Saura Import &Export Co., Inc v.

DBP
G.R. No. L-24968 April 27, 1972

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 parties—
Saura's request for cancellation and RFC's subsequent approval of such
cancellation—was 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.

2. Bonnevie v. CA
GR No. L-49101 October 24, 1983

Facts: Spouses Lozano mortgaged their property to secure the payment of a loan
amounting to 75K with private respondent Philippine Bank of Communication
(PBCom). The deed of mortgage was executed on 12-6-66, but the loan proceeeds
were received only on 12-12-66. Two days after the execution of the deed of
mortgage, the spouses sold the property to the petitioner Bonnevie for and in
consideration of 100k—25K of which payable to the spouses and 75K as payment to
PBCom. Afterwhich, Bonnevie defaulted payments to PBCom prompting the latter to
auction the property after Bonnivie failed to settle despite subsequent demands, in
order to recover the amount loaned. The latter now assails the validity of the
mortgage between Lozano and Pbcom arguing that on the day the deed was
executed there was yet no principal obligation to secure as the loan of P75,000.00
was not received by the Lozano spouses, so that in the absence of a principal
obligation, there is want of consideration in the accessory contract, which
consequently impairs its validity and fatally affects its very existence.

Issue: Was there a perfected contract of loan?

Held: Yes. From the recitals of the mortgage deed itself, it is clearly seen that the
mortgage deed was executed for and on condition of the loan granted to the Lozano
spouses. The fact that the latter did not collect from the respondent Bank the
consideration of the mortgage on the date it was executed is immaterial. A contract
of loan being a consensual contract, the herein contract of loan was perfected at
the same time the contract of mortgage was executed. The promissory note
executed on December 12, 1966 is only an evidence of indebtedness and does not
indicate lack of consideration of the mortgage at the time of its execution.

4. Pajuyo v. CA
GR No. 146364 June 3, 2004

Facts: Pajuyo entrusted a house to Guevara for the latter's use provided he should
return the same upon demand and with the condition that Guevara should be
responsible of the maintenance of the property. Upon demand Guevara refused to
return the property to Pajuyo. The petitioner then filed an ejectment case against
Guevara with the MTC who ruled in favor of the petitioner. On appeal with the CA,
the appellate court reversed the judgment of the lower court on the ground that
both parties are illegal settlers on the property thus have no legal right so that the
Court should leave the present situation with respect to possession of the property
as it is, and ruling further that the contractual relationship of Pajuyo and Guevara
was that of a commodatum.

Issue: Is the contractual relationship of Pajuyo and Guevara that of a

commodatum?

Held: No. The Court of Appeals’ theory that the Kasunduan is one of commodatum
is devoid of merit. In a contract of commodatum, one of the parties delivers to
another something not consumable so that the latter may use the same for a
certain time and return it. An essential feature of commodatum is that it is
gratuitous. Another feature of commodatum is that the use of the thing belonging
to another is for a certain period. Thus, the bailor cannot demand the return of the
thing loaned until after expiration of the period stipulated, or after accomplishment
of the use for which the commodatum is constituted. If the bailor should have
urgent need of the thing, he may demand its return for temporary use. If the use of
the thing is merely tolerated by the bailor, he can demand the return of the thing at
will, in which case the contractual relation is called a precarium. Under the Civil
Code, precarium is a kind of commodatum. 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. Case law on ejectment has treated
relationship based on tolerance as one that is akin to a landlord-tenant relationship
where the withdrawal of permission would result in the termination of the lease.
The tenant’s withholding of the property would then be unlawful.

Eastern Shipping Lines v. CA

GR No. 97412 July 12, 1994

Facts: Petitioner-defendant was consigned to deliver a cargo. Upon embarkment,

the cargo was found to be damaged while on transit. Private respondent-plaintiff,
Mercantile Insurance, paid the consignee the amount of damage based on a marine
insurance policy. Mercantile consquently sued the petitioner for recovery of
damages it paid to the consignee. The court a quo decided in favor of the plaintiff
and further stressing the amount paid by the insurance company to the consignee
be paid and with the present legal interest of 12% per annum commencing on the
date of filing of the complaint, until fully paid. The petitioner now constests the
ruling particularly on the issue of interest.

