G.

R.No.L60033

Apr
i
l4,
1984

TEOFI
STOGUI
NGONA,
JR.
,
ANTONI
OI
.MARTI
N,
andTERESI
TASANTOS,
pet
i
t
i
oner
s,
vs.
THECI
TYFI
SCALOFMANI
LA,
HON.JOSEB.FLAMI
NI
ANO,
ASST.CI
TYFI
SCALFELI
ZARDON.
LOTAandCLEMENTDAVI
D,
r
espondent
s.
MAKASI
AR,
Act
g.C.
J.
:
+.

wph!
1
Thi
si
sapet
i
t
i
onf
orpr
ohi
bi
t
i
onandi
nj
unct
i
onwi
t
hapr
ayerf
ort
hei
mmedi
at
ei
ssuanceof
r
est
r
ai
ni
ngor
derand/
orwr
i
tofpr
el
i
mi
nar
yi
nj
unct
i
onf
i
l
edbypet
i
t
i
oner
sonMar
ch26,
1982.
OnMar
ch31,
1982,
byvi
r
t
ueofacour
tr
esol
ut
i
oni
ssuedbyt
hi
sCour
tont
hesamedat
e,
a
t
empor
ar
yr
est
r
ai
ni
ngor
derwasdul
yi
ssuedor
der
i
ngt
her
espondent
s,
t
hei
rof
f
i
cer
s,
agent
s,
r
epr
esent
at
i
vesand/
orper
sonorper
sonsact
i
ngupont
hei
r(
r
espondent
s'
)or
der
sori
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hei
r
pl
aceorst
eadt
or
ef
r
ai
nf
r
om pr
oceedi
ngwi
t
ht
hepr
el
i
mi
nar
yi
nvest
i
gat
i
oni
nCaseNo.
8131938oft
heOf
f
i
ceoft
heCi
t
yFi
scal
ofMani
l
a(
pp.4748,
r
ec.
)
.OnJanuar
y24,
1983,
pr
i
vat
er
espondentCl
ementDavi
df
i
l
edamot
i
ont
ol
i
f
tr
est
r
ai
ni
ngor
derwhi
chwasdeni
edi
n
t
her
esol
ut
i
onoft
hi
sCour
tdat
edMay18,
1983.
Ascanbegl
eanedf
r
om t
heabove,
t
hei
nst
antpet
i
t
i
onseekst
opr
ohi
bi
tpubl
i
cr
espondent
s
f
r
om pr
oceedi
ngwi
t
ht
hepr
el
i
mi
nar
yi
nvest
i
gat
i
onofI
.
S.No.8131938,
i
nwhi
chpet
i
t
i
oner
s
wer
echar
gedbypr
i
vat
er
espondentCl
ementDavi
d,
wi
t
hest
af
aandvi
ol
at
i
onofCent
r
alBank
Ci
r
cul
arNo.364andr
el
at
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egar
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ngf
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ansact
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y,
ont
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ackofj
ur
i
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ct
i
oni
nt
hatt
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l
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i
onsoft
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ged,
aswel
last
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t
est
i
monyofpr
i
vat
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espondent
'
spr
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nci
pal
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t
nessandt
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dencet
hr
oughsai
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ness,
showedt
hatpet
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t
i
oner
s'
obl
i
gat
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oni
sci
vi
li
nnat
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e.
Forpur
posesofbr
evi
t
y,
Weher
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heant
ecedentf
act
snar
r
at
edbyt
heSol
i
ci
t
or
Gener
ali
ni
t
sCommentdat
edJune28,
1982,
asf
ol
l
ows:
t
.

