their
September 1, 1975. When respondent Jose Sering signatures thereon and assented to the terms and
offered to pay the remaining balance of the conditions of the contract. They had no opportunity to
purchase price on September 18, 1975, an employee question nor change any of the terms of the
of petitioner refused to accept the payment, alleging agreement. It was offered to them on a take-it-or-
that the contract had already been cancelled. leave-it basis. When petitioner accepted and received
However, said respondent protested that he had not delayed payments beyond the grace period mentioned
received any notice of rescission from petitioner. in paragraph 9 of the contract, it waived its right to
rescind and is now estopped from exercising it.
The Sering spouses filed an action for specific
performance, but the case was dismissed by the No. The breach of the contract adverted to by
Court of First Instance of Quezon City. The case petitioner was so slight considering that private
was later transferred to the Human Settlements respondents had already paid P26,601.21 which
Regulatory Commission (HSRC) and then appealed inclusive of interests and penalties out of the total
to the Office of the President. purchase price of P21,328.00 and the remaining
balance was only P9,341.24, which private
respondents were willing to pay. To sanction the
ISSUE: rescission made by petitioner will work injustice to
First - Whether or not the respondent office of the private respondents. It would unjustly enrich
president committed a grave abuse of discretion in petitioner at their expense.
finding that the notice of rescission sent by the Therefore, the petition is DISMISSED. Petitioner is
petitioner to the respondent spouses served no real ordered to accept the amount of P9,341.29, the
purpose since it was not received by the latter? balance of the purchase price and to execute
Second - Whether or not the respondent office of immediately the final deed of sale in favor of private
the president committed a grave abuse of discretion respondents.
in finding that the petitioner is now estopped from
insisting on the rescission of the contract to sell
PDIC RULING:
PHILIPPINE DEPOSIT INSURANCE The Supreme Court ruled in favor of Citibank and
CORPORATION V. CITIBANK, N.A., G.R. NO. BA, stating that the funds received from their head
170290 offices and foreign branches are not insurable
deposits and are not subject to assessment for
insurance premiums under the PDIC Charter, the
FACTS: court also held that a branch has no separate legal
The case involves the Philippine Deposit Insurance personality and that the head office and branches of a
Corporation (PDIC) as the petitioner and Citibank, bank are considered one legal entity.
N.A. (Citibank) and Bank of America, S.T. & N.A. In the case of Citibank and BA, it is apparent
(BA) as respondents. PDIC, conducted that they both did not incorporate a separate
examinations of the books of Citibank in 1977 and domestic corporation to represent its business
BA in 1979, and discovered that both respondents interests in the Philippines. Their Philippine branches
received funds from their respective head offices are merely branches, without a separate legal
and their foreign branches. These funds were personality from their parent company. Thus, being
covered by Certificates of Dollar Time Deposit one and the same entity, the funds placed by the
which were not reported to PDIC as deposit respondents in their respective branches in the
liabilities subject to assessment for insurance. Philippines should not be treated as deposits made by
PDIC assessed both banks deficiency of sum. third parties subject to deposit insurance under the
Believing that litigation would inevitably arise from PDIC Charter.
this dispute, Citibank and BA filed separate Therefore, the Court agrees with the CA ruling that
petitions for declaratory relief, seeking a judgment there is nothing in the definition of a “bank” and a
stating that the money placements they received “banking institution” in Section 3(b) of the PDIC
from their head office and other foreign branches Charter which explicitly states that the head office of
were not deposits and did not give rise to insurable foreign bank and its other branches are separate and
deposit liabilities. distinct from their Philippine branches.
The Regional Trial Court (RTC) ruled in favor of
Citibank and BA, stating that the money placements
were subject of the petitions were not assessable
for insurance purposes under the PDIC Charter
because said placements were deposits made
outside of the Philippines and that there was no
depositor-depository relationship between the
respondents and their head office or other branches.
As a result, the petitioner was dismissed.
Furthermore, aggrieved party, PDIC appealed to the
CA which affirmed the ruling of the RTC.

ISSUE:
Whether the funds placed in the Philippine branch
by the head office and foreign branches of Citibank
and BA are insurable deposits under the PDIC
Charter?
TRUTH IN LENDING ACT ISSUE:
NEW SAMPAGUITA BUILDERS First – whether or not the loan accounts are bloated?
CONSTRUCTION, INC, et. al. v. PHILIPPINE
NATIONAL BANK. G.R. No. 148753, Second – Whether or not PNB could unilaterally
increase interest rates?