Issue: When should the reckoning period be for the computation of the payment of
legal interest on an award for loss or damage? What is the applicable rate of
interest?

Held: The Court laid down the following rules of thumb for guidance in cases like
that of the above:

I. When an obligation, regardless of its source, i.e., law, contracts, quasi-contracts,

delicts or quasi-delicts is breached, the contravenor can be held liable for damages.
The provisions under Title XVIII on "Damages" of the Civil Code govern in
determining the measure of recoverable damages.

II. With regard particularly to an award of interest in the concept of actual and
compensatory damages, the rate of interest, as well as the accrual thereof, is
imposed, as follows:

1. When the obligation is breached, and it consists in the payment of a sum of

money, i.e., a loan or forbearance of money, the interest due should be that which
may have been stipulated in writing. Furthermore, the interest due shall itself earn
legal interest from the time it is judicially demanded. In the absence of stipulation,
the rate of interest shall be 12% per annum to be computed from default, i.e., from
judicial or extrajudicial demand under and subject to the provisions of Article 1169
of the Civil Code.

2. 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, however, shall be
adjudged on unliquidated claims or damages except when or until the demand can
be established with reasonable certainty. Accordingly, where the demand is
established with reasonable certainty, the interest shall begin to run from the time
the claim is made judicially or (Art. 1169, Civil Code) but when such certainty
cannot be so reasonably established at the time the demand is made, the interest
shall begin to run only from the date the judgment of the court is made (at which
time the quantification of damages may be deemed to have been reasonably
ascertained). The actual base for the computation of legal interest shall, in any
case, be on the amount finally adjudged.

3. When the judgment of the court awarding a sum of money becomes final and
executory, the rate of legal interest, whether the case falls under paragraph 1 or
paragraph 2, above, shall be 12% per annum from such finality until its
satisfaction, this interim period being deemed to be by then an equivalent to a
forbearance of credit.

Garcia vs Thio Credit Digest

Carolyn M. Garcia

-vs-

Rica Marie S. Thio

GR No. 154878, 16 March 2007

FACTS

Respondent Thio received from petitioner Garcia two crossed checks which amount to
US$100,000 and US$500,000, respectively, payable to the order of Marilou Santiago. According
to petitioner, respondent failed to pay the principal amounts of the loans when they fell due and
so she filed a complaint for sum of money and damages with the RTC. Respondent denied that
she contracted the two loans and countered that it was Marilou Satiago to whom petitioner lent
the money. She claimed she was merely asked y petitioner to give the checks to Santiago. She
issued the checks for P76,000 and P20,000 not as payment of interest but to accommodate
petitioner’s request that respondent use her own checks instead of Santiago’s.

RTC ruled in favor of petitioner. CA reversed RTC and ruled that there was no contract
of loan between the parties.

ISSUE

(1) Whether or not there was a contract of loan between petitioner and respondent.

(2) Who borrowed money from petitioner, the respondent or Marilou Santiago?

HELD

(1) The Court held in the affirmative. A loan is a real contract, not consensual, and
as such I perfected only upon the delivery of the object of the contract. Upon delivery of the
contract of loan (in this case the money received by the debtor when the checks were encashed)
the debtor acquires ownership of such money or loan proceeds and is bound to pay the creditor
an equal amount. It is undisputed that the checks were delivered to respondent.

(2) However, the checks were crossed and payable not to the order of the respondent
but to the order of a certain Marilou Santiago. Delivery is the act by which the res or substance
is thereof placed within the actual or constructive possession or control of another. Although
respondent did not physically receive the proceeds of the checks, these instruments were placed
in her control and possession under an arrangement whereby she actually re-lent the amount to
Santiago.

Petition granted; judgment and resolution reversed and set aside.

