1. People v.

Concepcion (loan, concession of credit is a granting of

loan up to the credit limit, PNB, SEC. 35 of Act 2747)
FACTS:
Venancio Concepcion, President of the Philippine National Bank and a
member of the Board thereof, authorized an extension of credit in favor of
"Puno y Concepcion, S. en C. to the manager of the Aparri branch of the
Philippine National Bank. "Puno y Concepcion, S. en C." was a copartnership where Concepcion is a partner. Subsequently, Concepcion was
charged and found guilty in the Court of First Instance of Cagayan
with violation of section 35 of Act No. 2 7 4 7 . S e c t i o n 3 5 o f A c t
No. 2747 provides that the National Bank shall not,
d i r e c t l y o r indirectly, grant loans to any of the members of the board of
directors of the bank nor to agents of the branch banks. Counsel for the
defense argue that the documents of record do not prove that
authority to make a loan was given, but only show the concession of a credit.
They averred that the granting of a credit to the co-partnership "Puno
y Concepcion, S. en C." by Venancio Concepcion, President of the
Philippine National Bank, is not a "loan" within the meaning of
section 35 of Act No. 2747.
ISSUE:
Wh e th e r or n ot the g ran ti n g of a cre d i t of P300,000 to the co p a r t n e r s h i p " P u n o y Concepcion, S. en C." by Venancio
Concepcion, President of the Philippine National Bank, a "loan" within
the meaning of section 35 of Act No. 2747.
HELD:
The Supreme Court ruled in the affi rmative. The "credit" of an
individual means his ability to borrow money by virtue of the confidence or
trust reposed by a lender that he will pay what he may promise. A "loan"
means the delivery by one party and the receipt by the other party of
a given sum of money, upon an agreement, express or implied, to repay the
sum loaned,with or without interest. The concession of a "credit" necessarily
involves the granting of "loans"up to the limit of the amount fixed in the
"credit"
2. De los Santos v. Jarra (commodatum, carabao, indemnity for delay
in return)
G.R. No. L-4150 February 10, 1910 Facts: The Plaintiff Felix delos Santos filed
this suit against Agustina Jarra. Jarra was the administratix of the estate of
Jimenea. Plaintiff alleged that he owned 10 1st class carabaos which he lent
to his father-in-law Jimenea to be used in the animal-power mill without
compensation. This was done on the condition of their return after the work
at the latters mill is terminated. When delos Santos demanded the return of
the animals Jimenea refused, hence this suit. Issue: W/N the contracts is
one of a commodatum Ruling: YES. The carabaos were given on
commodatum as these were delivered to be used by defendant. Upon failure
of defendant to return the cattle upon demand, he is under the obligation to
indemnify the plaintiff by paying him their value. Since the 6 carabaos were
not the property of the deceased or of any of his descendants, it is the duty of
the administratrix of the estate to either return them or indemnify the owner
thereof of their value.

3. Saura Import v. DBP (DENR policy of only using local materials to

approve loan, perfected contract, mutual desistance, jute mill, 500K
loan)
Facts: Saura Inc. applied to the Rehabilitation Finance Corp (before its
conversion to DBP) for a loan of 500k secured by a first mortgage of the
factory building to finance for the construction of a jute mill factory and
purchase of factory implements. RFC accepted and approved the loan
application subject to some conditions which Saura admitted it could not
comply with. Without having received the amount being loaned, and sensing
that it could not at anyway obtain the full amount of loan, Saura Inc. then
asked for cancellation of the mortgage which RFC also approved. Nine years
after the cancellation of the mortgage, Saura sued RFC for damages for its
non-fulfillment of obligations arguing that there was indeed a perfected
consensual contract between them.
Issue: Was there a perfected consensual contract? Was there a real contract
of loan which would warrant recovery of damages arising out of breach of
such contract?
Held: On the first issue, yes, there was indeed a perfected consensual
contract, as recognized in Article 1934 of the Civil Code. There was
undoubtedly offer and acceptance in this case: the application of Saura, Inc.
for a loan of P500,000.00 was approved by resolution of the defendant, and
the corresponding mortgage was executed and registered. But this fact alone
falls short of resolving the second issue and the basic claim that the
defendant failed to fulfill its obligation and the plaintiff is therefore entitled to
recover damages. The action thus taken by both partiesSaura's request for
cancellation and RFC's subsequent approval of such cancellationwas in the
nature of mutual desistance what Manresa terms "mutuo disenso" which
is a mode of extinguishing obligations. It is a concept derived from the
principle that since mutual agreement can create a contract, mutual
disagreement by the parties can cause its extinguishment. In view of such
extinguishment, said perfected consensual contract to deliver did not
constitute a real contract of loan.
+++It should be noted that RFC entertained the loan application of Saura,
Inc. on the assumption that the factory to be constructed would utilize locally
grown raw materials, principally kenaf.
4. Naguiat v. CA (200K loan secured by REM, loan is a real contract
that is perfected only upon delivery)
FACTS
Queao applied with Naguiat a loan for P200,000, which the latter granted.
Naguiat indorsed to Queao Associated bank Check No. 090990 for the
amount of P95,000 and issued also her own Filmanbank Check to the order of
Queao for the amount of P95,000. The proceeds of these checks were to
constitute the loan granted by Naguiat to Queao. To secure the loan, Queao
executed a Deed of Real Estate Mortgage in favor of Naguiat, and
surrendered the owners duplicates of titles of the mortgaged properties. The