FACTS:
This case involves a construction company, New RULINGS:
Sampaguita Builders Construction, Inc. (NSBCI), First – Yes. Petitioner NSBCI’s loan accounts with
and its owners, Spouses Eduardo R. Dee and respondent appear to be bloated with some iniquitous
Arcelita M. Dee, as petitioners, and the Philippine imposition of interests, penalties, other charges and
National Bank (PNB) as the respondent. NSBCI attorney’s fees. There is no deficiency; there is
applied for a commercial loan with PNB in the actually an overpayment of more than 3M based on
amount of P8.0M. The loan was secured by real the computation of the SC.
estate properties owned by NSBCI’s president and
chairman of the board, Eduardo R. Dee. Second – No. NSBCI’s accessory duty to pay interest
did not give PNB unrestrained freedom to charge any
NSBCI executed promissory notes due on different rate other than that, which was agreed upon, and no
dates. The Promissory notes specified the interest interest shall be due, unless expressly stipulated in
rate to be charged: 19.5 percent in the first, and 21.5 writing.
percent in the second and again in the third. A
uniform clause therein permitted respondent to Therefore, this Petition is hereby PARTLY
increase the rate within the limits allowed by law at GRANTED.
any time depending on whatever policy it may
adopt in the future. Furthermore, without even
giving prior notice to petitioners.
NSBCI partly paid the loan, but later on defaulted
on its payments and failed to comply with its
promissory notes, leading PNB to initiate
foreclosure proceedings of properties. The
properties were sold at public auction, with PNB
being the highest bidder. NSBCI failed to redeem
the properties within the redemption period, and
PNB executed a deed of absolute sale consolidating
title to the properties in its name. PNB claimed that
NSBCI owed it 12M so they filed a case in court
asking NSBCI to pay for deficiency. NSBCI refused
to pay the above deficiency claim which compelled
PNB to institute the instant Complaint for the
collection of its deficiency claim. RTC found that
NSBCI was automatically entitled to the debt relief
package of PNB and ruled that the latter had no
cause of action against the former. However, court
of appeals reversed the decision, saying NSBCI was
not entitled, thus ordered them to pay the
deficiency.
RECTO LAW The Supreme Court modified the trial court’s decision
by setting aside the portion ordering Northern Motors
NORTHERN MOTORS V. SAPINOSO, G.R. NO. to reimburse Sapinoso the sum of P1,250.00. Costs
L-28074 were imposed against Sapinoso.
FACTS: The court clarified the interpretation of Article 1484,
On June 4, 1965, Casiano Sapinoso bought an Opel emphasizing that the prohibition against recovering
Kadett from Northern Motors, Inc. for P12,171.00, unpaid balances applies only after a foreclosure sale.
making a down payment and signing a promissory Prior to such a sale, creditors are not barred from
note for the remaining P10,540.00, payable in accepting voluntary payments from debtors.
monthly installments with 12% interest per annum.
Sapinoso defaulted on the first installment and
several subsequent payments.
After defaulting, Sapinoso made partial payments of
P530.52, P480.00, and P400.00, which were applied
to interest and principal. Northern Motors filed a
complaint for replevin and seizure of the car on July
22, 1966. The car was seized and delivered to
Northern Motors on October 25, 1966.
Sapinoso claimed that the car was defective and that
Northern Motors failed to repair it despite his
complaints. He argued that this justified his delayed
payments. He further claimed to have paid a total of
P4,230.52, leaving a balance of P5,987.58.
The Court of First Instance of Manila ruled that
Northern Motors had the right to possess the car but
ordered it to reimburse Sapinoso P1,250.00 paid
after the lawsuit was initiated.
ISSUE:
Whether Northern Motors, Inc. should reimburse
Casiano Sapinoso the sum of P1,250.00 paid after
the filing of the complaint, considering the
provisions of Article 1484 of the Civil Code.
RULING:
The appeal is meritorious. The Supreme Court ruled
in favor of Northern Motors, Inc.
The Court clarified that the prohibition under
Article 1484 against recovering any unpaid balance
applies only after an actual foreclosure sale has
taken place. Since no foreclosure sale had occurred,
Northern Motors was not barred from accepting the
payments made by Sapinoso.
The payment of P1,250.00 by Sapinoso was
voluntary and did not result from a “further action”
by Northern Motors. Therefore, Northern Motors
was not precluded from accepting these payments.
DOUBLE SALES lots be filed with the National Housing Authority. The
Ballado spouses’ rights as buyers of subdivision lots
AMOGUIS V. BALLADO, G.R. NO. 189626 should have been addressed by this authority.
FACTS: Following the principle in Tijam v. Sibonghanoy,
On November 24, 1969, spouses Francisco and estoppel by laches applies where there is an undue
Concepcion Ballado entered into two contracts to delay in asserting a right that misleads the court and
sell with St. Joseph Realty, Ltd. For two parcels of the opposing party, making it unjust to allow the
land (Lot Nos. 1 and 2). They made payments until assertion of that right. This principle was reaffirmed
1979 when Crisanto Pinili, the collector, refused to in Calimlim v. Ramirez and Figueroa v. People of the
accept further payments because the Ballados had Philippines, stating that jurisdictional issues can be
erected a small house in violation of subdivision raised at any stage, but estoppel by laches may bar
rules. Despite the house being taken down, such claims in exceptional cases.
payments were still not collected. The Court modified the lower court's decision,
On February 17, 1987, the Ballados discovered that emphasizing that the exceptional circumstances of
St. Joseph Realty had rescinded their contracts and Tijam v. Sibonghanoy applied, and thus, the
sold the lots to Epifanio Amoguis, whose sons later petitioners were estopped from challenging the RTC’s
occupied the lots. Francisco Ballado confronted the jurisdiction after failing to timely raise the issue.
Amoguis brothers about the removal of barbed wire Jurisdictional defenses must be timely raised to avoid
fences he had installed. estoppel by laches, especially in cases involving
The Ballado spouses filed a complaint for damages, specific regulatory bodies such as the National
injunction, cancellation and annulment of titles, and Housing Authority.
attorney’s fees against St. Joseph Realty and the
Amoguis brothers. The Regional Trial Court (RTC)
ruled in favor of the Ballados. The Court of Appeals
(CA) affirmed the RTC decision, noting that the
jurisdiction issue was not raised in the RTC, thus
estopping St. Joseph Realty and the Amoguis
brothers from raising it on appeal.
ISSUE:
Whether the Regional Trial Court’s lack of
jurisdiction was lost by waiver or estoppel.
RULING:
The Regional Trial Court’s lack of jurisdiction was
lost by waiver or estoppels
The petitioners (St. Joseph Realty and the Amoguis
brothers) are estopped from questioning the RTC’s
jurisdiction because they failed to timely raise the
issue, and laches had set in. Although Presidential
Decree No. 957 and Presidential Decree No. 1344
vested exclusive jurisdiction over subdivision
disputes in the National Housing Authority (later
the Housing and Land Use Regulatory Board), the
petitioners’ delayed assertion of this defense misled
the court and the opposing party.
Presidential Decree No. 957, effective since July 12,
1976, mandated that disputes involving subdivision
LAW ON BANK SECRECY OF DEPOSIT RULING
BANGAYAN V. RIZAL COMMERCIAL The Supreme Court ruled in favor of RCBC,
BANKING CORPORATION, G.R. NO. 149193, A dismissing Bangayan’s complaint.
FACTS: A. Justification for Dishonoring Checks and
Entitlement to Damages:
Ricardo B. Bangayan, the petitioner, held savings
and current accounts with Rizal Commercial The Court held that RCBC was justified in
