Dec 19.

( Continuation) In the case of Ruiz vs CA The interest rate stipulated here was 10% per month compounded monthly. So mas dako siya kesa sa Medel, obviously its excessive and compounded monthly. Compounded means that the interest for this month, for example January, if unpaid will be added to the principal. So if naa kay utang, ang principal kay 10k, unya ang interest is 100 if dili siya mabayaran, ang imong principal for the next month mahimo nang 10,100. So magkadako magkadako ang interest. So, the SC said again reiterating the case of Medel, that this is already excessive and unconscionable. Also in the case of Trade & Investment Development Corp. Actually in the cases decided by the SC the only interest rate more than 12% per annum that was not considered as unconscionable was 2% interest per month. But, in that case it was because the case was decided in a very short period of time. But another case was still 2% per month, but the case was heard for a very long time and when the decision was made, the amount of the debt was 4x more than the principal. So, these were the cases decided by the SC. 2% basta dili lang pud compounded. But of course again, even if the SC would say that the interest is iniquitous and unconscionable, the court cannot delete the interest, it is stipulated by the parties. It is valid to stipulate a rate of interest, of course it would be understandable for the creditor to charge an interest because the creditor is deprived with the use of money for a long time. So, in the meantime the value of the money will fluctuate, so the interest will answer for that and the opportunity lost for dispossession of the money. So, that is a valid stipulation to delete the interest will make a new contract for the parties. The courts have no authority over it. What the courts can do is to reduce the interest and not totally remove it. You cannot say, ay salamat wala nay interest. The minimum is, youll still be held to pay the legal interest of 12% per annum. Art. 1176 The receipt of the principal by the creditor without reservation with respect to the interest, shall give rise to the presumption that said interest has been paid. The receipt of a later installment of a debt without reservation as to prior installments, shall likewise raise the presumption that such installments have been paid. Take note that this article is composed of two parts. (1) Receipt of the principal without reservation with respect to the interest.

It presupposes that the interest has been paid. For example, your debt is 10k and you are paying an interest of 1% per mo. (100 php per mo) If you issued a receipt for the 10K, what is the presumption? General rule: Can the creditor say na hala kulang pa kag 100 ha 10,000 sa akong giresibo,it is presumed that the receipt was for 10k because the 100 has been paid. Why do we have that presumption? Because this is related to Article 1253 of the NCC. Art 1253 If the debt produces interest, payment of the principal shall not be deemed to have been made until the interests have been recovered. So take note when you pay the creditor, the application of payment, for example what you paid is not for the whole amount. The debt is 10,000 interest is 100, you only have 100, the application of payment is first in the interest then principal, so if you only paid 10,000, 100 will be applied to the interest and 9,900 to the principal, so naa pa kay kulang na 100 sa principal. So, if you issued a receipt for 10k indicating that it is the payment for the principal, there is a presumption that the interest rate has been paid. (2) The receipt of a later installment of a debt without reservation as to prior installments, shall likewise raise the presumption that such installments have been paid. So your obligation is to pay for the installment 10k every month, you paid and you were issued with a receipt. For example the debt would start in Jan and end in Dec 2012. So youre issued a receipt like for example July, installment 10k, what is then the consequence of the issuance of that receipt from the creditor? It gives rise to a presumption that the installments due for Jan to June had already been paid. Because if you pay, you would first apply the payment to the first installment due and so on and so forth. So, that is the presumption. Manila Trading & Supply Company vs Medina (refer to case digest ) What is the stipulation called in this case? a stipulation that failure to pay any of the installments will make the remaining balance already due and demandable. That is called as an acceleration clause. What installments were not paid allegedly? due installments of Sept 1956 to Jan 1957 What is the defense? Medina admitted the par 2, 3 and 4 of the complaint. However he said that the rates were unconscionable. He pleaded that he was induced to pay 4,000 additional on Jan 24, 1957 upon promise that he would not be sued that he would be allowed to pay the balance.

What was the evidence presented by Medina? He showed receipts of the payments. Were those receipts considered by the court? No, because there were inconsistencies with the dates, serial numbers. It is diff. to believe that the company will issue receipts with random serial numbers. What was the other defense of Medina then? Those receipts were not believed by the court because they were not in sequence, the form is different. Accdg to medina, assuming that those were not genuine receipts, but there was a receipt dated January 1957, take not what was the period covered by the collection? it was sept 1956 to Jan 1957. So, he showed a genuine receipt issued on Jan 1957. So, he avers that there is a presumption that the receipt of a later installment means that the prior installments have been paid. Lets admit that the other receipts are unbelievable. The only believable is the Jan 1957 receipt, according to the law, there is now a presumption that I already paid the amounts pr installments due from Sep to December because again the receipt of a later installment means that the prior installments have been paid. However, why is that presumption not applied to this case? What should have been indicated for the presumption to apply? How should the receipt be written for there to be an indisputable presumption for the prior installments to be paid? For example, there was a receipt dated Jan 1957, assuming there was a receipt issued for that date. Does it follow that all the other installments prior to Jan 1957 had already been paid? NO. It is not enough that the receipt is dated on Jan 1957, it should be specified that the receipt is for the payment of the particular installment due. For article 1176 to apply, it should state that the installment due is for January, aside from the date. The date is only a prima facie evidence that you have paid on that day. It could have been an installment for the past month but you only paid on that date. Again, it should indicate that it is for the installment due for that particular date. So, if it says that it is for the installment due for January, then it is presumed that you have already paid the previous installments. The supreme court said that article 1176 is only a DISPUTABLE PRESUMPTION, this means that any evidence to the contrary can be presented. So even if assuming that the receipt presented by medina will give rise to the presumption that the previous months have been paid, but if there are proofs to the contrary, it can be disputed. This is opposed to a conclusive presumption, a presumption you cannot disproof. The law says that it is what it is. you cannot disprove is.