deed was notarized and Queao issued to Naguiat a promissory note for the
amount of P200,000. Queao also issued a post-dated check amounting to
P200,000 payable to the order of Naguait. The check was dishonoured for
insufficiency of funds. Demand was sent to Queao. Shortly, Queao, and one
Ruby Reubenfeldt met with Naguiat. Queao told Naguiat that she did not
receive the loan proceeds, adding that the checks were retained by
Reubenfeldt, who purportedly was Naguiats agent.
Naguiat applied for extrajudicial foreclosure of the mortgage. RTC declared
the Deed as null and void and ordered Naguiat to return to Queao the
owners duplicates of titles of the mortgaged lots.
ISSUE
Whether or not the issuance of check resulted in the perfection of the loan
contract.
HELD
The Court held in the negative. No evidence was submitted by Naguiat that
the checks she issued or endorsed were actually encashed or deposited. The
mere issuance of the checks did not result in the perfection of the contract of
loan. The Civil Code provides that the delivery of bills of exchange and
mercantile documents such as checks shall produce the effect of payment
only when they have been cashed. It is only after the checks have been
produced the effect of payment that the contract of loan may have been
perfected.
Article 1934 of the Civil Code provides: An accepted promise to deliver
something by way of commodatum or simple loan is binding upon the parties,
but the commodatum or simple loan itsel shall not be perfected until the
delivery of the object of the contract. A loan contract is a real contract, not
consensual, and as such, is perfected only upon the delivery of the objects of
the contract.
5. Republic v. Bagtas (Bulls, lease not commodatum, bull died from
Huk raid [fortuitous event], who bears the the loss)
Facts: Bagtas borrowed three bulls from the Bureau of Animal Industry for one
year for breeding purposes subject to payment of breeding fee of 10% of
book value of the bull. Upon expiration, Bagtas asked for renewal. The
renewal was granted only to one bull. Bagtas offered to buy the bulls at its
book value less depreciation but the Bureau refused. The Bureau said that
Bagtas should either return or buy it at book value. Bagtas proved that he
already returned two of the bulls, and the other bull died during a Huk raid,
hence, obligation already extinguished. He claims that the contract is a
commodatum hence, loss through fortuitous event should be borne by the
owner.
Issue: WON Bagtas is liable for the death of the bull.
Held: Yes. Commodatum is essentially gratuitous. However, in this case, there

is a 10% charge. If this is considered compensation, then the case at bar is a

lease. Lessee is liable as possessor in bad faith because the period already
lapsed.
Even if this is a commodatum, Bagtas is still liable because the fortuitous
event happened when he held the bull and the period stipulated already
expired and he is liable because the thing loaned was delivered with appraisal
of value and there was no contrary stipulation regarding his liability in case
there is a fortuitous event.
6. Pajuyo v. CA (Kasunduan is not a commodatum, involves a
condition, ejectment case supposes a landlord-tenant relationship)
Facts:
Pajuyo and Guevarra executed a Kasunduan. Pajuyo, as owner of a house,
allowed Guevarra to live in the house for free provided Guevarra would
maintain the cleanliness and orderliness of the house. Guevarra promised
that he would voluntarily vacate the premises on Pajuyos demand.
After some time, Pajuyo informed Guevarra of his need of the house,
however, Guevarra refused to vacate the house. Hence, Pajuyo filed an
ejectment case against Guevarra in the MTC.
The MTC ruled in favor of Pajuyo and ordered Guevarra to vacate the lot.
Pajuyo is the owner of the house, and he allowed Guevarra to use the house
only by tolerance. Thus, Guevarras refusal to vacate the house on Pajuyos
demand made Guevarras continued possession of the house illegal. The RTC
upheld the Kasunduan, which established the landlord and tenant relationship
between Pajuyo and Guevarra. However, the Court of Appeals reversed the
MTC and RTC rulings, which held that the Kasunduan between Pajuyo and
Guevarra created a legal tie akin to that of a landlord and tenant relationship.
The Court of Appeals ruled that the Kasunduan is not a lease contract but a
commodatum because the agreement is not for a price certain.
Issue: Whether or not the Kasunduan voluntarily entered into by the parties
was in fact a commodatum, instead of a Contract of Lease as found by the
MTC.
Ruling: No.
The Kasunduan reveals that the accommodation accorded by Pajuyo to
Guevarra was not essentially gratuitous. While the Kasunduan did not require
Guevarra to pay rent, it obligated him to maintain the property in good
condition. The imposition of this obligation makes the Kasunduan a contract
different from a commodatum. The effects of the Kasunduan are also different
from that of a commodatum.
Even assuming that the relationship between Pajuyo and Guevarra is one of
commodatum, Guevarra as bailee would still have the duty to turn over
possession of the property to Pajuyo, the bailor. The obligation to deliver or to
return the thing received attaches to contracts for safekeeping, or contracts
of commission, administration and commodatum. These contracts certainly
involve the obligation to deliver or return the thing received.

+++ But is it not the duty of the bailee to maintain the thing loaned in the first place?
7. Producers Bank v. CA (intent of parties govern, commodatum not
a mutuum, a consumable can be subject to a commodatum provided
it is meant not to be consumed, money to be able to incorporate,
fruit of 12K belongs to the bailor)
FACTS:
Sometime in 1979, private respondent Franklin Vives was asked by his
neighbor and friend Angeles Sanchez to help her friend and townmate, Col.
Arturo Doronilla, in incorporating his business, the Sterela Marketing and
Services (Sterela for brevity). Specifically, Sanchez asked private
respondent to deposit in a bank a certain amount of money in the bank
account of Sterela for purposes of its incorporation. (rationale: Doronilla had
to show that he had sufficient funds for incorporation) She assured private
respondent that he could withdraw his money from said account within a
months time. With this, Mrs. Vivies, Sanchez and a certain Estrella Dumagpi,
secretary of Doronilla, went to the bank to open an account with Mrs. Vives
and Sanchez as signatories. A passbook was then issued to Mrs. Vives (the
passbook was given to the wife of Vives and the passbook had an instruction
that no withdrawals/deposits will be allowed unless the passbook is
presented).. Subsequently, private respondent learned that part of the money
was withdrawn without presentment of the passbook as it was his wife got
hold of such. Mrs. Vives could not also withdraw said remaining amount
because it had to answer for some postdated checks issued by Doronilla who
opened a current account for Sterela and authorized the bank to debit
savings.
Private respondent referred the matter to a lawyer, who made a written
demand upon Doronilla for the return of his clients money. Doronilla issued
another check for P212,000.00 in private respondents favor but the check
was again dishonored for insufficiency of funds.
Private respondent instituted an action for recovery of sum of money in the
Regional Trial Court (RTC) in Pasig, Metro Manila against Doronilla, Sanchez,
Dumagpi and petitioner. The RTC ruled in favor of the private respondent
which was also affirmed in toto by the CA. Hence this petition.
ISSUE: WON THE TRANSACTION BETWEEN THE DORONILLA AND
RESPONDENT VIVES WAS ONE OF SIMPLE LOAN.
HELD: NO.
A circumspect examination of the records reveals that the transaction
between them was a commodatum. Article 1933 of the Civil Code
distinguishes between the two kinds of loans in this wise:
By the contract of loan, one of the parties delivers to another, either
something not consumable so that the latter may use the same for a certain
time and return it, in which case the contract is called a commodatum; or
money or other consumable thing, upon the condition that the same amount