Banking Corporation (RCBC). These accounts had dishonoring Bangayan’s checks due to the insufficient
an “automatic transfer” feature to fund checks from funds in his accounts, which were depleted to cover
either account. On June 26, 1992, Bangayan the customs duties of the corporations under the
allegedly signed a Comprehensive Surety surety agreement. The Court found that RCBC acted
Agreement with RCBC, securing the obligations of within its rights under the agreement that Bangayan
nine corporations: Paragon Paper Industries, Inc., purportedly signed. Despite Bangayan’s claim of
Red Falcon Trading Corporation, Empire Stationery forgery, the Court recognized the validity of the
Products Corporation, Megaplus Products surety agreement based on the evidence presented by
Corporation, Impressions Products Corporation, RCBC. Consequently, Bangayan was not entitled to
Compac International Corporation, Pacific Star damages as the dishonor of the checks was justified.
Products Corporation, Advance Paper Corporation,
and Popular Stationery Products Corporation. B. Admissibility of Mr. Lao’s Testimony:
Bangayan disputed the authenticity of this The Court addressed the issue of the lower court’s
agreement, claiming the signature was not his and decision to allow the testimony of Mr. Lao, despite an
the document was not notarized. earlier order to strike it off. The Court found no
RCBC issued letters of credit for the corporations reversible error in the lower court’s decision, noting
guaranteed by Bangayan. When these corporations that the trial court has the discretion to admit or
failed to pay customs duties, RCBC froze exclude evidence. The testimony of Mr. Lao was
Bangayan’s accounts to cover the debts. deemed relevant and material to the case.
Consequently, several of Bangayan’s checks were C. Violation of the Bank Secrecy Act:
dishonored due to insufficient funds, leading to
lawsuits from the payees. Bangayan claimed The Court found no evidence that RCBC disclosed
RCBC’s actions were wrongful and filed a any confidential information in violation of the Bank
complaint for damages, alleging a violation of the Secrecy Act. The disclosure to the BOC was part of
Bank Secrecy Act due to the disclosure of his standard banking procedures related to the
account information to the Bureau of Customs investigation of the corporations’ import transactions
(BOC). and obligations. The Court noted that such disclosures
are permissible under specific circumstances,
RCBC defended its actions by asserting the validity particularly when necessary to protect the bank’s
of the surety agreement, the necessity of freezing interests and comply with regulatory requirements.
Bangayan’s accounts to cover the corporations’
debts, and the legality of the disclosure to the BOC. The Supreme Court ruled in favor of Rizal
Commercial Banking Corporation (RCBC) and
ISSUE: dismissed Ricardo B. Bangayan’s complaint. The
A. Whether RCBC was justified in dishonoring Court found that RCBC was justified in dishonoring
the checks, and, consequently, whether Bangayan’s checks due to insufficient funds,
Bangayan is entitled to damages arising following the depletion of his accounts to cover
from the dishonor. customs duties for the corporations he guaranteed.
B. Whether there was reversible error on the Additionally, the Court held that there was no
part of the lower court in allowing the reversible error in allowing Mr. Lao’s testimony, and
testimony of Mr. Lao, despite its earlier RCBC did not violate the Bank Secrecy Act. Court of
order to strike off the testimony. Appeals affirming the trial court’s dismissal of
C. Whether RCBC violated the Bank Secrecy Bangayan’s complaint was upheld.
Act.
TRUTH IN LENDING ACT unilateral determination of interest rates violates the
principle of mutuality because it places one party at a
UCPB V. SPS. BELUSO, G.R. NO. 159912, disadvantage by making the terms excessively
AUGUST 17, 2007 burdensome or oppressive.
FACTS: No. The foreclosure of the mortgaged properties and
the subsequent issuance of the Sheriff’s Certificate of
On April 16, 1996, UCPB granted the spouses Sale were declared void. The Court found that the
Beluso a Promissory Notes Line under a Credit computation of the spouses’ indebtedness, which
Agreement, allowing them to avail of up to P1.2 served as the basis for the foreclosure, was erroneous.
million, secured by a real estate mortgage on UCPB included unauthorized and excessive interest
parcels of land in Roxas City. The Credit rates, penalties, and charges in their computation,
Agreement was later amended to increase the credit which inflated the debt beyond what was justifiable.
line to P2.35 million, and the spouses executed As a result, the foreclosure was deemed to have no
several promissory notes. legal basis.
The spouses Beluso alleged that they did not receive
amounts covered by the last two promissory notes Yes. The Supreme Court found UCPB liable for
and claimed the principal indebtedness was only P2 violating the Truth in Lending Act (Republic Act No.
million. UCPB applied interest rates ranging from 3765). The Act mandates that lenders must disclose
18% to 34% on the promissory notes. By February the true cost of credit to the borrowers, including the
1998, UCPB charged additional interest and finance charges and the annual percentage rate.
penalties, leading to a total demand of UCPB failed to provide such disclosures, which
P2,932,543.00 plus attorney’s fees. After defaulting, misled the spouses Beluso regarding the actual costs
UCPB foreclosed on the mortgaged properties, and terms of their credit. The lack of transparency and
which had ballooned the debt to P3,784,603.00. proper disclosure violated the borrowers’ rights under
the Act and contributed to the confusion and dispute
On 9 February 1999, the spouses Beluso filed a over the actual indebtedness.
petition for annulment, accounting, and damages
against UCPB. Not guilty. Forum shopping occurs when a party
attempts to secure favorable rulings in multiple courts
ISSUE:
for the same issue. The Court determined that the
Whether the interest rate provisions in the spouses Beluso were not guilty of forum shopping.
promissory notes were valid. They had pursued different remedies for distinct
Whether the foreclosure of the mortgaged properties aspects of their grievances in good faith, without any
was valid. intention to obtain multiple judgments or harass
Whether UCPB violated the Truth in Lending Act. UCPB. This distinction helped the Court conclude
Whether the spouses Beluso were guilty of forum that their actions were legitimate and not intended to
shopping. manipulate the judicial process.
RULING: FINAL DECISION:
The Supreme Court ruled in favor of the spouses The Supreme Court modified the decision of the
Beluso, affirming the Court of Appeals decision. lower courts. While UCPB was ordered to return the
foreclosed properties to the spouses Beluso, the
Yes. The Supreme Court ruled that the interest rate spouses were also required to pay UCPB a corrected
provisions in the promissory notes were invalid due and recalculated amount of P1,560,308.00, which
to a lack of mutuality of contracts, as stipulated accurately represented the principal debt without the
under Article 1308 of the Civil Code. This article invalidated interest rates and penalties. The Court also
states that the validity and compliance of contracts removed any obligation for UCPB to pay attorney’s
cannot depend solely on the will of one of the fees or the costs of suit, emphasizing that the errors
contracting parties. In this case, the promissory were primarily related to the interpretation in Truth
notes allowed UCPB unilateral discretion to Lending Act.
increase the interest rates without prior agreement
from the spouses Beluso. The Court held that such RECTO LAW
Visayan Sawmill Company, Inc. vs. Court of impossible, they can seek rescission even after
Appeals, G.R. No. 83851 initially choosing fulfillment.