Frias v. San Diego-Sison, 520 SCRA 244 (2007) - Kikoy

BOBIE ROSE V. FRIAS, represented by her Attorney-in-fact, MARIE F. FUJITA, Petitioner,

vs.

FLORA SAN DIEGO-SISON, Respondent.

Doctrine: The payment of regular interest constitutes the price or cost of the use of money, and until the
principal sum due is returned to the creditor, regular interest continues to accrue since the debtor
continues to use such principal amount. For a debtor to continue in possession of the principal of the loan
and to continue to use the same after maturity of the loan without payment of the monetary interest
constitutes unjust enrichment on the part of the debtor at the expense of the creditor.

Facts:

● On 7 Dec 1990, Bobie Rose Frias and Dr. Flora San-Diego Sison entered into a MOA over Frias’
property
● MOA consideration is 3M
● Sison has 6 months from the date of contract’s execution to notify Frias of her intention to
purchase the property with the improvements at 6.4M
● Prior to this 6 month period, Frias may still offer the property to other persons, provided that 3M
shall be paid to Sison including interest based on prevailing compounded bank interest + amount
of sale in excess of 7M [should the property be sold at a price greater than 7M]
● In case Frias has no other buyer within 6 months from the contract’s execution, no interest shall
be charged by Sison on the 3M
● In the event that on the 6th month, Sison would decide not to purchase the property, Frias has 6
months to pay 3M (amount shall earn compounded bank interest for the last 6 months only)
● 3M treated as a loan and the property considered as the security for the mortgage
● Upon notice of intention to purchase, Sison has 6 months to pay the balance of 3.4M (6.4M less
3M MOA consideration)
● Frias received from Sison 3M (2M in cash; 1M post-dated check dated February 28, 1990, instead
of 1991, which rendered the check stale). Frias gave Sison the TCT and the Deed of Absolute Sale
over the property. Sison decided not to purchase the property, so she notified Frias through a
letter dated March 20, 1991 [Frias received it only on June 11, 1991], and Sison reminded Frias of
their agreement that the 2M Sison paid should be considered as a loan payable within 6 months.
Frias failed to pay this amount.
● Sison filed a complaint for sum of money with preliminary attachment. Sison averred that Frias
tried to deprive her of the security for the loan by making a false report of the loss of her owner’s
 copy of TCT, executing an affidavit of loss and by filing a petition[1] for the issuance of a new
owner’s duplicate copy. RTC issued a writ of preliminary attachment upon the filing of a 2M bond.
● RTC found that Frias was under obligation to pay Sison 2M with compounded interest pursuant
to their MOA. RTC ordered Frias to pay Sison:
● 2M + 32% annual interest beginning December 7, 1991 until fully paid
● 70k representing premiums paid by Sison on the attachment bond with legal interest counted
from the date of this decision until fully paid
● 100k moral, corrective, exemplary damages [liable for moral damages because of Frias’ fraudulent
scheme]
● 100k attorney’s fees + cost of litigation
● CA affirmed RTC with modification—32% reduced to 25%. CA said that there was no basis for Frias
to say that the interest should be charged for 6 months only. It said that a loan always bears
interest; otherwise, it is not a loan. The interest should commence on June 7, 1991 until fully paid,
with compounded bank interest prevailing at the time [June 1991] the 2M was considered as a
loan (as certified by the bank).

Issue/s: WON compounded bank interest should be limited to 6 months as contained in the MOA. NO

WON Sison is entitled to moral damages. YES

WON the grant of attorney’s fees is proper, even if not mentioned in the body of the decision. NO

Held:

● CA committed no error in awarding an annual 25% interest on the 2M even beyond the 6-month
stipulated period. In this case, the phrase "for the last six months only" should be taken in the
context of the entire agreement.
● SC notes that the agreement speaks of two (2) periods of 6 months each (see FACTS—words in
bold & underline). No interest will be charged for the 1st 6-month period [while Sison was making
up her mind], but only for the 2nd 6-month period after Sison decided not to buy the property.
There is nothing in the MOA that suggests that interest will be charged for 6 months only even if
it takes forever for Frias to pay the loan.
● The payment of regular interest constitutes the price or cost of the use of money, and until the
principal sum due is returned to the creditor, regular interest continues to accrue since the debtor
continues to use such principal amount. For a debtor to continue in possession of the principal of
the loan and to continue to use the same after maturity of the loan without payment of the
monetary interest constitutes unjust enrichment on the part of the debtor at the expense of the
creditor.