of the same kind and quality shall be paid, in which case the contract is
simply called a loan or mutuum.
Commodatum is essentially gratuitous.
Simple loan may be gratuitous or with a stipulation to pay interest.
In commodatum, the bailor retains the ownership of the thing loaned, while in
simple loan, ownership passes to the borrower.
The foregoing provision seems to imply that if the subject of the contract is a
consumable thing, such as money, the contract would be a mutuum.
However, there are some instances where a commodatum may have for its
object a consumable thing. Article 1936 of the Civil Code provides:
Consumable goods may be the subject of commodatum if the purpose of the
contract is not the consumption of the object, as when it is merely for
exhibition.
Thus, if consumable goods are loaned only for purposes of exhibition, or when
the intention of the parties is to lend consumable goods and to have the very
same goods returned at the end of the period agreed upon, the loan is a
commodatum and not a mutuum.
The rule is that the intention of the parties thereto shall be accorded
primordial consideration in determining the actual character of a contract. In
case of doubt, the contemporaneous and subsequent acts of the parties shall
be considered in such determination.
+++ But how can you return the exact same thing in this case (as per a
commodatum
8. Mina v. Pascual (warehouse on lot, not a commodatum due to lack
of fixed period, sale void: He who has only the use of a thing cannot
validly sell the thing itself, ownership is not possessed)
FACTS:
Francisco was the owner of the lot where Andres Fontanilla,with the consent
of the owner, erected a warehouse. Mina et al. Were considered as
Franciscos heirs while Ruperta Pascuals children were considered as heirs of
Andres. Pascual, as guardian of her minor children, requested for an
authorization to sell the six-sevenths of one half of the warehouse together
with its lot. Mina opposed the petition for the reason that Pascual had
included therein the lot occupied by the warehouse, which they claimed was
their exclusive property. The court, before determining the ownership of the
lot, ordered the sale of the building.
b.ISSUE:
Whether or not the sale is void
c.HELD:
Yes. What is essentially pertinent is the fact that the defendants agree that

the plaintiffs have the ownership and they themselves only the use
(commodatum) of the said lot. He who has only the use of a thing cannot
validly sell the thing itself. The effect of the sale being a transfer of the
ownership of the thing, it is evident that he who has only the mere use of the
thing cannot transfer its ownership. Hence, it is null and void
------------------------------------------------------------------------------------------------------------------------------Francisco is the owner of land and he allowed his brother, Andres, to erect a
warehouse in that lot. Both Francisco and Andres died and their children
became their respective heirs: Mina for Francisco and Pascual for Andres.
Pascual sold his share of the warehouse and lot. Mina opposed because the
lot is hers because her predecessor (Francisco) never parted with its
ownership when he let Andres construct a warehouse, hence, it was a
contract of commodatum. What is the nature of the contract between
Francisco and Andres?
The Supreme Court held that it was not a commodatum. It is an essential
feature of commodatum that the use of the thing belonging to another shall
be for a certain period. The parties never fixed a definite period during which
Andres could use the lot and afterwards return it.
+++ Precarium? [because this case came out before the new civil code
+++ Hence, as the facts aforestated only show that a building was erected
on another's ground, the question should be decided in accordance with the
statutes that, thirty years ago, governed accessions to real estate. It is only
necessary to annul the sale of the said lot which was made by Ruperta
Pascual, in representation of her minor children, to Cu Joco, and to maintain
the latter in the use of the lot until the plaintiffs shall choose one or the other
of the two rights granted them by article 361 of the Civil Code
the owner of the land on which a building is erected in good faith has a right
to appropriate such edifice to himself, after payment of the indemnity
prescribed in articles 453 and 454, or to oblige the builder to pay him the
value of the land. Such, and no other, is the right to which the plaintiff are
entitled.
9. Quintos v. Beck (lease, commodatum of furniture, deposit does
not comply with the obligation, 3 gas heaters and 4 electric lamps)
Quintos and Beck entered into a contract of lease, whereby the latter occupied the formers house.
On Jan 14, 1936, the contract of lease was novated, wherein the QUintos gratuitously granted to
Beck the use of the furniture, subject to the condition that Beck should return the furnitures to
Quintos upon demand. Thereafter, Quintos sold the property to Maria and Rosario Lopez. Beck
was notified of the conveyance and given him 60 days to vacate the premises. IN addition,
Quintos required Beck to return all the furniture. Beck refused to return 3 gas heaters and 4
electric lamps since he would use them until the lease was due to expire. Quintos refused to get
the furniture since Beck had declined to return all of them. Beck deposited all the furniture
belonging to QUintos to the sheriff.
ISSUE: WON Beck complied with his obligation of returning the furnitures to Quintos when it
deposited the furnitures to the sheriff.

RULING: The contract entered into between the parties is one of commadatum, because under it
the plaintiff gratuitously granted the use of the furniture to the defendant, reserving for herself the
ownership thereof; by this contract the defendant bound himself to return the furniture to the
plaintiff, upon the latters demand (clause 7 of the contract, Exhibit A; articles 1740, paragraph 1,
and 1741 of the Civil Code). The obligation voluntarily assumed by the defendant to return the
furniture upon the plaintiff's demand, means that he should return all of them to the plaintiff at the
latter's residence or house. The defendant did not comply with this obligation when he merely
placed them at the disposal of the plaintiff, retaining for his benefit the three gas heaters and the
four eletric lamps.
As the defendant had voluntarily undertaken to return all the furniture to the plaintiff, upon the
latter's demand, the Court could not legally compel her to bear the expenses occasioned by the
deposit of the furniture at the defendant's behest. The latter, as bailee, was nt entitled to place the
furniture on deposit; nor was the plaintiff under a duty to accept the offer to return the furniture,
because the defendant wanted to retain the three gas heaters and the four electric lamps.
+++was not labeled as a precarium because case was prior to the New Civil Code
10. Republic v. Grijaldo (loan secured by chattel mortgage, crops as
payment, mutuum, obligation is to deliver a generic thing,
moratorium halted prescription)
FACTS:
In the year 1943 appellant Jose Grijaldo obtained five loans from the branch office of the Bank of
Taiwan, Ltd. in Bacolod City, in the total sum of P1,281.97 with interest at the rate of 6% per
annum, compounded quarterly. These loans are evidenced by five promissory notes executed by
the appellant in favor of the Bank of Taiwan, Ltd., as follows: On June 1, 1943, P600.00; on June
3, 1943, P159.11; on June 18, 1943, P22.86; on August 9, 1943,P300.00; on August 13, 1943,
P200.00, all notes without due dates, but because the loans were due one year after they were
incurred. To secure the payment of the loans the appellant executed a chattel mortgage on the
standing crops on his land, Lot No. 1494 known as Hacienda Campugas in Hinigiran, Negros
Occidental.
By virtue of Vesting Order No. P-4, dated January 21, 1946, and under the authority provided for
in the Trading with the Enemy Act, as amended, the assets in the Philippines of the Bank of
Taiwan, Ltd. were vested in the Government of the United States. Pursuant to the Philippine
Property Act of 1946 of the United States, these assets, including the loans in question, were
subsequently transferred to the Republic of the Philippines by the Government of the United
States under Transfer Agreement dated July 20, 1954. These assets were among the properties
that were placed under the administration of the Board of Liquidators created under Executive
Order No. 372, dated November 24, 1950, and in accordance with Republic Acts Nos. 8 and 477
and other pertinent laws.
On September 29, 1954 the appellee, Republic of the Philippines, represented by the Chairman of
the Board of Liquidators, made a written extrajudicial demand upon the appellant for the payment
of the account in question. The record shows that the appellant had actually received the written
demand for payment, but he failed to pay.
On January 17, 1961 the appellee filed a complaint in the Justice of the Peace Court of Hinigaran,
Negros Occidental, to collect from the appellant the unpaid account in question. The Justice of the
Peace Of Hinigaran, after hearing, dismissed the case on the ground that the action had