FACTS: The VSC's obligation to sell is clearly dependent on

RHJ Trading’s establishment of an irrevocable and
In 1983, RHJ Trading and Visayan Sawmill unconditional letter of credit. The VSC agreed to
Company (VSC) engaged in a contract for the sale deliver the scrap iron only upon receiving payment
of scrap iron located at VSC’s stockyard. The through this letter of credit. Therefore, the contract
agreement stipulated that RHJ Trading would open was not a sale where ownership would transfer to the
a letter of credit worth P250,000 by May 15, 1983, buyer with the condition that payment would be made
in favor of VSC. RHJ Trading began collecting the later. Instead, no sale would occur until the letter of
scrap iron but was instructed to halt operations on credit was established. Consequently, since the
May 30, allegedly due to a legal case filed against agreement was only a promise to sell, the RHJ
them. VSC claimed to have canceled the contract on Trading's failure to meet this condition is not a breach
May 23 due to RHJ Trading's failure to fulfill the but merely an event that prevented the obligation to
conditions, but RHJ Trading asserted that the letter transfer title from becoming effective. The VSC
of credit had been opened and delayed in wasn't obliged to sell and couldn't be forced to
transmission, a claim supported by bank comply with specific performance. Instead, it could
confirmation. Despite RHJ Trading's efforts to rescind the contract under Article 1597 of the Civil
resume the transaction after the legal matter's Code. The Supreme Court reversed the decision.
resolution, VSC's refusal led to RHJ Trading filing
a complaint seeking fulfillment of the contract and
damages.

RHJ Trading's legal action was met with

counterclaims from VSC, arguing the cancellation
was justified due to the failure to open the letter of
credit within the specified timeframe. The Regional
Trial Court (RTC) ruled in favor of RHJ Trading,
ordering VSC to pay damages. This decision was
upheld by the Court of Appeals (CA) with
modifications to the damages awarded, highlighting
the complexity of contractual obligations,
fulfillment, and the legal recourse available in cases
of dispute.

