TAN vs.

VALDEHUEZA

Facts:

An action instituted by the plaintiff-appellee Lucia Tan against the defendants- JARDENIL VS. SOLAS Art. 1956 Calinisan
appellants Arador Valdehueza and Rediculo Valdehueza for (a) declaration of
ownership and recovery of possession of the parcel of land described in the first cause
of action of the complaint, and (b) consolidation of ownership of two portions of another Facts:
parcel of (unregistered) land described in the second cause of action of the complaint,
purportedly sold to the plaintiff in two separate deeds of pacto de retro. Parcel of land A)Solas entered into a mortgage with Jardenil, in connection with a loan from Nov 1932
described in the first cause of action was the subject matter of the public auction sale toMarch 1934.
in Oroquieta, Misamis Occidental, wherein the TAN was the highest bidder . Due to the
failure of defendant Arador Valdehueza to redeem the said land within the period of one B)Solas was unable to pay his obligation.
year as being provided by law, MR. VICENTE D. ROA who was then the Ex-Officio
Provincial Sheriff executed an ABSOLUTE DEED OF SALE in favor of the plaintiff C)Jardenil extended to another year from the date of maturity within which to
LUCIA TAN. Civil case 2002 was a complaint for injunction filed by Tan on July 24, makepayment, without making any mention of any interest which the mortgagor should
1957 against the Valdehuezas, to enjoin them "from entering the above-described payduring the additional period.
parcel of land and gathering the nuts therein " This complaint and the counterclaim
were subsequently dismissed. The Valdehuezas appealed to the lower court alleging D)Still, Solas was unable to pay.
that it erred in making a finding on the second cause of action that the transactions
between the parties were simple loan, instead, it should be declared as equitable E)The original mortgage show that there was an agreement to pay interest only up to
mortgage. thedate of maturity (first day of maturity), May 31, 1934.

Held: Issue:W/N Solas is bound to pay the stipulated interest only up to the date of maturity
as fixed in thepromissory note, or up to the date payment is effected?
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, Held:
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 A)Pay interest only until the date of maturity.B)Interest shall be due only when it has
updated himself on law been expressly stipulated.C)There is nothing in the mortgage deed to show that the
and jurisprudence; he cited, in support of his ruling, article 1875 of the old Civil Code terms employed by the partiesthereto are at war with their evident intent.D)The true
and decisions of this Court circa 1910 and 1912. Under article 1875 of the Civil Code intention of the parties was that no interest should be paid during the period
of 1889, registration was a necessary requisite for the validity of a mortgage even as ofgrace.E)There was no mutual mistake.
between the parties, but under article 2125 of the new Civil Code (in effect since August
30,1950), this is no longer so. 4 If the instrument is not recorded, the mortgage is
nonetheless binding between the parties. (Article 2125, 2nd sentence).