prescribed. The appellee appealed to the Court of First Instance of Negros Occidental and on
March 26, 1962 the court a quo rendered a decision ordering the appellant to pay the appellee the
sum of P2,377.23 as of December 31, 1959, plus interest at the rate of 6% per annum
compounded quarterly from the date of the filing of the complaint until full payment was made.
The appellant was also ordered to pay the sum equivalent to 10% of the amount due as attorney's
fees and costs.
The appellant appealed directly to this Court. During the pendency of this appeal the appellant
Jose Grijaldo died. Upon motion by the Solicitor General this Court, in a resolution of May 13,
1963, required Manuel Lagtapon, Jacinto Lagtapon, Ruben Lagtapon and Anita L. Aguilar, who
are the legal heirs of Jose Grijaldo to appear and be substituted as appellants in accordance with
Section 17 of Rule 3 of the Rules of Court.
ISSUE:
Whether or not the obligation to pay is extinguished.
The appellant likewise maintains, in support of his contention that the appellee has no cause of
action, that because the loans were secured by a chattel mortgage on the standing crops on a land
owned by him and these crops were lost or destroyed through enemy action his obligation to pay
the loans was thereby extinguished.
HELD:
This argument is untenable. The terms of the promissory notes and the chattel mortgage that the
appellant executed in favor of the Bank of Taiwan, Ltd. do not support the claim of appellant. The
obligation of the appellant under the five promissory notes was not to deliver a determinate thing
namely, the crops to be harvested from his land, or the value of the crops that would be harvested
from his land. Rather, his obligation was to pay a generic thing the amount of money
representing the total sum of the five loans, with interest. The transaction between the appellant
and the Bank of Taiwan, Ltd. was a series of five contracts of simple loan of sums of money. "By
a contract of (simple) loan, one of the parties delivers to another ... money or other consumable
thing upon the condition that the same amount of the same kind and quality shall be paid."
(Article 1933, Civil Code) The obligation of the appellant under the five promissory notes
evidencing the loans in questions is to pay the value thereof; that is, to deliver a sum of money
a clear case of an obligation to deliver, a generic thing. Article 1263 of the Civil Code provides:
In an obligation to deliver a generic thing, the loss or destruction of anything of the same kind
does not extinguish the obligation.
The chattel mortgage on the crops growing on appellant's land simply stood as a security for the
fulfillment of appellant's obligation covered by the five promissory notes, and the loss of the
crops did not extinguish his obligation to pay, because the account could still be paid from other
sources aside from the mortgaged crops.

11. Martinez v. Ramos (son receives by order of his father, I promise

to pay - personal loan)

12. Tan v. Valehueza (not a loan but an equitable mortgage, no

payment of unstipulated interest, nuts)
Facts:Defendants herein, Arador, Rediculo, Pacita, Concepcion and Rosario, all surnamed
Valdehueza, are brothers and sisters; the parcel of land described in the first cause of action was
the subject matter of the public auction sale wherein the plaintiff was the highest bidder and as
such a Certificate of Sale was executed in favor of LUCIA TAN the herein plaintiff. Due to the
failure of defendant Arador Valdehueza to redeem the said land within the period of one year as
being provided by law, an ABSOLUTE DEED OF SALE in favor of the plaintiff LUCIA; that
defendants ARADOR VALDEHUEZA and REDICULO VALDEHUEZA have executed two
documents of DEED OF PACTO DE RETRO SALE in favor of the plaintiff herein, LUCIA TAN
of two portions of a parcel of land which is described in the second cause of action with the total
amount of P1,500; that from the execution of the Deed of Sale with right to repurchase mentioned
in the second cause of action, defendants Arador Valdehueza and Rediculo Valdehueza remained
in the possession of the land. A complaint for injunction filed by Tan to enjoin the Valdehuezas
"from entering the parcel of land and gathering the nuts therein ...." This complaint and the
counterclaim were subsequently dismissed for failure of the parties"to seek for the immediate trial
thereof, thus evincing lack of interest on their part to proceed with the case. The Deed of Pacto de
Retro referred to was not registered in the Registry of Deeds, while the 2nd Deed of Pacto de
Retro was registered.
Isue:Whether the transactions between the parties were simple loan?
Held:NO. Under article 1875 of the Civil Code of 1889, registration was a necessary requisite for
the validity of a mortgage even as between the parties,but under article 2125 of the new Civil
Code (in effect since August 30,1950),this is no longer so.The Valdehuezas having remained in
possession of the land and the realty taxes having been paid by them, the contracts which
purported to be pacto de retro transactions are presumed to be equitable mortgages, 5 whether
registered or not, there being no third parties involved.
The parcel of land described in the 1st cause of action was the subject matter of a public auction
sale, where Lucia Tan was the highest bidder. Due to the failure of Arador Valdehueza to redeem
the land within 1 year, the sheriff executed an ABSOLUTE DEED OF SALE in favour of Lucia
Tan.