ISSUE:

Whether or not the reasons or grounds for

cancelling the contract valid and justified.

RULINGS:

The reasons or grounds for cancelling the contract

valid and justified. Both the trial court and the
public respondent erred in the appreciation of the
nature of the transaction between the petitioner
corporation and the private respondent. To this
Court's mind, what obtains in the case at bar is a
mere contract to sell or promise to sell, and not a
contract of sale. The injured party can choose either
to have the obligation fulfilled or rescinded, with
damages in both cases. If fulfillment becomes DOUBLE SALE
 SPOUSES GERMAN VS. SPOUSES SANTUYO, According to Article 1544, ownership of immovable
G.R. NO. 210845 property in a double sale goes to the buyer who
registers it first in good faith. The Santuyo Spouses
FACTS: were the first to register the property in their names
with the Registry of Deeds for Naga City under
Francisco and Basilisa Bautista owned a 400-square Transfer Certificate of Title No. 22931. However, the
meter land in Barangay Balatas, Naga City. Danilo Regional Trial Court correctly found that the Santuyo
and Clarita German had been leasing this land since Spouses did not act in good faith when they registered
1985 under Soledad Salapare, who managed it for the property.
Jose and Helen Mariano. The Bautistas sold the
land to the Marianos on April 22, 1986, who then Generally, people dealing with registered land can
agreed to sell it to the Germans once Helen Mariano trust the certificate of title without investigating the
signed the Deed of Sale after full payment. The property's condition. However, potential buyers
Germans claimed they completed payment in 1988. should be cautious if there are signs that require
However, on July 28, 1992, Benjamin and Editha further inquiry, such as the presence of occupants or
Santuyo claimed ownership, saying they bought the if the seller does not possess the property. In these
land from the Bautistas and were registered as cases, buyers are expected to investigate the land's
owners on April 28, 1992. The Court of Appeals status. Common practice in real estate includes
upheld the Santuyos' right to possess the property in inspecting the premises, and if the land is occupied by
2000. The Germans then filed a case in 2001 to someone other than the seller, the buyer must verify
nullify the Santuyos' purchase, claiming they had the occupant's rights. Neglecting these steps is
already paid in full. The RTC ruled in favor of the considered negligent and prevents the buyer from
Germans, stating the sale to them was valid and the claiming to be a "purchaser in good faith." It is
Santuyos were not buyers in good faith, as they established that registration of a later sale must be
should have been aware of the Germans' possession. done in good faith to take precedence over an earlier
The CA later reversed this decision, dismissing the sale.
Germans' complaint.
The court is unconvinced by Editha's statements that
ISSUE: she had not seen the land before buying it from the
Bautistas and only knew it was in Mariano
1. Whether or not Article 1544 of the Civil Code Subdivision. She claimed not to know its location in
applies to the case. 1986 and did not visit it even in 1990 while working
for the Mariano spouses. Before purchasing the land
2. Whether or not the Santuyo Spouses were in 1991, she did not investigate its physical condition.
purchasers in good faith. The Santuyo spouses' defense that having the title in
the seller's name was sufficient is rejected. Purchasing
RULINGS:
property without knowing its precise location or
The rule on double sales applies when the same condition is negligent. This lack of due diligence
thing is sold to multiple buyers by one seller, but negates their claim of good faith. Additionally, Helen
not to sales of the same thing by multiple sellers. Mariano's involvement in the 1991 sale further
Contrary to the Court of Appeals' findings, there undermines the Santuyo spouses' claim of good faith.
was a double sale in this case. The Bautista Spouses The Regional Trial Court found that the Santuyos'
sold the same property twice: first to the Mariano evidence did not demonstrate good faith in their
Spouses in 1986 and then to the Santuyo Spouses in purchase and registration of the land, despite their
1991. Both parties acknowledge these two denial of knowledge about the plaintiffs' presence and
transactions. The lower courts did not question the ownership claims.
validity of either sale. Clearly, there are conflicting
ownership claims, as the property title would belong
to the Mariano Spouses if it was transferred to them PDIC
first, leaving no rights for the Santuyo Spouses in
the second sale.
RIZAL COMMERCIAL BANKING CORP. VS. Whether or not the allocated funds may be escheated
HI-TRI DEVELOPMENT CORP., G.R. NO. in favor of the Republic.
192413
RULINGS:
FACTS:
No. There are checks of a special type called
In 1990, Teresita Millan offered to buy six parcels manager’s or cashier’s checks. These are bills of
of land owned by the Spouses Bakunawa for exchange drawn by the bank’s manager or cashier, in
₱6,724,085.71. She made a down payment of the name of the bank, against the bank itself.
₱1,019,514.29 but failed to resolve issues regarding Typically, a manager’s or a cashier’s check is
the sale. The Bakunawas rescinded the sale and procured from the bank by allocating a particular
offered to return the down payment, which Millan amount of funds to be debited from the depositor’s
refused. Subsequently, Hi-Tri Development account or by directly paying or depositing to the
Corporation issued a Manager’s Check to Millan's bank the value of the check to be drawn. Since the
company, Rosmil Realty and Development bank issues the check in its name, with itself as the
Corporation, for ₱1,019,514.29. This transaction drawee, the check is deemed accepted in advance.
formed part of a complaint filed against Millan and Ordinarily, the check becomes the primary obligation
her representative in the Regional Trial Court of of the issuing bank and constitutes its written promise
Quezon City. In 2003, RCBC reported the to pay upon demand.
unclaimed down payment to the Bureau of Treasury
without informing the Bakunawas. In 2008, the Nevertheless, the mere issuance of a manager’s check
Bakunawas settled with Millan and Rosmil Realty does not ipso facto work as an automatic transfer of
for ₱3,000,000.00, including the original amount. funds to the account of the payee. Since there was no
However, they later discovered that the down delivery, presentment of the check to the bank for
payment was involved in escheat proceedings payment did not occur. An order to debit the account
before the RTC, causing disappointment. of respondents was never made. In fact, petitioner
confirms that the Manager’s Check was never
THE RTC RULING negotiated or presented for payment to its Ermita
Branch, and that the allocated fund is still held by the
The Makati City RTC ruled in May 2008 to forfeit bank. As a result, the assigned fund is deemed to
unclaimed deposits, including one held by RCBC, remain part of the account of Hi-Tri, which procured
to the Republic. Respondents sought inclusion or the Manager’s Check. The doctrine that the deposit
intervention, claiming they were uninformed, but represented by a manager’s check automatically
their motion was denied in November 2008 as passes to the payee is inapplicable, because the
untimely and lacking challenge to the court's instrument – although accepted in advance – remains
findings. undelivered. Hence, respondents should have been
informed that the deposit had been left inactive for
THE CA RULING more than 10 years, and that it may be subjected to
escheat proceedings if left unclaimed.
The Court of Appeals reversed the decisions of the
Regional Trial Court from May and November
2008. It ruled that RCBC failed to properly
communicate with the parties involved before
initiating escheat proceedings, violating their due
process rights. Furthermore, the RTC did not issue
personal notices to those with claims on the
unclaimed balances, rendering its decisions void
due to jurisdictional issues.