Dispositive: WHEREFORE, in view of all the foregoing, the Decision dated June 18, 2002 and the Resolution
dated September 11, 2002 of the Court of Appeals in CA-G.R. CV No. 52839 are AFFIRMED with
MODIFICATION that the award of attorney’s fees is DELETED.
Bataan Seedling vs Repbulic

FACTS
Petitioner entered into a contract with respondent, represented by the DENR for
the reforestation of a forest land within a period of 3 years. Petitioner undertook to
report to DENR any event or condition which delays or may delay the project. With the
contract was the release of mobilization fund but the fund was to be returned upon
completion or deducted from periodic release of mhoneys to petitioner. Believing that
petitioners failed to comply with their obligations, respondent sent a notice of
cancellation. Petitioners failed to respond to the notice, thus, respondent filed a
complaint for damages against petitioners. The RTC held that respondent had sufficient
grounds to cancel the contract but saw no reason why the mobilization fund and the
cash advances should be refunded or that petitioners are liable for liquidated damages.
Both parties appealed to the CA, which affirmed the trial court and that the balnce of
the fund should be returned with 12% interest.

ISSUE

Whether the order to refund the balance of the fund with 12% interest pa is
proper.

HELD

No. Interest at the rate of 12% pa is impossible if there is no stipulation in the

contract. Herein subject contract does not contain any stipulation as to interest.
However, the amount due to respondent does not represent a loan or forbearance of
money. The word “forbearance” is defined, within, the context of usury law, as a
contractual obligation of lender or creditor to refrain, during given period of time, from
requiring borrower or debtor to repay loan or debt then due and payable. In the absence
of stipulation, the legal interest is 6% pa on the amount finally adjudged by the Court.

Catungal vs Hao
GR No. 134972, 22 March 2001
355 SCRA 29

FACTS
 The original owner Aniana Galang, leased a 3-storey building in Parañaque to BPI in 1972.
During the lease period, BPI subleased the ground floor to Doris Hao. In 1984, Galang and Hao
executed a lease contract on the 2nd and 3rd floors of the building. 2 years later, spouses Catungal
bought the property from Galang. Upon expiration of the lease agreements, Catungal demanded
Hao to vacate the building. The demand was unheeded so petitioners filed for ejectment before
the MeTC, which ordered Hao to vacate the premises and pay P20,000 until she finally vacates.
Petitioners moved for clarificatory or amended judgment on the ground that lthough MeTC
ordered defendant to vacate, it only awarded rent or compensation for the use of said property
for the ground floor and not for the entire subject property. the MeTC amended the judgment but
petitioners moved for reconsideration praing that respondent be ordered to pay P20,000 pm for
the use and occupancy of the ground floor and P10,000 pm for the 2nd and 3rd floors. The case
was referred to RTC which affirmed the decision. On appeal to the CA, the latter reduced the
P20,000 to P8,000 and the P10,000 each to P5,000 each.

ISSUE
Whether or not the RTC decision should be reinstated

HELD
Yes. The plaintiff in an ejectment case is entitled to damages caused by his loss of the
use and possession of the premises.

DANILO D. MENDOZA, also doing business under the name and style of ATLANTIC
EXCHAGE PHILIPPINES, petitioner,

vs. COURT OF APPEALS, PHILIPPINE NATIONAL BANK, FERNANDO

MARAMAG JR., RICARDO G. DECEPIDA, and BAYANI A.
BAUTISTA, respondent.