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.
 CA affirmed RTC with modification32% 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).
BOBIE ROSE FRIAS v. FLORA SAN DIEGO-SISON
2007 / Austria-Martinez ISSUES & HOLDING Ratio only discusses topic of INTEREST (as per syllabus)
On 7 Dec 1990, Bobie Rose Frias and Dr. Flora San-Diego Sison entered into
a MOA over Friasproperty WON compounded bank interest should be limited to 6 months as contained
in the MOA. NO
MOA consideration is 3M
WON Sison is entitled to moral damages. YES
Sison has 6 months from the date of contracts execution to notify Frias of
her intention to purchase the property with the improvements at 6.4M WON the grant of attorneys fees is proper, even if not mentioned in the body
of the decision. NO
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 CA committed no error in awarding an annual 25% interest on the 2M even beyond
prevailing compounded bank interest + amount of sale in excess of 7M [should the the 6-month stipulated period. In this case, the phrase "for the last six months only"
property be sold at a price greater than 7M] should be taken in the context of the entire agreement.
SC notes that the agreement speaks of two (2) periods of 6 months
In case Frias has no other buyer within 6 months from the each (see FACTSwords in bold & underline). No interest will be charged for the
contracts execution, no interest shall be charged by Sison on the 3M 1st 6-month period [while Sison was making up her mind], but only for the 2nd 6-month
In the event that on the 6th month, Sison would decide not to period after Sison decided not to buy the property. There is nothing in the
purchase the property, Frias has 6 months to pay 3M (amount shall MOA that suggests that interest will be charged for 6 months only even if it takes
earn compounded bank interest for the last 6 months only) forever for Frias to pay the loan.
The payment of regular interest constitutes the price or cost of the use of
3M treated as a loan and the property considered as the money, and until the principal sum due is returned to the creditor, regular interest
security for the mortgage continues to accrue since the debtor continues to use such principal amount. For a
Upon notice of intention to purchase, Sison has 6 months to pay the balance debtor to continue in possession of the principal of the loan and to continue to
of 3.4M (6.4M less 3M MOA consideration) use the same after maturity of the loan without payment of the monetary
Frias received from Sison 3M (2M in cash; 1M post-dated check dated February 28, interest constitutes unjust enrichment on the part of the debtor at the expense of the
1990, instead of 1991, which rendered the check stale). Frias gave Sison the TCT creditor.
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 CA DECISION AND RESOLUTION AFFIRMED WITH MODIFICATIONAward of
received it only on June 11, 1991], and Sison reminded Frias of their agreement that attorneys fees deleted
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 owners copy of TCT, executing an affidavit of loss and by filing
a petition[1] for the issuance of a new owners 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 attorneys fees + cost of litigation
 Ramos et. al vs. Central Bank of the Philippines G.R. No. L-29352, October
Overseas Bank of Manila vs. Cordero 4, 1971
MARCH 16, 2014LEAVE A COMMENT
Facts:
Central Bank, by promising to rehabilitate the bank, is estopped from closing it
down. The conduct of the Central Bank reveals a calculated attempt to evade
Private respondent opened a 1-year time deposit with petitioner bank amounting to rehabilitating OBM despite its promises. Hence, respondent Central Bank of the
P80,000, with interest of 6% p.a. Due to its distressed financial condition, the bank was Philippines is directed to comply with it obligations under the voting trust
unable to pay. Cordero instituted an action before the CFI Manila. Petitioner raised the agreement, and to desist from taking action in violation thereof.
defenses of insolvency and prejudice to other depositors. The lower court, and the Facts: The Overseas Bank of Manila (OBM) is a commercial banking corporation duly
Court of Appeals, ruled in favor of Cordero. Hence, the instant petition for review on organized and existing under the laws of the Philippines with principal office at Rosario
certiorari. Street, Manila. Ramos et. alare the majority and controlling stockholders of Overseas
Bank of Manila (OBM). Pursuant to a resolution from the Central Bank and the
Certain supervening events rendered the issue moot and academic. Respondents Monetary Board, the operation of for various violations of the banking laws and
brother and attorney-in-fact sent a letter to the Commercial Bank of Manila (petitioners implementing regulations. Because the financial situation of the OBM had caused
successor-in-interest), acknowledging receipt of P10,000, and another manifestation mounting concern in the Central Bank, petitioner Ramos and the OBM management
for P73,840, with waiver of damages. Upon further examination, it was found that the met with respondent Central Bank on the necessity and urgency of rehabilitating the
respondents brother has no SPA. Respondents brother submitted the SPA, with OBM through the extension of necessary financial assistance.
explanatory comment that the waiver applies only to third party claims, suits and
damages, not to interest and attorneys fees.
In lieu thereof, the Monetary Board issued another resolution dated April, 1967
demanding the stockholders to mortgage their properties or assign the same to the
Issue: Central Bank and to execute a voting trust agreement whereby they will pass the
management to Philippine National Bank in order to stave of liquidation. Hence,
Whether respondent is entitled to interest and attorneys fees Ramos et. al executed the voting trust agreement prepared by Central Bank with
petitioners as cestuis que trust and Central Banks Superintendent of Banks as the
Held: Trustee. Petitioners likewise conveyed by way of mortgage to the Central Bank all their
private properties and holdings to secure the obligations of the OBM to the Central
Bank. Accordingly, new directors and officers were elected and installed and they took
The obligation to pay interest on the deposit ceases the moment the operation of the over the management and control of the Overseas bank..
bank is completely suspended by the Central Bank. Neither can respondent Cordero
recover attorneys fees. Petitioners refusal to pay was not due to a willful and dishonest
refusal to comply with its obligation but to restrictions imposed by Central Bank. However, after 8 months, the Central Bank did not make any positive action to
reorganize and resume OBMs normal operations. Instead, Central Bank issued a
resolution excluding OBM from clearing with it and authorizing the nominee board of
directors to suspend operations. Worse, Central Bank Monetary Board issued a
resolution ordering the liquidation the bank. Hence this petition for certiorari, prohibition
and mandamus with prayer for the issuance of a writ of preliminary injunction to restrain
respondent Central Bank of the Philippines from enforcing and implementing the
Monetary Board Resolutions. Petitioners charged that the OBM became financially
distressed because of this suspension and the deprivation by the Central Bank of all
the usual credit facilities and accommodations accorded to the other banks. Central
Bank contended that to assail Resolution of the Monetary Board ordering the liquidation
of the Overseas Bank, an action must be filed in the Court of First Instance of Manila
by the Bank itself, and not by petitioning stockholders
Issue: Whether or not the CB had agreed to rehabilitate, normalize and stabilize OBM
and whether or not the Central Bank resolutions were adopted in abuse of discretion.

