Ligutan vs. CA, G.

R 138677

Facts:

Petitioners Tolomeo Ligutan and Leonidas dela Llana obtained a loan in the amount of P120,000.00 from
respondent Security Bank and Trust Company. Petitioners executed a promissory note binding
themselves, jointly and severally, with an interest of 15.189% per annum upon maturity and to pay a
penalty of 5% every month on the outstanding principal and interest in case of default and also a 10%
attorney’s fees if the matter were indorsed to a lawyer for collection.

The obligation matured, the petitioners were not able to settle the obligation; The bank gave an
extension, still the same happened. Since the petitioners still defaulted, the former filed a complaint for
recovery of the due amount.

Issue:

Whether the interest and penalty charge imposed by private respondent bank on petitioners’ loan are
manifestly exorbitant, iniquitous and unconscionable?

Held:

The obligor would then be bound to pay the stipulated indemnity without the necessity of proof on the
existence and on the measure of damages caused by the breach. Although a court may not at liberty
ignore the freedom of the parties to agree on such terms and conditions as they see fit that contravene
neither law nor morals, good customs, public order or public policy, a stipulated penalty, nevertheless,
may be equitably reduced by the courts if it is iniquitous or unconscionable or if the principal obligation
has been partly or irregularly complied with. The question of whether a penalty is reasonable or
iniquitous can be partly subjective and partly objective. Its resolution would depend on such factors as,
but not necessarily confined to, the type, extent and purpose of the penalty, the nature of the
obligation, the mode of breach and its consequences, the supervening realities, the standing and
relationship of the parties, and the like, the application of which, by and large, is addressed to the sound
discretion of the court. The CA exercised good judgment in reducing the stipulated penalty interest from
5% to 3% a month. It was also been held that the 15.189% per annum stipulated interest and the 10%
attorney’s is reasonable and not excessive. The interest prescribed in loan financing arrangements is a
fundamental part of the banking business and the core of a bank's existence.
Eastern Shipping vs CA, GR No. 97412

FACTS:

Two fiber drums were shipped owned by Eastern Shipping from Japan. The shipment was insured with a
marine policy. Upon arrival in Manila unto the custody of metro Port Service, which except to one drum,
said to be in bad order and which damage was unknown to the Mercantile Insurance Company. Allied
Brokerage Corporation received the shipment from Metro, one drum opened and without seal. Allied
delivered the shipment to the consignee’s warehouse. The latter excepted to one drum which contained
spillages while the rest of the contents was adulterated/fake. As consequence of the loss, the insurance
company paid the consignee, so that it became subrogated to all the rights of action of consignee
against the defendants Eastern Shipping, Metro Port and Allied Brokerage. The insurance company filed
before the trial court. The trial court ruled in favor of plaintiff and ordered defendants to pay the former
with present legal interest of 12% per annum from the date of the filing of the complaint. On appeal by
defendants, the appellate court denied the same and affirmed in toto the decision of the trial court.

ISSUE:

(1) Whether the applicable rate of legal interest is 12% or 6%.

(2) Whether the payment of legal interest on the award for loss or damage is to be computed from the
time the complaint is filed from the date the decision appealed from is rendered.

HELD:

(1) The Court held that the legal interest is 6% computed from the decision of the court a quo. When an
obligation, not constituting a loan or forbearance of money, is breached, an interest on the amount of
damages awarded may be imposed at the discretion of the court at the rate of 6% per annum. No
interest shall be adjudged on unliquidated claims or damages except when or until the demand can be
established with reasonable certainty.

When the judgment of the court awarding a sum of money becomes final and executor, the rate of legal
interest shall be 12% per annum from such finality until satisfaction, this interim period being deemed to
be by then an equivalent to a forbearance of money.

The interest due shall be 12% PA to be computed from default, J or EJD.