[G.R. No. 116710. June 25, 2001]

FACTS:
Respondent was granted by respondent Philippine National Bank (PNB) credit line and
Letter of Credit/Trust Receipt (LC/TR) line. As security for the credit accommodations
and for those which may thereinafter be granted, petitioner mortgaged to respondent
PNB some of his properties. Petitioner later requested for loan restructuring and issued
promissory notes, which he failed to comply. Respondent PNB extra-judicially
foreclosed the real and chattel mortgages, and the mortgaged properties were sold at
public auction to respondent PNB, as highest bidder. Petitioner filed a case in the RTC
contending that foreclosure is illegal invoking promissory estoppel, and secured
favorable judgment. The decision of RTC was reversed by the Court of Appeals.

ISSUE:
Whether or not the foreclosure of petitioner’s real estate and chattel mortgages were
legal and valid as opposed to promissory estoppel.

RULING:

YES. First, there was no promissory estoppel as the promise (of respondent bank) must
be plain and unambiguous and sufficiently specific. Second, there was no meeting of
the minds leading to another contract, hence loan was not restructured. Third,
promissory notes petitioner issued were valid. Fourth, stipulation in the mortgage,
extending its scope and effect to after-acquired property is valid and binding after the
correct and valid process of extra-judicial foreclosure. Finally, record showed that
petitioner did not even attempt to tender any redemption price during the one-year
redemption period.
Banco Filipino vs CA
GR No. 129227, 30 May 2000
332 SCRA 241

FACTS
Elsa and Calvin Arcilla secured, on 3 occassions, loan from petitioner as evidenced by
promissory note. REM was also executed. Under said deeds, Banco Filipino may increase rate
of interest on said loans, within the limits allowed by law. at that time, under Usury Law, the
maximum rate of interest for loans secured by REM was 12% pa. later, the Central bank issued
Circular No. 494 provinding for the maximum interest of 19%pa. meanwhile, Skyli Builders, thru
President Calvin Arcilla secured loans from BPI with FGU Insurance as surety. Banco Filipino
issued an account statement with 17% pa as interest. The Arcillas filed for annulment of the loan
contracts because the rate of interests charged were usurious.

ISSUE
Whether or not respondents are entitled to refund of the alleged interest overpayments.

HELD
 Yes. Private respondents aver that they are entitled to the refund inasmuch as the
escalation clause incorporated in the loan contracts do not have a corresponding de-escalation
clause and is therefore, illegal.

In Banco Filipino Savings & Mortgage Bank vs Navarro, the Court ruled that Central Bank
Circular 494, although it has the force and effect of law, is not a law and is not the law
contemplated by the parties which authorizes the petitioner to unilaterally raise the interest rate
of loan. The reliance on the circular was without any legal basis.

First Metro Investment vs Este Del Sol

FACTS:

Petitioner FMIC granted respondent a loan of Seven Million Three Hundred Eighty
Five Thousand Five Hundred Pesos (P7,385,500.00) to finance the construction of a
sports complex at Montalban, Rizal. Respondent also executed, as provided for by the
Loan Agreement, an Underwriting Agreement with underwriting fee, annual
supervision fee and consultancy fee with Consultancy Agreement for four (4) years,
coinciding with the term of the loan. The said fees were deducted from the first
release of loan. Respondent failed to meet the schedule of repayment. Petitioner
instituted an instant collection suit. The trial court rendered its decision in favor of
petitioner. The Court of Appeals reversed the decision of the trial court in favor of
herein respondents after its factual findings and conclusion.

ISSUE:

Whether or not the Underwriting and Consultancy Agreements were mere subterfuges
to camouflage the usurious interest charged by the petitioner.

RULING:

YES. In the instant case, several facts and circumstances taken altogether show that
the Underwriting and Consultancy Agreements were simply cloaks or devices to
cover an illegal scheme employed by petitioner FMIC to conceal and collect
excessively usurious interest. “Art. 1957. Contracts and stipulations, under any cloak
or device whatever, intended to circumvent the laws against usury shall be void. The
stipulated penalties, liquidated damages and attorney’s fees, excessive, iniquitous and
unconscionable and revolting to the conscience as they hardly allow the borrower any
chance of survival in case of default. Hence, the instant petition was denied and the
assailed decision of the appellate court is affirmed.