Held: If jurisdiction was already acquired ito delve into the validity of Resolutions 1263
and 1290 (and this the Central Bank admits), there is no cogent reason why, after such
jurisdiction had been acquired, the Court should be deprived thereof by the subsequent
adoption of Resolution 1333, particularly because the latter, in relation to the
antecedent facts, appears to be no more than a deliberate effort to evade the
jurisdiction of this Court, and have the case thrown back to the Court of First Instance.
The Central Bank, by promising to rehabilitate the bank, is estopped from closing it
down. The conduct of the Central Bank reveals a calculated attempt to evade
rehabilitating OBM despite its promises. Hence, respondent Central Bank of the
Philippines is directed to comply with it obligations under the voting trust agreement,
and to desist from taking action in violation thereof.
Petitioner Lirag Textile Miil, Inc. and defendant Social SecuritySystem (SSS)
The Central Bank made express representations to petitioners herein that it would entered into a Purchase Agreement wherein thelatter will purchase
support the OBM, and avoid its liquidation if the petitioners would execute (a) the voting preferred shares of stock from the former whichis worth one million
trust agreement turning over the management of OBM to the Central Bank or its
nominees, and (b) mortgage or assign their properties to the Central Bank to cover the
pesos. Defendant paid petitioner in the amountof P500, 000 as evidence by
overdraft balance of OBM. The petitioners having complied with these conditions and Stock Certificate 128 and anotherP500, 000 as evidenced by Stock
parted with value to the profit of the CB (which thus acquired additional security for its Certificate 139.The following conditions were stipulated in the
own advances), the Central Bank may not now renege on its representations and
liquidate the OBM, to the detriment of its stockholders, depositors and other creditors,
PurchaseAgreement: (1) that petitioner will repurchase or redeem
under the rule of promissory estoppel. StockCertificates 128 and 139 from defendant at regular intervals for
oneyear and to pay dividends, and (2) that in case of failure, the
entireobligation shall become due and demandable and petitioner shallbe
liable in the amount equivalent to 12% of the amount thenoutstanding as
liquidated damages.Furthermore, Basilio Lirag signed as a surety in
the event LiragTextile Mills, Inc. fails to make good on its
obligation.However, due to financial reverses, petitioner corporation failed
toredeem the stock certificates and pay the dividends
despitedefendant's demand letter. Because of such failure, defendant
SSSsent a demand letter to Basilio Lirag, requiring him to fulfill
hisobligation as surety. But he was also unable to comply with
suchobligation.So SSS filed a petition for Specific Performance
and damages withthe Court of First Instance in Rizal, praying for
the fulfillment ofLirag Textile Mills, Inc. and Basilio Lirag's obligations. The
CFI ruledin favor of SSS, saying that the Purchase Agreement was a
debtinstrument. Hence this present petition.Petitioners argue that the
lower court erred in its decision. Theycontend that the obligation to
redeem the stock certificates and paythe dividends does not exist on the
ground the SSS is a preferredstockholder of the Lirag Textile Mills, Inc. and
because of itsfinancial condition upon which such liability
depended. Basilio Liragfurther contends that since Great reliance is made by appellants on Art. 1411 of the New Civil Code which states:
the corporation's obligation is withoutbasis, he also is not liable.
Art. 1411. When the nullity proceeds from the illegality of the cause or object of the
ISSUE: Whether or not Basilio Lirag is liable for the contract, and the act constitutes criminal offense, both parties being in pari delicto, they
shall have no action against each other, and both shall be prosecuted. Moreover, the
entireobligation provisions of the Penal Code relative to the disposal of effects or instruments of a crime
shall be applicable to the things or the price of the contract.

This rule shall be applicable when only one of the parties is guilty; but the innocent one
may claim what he has given, and shall not be bound to comply with his promise.