Arador and Rediculo Valdehueza have executed 2 documents of DEED OF PACTO DE RETRO
SALE in favour Lucia tan of 2 portions of a parcel of land which is described in the 2nd cause of
action with the total amount of P1,500.00. One of the deeds of PACTO DE RETRO SALE was
unregistered.
From the execution of the Deed of Sale with right to repurchase mentioned in the 2nd cause of
action, the Valdehuezas remained in the possession of the land; that land taxes to the said land
were paid by them.
Tan filed an action against the Valdehuezas for (a) declaration of ownership and recovery of
possession of the parcel of land described in the 1st cause of action, and (b) consolidation of
ownership of two portions of another parcel of (unregistered) land described in the 2nd cause of
action of the complaint, purportedly sold to the plaintiff in 2 separate deeds of pacto de retro.
The trial court ruled in favour of Tan.
ISSUE
Whether the 2nd cause of action that the transactions between the parties were simple loan and
not equitable mortgage.
DECISION
The Valdehuezas having remained in possession of the land and the realty taxes having been paid
by them, the contracts which purported to be pacto de retro transactions are presumed to be
equitable mortgages, whether registered or not, there being no third parties involved.
The trial court treated the registered deed of pacto de retro as an equitable mortgage but
considered the unregistered deed of pacto de retro "as a mere case of simple loan, secured by the
property thus sold under pacto de retro," on the ground that no suit lies to foreclose an
unregistered mortgage. It would appear that the trial judge had not updated himself on law and
jurisprudence; he cited, in support of his ruling, article 1875 of the old Civil Code and decisions
of this Court circa 1910 and 1912.
Under article 1875 of the Civil Code of 1889, registration was a necessary requisite for the
validity of a mortgage even as between the parties, but under article 2125 of the new Civil Code
(in effect since August 30,1950), this is no longer so.
If the instrument is not recorded, the mortgage is nonetheless binding between the parties.
(Article 2125, 2nd sentence).
The Valdehuezas claim that their answer to the complaint of Tan affirmed that they remained in
possession of the land and gave the proceeds of the harvest to the Tan; it is thus argued that they
would suffer double prejudice if they are to pay legal interest on the amounts stated in the pacto
de retro contracts, as the lower court has directed, and that therefore the court should have
ordered evidence to be adduced on the harvest.
The record does not support this claim. Nowhere in the original and the amended complaints is an
allegation of delivery to the plaintiff of the harvest from the land involved in the 2nd cause of
action. Hence, the Valdehuezas's answer had none to affirm.
The imposition of legal interest on the amounts subject of the equitable mortgages, P1,200 and
P300, respectively, is without legal basis, for, "No interest shall be due unless it has been
expressly stipulated in writing." (Article 1956, new Civil Code) Furthermore, the Tan did not pray
for such interest; her thesis was a consolidation of ownership, which was properly rejected, the

contracts being equitable mortgages.

13. Jardenil v. Solas (foreclosure of mortgage, interest up to the date
of maturity, legal interest afterwards, interest shall be due only
when it has been expressly stipulated)
Jardenil vs Solas
Facts:
An action for foreclosure of mortgage. Solas agreed to pay interest only up to the date of maturity.
The contract is silent as to whether after the date of maturity, in the event of non-payment, the
debtor would continue to pay interest.
Issue:
IS Solas bound to pay the stipulated interest only up to the date of maturity as fixed in the
promissory note, or up to the date payment is effected?
Held: It was only up to the date of maturity
Ratio:
Interest shall be due only when it has been expressly stipulated. The court must not impose an
obligation that the parties have not chosen to agree upon. The act of the mortgagee of granting to
the mortgagor on the deed of mortgage an extension of one year from the date of maturity to
make the payment without making any mention of any interest which the mortgagor should pay
during the additional period indicates the true intention of the parties that not interest should be
paid during the period of grace.

14. Soncuya v. Azarraga (payment of interest must be expressly

stipulated

15. Royal Shirt v. Co Bon Tic (ballet shoes, outright sale not
consignment, no signed stipulated interest, legal interest for delay)
FACTS:

- The parties entered into a contract wherein it is stipulated that 350 pairs of
ballet shoes will be sold by Co and that Co had 9 days from delivery of the
shoes to make his choice of 2 alternatives: a) consider the sale for the shoes
closed at a flat rate, or b) return the remaining unsold ones to Royal.
- Co failed to return the unsold pairs after 9 days and actually began making
partial payments on account of the purchase price agreed upon.
- Co then contended that there was merely a consignment of the goods and he
wanted to return the unsold shoes. Royal refused contending that it was an
outright sale.
ISSUE: WoN the sale was an outright sale / WoN Co is bound by the interest stipulated
in the invoice.
SC: YES! / NO!
- OUTRIGHT SALE
o Co accepted the invoice of the ballet shoes and he even noted down in
his own handwriting the partial payments that he made.
o If the sale has been on consignment, a stipulation as to the period of
time for the return of the unsold shoes should have been made,
however, this was not done
- NOT BOUND BY THE INTEREST (for Attorneys fees)
o He did not sign the invoice slip the stipulated interest was 20%, hence,
not binding
o However, he is bound by the legal interest of 6%
Hence, Co was ordered to pay the balance of the purchase price for the ballet shoes
+ legal interest
Facts:
An action for the recovery of money by Royal Shirt Factory from Co Bon Tic the sum of P1,422 to represent
the balance of the price of 350 pairs of Balleteenas shoes at P7 a pair with interest at 12% per annum
Issue: Whether it was an outright sale or a sale merely on consignment ?
Municipal court held that it was a sale on consignment while CFI held that it was an outright sale.
Held: It was an outright sale.
Ratio:
In Exhibit A, an order slip contained a condition in the sale. According to the testimony of Mr. Chebat it
means that Co could either consider the sale as 1) one on consignment, sell as many shoes as he could for
any price and pay for it at P8 a pair and at the end of 9 days, return the shoes unsold; or 2) an absolute
sale at P7 a pair. Since he was not able to return any of the shoes at the end of nine days, he must have
chosen the second alternative. But since this was a self serving evidence, it was not admitted.