hqw
OnDecember23,
1981,
pr
i
vat
er
espondentDavi
df
i
l
edI
.
S.No.8131938i
nt
heOf
f
i
ceoft
heCi
t
y
Fi
scal
ofMani
l
a,
whi
chcasewasassi
gnedt
or
espondentLot
af
orpr
el
i
mi
nar
yi
nvest
i
gat
i
on
(
Pet
i
t
i
on,
p.8)
.
I
nI
.
S.No.8131938,
Davi
dchar
gedpet
i
t
i
oner
s(
t
oget
herwi
t
honeRober
tMar
shal
landt
he
f
ol
l
owi
ngdi
r
ect
or
soft
heNat
i
onSavi
ngsandLoanAssoci
at
i
on,
I
nc.
,
namel
yHomer
oGonzal
es,
JuanMer
i
no,
Fl
avi
oMacasaet
,
Vi
ct
orGomez,
Jr
.
,
Per
f
ect
oManal
ac,
Jai
meV.Paz,
Paul
i
noB.
Di
oni
si
o,
andoneJohnDoe)wi
t
hest
af
aandvi
ol
at
i
onofCent
r
alBankCi
r
cul
arNo.364and
r
el
at
edCent
r
alBankr
egul
at
i
onsonf
or
ei
gnexchanget
r
ansact
i
ons,
al
l
egedl
ycommi
t
t
edas
f
ol
l
ows(
Pet
i
t
i
on,
Annex"
A"
)
:
t
.

hqw
"
Fr
om Mar
ch20,
1979t
oMar
ch,
1981,
Davi
di
nvest
edwi
t
ht
heNat
i
onSavi
ngsandLoan
Associ
at
i
on,
(
her
ei
naf
t
ercal
l
edNSLA)t
hesum ofP1,
145,
546.
20onni
nedeposi
t
s,
P13,
531.
94
onsavi
ngsaccountdeposi
t
s(
j
oi
nt
l
ywi
t
hhi
ssi
st
er
,
Deni
seKuhne)
,
US$10,
000.
00ont
i
me

deposi
t
,
US$15,
000.
00underar
ecei
ptandguar
ant
eeofpaymentandUS$50,
000.
00undera
r
ecei
ptdat
edJune8,
1980(
auj
oi
nt
l
ywi
t
hDeni
seKuhne)
,
t
hatDavi
dwasi
nducedi
nt
omaki
ng
t
heaf
or
est
at
edi
nvest
ment
sbyRober
tMar
shal
l
anAust
r
al
i
annat
i
onalwhowasal
l
egedl
ya
cl
oseassoci
at
eofpet
i
t
i
onerGui
ngonaJr
.
,
t
henNSLAPr
esi
dent
,
pet
i
t
i
onerMar
t
i
n,
t
henNSLA
Execut
i
veVi
cePr
esi
dentofNSLAandpet
i
t
i
onerSant
os,
t
henNSLAGener
alManager
;t
haton
Mar
ch21,
1981NLAwaspl
acedunderr
ecei
ver
shi
pbyt
heCent
r
alBank,
sot
hatDavi
df
i
l
ed
cl
ai
mst
her
ewi
t
hf
orhi
si
nvest
ment
sandt
hoseofhi
ssi
st
er
;t
hatonJul
y22,
1981Davi
d
r
ecei
vedar
epor
tf
r
om t
heCent
r
al
Bankt
hatonl
yP305,
821.
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hosei
nvest
ment
swer
e
ent
er
edi
nt
her
ecor
dsofNSLA;t
hat
,
t
her
ef
or
e,
t
her
espondent
si
nI
.
S.No.8131938
mi
sappr
opr
i
at
edt
hebal
anceoft
hei
nvest
ment
s,
att
hesamet
i
mevi
ol
at
i
ngCent
r
alBank
Ci
r
cul
arNo.364andr
el
at
edCent
r
al
Bankr
egul
at
i
onsonf
or
ei
gnexchanget
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ansact
i
ons;t
hat
af
t
erdemands,
pet
i
t
i
onerGui
ngonaJr
.pai
donl
yP200,
000.
00,
t
her
ebyr
educi
ngt
heamount
s
mi
sappr
opr
i
at
edt
oP959,
078.
14andUS$75,
000.
00.
"
Pet
i
t
i
oner
s,
Mar
t
i
nandSant
os,
f
i
l
edaj
oi
ntcount
er
af
f
i
davi
t(
Pet
i
t
i
on,
Annex'
B'
)i
nwhi
cht
hey
st
at
edt
hef
ol
l
owi
ng.
t
.