MBTC vs Rosales

Metropolitan Bank and Trust Company v

Ana Grace Rosales

GR No. 183204, 13 Jan 2014

Del Castillo, J.:

FACTS:

In 2000, respondent Ana Grace Rosales, an owner of a travel agency, and her mother Yo Yuk
To opened a Joint Peso Account10 with petitioner bank. In May 2002, respondent Rosales
accompanied her client Liu Chiu Fang, a Taiwanese National applying for a retiree’s visa from
the Philippine Leisure and Retirement Authority (PLRA), to petitioner’s branch in Escolta to open
a savings account.

On 31 July 2003, petitioner issued a "Hold Out" order against respondents’ accounts. On 3
Sept 2003, petitioner filed a criminal case for Estafa through False Pretences,
Misrepresentation, Deceit and Use of Falsified Documents against the respondent. It was
alleged that the respondents are the one responsible for the unauthorized withdrawal fo $75,000
from Liu Chiu Fang’s account. Petitioner alleged that on 5 Feb 2003, it received from the PLRA
a Withdrawal Clearance for the account of Liu Chiu Fang, that in the afternoon of the same day,
respondents went to inform the branch head Gutierrez that Liu Chiu Fang was going to withdraw
her deposits in cash. Gutierrez told respondents to come back the following day for the bank
did not have enough dollars. On 6 Feb, respondents accompanied an unidentified impostor to
the bank with enabled them to withdraw Liu Chiu Fang’s dollar deposit.

On 3 Mar 2003, respondents opened a Joint Dollar Account with petitioner bank with an initial
deposit of $14,000. The bank later discovered that the serial numbers of the dollar notes
deposited by respondents were the same as those withdrawn by the impostor.

On 10 Sept 2004, respondents filed before the RTC of Manila a Complaint for Breach of
Obligation and Contract with Damages, against petitioner. Respondents alleged that they
attempted several times to withdraw their deposits but were unable to because petitioner had
placed their accounts under "Hold Out" status. No explanation, however, was given by petitioner
as to why it issued the "Hold Out" order. Petitioner alleged that respondents have no cause of
action because it has a valid reason for issuing the "Hold Out" order. It averred that due to the
fraudulent scheme of respondent Rosales, it was compelled to reimburse Liu Chiu Fang the
amount of US$75,000.0050 and to file a criminal complaint for Estafa against respondent
Rosales.
ISSUE:

Whether or not the Metrobank breached its contract with respondents Rosales.

HELD:

Yes. The Court held that Metrobank’s reliance on the “Hold Out” clause in the
Application and Agreement for Deposit Account is misplaced. Bank deposits, which are in the
nature of a simple loan or mutuum, must be paid upon demand by the depositor.

The “Hold Out” clause applies only if there is a valid and existing obligation arising from
any of the sources of obligation enumerated in Article 1157 of the Civil Code, to wit: law,
contracts, quasi-contracts, delict, and quasi-delict. In this case, petitioner failed to show that
respondents have an obligation to it under any law, contract, quasi-contract, delict, or quasi-
delict. And although a criminal case was filed by petitioner against respondent Rosales, this is
not enough reason for petitioner to issue a “Hold Out” order as the case is still pending and no
final judgment of conviction has been rendered against respondent Rosales.

In fact, it is significant to note that at the time petitioner issued the “Hold Out” order, the
criminal complaint had not yet been filed. Thus, considering that respondent Rosales is not
liable under any of the five sources of obligation, there was no legal basis for petitioner to issue
the “Hold Out” order. Accordingly, we agree with the findings of the RTC and the CA that the
“Hold Out” clause does not apply in the instant case.

In view of the foregoing, the Court found that petitioner is guilty of breach of contract
when it unjustifiably refused to release respondents’ deposit despite demand. Having breached
its contract with respondents, petitioner is liable for damages.