ISSUE:
TRUTH IN LENDING ACT
THE CONSOLIDATED BANK AND TRUST on attorney's fees was questioned, especially since
CORPORATION VS. COURT OF APPEALS, there was no litigation involved.
G.R. NO. 91494.
Regarding attorney's fees, the court emphasized that
FACTS: such awards must be justified by factual, legal, and
equitable reasoning. While attorney's fees can be
In 1977, George King Tim Pua personally obtained granted, they are exceptions rather than the rule, and
multiple loans from a bank, totaling P1,635,000.00, the court must explicitly state the basis for such
with corresponding promissory notes due between awards in its decision. In this case, the Court of
May and September 1977. In 1979, Pua, through Appeals adhered to these principles, finding the
George and George Trade Inc., secured additional attorney's fees justified as the respondents had to
loans amounting to P650,000.00, co-signed by Pua litigate and incur expenses to protect their interests.
and Pua Ke Seng, with stringent default penalties. Consequently, the court affirmed the decision with a
To secure his debts, Pua assigned the proceeds of a slight modification to the reimbursement amount and
P2,908,485.00 fire insurance policy, which the bank specified the legal interest to be applied.
used to settle his personal debt and partially cover
the corporate loans, leaving an outstanding balance
of P288,469.80. The bank sued to recover this
balance plus attorney's fees, while the defendants
claimed the loans were paid off and sought the
surplus insurance money. The trial court ruled in
favor of the bank, but the Court of Appeals later
reversed this decision, ordering the bank to pay Pua
P466,182.39 plus interest and attorney's fees.

ISSUE:

Whether George King Tim Pua are indebted to

Solid bank in the amount of P288,469.80 as held by
the then Court of First Instance of Manila or
whether George King Tim Pua are entitled to
reimbursement from Solid bank in the amount of
P466,182.39 as decreed by the Court of Appeals?

RULINGS:

The court ruling established that charging

compounded interest is permissible when agreed
upon by parties. This principle was upheld in the
case of Mambulao Lumber Company v. Philippine
National Bank, where it was determined that parties
can agree to capitalize unpaid interest, turning it
into principal that accumulates further interest.
Similarly, handling charges on loans are permitted
under specific regulations, yet adherence to
disclosure requirements outlined in the Truth in
Lending Act is mandatory. While penalties can be
lawful, they must not be excessive. In the case at
hand, the court deemed a 3% penalty on the unpaid
loan balance as reasonable. However, the insistence
RECTO LAW ISSUE:
EQUITABLE BANK SAVINGS V. ROSALINDA Is it the petitioner's responsibility to return the sum of
PALCES G.R NO. 214752 103,000 that was paid by the respondent in
installments while the petitioner was in possession of
FACTS: the automobile and to waive the 15,000 attorney fee
award?
Respondent borrowed ₱1,196,000.00 on August 15,
2005, to buy a car. The loan comprises a promissory
note and chattel mortgage. The installment payment COURT RULING:
is ₱33,225.00 per month for 36 months. The bank
has the right to foreclose on the mortgage, collect There was no vendor-vendee relationship between
costs associated with the procedures, and charge Palces and the Bank, as per Article 1484. Palces
legal fees if payment is not made in full. The purchased the car from a third party rather than a
respondent paid monthly installments between bank, and she utilized it as a chattel mortgage for a
September 15, 2006, and December 21, 2006; but, $1,160,000 loan. Therefore, a contract for the
from January to February 2007, payment was not installment sale of personal property did not exist.
received. Despite receiving a demand letter from the
bank, the respondent (Palces) did not reply. It is only fitting that foreclosure procedures, if any
haven't been completed already, be started in line with
On March 7, 2007, the petitioner filed a complaint Article No. 1508, also known as The Chattel
against the respondent seeking recovery of Mortgage Law, as the bank already held control of the
possession with replevin and an alternative prayer car. Furthermore, the Promissory Note with Chattel
for an amount of money and damages. She Mortgage has no clause that prevents petitioner from
conversed with bank officer Rodrigo Dumagpi on obtaining future payments from respondent. Palces'
behalf of the respondent. Respondent gave obligation will be lessened as a result of this partial
petitioner ₱103,000.00 in installments, yet even so installment.
after the petitioner filed a complaint, the vehicle
was taken back. The principle that states there shall be no premium
RTC RULING: placed on the right to litigate prevents attorney fees
from being collected as part of damages. They are not
On May 20, 2010, the RTC granted the petitioners' to be given out each time a party prevails in court.
request to be granted possession of the vehicle in
question and to have the respondent pay further PARTLYGRANTED.
costs of the lawsuit as well as a $15,000 attorney's
fee.
CA RULING:

The petitioner was already in possession of the

automobile, thus on February 13, 2014, the CA
changed the RTC's verdict, directing the petitioner
to return the 103,000.00 installment and deleting the
respondent's award of attorney's fees.
A contract for the sale of personal property that is
receivable in installments is covered by Article
1484 of the Civil Code, which served as the
foundation for the CA's ruling.
MACEDA LAW ISSUE:

LUISA F. MCLAUGHIN V. THE COURT OF Whether the respondent court committed grave abuse
APPEALS AND RAMON FLORES G.R NO. L- of discretion in issuing order.
57552

FACTS: COURT RULING:

A contract for the conditional sale of real estate The Supreme Court ruled in favor of Luisa F.
with a total purchase price of $140,000.00 was McLaughlin.
signed by the petitioner, McLaughlin, and the
respondent, Flores, on February 28, 1997. The The Court determined that the decision made by the
amount is split into two payments: 26,550.00 was Court of Appeals to reverse the trial court's ruling was
due at the time the deed was executed, and the incorrect. In its opinion, McLaughlin's accusations
remaining 113,450.00 is due with interest at the rate against Flores were amply supported by the evidence
of 1% per month until the entire amount is paid in that was shown during the trial. In support of his
full beginning on December 1, 1976, and not later defense that he had already paid the leases and shares
than May 31, 1977. in accordance with their agreement, Flores did not
provide enough evidence, the court ruled.
Since respondent failed to pay the remaining
amount owing on May 31, 1977, petitioner filed a The Court further stressed that, barring evidence of
complaint on June 19, 1979, seeking to have the substantial abuse of discretion or reversible mistake,
deed of sale canceled. the trial court's factual findings particularly those
upheld by the Court of Appeals are typically
In their Compromise Agreement, respondent conclusive and binding on the Supreme Court. The
admitted to being indebted to petitioner for the court in this instance did not discover any misuse or
outstanding balance. The remaining 69,059.00 will mistake in the lower courts' rulings.
be paid in two equal installments between June 30
and December 31 of the same year. $50,000 will be Therefore, the Supreme Court reinstated the decision
paid upon signing the agreement. And respondent of the trial court, ordering Ramon Flores to pay the
also agreed to pay 1,000.00 monthly until obligation outstanding rentals and shares to Luisa F.
is fully paid. McLaughlin, as well as damages as previously
awarded.
On October 15, 1980, petitioner demanded all the
outstanding balance of respondent.

On October 30,1980, respondent agreed to pay all

the outstanding balance but he also request the
certificate of title of real property and also the tax
payment receipt in his favor. Petitioner refused the
willingness of the respondent.

