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54 Bangayan vs RCBC - Digest

54 Bangayan vs RCBC - Digest

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Published by Trish Verzosa

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Published by: Trish Verzosa on Oct 03, 2013
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FACTS: Petitioner Bangayan had a savings account and a current account with one of the branches of respondent Rizal Commercial Banking Corporation (RCBC). Bangayan purportedly signed a Comprehensive Surety Agreement with respondent RCBC in favor of nine corporations. Under the Surety Agreement, the funds in petitioner Bangayan’s accounts with RCBC would be used as security to guarantee any existing and future loan obligations, advances, credits/increases and other obligations, including any and all expenses that these corporations may incur with respondent bank. Bangayan contests the veracity and due authenticity of the Agreement on the ground that his signature thereon was not genuine, and that the agreement was not notarized. Respondent RCBC refutes this claim. Then occurred different transactions between RCBC with other entities in relation to the Surety Agreement. RCBC issued commercial letters of credit in favor of different corporations. Mr. Lao, of RCBC, claimed that the bank would not have extended the letters of credit in favor of the three corporations without petitioner Bangayan acting as surety. After all the transactions in relation to the letters of credit issued by RCBC in relation to the Surety Agreement, Bangayan’s account was depleted. Two of the seven checks that were drawn against petitioner Bangayan’s Current Account were presented for payment to respondent RCBC were returned by respondent RCBC with the notation "REFER TO DRAWER. Five other checks of petitioner Bangayan were presented for payment to respondent RCBC. These five checks were dishonored by respondent RCBC on the ground that they had been drawn against insufficient funds ("DAIF") and were likewise returned. Thus, Bangayan, demanded that respondent bank restore all the funds to his account and indemnify him for damages. Bangayan filed a complaint for damages against respondent RCBC. In its defense, RCBC claims that Bangayan signed a Surety Agreement in favor of several companies that defaulted in their payment of customs duties that resulted in the imposition of a lien over the accounts. Also, it funded a letter of credit of Lotec Marketing with the account of petitioner Bangayan, who agreed to guarantee Lotec Marketing’s obligations under the Surety Agreement; and, that the bank applied Bangayan’s deposits to satisfy part of Lotec Marketing’s obligation which resulted in the depletion of the bank accounts. ISSUE: Whether respondent RCBC was justified in dishonoring the checks, and, consequently, whether petitioner Bangayan is entitled to damages arising from the dishonor. HELD: Yes. RCBC was justified in dishonoring the checks. Bangayan is not entitled to damages. Whatever damage to petitioner Bangayan’s interest or reputation from the dishonor of the seven checks was a consequence of his agreement to act as surety for the corporations and their failure to pay their loan obligations, advances and other expenses. First, there was no malice or bad faith on the part of respondent RCBC in the dishonor of the checks, since its actions were justified by petitioner Bangayan’s obligations under the Surety Agreement. Both the trial and the appellate courts gave credence to the Surety Agreement, which categorically guaranteed the four corporations’ obligations to respondent RCBC under the

As petitioner failed to discharge his burden of demonstrating that his signature was forged. there is no reason to overturn the factual findings of the lower courts with respect to the genuineness and due execution of the Surety Agreement. The trial and the appellate courts. the mere absence of notarization does not necessarily render the Surety Agreement invalid. Second. there being no positive and convincing evidence to prove such fact. petitioner Bangayan never contested the existence of the Surety Agreement prior to the filing of the Complaint. Thus. In all seven dishonored checks.letters of credit. therefore. With respect to the first two dishonored checks. On the other hand. not by the bank’s actions. It must be also be emphasized that petitioner Bangayan did not complain against the four corporations which had benefitted from his bank account. committed no reversible error in disallowing the award of damages to petitioner. actual or compensatory damages are those awarded in satisfaction of or in recompense for loss or injury sustained. They proceed from a sense of natural justice and are designed to repair the wrong that has been done. . Any damage to petitioner arising from the dishonor of those checks was brought about. the five other checks were subsequently dishonored because petitioner Bangayan’s account was by that time already depleted due to the partial payment of Lotec Marketing’s loan obligation. Fourth. petitioner Bangayan cannot attribute any wrong or misconduct to respondent RCBC since there was no malice or bad faith on the part of respondent in dishonoring the checks. respondent RCBC had already put on hold petitioner Bangayan’s account to answer for the customs duties being demanded from the bank by the BOC. Under Articles 2199 and 2200 of the Civil Code. respondent RCBC properly exercised its right as a creditor under the Surety Agreement to apply the petitioner Bangayan’s funds in his accounts as security for the obligations of the four corporations under the letters of credit. that the annex of the Surety Agreement does not bear petitioner Bangayan’s signature is not a sufficient ground to invalidate the main agreement altogether. but by the corporations that defaulted on their obligations that petitioner had guaranteed to pay. Third.

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