RCBC vs BUENAVENTURA This involves a loan obligation secured by a mortgage, then the obligation of the debtor was to deposit the amounts into his savings account and then the bank will withdraw from that account and apply to the payment of the loan. However, in this

case there was a foreclosure of the property. When the property was foreclosed, it was premised on the presumption that the debtor did not pay the obligations and so the foreclosure was applied. In fact, the debtor here was able to prove that he actually deposited amounts in his savings account. The bank said at as a defense that it did not withdraw the amounts. The Supreme court said that at the time of the foreclosure, in april 1999, the savings account showed a total deposit of 852,913.26 which was more than enough to cover whatever amortizations due for him at that time. The amortization schedule also show that as of april 1999, the loan account with the bank, total of 269,000 plus and then by march, it was zero, meaning he already paid his loan. The principle is, there can only be foreclosure proceedings if he is in default and he will be in default if after demand, he still did not fulfill his obligations. In this particular case, he had more than enough money to pay off his obligation in his savings account with RCBC. For his part, he already complied with his obligation which is only to deposit the amount. RCBC is to withdraw that amount. So, the amortization schedule itself as of march is zero, meaning it accepted installments as of that date, so applying article 1176, the receipt of the principal by the creditor w/o reservation with respect to the interest shall give rise to the presumption that the said interest had been paid and the receipt of a later installment w/o reservation as to prior installments shall likewise raise a presumption that such installments has been paid. SO, RCBC cannot deny because it has been shown in the passbook of the debtor. So RCBC was at fault when it proceeded with the foreclosure despite the fact that there is already payment. Now, take note that 1176 here will not apply to an obligation to pay taxes, like for example, year 2010, you did not pay your taxes, 2011 you still did not pay. In 2012, you paid and it was accepted by the BIR, then still the BIR sent you a demand letter for the taxes due in year 2010 to 2011. can you cite 1176 that you already received my payment on April 15, 2012, so that gives rise to the presumption that I already paid the taxes due in 2010 to 2011? NO, each taxes due in 2010 and 2011 are different. It is considered as a separate obligation. They are distinct from one another. It is not a case of an installment. Because in installment, there is only one obligation but you pay it in installments. But in payment of taxes, each tax due is separate and distinct from the others. Article 1177 The creditors, after having pursued the property in possession of the debtor to satisfy their claims, may exercise all the rights and bring all the actions of the latter for the same purpose, save those which are inherent in his person; they may also impugn the acts which the debtor may have done to defraud them.

1177 gives us the remedies of the creditors. What are the remedies? 1. It may compel the debtor to perform. Specific performance it may be the debtor himself or you can compel performance at the expense of the debtor. IF for example the debtor fails or refuses to voluntarily comply, what can the creditor do? he can file a case in court. If the decision is favorable to the creditor, then the court will compel the debtor to pay. But if he still refuses to pay, then the creditor can now pursue the property in possession of the debtor. But ,it will not be the creditor himself to go to house of the debtor and take all the tv, the reft and kung naa pa siyay yuta. It will be the sheriff. The creditor may proceed against the properties of the debtor. If no properties, pero naay nagkautang kay debtor, he can garnish those accounts receivable. So instead na si debtor ang magcollect, si creditor na ang pwede mucollect adto. So halimbawa wala juy properties si debtor? He may exercise all the rights and bring all the actions of the latter for the same purpose. Si debtor naay rights na pwede makabenefit si creditor, like si debtor naay right over the parcel of land, pero wala niya giexercise iyahang right, the creditor can bring the actions that the debtor should have brought. Like, if the debtor can bring an action against forcible entry and unlawful detainer, recovery of possession, wala lang niya giexercise, the creditor can bring the action. 2. The creditor may also impugn the acts which the debtor may have done to defraud them. For example, the debtor owed 1M from the creditor. at that time kampante si creditor bec. debtor owned a commercial lot. But after he contracted the loan, the debtor sold the lot, his one and only lot to his son. His son was just in high school and the value of the land is 10M, in the deed of sale is 100k, and after the sale the debtor still remained in possession of the property and he still continued to real estate taxes of the property. But there is a deed of sale. But when the creditor collected, the debtor refused kay wala na daw siyay kwarta. Then, the creditor discovered that the one and only property gibaligya na diay sa anak, so what can the creditor do? He can impugn the sale as a fraud. It has all the badges of a fraudulent sale. SIGUAN VS LIM 7 badges of fraud (1) The fact that the consideration of the conveyance is fictitious or is inadequate; (2) A transfer made by a debtor after suit has begun and while it is pending against him;

(3) A sale upon credit by an insolvent debtor; (4) Evidence of large indebtedness or complete insolvency; (5) The transfer of all or nearly all of his property by a debtor, especially when he is insolvent or greatly embarrassed financially; (6) The fact that the transfer is made between father and son, when there are present other of the above circumstances; and (7) The failure of the vendee to take exclusive possession of all the property The presence of anyone of these circumstances could be a badge of fraud. It is not exclusive, there are also others when we go to rescission. So, he can impugn the sale, he can impugn the sale because it will be improbable for the debtor to sell his land to his high school son, it is only a simulated sale. It was intended to defraud the creditor. This is what you call Accion pauliana the action to exercise the rights of the debtor and bring all the actions of the debtor for that purpose is what we call Accion subrogatoria the creditor could be subrogated to the rights and actions of the debtor. So here are the remedies in general. 1. specific performance 2. Proceed against the properties 3. Against the rights or actions of the debtor (accion subragotria) 4. Or he may impugn the acts of the debtor (accion pauliana)