The court looked at the conduct of the parties. Exhibit B was an invoice of the same 350 shoes including
sales tax listed as P2,450. It was noted down in his own handwriting the different partial payments of
P500, P528 and lastly the P420 by check. It was obvious that he accepted the outright sale since in making
the partial payments, he made no mention of the number of shoes sold by him and the number of shoes
remaining unsold which he should have done if the sale was on consignment.
Issue: Should the interest rate be at 12% or 6% per annum?
Held: It should only be at 6% per annum.
Ratio: There was an absence of stipulation as to the rate of interest so he would be paying only 6% per
annum. Exhibit A does not have any stipulation as to the rate of interest. Exhibit B was not signed by him.
If the court would hold Co bound by Exhibit B, it was only because of his tacit acceptance of the total
value of 350 pairs of shoes.

16. Arwood Industries v. D.M. Consunji (2% interest, delay causes

interest even if not stipulated, two options in case of delay,
construction of condo)
FACTS: Petitioner and respondent, as owner and contractor, respectively entered into
an Agreement for the construction of petitioners condominium. Despite the
completion of the project, petitioner was not able to pay respondent the full amount
and left a balance. Repeated demands were left unheeded prompting respondent to
file a civil case against petitioner, with a prayer among others that the full amount be
paid with interest of 2% per month, from Nov. 1990 up to the time of payment. RTC
ruled in favor of respondent. Petitioner appealed to the CA, particularly opposing the
imposition of the 2% interest. The CA ruled in favor of the 2% interest.
Petitioners contention- The imposition of the interest is without basis because (1)
although it was written in the Agreement, it was not mentioned by the RTC in the
dispositive portion and (2) the interest does not apply to the respondents claim but
to the monthly progress billing.
ISSUE: WON the RTC and Ca is correct in imposing a 2% per month interest on the
monetary award or the balance of the contract price.
HELD: Yes. The Agreement between the parties is the formal expression of the
parties rights, duties and obligations. It is the best evidence of the intention of the
parties. Consequently, upon the fulfillment by respondent of its obligation to
complete the construction project, petitioner had the correlative duty to pay for
respondents services. However, petitioner refused to pay the balance of the contract
price. From the moment respondent completed the construction of the condominium
project and petitioner refused to pay in full, there was delay on the part of petitioner.
Delay in the performance of an obligation is looked upon with disfavor because, when
a party to a contract incurs delay, the other party who performs his part of the
contract suffers damages thereby. Obviously, respondent suffered damages brought
about by the failure of petitioner to comply with its obligation on time. And, sans
elaboration of the matter at hand, damages take the form of interest. Accordingly,
the appropriate measure of damages in this case is the payment of interest at the
rate agreed upon, which is 2% interest for every month of delay.

It must be noted that the Agreement provided the contractor, respondent in this
case, two options in case of delay in monthly payments, to wit: a) suspend work on
the project until payment is remitted by the owner or b) continue the work but the
owner shall be required to pay interest at a rate of two percent (2%) per month or a
fraction thereof. Evidently, respondent chose the latter option, as the condominium
project was in fact already completed. The payment of the 2% monthly interest,
therefore, cannot be jettisoned overboard.
Since the Agreement stands as the law between the parties, this Court cannot ignore
the existence of such provision providing for a penalty for every months delay. Facta
legem facunt inter partes. Neither can petitioner impugn the Agreement to which it
willingly gave its consent. From the moment petitioner gave its consent, it was
bound not only to fulfill what was expressly stipulated in the Agreement but also all
the consequences which, according to their nature, may be in keeping with good
faith, usage and law. Petitioners attempt to mitigate its liability to respondent should
thus fail.
As a last-ditch effort to evade liability, petitioner argues that the amount of
P962,434.78 claimed by respondent and later awarded by the lower courts does not
refer to monthly progress billings, the delayed payment of which would earn
interest at 2% per month.
Petitioner appears confused by a semantics problem. Monthly progress billings
certainly form part of the contract price. If the amount claimed by respondent is not
the monthly progress billings provided in the contract, what then does such amount
represent? Petitioner has not in point of fact convincingly supplied an answer to this
query. Neither has petitioner shown any effort to clarify the meaning of monthly
progress billings to support its position. This leaves us no choice but to agree with
respondent that the phrase monthly progress billings refers to a portion of the
contract price payable by the owner (petitioner) of the project to the contractor
(respondent) based on the percentage of completion of the project or on work
accomplished at a particular stage. It refers to that portion of the contract price still
to be paid as work progresses, after the downpayment is made.
This definition is, indeed, not without basis. Articles 6.02 and 6.03 of the Agreement,
which respectively provides that the (b)alance shall be paid in monthly progress
payments based on actual value of the work accomplished and that the progress
payments shall be reduced by a portion of the downpayment made by the OWNER
corresponding to the value of the work completed give sense to respondents
interpretation of monthly progress billings.

17. Overseas Bank v. Cordero (80k time deposit, bank is exempted

from paying interest during insolvency as it cannot generate funds
to pay)
Facts:
Cordero opened a one-year time deposit with Overseas Bank of Manila in the amount of P80K with
interest at the rate of 6% per annum.

 Due to the distressed financial condition of the bank, it was unable to pay Cordero his said time
deposit and its interest
Cordero instituted an action at the CFI
The bank raised as special defense its state of insolvency
CFI rules in favor of Cordero. CA affirms.
There were certain supervening events regarding the principal amount. It turns out that Corderos
brother and atty-in-fact, already received P10K from PDIC. Also, the brother already received the
sum of P73,840. So the principal claim of respondent was already satisfied. The only issue
remaining was the interest
Issue: Is the respondent entitled to the interest on his time deposit during the period that petitioner was
closed? No
Ratio:
A bank should pay stipulated interest on money deposited if it was able to generate funds to cover the
payment of such interest. But this obligation to pay interest on the deposit ceases from the moment the
operation of the bank is completely suspended by the Central Bank.

18. Ramos v. Central Bank (banks, no payment of interest during

closure)
Facts:

This is a resolution only so the facts are limited.

There was a Motion for Reconsideration filed by Central Bank regarding the Courts Resolution applying
the Tapia ruling reaffirmed by the court in cases such as OBM vs Cordero (previous case) that the bank is
not liable for interest on the Central Bank loans and advances during the period of its closure.
Issue: Payment of interest
The payment of interest should not be made.

Pending final determination is respondent Central Bank's motion for

reconsideration dated December 28, 1982 of the Court's Resolution of
October 19, 1982 which ruled "applying the Tapia ruling as reaffirmed by the
Court in the subsequent cases cited above OBM vs. Vicente Cordero, 113
SCRA 303 (March 30, 1982), per Escolin, J.; OBM vs. Julian Cordero, 113
SCRA 778 (April 27, 1982), per Barredo, J.) that the bank is not liable for
interest on the Central Bank loans and advances during the period of its
closure from August 21 1968 to January 8, 1981."