hqw
"
ThatMar
t
i
nbecamePr
esi
dentofNSLAi
nMar
ch1978(
af
t
ert
her
esi
gnat
i
onofGui
ngona,
Jr
.
)
andser
vedassuchunt
i
lOct
ober30,
1980,
whi
l
eSant
oswasGener
alManagerupt
o
November1980;t
hatbecauseNSLAwasur
gent
l
yi
nneedoff
undsandatDavi
d'
si
nsi
st
ence,
hi
si
nvest
ment
swer
et
r
eat
edasspeci
al
-account
swi
t
hi
nt
er
estabovet
hel
egalr
at
e,
an
r
ecor
dedi
nsepar
at
econf
i
dent
i
al
document
sonl
yapor
t
i
onofwhi
chwer
et
ober
epor
t
ed
becausehedi
dnotwantt
heAust
r
al
i
angover
nmentt
ot
axhi
st
ot
alear
ni
ngs(
nor
)t
oknowhi
s
t
ot
ali
nvest
ment
s;t
hatal
lt
r
ansact
i
onswi
t
hDavi
dwer
er
ecor
dedexceptt
hesum of
US$15,
000.
00whi
chwasaper
sonal
l
oanofSant
os;t
hatDavi
d'
scheckf
orUS$50,
000.
00was
cl
ear
edt
hr
oughGui
ngona,
Jr
.
'
sdol
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araccountbecauseNSLAdi
dnothaveone,
t
hatadr
af
tof
US$30,
000.
00waspl
acedi
nt
henameofonePazRocesbecauseofapendi
ngt
r
ansact
i
on
wi
t
hher
;t
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i
ppi
neDeposi
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nsur
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por
at
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eadyr
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edSpeci
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oceedi
ngs
No.821695i
nt
heCour
tofFi
r
stI
nst
ancet
ocont
esti
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s(
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s)cl
osur
e;t
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t
erNSLAwas
pl
acedunderr
ecei
ver
shi
p,
Mar
t
i
nexecut
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d'
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avorandcausedt
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t
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ansf
ert
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f(
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atdi
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i
ngwi
t
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ueof
P510,
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00;and,
t
hatt
hel
i
abi
l
i
t
i
esofNSLAt
oDavi
dwer
eci
vi
li
nnat
ur
e.
"
Pet
i
t
i
oner
,
Gui
ngona,
Jr
.
,
i
nhi
scount
er
af
f
i
davi
t(
Pet
i
t
i
on,
Annex'
C'
)st
at
edt
he
f
ol
l
owi
ng:
t
.

hqw
"
Thathehadnohandwhat
soeveri
nt
het
r
ansact
i
onsbet
weenDavi
dandNSLAsi
ncehe
(
Gui
ngonaJr
.
)hadr
esi
gnedasNSLApr
esi
denti
nMar
ch1978,
orpr
i
ort
ot
hoset
r
ansact
i
ons;
t
hatheassumedapor
t
i
ono;t
hel
i
abi
l
i
t
i
esofNSLAt
oDavi
dbecauseoft
hel
at
t
er
'
si
nsi
st
ence
t
hathepl
acedhi
si
nvest
ment
swi
t
hNSLAbecauseofhi
sf
ai
t
hi
nGui
ngona,
Jr
.
;t
hati
na
Pr
omi
ssor
yNot
edat
edJune17,
1981(
Pet
i
t
i
on,
Annex"
D"
)he(
Gui
ngona,
Jr
.
)boundhi
msel
ft
o
payDavi
dt
hesumsofP668.
307.
01andUS$37,
500.
00i
nst
at
edi
nst
al
l
ment
s;t
hathe
(
Gui
ngona,
Jr
.
)secur
edpaymentoft
hoseamount
swi
t
hsecondmor
t
gagesovert
wo(
2)
par
cel
sofl
andunderadeedofSecondRealEst
at
eMor
t
gage(
Pet
i
t
i
on,
Annex"
E"
)i
nwhi
chi
t