Since, according to the appellants, a usurious loan is void due to illegality of cause or
object, the rule of pari delicto expressed in Article 1411, supra, applies, so that neither
party can bring action against each other. Said rule, however, appellants add, is
modified as to the borrower, by express provision of the law (Art. 1413, New Civil Code),
allowing the borrower to recover interest paid in excess of the interest allowed by the
Usury Law. As to the lender, no exception is made to the rule; hence, he cannot recover
ANGEL JOSE WAREHOUSING CO., INC., plaintiff-appellee, on the contract. So they continue the New Civil Code provisions must be upheld
vs. as against the Usury Law, under which a loan with usurious interest is not totally void,
CHELDA ENTERPRISES and DAVID SYJUECO, defendants-appellants. because of Article 1961 of the New Civil Code, that: Usurious contracts shall be
governed by the Usury Law and other special laws, so far as they are not inconsistent
with this Code. (Emphasis ours.)
Luis A. Guerrero for plaintiff-appellee.
Burgos and Sarte for defendants-appellants.
ISSUE

BENGZON, J.P., J.:

Whether or not the illegal terms as to payment of interest likewise renders a nullity the
legal terms as to payments of the principal debt.
FACTS

HELD
Plaintiff corporation filed suit in the Court of First Instance of Manila on May 29, 1964
against the partnership Chelda Enterprises and David Syjueco, its capitalist partner, for
recovery of alleged unpaid loans in the total amount of P20,880.00, with legal interest Article 1420 of the New Civil Code provides in this regard: In case of a divisible
from the filing of the complaint, plus attorneys fees of P5,000.00. Alleging that post contract, if the illegal terms can be separated from the legal ones, the latter may be
dated checks issued by defendants to pay said account were dishonored, that enforced.
defendants industrial partner, Chellaram I. Mohinani, had left the country, and that
defendants have removed or disposed of their property, or are about to do so, with
intent to defraud their creditors, preliminary attachment was also sought. In simple loan with stipulation of usurious interest, the prestation of the debtor to pay
the principal debt, which is the cause of the contract (Article 1350, Civil Code), is not
illegal. The illegality lies only as to the prestation to pay the stipulated interest;
Answering, defendants averred that they obtained four loans from plaintiff in the total hence, being separable, the latter only should be deemed void, since it is the only
amount of P26,500.00, of which P5,620.00 had been paid, leaving a balance of one that is illegal.
P20,880.00; that plaintiff charged and deducted from the loan usurious interests
thereon, at rates of 2% and 2.5% per month, and, consequently, plaintiff has no cause
of action against defendants and should not be permitted to recover under the law. A
counterclaim for P2,000.00 attorneys fees was interposed.
 Eastern Shipping vs CA time the claim is made judicially or EJ but when such certainty cannot be so
GR No. 97412, 12 July 1994 reasonably established at the time the demand is made, the interest shll begin
234 SCRA 78 to run only from the date of judgment of the court is made.

FACTS
Two fiber drums were shipped owned by Eastern Shipping from Japan. (3) The Court held that it should be computed from the decision rendered by the
The shipment as insured with a marine policy. Upon arrival in Manila unto the court a quo.
custody of metro Port Service, which excepted to one drum, said to be in bad
order and which damage was unknown the Mercantile Insurance Company.
Allied Brokerage Corporation received the shipment from Metro, one drum
opened and without seal. Allied delivered the shipment to the consignees
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 an 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 damaes
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 fro 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
 G.R. No. 133877 November 14, 2001
Rizal Commercial Banking Corporation, petitioner,
BPI FAMILY BANK V. FRANCO vs.
Alfa RTW Manufacturing Corporation, BA Finance Corporation, North American
(Simple Loan)
Garments Corporations, Johnny Teng, Ramon Lee, Antonio Lacdao, Ramon LUY
Article 1980 of the Civil Code: Fixed, savings, and current deposits of money and ALFA Integrated Textile Mills, respondents,
in banks and similar institutions shall be governed by the provisions
concerning loan. Definition of Terms:
As there is a debtor-creditor relationship between a bank and its depositor, Trust Receipt - is a security transaction intended to aid in financing importers and retail
BPI-FB ultimately acquired ownership of Francos deposits, but such detailers who do not have sufficient funds or resources to finance the importation or
ownership is coupled with a corresponding obligation to pay him an equal purchase of merchandise, and who may not be able to acquire credit except thru
amount on demand. Although BPI-FB owns the deposits in Francos accounts, utilization, as collateral, of the merchandise imported or purchased [Ching vs Court of
Appeals, 331 SCRA 16 (2000), citing Samo vs People, 5 SCRA 354 (1962)]
it cannot prevent him from demanding payment of BPI-FBs obligation by
drawing checks against his current account, or asking for the release of the Facts:
funds in his savings account. Thus, when Franco issued checks drawn against On March 12, 1982, Rizal Banking Corporation (RCBC) filed with the Regional Trial
his current account, he had every right as creditor to expect that those checks Court of Makati, a civil case, for a sum of money against Alfa RTW Manufacturing
would be honored by BPI-FB as debtor. Corporation, Johnny Teng, Ramon Lee, Antonio Lacdao, Ramon Luy and Alfa
Integrated Textile Mills.