In the Tapia ruling (105 SCRA 49, June 11, 1981), the Court held that "the
obligation to pay interest on the deposit ceases the moment the operation of
the bank is completely suspended by the duly constituted authority, the
Central Bank," and that "for the guidance of those who might be concerned,
and so that unnecessary litigations may be avoided from further clogging the
dockets of the courts, that in the light of the considerations expounded in the
above opinion, the same formula that exempts petitioner from the payment of
interest to its depositors during the whole period of factual stoppage of its
operations by orders of the Central Bank, modified in effect by the decision
as well as the approval of a formula of rehabilitation by this Court, should be,
as a matter of consistency, applicable or followed in respect to all other
obligations of petitioner which could not be paid during the period of its actual
complete closure."
Pending final determination is respondent Central Bank's motion for
reconsideration dated December 28, 1982 of the Court's Resolution of
October 19, 1982 which ruled "applying the Tapia ruling as reaffirmed by the
Court in the subsequent cases cited above OBM vs. Vicente Cordero, 113
SCRA 303 (March 30, 1982), per Escolin, J.; OBM vs. Julian Cordero, 113
SCRA 778 (April 27, 1982), per Barredo, J.) that the bank is not liable for
interest on the Central Bank loans and advances during the period of its
closure from August 21 1968 to January 8, 1981."

In the Tapia ruling (105 SCRA 49, June 11, 1981), the Court held that "the
obligation to pay interest on the deposit ceases the moment the operation of
the bank is completely suspended by the duly constituted authority, the
Central Bank," and that "for the guidance of those who might be concerned,
and so that unnecessary litigations may be avoided from further clogging the

dockets of the courts, that in the light of the considerations expounded in the
above opinion, the same formula that exempts petitioner from the payment of
interest to its depositors during the whole period of factual stoppage of its
operations by orders of the Central Bank, modified in effect by the decision
as well as the approval of a formula of rehabilitation by this Court, should be,
as a matter of consistency, applicable or followed in respect to all other
obligations of petitioner which could not be paid during the period of its actual
complete closure."

19. Lirag v. SSS (Stocks, (re)purchase agreement is a debt

instrument, surety, 12% as liquidated damages due to breach, bound to
earn legal interest from the time of demand, in this case, judicial i.e. the time of filing the action.)
Facts:
SSS (respondent) and Lirag Textile Mills (Petitioner) entered into a Purchased
Agreement which Respondent agreed to purchase preferred stocks of Petitioner
worth P1 million subject to conditions:
o For Petitioner to repurchase the shares of stocks at a regular interval of
one year and to pay dividends.
o Failure to redeem and pay the dividend, the entire obligation shall
become due and demandable and it shall be liable for an amount
equivalent to 12% of the amount then outstanding as liquidated
damages.
Basilio Lirag (Basilio) as President of Lirag Textile Mills signed the Agreement as a
surety to guarantee the redemption of the stocks, the payment of dividends and
other obligations.
Pursuant to the Agreement, Respondent paid Petitioner P500,000 on two occasions
and the latter issued 5,000 preferred stocks with a par value of P100 as
evidenced by Stock Certificate Nos. 128 and 139.
After sending Respondent sent demand letters, Petitioner and Basilio still made no
redemption nor made dividend payments.
Respondent filed an action for specific performance and damages against Petitioner:

 Petitioner contends that there is no obligation on their part to redeem the stock
certificates since Respondent is still a preferred stock holder of the company and
such redemption is dependent upon the financial ability of the company.
On the part of Basilio, he contends that his liability only arises only if the company
is liable and does not perform its obligations under the Agreement.

Issue:
1) Whether or not the Purchase Agreement entered into by the Parties is a debt
instrument?
2) If so, Is Basilio liable as surety?
3) Whether or not Lirag is liable for the interest as liquidated damages?

Held:
1) YES, the Purchase Agreement is a debt instrument. The terms and conditions of the
Agreement show that parties intended the repurchase of preferred shares on the
respective scheduled dates to be an absolute obligation, which does not depend
on the financial ability of the corporation.
o This absolute obligation on the part of the Petitioner corporation is made
manifest by the fact that a surety was required to see to it that the obligation
is fulfilled in the event the principal debtors inability to do so.
o It cannot be said that SSS is a preferred stockholder. The rights given by the
Purchase Agreement to SSS are not rights enjoyed by ordinary stockholders.
Since there was a condition that failure to repurchase the stocks on the
scheduled dates renders the entire obligation due and demandable with
interest. These features clearly show that intent of the parties to be bound
therein as debtor and creditor and not as a corporation and stockholder.
2) YES, Basilio is liable as surety. Thus it follows that he cannot deny liability for
Lirags default. As surety, he is bound immediately to pay SSS the amount then
outstanding.
3) The award of liquidated damages represented by 12% of the amount then
outstanding is correct, considering that the petitioners in the stipulation of facts
admitted having failed to fulfill their obligations under the Agreement. The grant
of liquidated damages is expressly provided for the Purchase Agreement in case
of contractual breach.
Since Lirag did not deny its failure to redeem the preferred shares and the nonpayment of dividends which are overdue, they are bound to earn legal interest
from the time of demand, in this case, judicial i.e. the time of filing the action.

20. Angel Jose v. Chelda Enterprises (usurious loan does not preclude
payment of principal, divisible: illegal part may be separated from
legal part, interest is only an accessory obligation, whole interest
will be taken out)
Plaintiff filed a case in the CFI against partnership Chelda and David Syjueco for the recovery of
unpaid loans in the total amount of P20,880 with legal interest from the filing of the complaint.
Defendants averred that they obtained four loans totaling P26,500. Out of this 5,620 had been paid
leaving a balance of P20,880 and that plaintiff charged and deducted from the loan usurious
interest at rates of 2% and 2.5% per month, hence the plaintiff had no cause of action and should
not be permitted to recover.
Plaintiff denies the usury.
CFI finds that the unpaid principal amount was P20,287.50 and that P1,048.15 had been deducted in
advance by plaintiff. Thus it should be deducted from the principal leaving a balance of
P19,247.35 still payable to the plaintiff. It also ruled that notwithstanding the usurious interest
rate, such does not bar the payment of the principal amount.
Respondents contentions:
A usurious loan is void due to illegality of cause or object, the rule of pari delicto bars the action that can
be brought about by both parties based on Article 1411.
Issue: In a loan with usurious interest, may the creditor recover the principal of the loan?
Held: Yes
Ratio:
A contract of loan with a usurious interest consists of principal and accessory stipulations. The principal is
to pay the debt and the accessory is to pay interest.
The stipulations are divisible in the sense that the former can still stand without the latter. In case of a
divisible contract, if the illegal terms can be separated from the legal ones, the latter may be enforced.
The illegality lies only as to the prestation to pay the stipulated interest; hence being separable, the
latter only should be deemed void since it is the only one that is illegal.