waspr
ovi
dedt
hatt
hemor
t
gageoverone(
1)par
cel
shal
lbecancel
l
eduponpaymentofonehal
foft
heobl
i
gat
i
ont
oDavi
d;t
hathe(
Gui
ngona,
Jr
.
)pai
dP200,
000.
00andt
ender
edanot
her
P300,
000.
00whi
chDavi
dr
ef
usedt
oaccept
,
hence,
he(
Gui
ngona,
Jr
.
)f
i
l
edCi
vi
lCaseNo.Q33865i
nt
heCour
tofFi
r
stI
nst
anceofRi
zalatQuezonCi
t
y,
t
oef
f
ectt
her
el
easeoft
he
mor
t
gageoverone(
1)oft
het
wopar
cel
sofl
andconveyedt
oDavi
dundersecondmor
t
gages.
"
Att
hei
ncept
i
onoft
hepr
el
i
mi
nar
yi
nvest
i
gat
i
onbef
or
er
espondentLot
a,
pet
i
t
i
oner
smovedt
o
di
smi
sst
hechar
gesagai
nstt
hem f
orl
ackofj
ur
i
sdi
ct
i
onbecauseDavi
d'
scl
ai
msal
l
egedl
y
compr
i
sedapur
el
yci
vi
lobl
i
gat
i
onwhi
chwasi
t
sel
fnovat
ed.Fi
scalLot
adeni
edt
hemot
i
ont
o
di
smi
ss(
Pet
i
t
i
on,
p.8)
.
But
,
af
t
ert
hepr
esent
at
i
onofDavi
d'
spr
i
nci
pal
wi
t
ness,
pet
i
t
i
oner
sf
i
l
edt
hei
nst
antpet
i
t
i
on
because:(
a)t
hepr
oduct
i
onoft
hePr
omi
sor
yNot
es,
Banker
'
sAccept
ance,
Cer
t
i
f
i
cat
esofTi
me
Deposi
t
sandSavi
ngsAccountal
l
egedl
yshowedt
hatt
het
r
ansact
i
onsbet
weenDavi
dand
NSLAwer
esi
mpl
el
oans,
i
.
e.
,
ci
vi
lobl
i
gat
i
onsont
hepar
tofNSLAwhi
chwer
enovat
edwhen
Gui
ngona,
Jr
.andMar
t
i
nassumedt
hem;and(
b)Davi
d'
spr
i
nci
palwi
t
nessal
l
egedl
yt
est
i
f
i
ed
t
hatt
hedupl
i
cat
eor
i
gi
nal
soft
heaf
or
esai
di
nst
r
ument
sofi
ndebt
ednesswer
eal
lonf
i
l
ewi
t
h
NSLA,
cont
r
ar
yt
oDavi
d'
scl
ai
mt
hatsomeofhi
si
nvest
ment
swer
enotr
ecor
d(
Pet
i
t
i
on,
pp.89)
.
Pet
i
t
i
oner
sal
l
egedt
hatt
heydi
dnotexhaustavai
l
abl
eadmi
ni
st
r
at
i
ver
emedi
esbecauset
odo
sowoul
dbef
ut
i
l
e(
Pet
i
t
i
on,
p.9)[
pp.153157,
r
ec.
]
.
Ascor
r
ect
l
ypoi
nt
edoutbyt
heSol
i
ci
t
orGener
al
,
t
hesol
ei
ssuef
orr
esol
ut
i
oni
swhet
herpubl
i
c
r
espondent
sact
edwi
t
houtj
ur
i
sdi
ct
i
onwhent
heyi
nvest
i
gat
edt
hechar
ges(
est
af
aand
vi
ol
at
i
onofCBCi
r
cul
arNo.364andr
el
at
edr
egul
at
i
onsr
egar
di
ngf
or
ei
gnexchange
t
r
ansact
i
ons)subj
ectmat
t
erofI
.
S.No.8131938.
Ther
ei
smer
i
ti
nt
hecont
ent
i
onoft
hepet
i
t
i
oner
st
hatt
hei
rl
i
abi
l
i
t
yi
sci
vi
li
nnat
ur
eand
t
her
ef
or
e,
publ
i
cr
espondent
shavenoj
ur
i
sdi
ct
i
onovert
hechar
geofest
af
a.
Acasualper
usaloft
heDecember23,
1981af
f
i
davi
t
.compl
ai
ntf
i
l
edi
nt
heOf
f
i
ceoft
heCi
t
y
Fi
scal
ofMani
l
abypr
i
vat
er
espondentDavi
dagai
nstpet
i
t
i
oner
sTeopi
st
oGui
ngona,
Jr
.
,
Ant
oni
oI
.Mar
t
i
nandTer
esi
t
aG.Sant
os,
t
oget
herwi
t
honeRober
tMar
shal
landt
heot
her
di
r
ect
or
soft
heNat
i
onSavi
ngsandLoanAssoci
at
i
on,
wi
l
lshowt
hatf
r
om Mar
ch20,
1979t
o
Mar
ch,
1981,
pr
i
vat
er
espondentDavi
d,
t
oget
herwi
t
hhi
ssi
st
er
,
Deni
seKuhne,
i
nvest
edwi
t
h
t
heNat
i
onSavi
ngsandLoanAssoci
at
i
ont
hesum ofP1,
145,
546.
20ont
i
medeposi
t
scover
ed
byBanker
sAccept
ancesandCer
t
i
f
i
cat
esofTi
meDeposi
t
sandt
hesum ofP13,
531.
94on
savi
ngsaccountdeposi
t
scover
edbypassbooknos.6632and29742,
orat
ot
alof
P1,
159,
078.
14(
pp.1516,
r
oc.
)
.I
tappear
sf
ur
t
hert
hatpr
i
vat
er
espondentDavi
d,
t
oget
herwi
t
h
hi
ssi
st
er
,
madei
nvest
ment
si
nt
heaf
or
esai
dbanki
nt
heamountofUS$75,
000.
00(
p.17,
r
ec.
)
.
Mor
eover
,
t
her
ecor
dsr
evealt
hatwhent
heaf
or
esai
dbankwaspl
acedunderr
ecei
ver
shi
pon
Mar
ch21,
1981,
pet
i
t
i
oner
sGui
ngonaandMar
t
i
n,
upont
her
equestofpr
i
vat
er
espondent
Davi
d,
assumedt
heobl
i
gat
i
onoft
hebankt
opr
i
vat
er
espondentDavi
dbyexecut
i
ngonJune
17,
1981aj
oi
ntpr
omi
ssor
ynot
ei
nf
avorofpr
i
vat
er
espondentacknowl
edgi
ngan