The trial court rendered judgment on August 19, 1991, the dispositive portion,
PEOPLE V. PUIG AND PORRAS which reads:
(Simple Loan) Order the defendants to pay, jointly and severally, to plaintiff the amount of Eighteen
Depositors who place their money with the bank are considered creditors of Million Nine Hundred Sixty-one Thousand Three Hundred Seventy-two Pesos
the bank. The bank acquires ownership of the money deposited by its clients, and Forty-three Centavos (P18,961,372.43), Philippine Currency, (inclusive of
making the money taken by respondents as belonging to the bank. interest, service charges, litigation expenses and attorneys fees), with interest
The relationship between banks and depositors has been held to be that of thereon at the legal rate from February 15, 1988 until fully paid.
creditor and debtor. Articles 1953 and 1980 of the New Civil Code, as
On appeal, the Court of Appeals affirmed with modification of the RTC decision,
appropriately pointed out by petitioner, provide as follows:
thus:
Article 1953. A person who receives a loan of money or any other fungible WHEREFORE, with the modification that instead of P18,961,372.43, all the
thing acquires the ownership thereof, and is bound to pay to the creditor an defendants are hereby ordered to pay, jointly and severally to plaintiff the amount
equal amount of the same kind and quality. of P3,060,406.25, Philippine Currency, inclusive of stipulated interest, service charges,
Article 1980. (supra) litigation expenses and attorneys fees, with interest thereon at the legal rate from
In summary, the Bank acquires ownership of the money deposited by its February 15, 1988, until fully paid.
clients; and the employees of the Bank, who are entrusted with the possession
of money of the Bank due to the confidence reposed in them, occupy positions Issue:
Whether or not the Court of Appeals can deviate from the provisions of the contract,
of confidence. The Informations, therefore, sufficiently allege all the essential
which itself is the law between the parties?
elements constituting the crime of Qualified Theft.
Held:
1. The rule is well settled that the jurisdiction of the Court of Appeals via Rule 45 of the
1997 Rules of Civil Procedure, as amended, is limited to reviewing errors of law.
Findings of fact of the said Court are conclusive, except in a number of instances.
Where in the case at bar, exception n0. 6 stated in Siguan vs Lim (318 SCRA 725) is
present to wit:

(6) when the Court of Appeals, in making its findings, went beyond the issues of the
case and the same is to the admissions of both the appellant and appelle
 Herein lies the reversible error on the part of the Court of Appeals. When it ruled that
only P3,060,406.25 should be awarded to petitioner RCBC, the Appellate Court
disregarded the parties stipulations in their contracts of loan, more specifically, those
pertaining to the agreed (1) Interest rates, (2) service charge and (3) penalties in case
of any breach thereof. The CA failed to apply the honoured doctrine

That which is agreed to in a contract is the law between the parties. Thus, obligations
arising from contracts have the force of law between the contracting parties and should
be complied with in good faith.

The court cannot vary the terms and conditions therein stipulated unless such
stipulation is contrary to law, morals, good customs, public order or public policy.

2. In the determination and computation of interest of payment, this court, in Eastern

Shipping Lines, Inc. (234 SCRA 18, 1994) vs Court of Appeals, through Justice Jose
C. Vitug, held:

2.1. When the obligation is breached and it consist in the payment of a sum of money (i.e.,
loan or forbearance of money, the interest due should be that which may be have
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 169 of the Civil Code

2.2. When the obligation, not constituting a loan or forbearance of money, is breached, and
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.

WHEREFORE; the petition is hereby GRANTED. The assailed decision of the court of
Appeals in MODIFIED in the sense that the award to petitioner RCBC of
P3,0606,406.25 is SET ASIDE and substituted with an amount to be computed by the
trial court, upon finality of this Decision.