To proclaim the recission of the deed of sale and

take respondent's payment as liquidated payment
for damages, petitioner filed a motion on November
7, 1980, alleging that respondent had neglected to
pay the remaining amount.
Respondent filed a reconsideration and it was
granted by the Trial Court on November
27,1980.But the Court of Appeal nullified and set
aside the disputed order of Trial Court.
LAW ON SECRECY OF BANK DEPOSIT RULINGS:
KAREN E. SALVACION V. CENTRAL BANK
OF THE PHILIPPINES, CHINA BANKING NO. Clearly, a foreign exchange deposit made by a
CORPORATION. G.R NO. 94723, . visitor or transient is not the kind of deposit
encouraged by PD Nos. 1034 and 1035 and provided
incentives and protection by said laws because the
FACTS: depositor will only keep the money in the bank for a
brief period of time because they are only in the
American visitor Gref Bartelli lured 12-year-old country for a few days at a time.
Karen Salvacion into his apartment on February 4,
1989, and sexually assaulted her for four days. As said, respondent Greg Bartelli is merely a visitor
Police stopped Greg Bartelli and took him to Makati or a temporary resident. During his brief visit to the
Municipal Jail on February 7, 1989, after which Philippines, he placed his dollars with the respondent
they liberated Karen Salvacion. He was the target of China Banking Corporation just for safekeeping.
four charges of rape and serious illegal
imprisonment. A action for damages with In summary, how the law is applied relies on how fair
preliminary attachment was also brought by the it is. Justice would ultimately be served, particularly
petitioners. to citizens who have been wronged by a foreign
visitor such as accused Greg Bartelli, if we decide
A warrant of preliminary attachment was requested that the in question Section 113 of Central Bank
and granted. China Banking Corporation received a Circular No. 960, which exempts from attachment,
Notice of Garnishment from the Makati Deputy garnishment, or any other order or process of any
Sheriff. Nonetheless, China Bank responded to the court, legislative body, government agency, or any
garnishment notification by citing RA 1405 administrative body whatsoever, applies to a foreign
(Secretcy of Bank Deposits). The sheriff argued that transient. This would be in violation of Article 10 of
since the disclosure is only incidental to a legally the New Civil Code, which states that "it is presumed
established garnishment through a court order, the that the lawmaking body intended right and justice to
garnishment did not violate the secrecy of bank prevail in case of doubt in the interpretation or
accounts. China Bank then made use of Central application of laws."
Bank Circular No. 960's Section 113.
In other words, in cases where the statute is silent or
In their petition for declaratory relief, the petitioners unclear, this is one of the basic remedies that would
requested that Section 113 of Central Bank Circular satisfy the strong moral demands.
No. 960 be ruled invalid because it violates the
Constitution's provision that states, "Foreign The provisions of CB Circular No. 960's Section 113
currency deposits shall be exempt from attachment, and PD No. 1246, to the extent that they change
garnishment, or any other order orprocess of any Section 8 of R.A. No. 6426 are hereby declared
court, legislative body, government agency, or any INAPPLICABLE to this case due to its unique facts.
administrative body whatsoever." This means that
the petitioners' ability to have defendant Greg
Bartelli's bank deposit garnished in order to satisfy
the judgment rendered in their favor has been taken
away.

ISSUE:
Whether or not Sec. 113 of Central Bank Circular
No. 960 and Section 8 of the Foreign
CurrencyDeposit Act shall be made applicable to
a foreign transient.
CONDOMINIUM ACT RULINGS:

LEVISTE MANAGEMENT SYSTEM, INC. V. No. By constructing a third story above the roof deck,
LEGASPI TOWER 200, INC., ET. AL. G.R NO. the petitioner violated the Master Deed as well as the
199353 Respondent's bylaws and the Condominium Act.
According to the Supreme Court's judgment,
LEMANS is required to pay for the demolition of the
FACTS: illegal penthouse that was built above Legaspi
Towers.
In Makati City's Paseo de Roxas, Legaspi Towers is
a seven-story condominium structure including a Lemans was permitted to complete construction as a
unit on the roof deck and two levels above it known result of the RTC and SC's ruling that it was a builder
as Concession 2 and Concession 3. Leviste acting in good faith. Additionally, it meant that before
Management System purchased Concession 3 tearing down or assuming ownership of the third story
(Petitioner). that was added to the original two-story penthouse,
Legaspi Towers 200, owned by real estate developer
The petitioner was successful in obtaining a Conrado Leviste, had to pay the firm compensation.
building permit in order to construct Concession 4,
an additional unit, on top of Concession 3. But the Supreme Court ruled that if the builder was
Nevertheless, Petitioner ignored a notice from required to abide by particular laws or contracts, then
Respondent Legaspi Towers 200 Inc. (that the the declaration of good faith under Article 448 of the
construction was unlawful). A writ of obligatory Civil Code could not be applicable.
injunction was filed by the petitioner against the
respondent. The SC observed that even though the Master Deed
indicated that there would only be "two levels above
The Respondent was upheld by the RTC, which the deck roof," LEMANS was nevertheless compelled
found that Depra v. Dumlao and Article 448 of the by Section 4 of the Condominium Act (Republic Act
Civil Code were applied. Respondent truly owns the Number 4726) to obtain the approval of the
"air space" above the apartment.At Petitioner's condominium's registered owners.
expense, Respondent attempted to destroy
Concession 4. Although the corporation's board makes all of the
decisions, LEMANS only had an internal
According to the respondent, before amending the arrangement with the then-president of Legaspi
master deed in accordance with Section 4 of the Towers, rather than getting the condo owners'
Condominium Act, the petitioner should first obtain approval.
the approval of the registered owners of the
condominium project. The Supreme Court rejected the LEMANS Petition,
citing erroneous application of the Depra concept and
Petitioner contended that before Respondent can Articles 448 and 546 of the Civil Code in the
act, it is necessary to ascertain the values that are aggregated cases. According to the Civil Code, a
necessary under Depra. RTC and CA: Using builder acting in good faith is presumed to be separate
Articles 448 and 546 of the Civil Code, these courts from the landowner and not be governed by any
determined that LEMANS had constructed the contracts or particular laws pertaining to the subject
penthouse in good faith. property. Republic Act No. 4726[2], also known as
the Condominium Act, governs properties recorded in
ISSUE: line with Section 4[1] of that Act; the Master Deed
and the Bylaws of the condominium corporation, on
Whether or not Respondent lawfully built the other hand, define the contractual relationships
Concession 4 on top of Petitioner’s condominium between the condominium corporation and the unit
building. owners.