i
ndebt
ednessofPl
,
336,
614.
02andUS$75,
000.
00(
p.80,
r
ec.
)
.Thi
spr
omi
ssor
ynot
ewas
basedont
hest
at
ementofaccountasofJune30,
1981pr
epar
edbyt
hepr
i
vat
er
espondent(
p.
81,
r
ec.
)
.Theamountofi
ndebt
ednessassumedappear
st
obebi
ggert
hant
heor
i
gi
nalcl
ai
m
becauseoft
headdedi
nt
er
estandt
hei
ncl
usi
onofot
herdeposi
t
sofpr
i
vat
er
espondent
'
ssi
st
er
i
nt
heamountofP116,
613.
20.
Ther
eaf
t
er
,
oronJul
y17,
1981,
pet
i
t
i
oner
sGui
ngonaandMar
t
i
nagr
eedt
odi
vi
det
hesai
d
i
ndebt
edness,
andpet
i
t
i
onerGui
ngonaexecut
edanot
herpr
omi
ssor
ynot
eant
edat
edt
oJune
17,
1981wher
ebyheper
sonal
l
yacknowl
edgedani
ndebt
ednessofP668,
307.
01(
1/
2of
P1,
336,
614.
02)andUS$37,
500.
00(
1/
2ofUS$75,
000.
00)i
nf
avorofpr
i
vat
er
espondent(
p.25,
r
ec.
)
.Theaf
or
esai
dpr
omi
ssor
ynot
eswer
eexecut
edasar
esul
tofdeposi
t
smadebyCl
ement
Davi
dandDeni
seKuhnewi
t
ht
heNat
i
onSavi
ngsandLoanAssoci
at
i
on.
Fur
t
her
mor
e,
t
hevar
i
ouspl
eadi
ngsanddocument
sf
i
l
edbypr
i
vat
er
espondentDavi
d,
bef
or
e
t
hi
sCour
ti
ndi
sput
abl
yshowt
hathehasi
ndeedi
nvest
edhi
smoneyont
i
meandsavi
ngs
deposi
t
swi
t
ht
heNat
i
onSavi
ngsandLoanAssoci
at
i
on.
I
tmustbepoi
nt
edoutt
hatwhenpr
i
vat
er
espondentDavi
di
nvest
edhi
smoneyonni
ne.and
savi
ngsdeposi
t
swi
t
ht
heaf
or
esai
dbank,
t
hecont
r
actt
hatwasper
f
ect
edwasacont
r
actof
si
mpl
el
oanormut
uum andnotacont
r
actofdeposi
t
.Thus,
Ar
t
i
cl
e1980oft
heNewCi
vi
lCode
pr
ovi
dest
hat
:
t
.