21. Cu-Unjieng v. Mabalacat (compounding of interest was not

stipulated. Voluntary payment of interest does not bind the debtor)
Facts: Cu Unjieng e Hijos loaned Mabalacat 163 k, for security, Mabalacat mortgaged
its property.
Mabalacat failed to pay, but Cu Unjieng extended the payment. Cu Unjieng filed a
case against Mabalacat for foreclosure of property and payment of attorney's fees. It
also claims interest over interest. Mabalacat insisted that the agreement for the
extension of the time of payment had the effect of abrogating the stipulation of the
original contract with respect to the acceleration of the maturity of the debt by noncompliance with the terms of the mortgage. The issue related on this case is the
interest over interest.
Issue: WoN Cu-Unjieng is entitled to interest over interest.

Ruling: It is well settled that, under article 1109 of the Civil Code, as well as under
section 5 of the Usury Law (Act No. 2655), the parties may stipulate that interest shall
be compounded; and rests for the computation of compound interest can certainly be
made monthly, as well as quarterly, semiannually, or annually. But in the absence of
express stipulation for the accumulation of compound interest, no interest can be
collected upon interest until the debt is judicially claimed, and then the rate at which
interest upon accrued interest must be computed is fixed at 6 per cent per annum. In
this case, there was no compound interest in the agreement.
Facts:
Cu Unjieng instituted an action for the recovery of P163,000 with interest from the Mabalacat Sugar
and to foreclose a mortgage.
The mortgage executed by Mabalacat Sugar contains a provision to the effect that non-compliance
on their part will cause the entire debt to become due and give occasion for the foreclosure of
the mortgage. Also, there was a stipulation placing the interest at 12% per annum and that it is
to be computed upon the still unpaid capital of the loan, shall be paid monthly, at the end of
each month
Issue:
1. Should the interest be compounded? Generally the interest can be compounded but not in this case
2. Does the voluntary payment of the interest bind the debtor? No
Ratio:
1. The provision merely requires the debtor to pay interest monthly at the end of each month, such
interest to be computed upon the capital of the loan already paid. It does not justify the
charging of compound interest accruing upon the capital monthly.
2. The interest is improperly charged at an unlawful rate. The voluntary payment is not binding since
it is usurious

22. Velez v. Balzarra (payments were not interests or rents but

payment to the principal, not a lease but a loan, solutio indebti,
what was received in mistake must be restored, Neri had been
benefited by the land)
FACTS:
Plaintiff Velez filed a complaint for the return of parcels of land sold by
Defendant to Plaintiffs husband. She further alleged that defendants had
remained in possession of said land under Contract of Lease but for over 2
years defendants had not paid the agreed rentals.
Defendant alleged that the real agreement was a loan secured by a mortgage of
those lands.

Trial court found that the payments made by defendants were not made by way
of interest but as payments for the principal. Defendant overpaid therefore
Plaintiff should return excess.

ISSUE: Whether payments were intended to be applied to the principal OR were

considered as rents, interests?

HELD:
Payments were NOT rents, interests
Neri took possession of land and collected fruits. The creditor having enjoyed the
beneficial use of the lands delivered as security for the loan, it appears to
have been the intention of the parties that the creditor should be
compensated thereby.
Though receipts, payments are called rents, they were prepared by Neri (Ps
husband) and Plaintiff, and defendants in their ignorance did not look into the
wording, being merely satisfied that they were proofs of payment.
The liability of plaintiff to return the excess payments is in keeping with Article
1895 (Old Civil Code) which provides that, when something is received which
there is no right to collect, and which by mistake has been unduly delivered,
the obligation to restore it arises.
The 2 requisites are present: 1) There is no right to collect these excess sums;
and 2) the amounts have been paid through mistake by defendants. Such
mistake is shown by the fact that their contracts never intended that either
rents or interest should be paid, and by the further fact that when these
payments were made, they were intended by defendants to be applied to the
principal, but they overpaid the amounts loaned to them.
Facts:
Plaintiff, in a complaint, prayed for the return of certain parcels of land which she alleged had been
sold by defendants to plaintiffs deceased husband with right to repurchase.
Plaintiff further alleged that defendants had remained in possession of said land under a contract of
lease but the defendants had not paid their rentals for two years
On the other hand, the defendants alleged that the actual contract was a loan secured by a
mortgage of those lands in which the amount borrowed was P2,400 and that they had already
paid P4,420.88. So they are demanding for the return of the excess.
TC found that the total amount loaned by the deceased Neri to the defendants was P3,067 and that
defendants already paid P4,429.88 and that defendants overpaid the amount of P1,362.88. The
court thus exonerated the defendants and ordered plaintiff to return to defendants the sum of
P432.63 which the plaintiff received from defendants although the amount was not due.

Exhibits A and D purports to be a sale of four and three parcels of land respectively.
Exhibits B, C, and E are contracts of loan from Neri to defendants.
Exhibits A to E were secured by the mortgage of the seven parcels of land.
Issue: WON the payment should be intended as rents or for the payment of the principal.
Held: It must be intended as payment of the principal.
The payments could not have been intended as rents since Neri took possession of the lands and collected
the fruits. None of the contracts were offered in evidence to say that there is any promise made by
defendants to pay rents.
+++As

for the amount to be returned by plaintiff, the trial court held that the plaintiff should return
only the excess sum she actually received (P432.63) but not the over-payment made to the
deceased Neri. If the defendants had appealed from the latter phase of the judgment, perhaps the
application of section 749 of the Code of Civil Procedure (now Rules 89, section 5 of the new
Rules of Court) might have been studied. Under that provision, contingent claims which become
absolute after the settlement of the estate of a deceased person may be enforced proportionately
against the distributees of the estate, and in the instant case this claim against Neri did not become
absolute till the discovery of the mistake, after the distribution of his estate. But defendants not
having appealed, this aspect of the case will not be passed upon.