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Case Digest for Credit Transactions

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CASE DIGEST FOR CREDIT TRANSACTIONS Eastern Shipping v CA and Mercantile Insurance Co.

Facts: 1. Two fiber drums containing riboflavin were shipped form Japan by SS Eastern Comet owned by pet Eastern Shipping under a bill of lading 2. It was insured uner resp’s insurance policy 3. It was discharged under the cutody of Metro Port service but the latter excepted to one drum which was in bad order 4. Allied Brokerage Corp received the shipment from Metroport with one drum opened and without a seal 5. Allied Banking then del ivered it to consignee’s warehouse. 6. The latter excepted to one drum with spillages and the rest of the conents were adulterated 7. Resp Mercantile Insurance claimed indemnity for the losses and damages sustained by the consignee worth 19K, which, it says is due to the fault and negligence of Eastern Shipping 8. ES refused to pay 9. MI was compelled to pay damages to the consignee under the marine policy 10. ES, Metroport and Allied Brokerage all denied liability. ES contends the shipment was in good order when it was turned over to Metroport. 11. The issues presented in the appellate court are as follows: a. W/N loss or damage was sustained b. W/N it was sustained while in the custody of ES c. W/N ES should be held liable 12. CA’s ruling: a. Yes. Shipment was shipped in a good condition as evidenced by the bill of lading and comm’l invoice. But when the same was delivered to Metroport, the latetr excepted to one drum which was damaged. b. According to the Marine Cargo Survey Report, one of the drums was in damaged consition. It shows, therefore that while in the successive custodies of ES, MS, AB, the shipment was in a damaged condition. When withdrew by AB from MS, one of the drums were opened. And when the drums were received by consignee, one of them was opened and the contents adulterated c.

ES, MS shall be joint and severally liable for the 19K damage. ES shall be liable for not more than $500 per case or the CIF value of the loss, while MS must be liable to the extent of the actual invoice value of each package, pursuant to management contract. With interest rate at 12% per annum from date of filing of the complaint. AB is dismissed.

13. Malayan held that the amount awarded should bear legal interest from the date of the decision of the court a quo, explaining that "if the suit were for damages, 'unliquidated and not known until definitely ascertained, assessed and determined by the courts after proof,' then, interest 'should be from the date of the decision.'"

Issues: 1. Joint and several liability of ES and MS 2. Reckoning of 12% per annum interest from the date of filing of the claim rather than from the date of the decision and only at a rate of 6% per annum, since it is unliquidated Ruling: 1. Liability. Both the carrier and the arrastre operator have the obligation to deliver the shimpment in good condition to the consignee. It is presumed that CC are negligent whenever loss or damage of goods is sustained. Not disputed. Exceptions unavailing 2. Interests. a. Rule is that, absent any stipulation, the legal rate of interest shall be imposed from the date of demand, judi or EJ. But interest can only be recovered from liquidated claims or damages or those that can be definitely ascertained, assessed and determined by courts after proof. In action for damages, for injury to persons, loss of property or other actions not involving any loan, much less forbearances of any money, goods or credits, legal interest is 6% per annum (2209). b. Central Bank Circular No. 416: Rate of interest for the loan, or forbearance of any money, goods, or credits and the rate allowed in judgments, in the absence of express contract as to such rate of interest, shall be twelve (12%) percent per annum from default from jud or EJ demand c.

Another instance was established in Nakpil and Sons vs. Court of Appeals whereby 12% per annum was imposed as a rate allowed in judgment, whereby no interest is actually imposed but a sum was fixed in the judgment. Delay in payment of such amount upon finality of judgment will cause imposition of interest

d. In this case, interest is 6% from the date of decision of lower court. 12% from finality.

Sanchez v Buenviaje

Facts: 1. Alejo Sanchez sued Teodoro Sanchez and Leonor Santilles in the Municipal Court of Bato, Camarines Sur, for the recovery of P2,000.00 which the latter had promised to pay in two notes 2. Said notes also contained stipulations for interest at the rate of 10% per month 3. The Municipal Court rendered judgment ordering Teodoro Sanchez only to pay to Alejo Sanchez P2,000.00 plus interest thereon at the legal rate from the filing of the complaint. 4. On appeal, CFI Camarines Sur asked Teodoro to pay double the cost of suit 5. In his petition for review, Teodoro claims that in a loan with usurious interest both the loan and the usurious interest are void. Ruling: The Usury Law (Act No. 2655), by its letter and spirit, does not deprive the lender of his right to recover of the borrower the money actually loaned this only in the case that the interest collected is usurious. The law, as it is now, does not provide for the forfeiture of the capital in favor of the debtor in usurious contract. In Briones vs. Cammayo, Chief Justice Concepcion and now Chief Justice Fernando concurred with Justice Castro who opined that both loan and usurious interest are void. However, it must be emphasized that eight other justices maintained that only the usurious interest is void but not the principal obligation. The creditor has no right of action for the recovery of the stipulated interest although he may sue for the recovery of the principal loaned.

Law v Olympic Sawmill

Facts: 1. On or about September 7, 1957, plaintiff loaned P10K, w/o interest, to defendant partnership and defendant Elino Lee Chi, as the managing partner. 2. The loan became ultimately due on January 31, 1960, but was not paid on that date, with the debtors asking for an extension of three months, or up to April 30, 1960. 3. The parties executed another loan doc extending the payment of credit up to April 30. 4. The debt was, however, increased by 6K to answer for the legal interest, atty’s fees and other costs 5. A collection case was filed against resp but the latter only agreed to pay 10K. Not the additional 6K, which they allege as constituting usurious interests 6. RTC issued writs of attachment on the properties of defendat and ordered the def to pay 10K plus 6K by way of liquidated damages with legal interests on both amounts Ruling: RTC decision is affirmed: a. Under 1354, the agreement of parties are presumed lawful unless proven otherwise. b. The award of liquidated damages is lawful since this represents pet’s loss of interest income, attorney's fees and incidentals c. The claim of resp of the application of Usury Law’s provision providing that the allegation of usury that was not denied under oath amounts to admission is untenable since it refers to suits when the defendant is the one who is alleged to have violated the usury law. That is not the case at bar because the one who is being sued is the one who alleges violation of the usury law. And said law has already benn declared legally inexistent

Baron v David

Facts:

Radio Corp v Roa

Facts: 1. The defendant Jesus R. Roa became indebted to the Philippine Theatrical Enterprises, Inc., in the sum of P28,400 payable in seventy-one equal monthly installments at the rate of P400 a month commencing thirty days after December 11, 1931, with five days grace monthly until complete payment of said sum. 2. PTE assigned all its rights to pet 3. There is an acceleration clause on the contract upon payment on any of the installments after which the whole amount shall be due 4. The prin dr was given extension for one installment w/o the knowledge and consent of the guarantors Issue: Should the guarantors be released of the guaranty as to the whole amount of debt? Ruling: ART. 1851.

An extension grated to the debtor by the creditor, without the consent of the guarantor,

extinguishes the latter's liability. Case: if a surety is liable for different payments, such as installments of rent, or upon a series of  promissory notes, an extension of time as to one or more will not affect the liability of the surety for the others. Applies only when what is accelerated are the subsequent installments, not the whole amount Not potestative, only foreclosure is potestative Consideration is presumed to exist

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