Case Digests in Credit Transactions

SY 1st Sem 2014-15

BPI FAMILY BANK v AMADO FRANCO and COURT OF APPEALS, GR No. 123498, November
23, 2007
FACTS:
BPI-FB, petitioner filed a separate civil and criminal case against Franco, private
respondent for the alleged multi-million peso scam. In the criminal case, private respondent along
with other accused except the one who was still at large were acquitted of the crime Estafa.
However, the civil case remained under the litigation and the respective right and liabilities of the
parties have yet to be adjudicated.
Private respondent demanded petitioner to unfreeze his account and release his deposit
herein but petitioner refused to heed with the request. Hence, he filed a complaint. Petitioner
traversed the complaint claiming that it had better right to the amounts because such spoke
volumes of respondents participation in the fraudulent transaction.
The Manila RTC rendered judgment in favor of petitioner. Unsatisfied with the decision,
Private respondent appealed before CA and confined his appeal to RTCs denial of his claim for
moral and exemplary damages and diminutive award of attorneys fees. CA rendered decision in
favor of respondent. Hence, this petition.
ISSUE:

Whether CA erred in ruling that petitioner cannot unilaterally freeze respondents account
as well as precluding him from withdrawing his deposits.
RULING:
No.
It bears emphasizing that 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 passed through various transactions in the
general course of banking business, even if of traceable origin, bears no earmarks of peculiar
ownership.
Further, deposit of money in the banks is governed by the Civil Code provisions on loan
and mutuum. As there is a debtor-creditor between a bank and its depositor, Petitioner ultimately
acquired ownership of respondents deposit, but such ownership is coupled with a corresponding
obligation to pay him an equal amount on demand. Thus, when respondent issued checks drawn
against his current account, he had every right as creditor to expect that those checks would be
honored by petitioner as debtor.
WHEREFORE, the petition is PARTIALLY GRANTED. The CA decision is AFFIRMED with
the MODIFICATION that the award of unearned interest on the time deposit and moral and
exemplary damages is DELETED.

YHT REALTY CORP., ERLINDA LAINEZ and ANICIA PAYAM v THE COURT OF APPEALS and
MAURICE McLOUGHLIN, GR No. 126780, February 17, 2005
FACTS:
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McLoughlin, private respondent, an Australian businessman-philantropist, used to stay at

Sheraton Hotel. He transferred from Sheraton to Tropicana Hotel in which private petitioners were
employed after he was convinced by Tan whom he met and befriended him during his stay in the
Philippines. Tan took care of private respondent booking at the petitioners hotel. Private
respondent rented a safety deposit box at Tropicana. Such box could only be opened through the
use of two keys, one of which is given to private respondent, and the other remained in the
possession of the management of the hotel.
Private respondent allegedly placed in his rented safety deposit box among others a
US$15,000 which he placed in two envelopes, one containing US$10,000 and the other US$5,000.
Also, another envelope containing AUS$10,000. He discovered that the envelope with US$10,000
was short of US$5,000. Also, the jewelry which he bought in Hongkong and stored in the safety
deposit was likewise missing. Upon his returned in the Philippines, he again rented safety deposit
box in which he placed therein US$15,000, another envelope containing AUS$10,000 and other
envelope containing his travel documents. When he opened his rented safety deposit box, he
noticed that US$2,000 as well as AUS$4,500 were missing. He immediately confronted private
petitioners. They admitted that Tan opened the safety box with the key assigned to him. Tan
admitted the allegations. He further signed a promissory note to pay the private respondent.
Private respondent insisted that it must be the hotel who must assume responsibility for
the loss suffered. However, management refuse to accept responsibility relying on the conditions
for renting the safety deposit box entitled Undertaking for the Use of Safety Deposit Box. He filed
a complaint for damages against petitioner. After trial, the RTC of Manila rendered judgement in
favor of private respondent. Also, CA affirmed such decision. Hence, this petition.
ISSUE:

Whether hotel may evade liability for the loss of items left with it for safekeeping by its
guests, by having these guests execute undertaking holding the establishment as well as its
employees free from loss.
RULING:
No.
Article 2003 provides that the hotel-keeper cannot free himself from responsibility by
posting notices to the effect that he is not liable for the articles brought by the guests. Any
stipulation between the hotel-keeper and the guest whereby responsibility of the former as set
forth in Articles 1998 to 2001 is suppressed or diminished shall be void.
Further, above article was incorporated in the New Civil Code as expression of public
policy precisely to apply situations such as that presented in this case. The hotel business like
common carriers business is imbued with public interest. Catering to the public, hotelkeepers are
bound to provide not only lodging for hotels guests and security to their persons and belongings.
The twin duty constitutes the essence of the business. The law in turn does not allow such duty to
the public to be negated or diluted by any contrary stipulation in so-called undertaking that
ordinarily appear in prepared forms imposed by hotel keepers on guests for their signature.
WHEREFORE, CAs decision is hereby AFFIRMED.
CECILIO DIEGO v SEGUNDO FERNANDO, GR No. L-15128, August 25, 1960
FACTS:
Fernando, defendant, executed a mortgage in favor of Diego, plaintiff, over a two parcels of
land registered in his name, to secure a loan of P2,000, without interest, payable within four years

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from the date of the mortgage. Possession of the mortgaged properties were turned over to the
mortgagee after the execution of the deed.
Due to the failure of the debtor to pay the loan after four years and after several demands,
plaintiff executed an action for foreclosure of mortgage. However, defendant averred that the true
transaction between him and the plaintiff was one of antichresis and not of mortgage. The court
found that there was nothing in the deed of mortgage to show that it was not a true contract of
mortgage and the fact that possession of the mortgaged properties were turned over to the
mortgagee did not alter the transaction. Hence, judgment was rendered in favor of plaintiff.
ISSUE:

Whether the contract between the parties is one of antichresis.

RULING:
No.
In a contract of Antichresis, it must be expressly agreed between creditor and debtor that
the former, having been given possession of the properties given as security, is to apply their fruits
to the payment of the interest, if owing, and thereafter to the principal of his credit; so that if a
contract of loan with security does not stipulate the payment of interest but provides for the
delivery to the creditor by the debtor of the property given as security, in order that the latter may
gather its fruit, without stating that said fruits are to be applied to the payment of interest, if any,
and afterwards that of the principal, the contract is a mortgage and not antichresis.
WHEREFORE, the decision of lower court is modified in the sense that the amount of to be
recovered was reduced, with an obligation to render an accounting of all fruits received by the
appellee from the properties in question from the time of the filing of this action until full payment,
in case appellants failed to pay until foreclosure of the mortgage thereon, the value of which fruits
shall be deducted from the total amount of his recovery.

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