(2) From the date the judgment is made. Where the demand is established with reasonable certainty,
the interest shall begin to run from the time the claim is made judicially or EJ but when such certainty
cannot be so reasonably established at the time the demand is made, the interest shll begin to run only
from the date of judgment of the court is made.

(3) The Court held that it should be computed from the decision rendered by the court a quo.
BPI vs Court of Appeals, GR No. 123498

Facts:

On August 15, 1989, Tevesteco opened a savings and current account with BPI-FB. Soon thereafter,
FMIC also opened a time deposit account with the same branch of BPI-FB

On August 31, 1989, Franco opened three accounts, namely, a current, savings, and time deposit, with
BPI-FB. The total amount of P2M used to open these accounts is traceable to a check issued by
Tevesteco allegedly in consideration of Franco’s introduction of Eladio Teves, to Jaime Sebastian, who
was then BPI-FB SFDM’s Branch Manager. In turn, the funding for 2M check was part of the 80M debited
by BPI-FB from FMIC’s time deposit account and credited to Tevesteco’s current account pursuant to an
Authority to Debit purportedly signed by FMIC’s officers.

It appears, however, that the signatures of FMIC’s officers on the Authority to Debit were forged. BPI-FB,
debited Franco’s savings and current accounts for the amounts remaining therein. In the meantime, two
checks drawn by Franco against his BPI-FB current account were dishonored and stamped with a
notation “account under garnishment.” Apparently, Franco’s current account was garnished by virtue of
an Order of

Notably, the dishonored checks were issued by Franco and presented for payment at BPI-FB prior to
Franco’s receipt of notice that his accounts were under garnishment. It was only on May 15, 1990, that
Franco was impleaded in the Makati case. Immediately, upon receipt of such copy, Franco filed a Motion
to Discharge Attachment. On May 17, 1990, Franco pre-terminated his time deposit account.

BPI-FB deducted the amount of P63,189 from the remaining balance of the time deposit account
representing advance interest paid to him. Consequently, in light of BPI-FB’s refusal to heed Franco’s
demands to unfreeze his accounts and release his deposits therein, Franco filed on June 4, 1990 with the
Manila RTC the subject suit.

ISSUE:

WON Respondent had better right to the deposits in the subject accounts which are part of the
proceeds of a forged Authority to Debit

HELD:

NO. There is no doubt that BPI-FB owns the deposited monies in the accounts of Franco, but not as a
legal consequence of its unauthorized transfer of FMIC’s deposits to Tevesteco’s account. BPI-FB
conveniently forgets that the deposit of money in banks is governed by the Civil Code provisions on
simple loan or mutuum. As there is a debtor-creditor relationship between a bank and its
depositor, BPI-FB ultimately acquired ownership of Franco’s deposits, but such ownership is coupled
with a corresponding obligation to pay him an equal amount on demand. Although BPI-FB owns the
deposits in Franco’s accounts, it cannot prevent him from demanding payment of BPI-FB’s obligation by
drawing checks against his current account, or asking for the release of the funds in his savings account.
Thus, when Franco issued checks drawn against his current account, he had every right as creditor to
expect that those checks would be honored by BPI-FB as debtor.

More importantly, BPI-FB does not have a unilateral right to freeze the accounts of Franco based on its
mere suspicion that the funds therein were proceeds of the multi-million peso scam Franco was
allegedly involved in. To grant BPI-FB, or any bank for that matter, the right to take whatever action it
pleases on deposits which it supposes are derived from shady transactions, would open the floodgates
of public distrust in the banking industry.

Ineluctably, BPI-FB, as the trustee in the fiduciary relationship, is duty bound to know the signatures of
its customers. Having failed to detect the forgery in the Authority to Debit and in the process
inadvertently facilitate the FMIC-Tevesteco transfer, BPI-FB cannot now shift liability thereon to Franco
and the other payees of checks issued by Tevesteco, or prevent withdrawals from their respective
accounts without the appropriate court writ or a favorable final judgment.