hqw
Ar
t
i
cl
e1980. Fi
xed,
savi
ngs,
andcur
r
entdeposi
t
sof
moneyi
nbanksandsi
mi
l
ari
nst
i
t
ut
i
ons
shal
lbegover
nedbyt
hepr
ovi
si
onsconcer
ni
ngsi
mpl
el
oan.
I
nt
hecaseofCent
r
alBankoft
hePhi
l
i
ppi
nesvs.Mor
f
e(
63SCRA114,
119[
1975]
,
We
sai
d:
t
.

hqw
I
tshoul
dbenot
edt
hatf
i
xed,
savi
ngs,
andcur
r
entdeposi
t
sofmoneyi
nbanksandsi
mi
l
ar
i
nst
i
t
ut
i
onsar
ehatt
r
uedeposi
t
s.ar
econsi
der
edsi
mpl
el
oansand,
assuch,
ar
enotpr
ef
er
r
ed
cr
edi
t
s(
Ar
t
.1980Ci
vi
lCode;I
nr
eLi
qui
dat
i
onofMer
cant
i
l
eBat
i
kofChi
naTanTi
ongTi
ckvs.
Amer
i
canApot
hecar
i
esCo.
,
66Phi
l414;Paci
f
i
cCoastBi
scui
tCo.vs.Chi
neseGr
ocer
s
Associ
at
i
on65Phi
l
.375;Fl
et
cherAmer
i
canNat
i
onal
Bankvs.AngChongUM 66PWL385;
Paci
f
i
cCommer
ci
al
Co.vs.Amer
i
canApot
hecar
i
esCo.
,
65Phi
L429;GopocoGr
ocer
yvs.
Paci
f
i
cCoastBi
scui
tCO.
,
65Phi
l
.443)
.
"
Thi
sCour
tal
sodecl
ar
edi
nt
her
ecentcaseofSer
r
anovs.Cent
r
alBankoft
hePhi
l
i
ppi
nes(
96
SCRA102[
1980]
)t
hat
:
t
.

hqw
Bankdeposi
t
sar
ei
nt
henat
ur
eofi
r
r
egul
ardeposi
t
s.Theyar
er
eal
l
y'
l
oansbecauset
heyear
n
i
nt
er
est
.Al
lki
ndsofbankdeposi
t
s,
whet
herf
i
xed,
savi
ngs,
orcur
r
entar
et
obet
r
eat
edasl
oans
andar
et
obecover
edbyt
hel
awonl
oans(
Ar
t
.1980Ci
vi
lCodeGul
l
asvs.Phi
l
.Nat
i
onalBank,
62Phi
l
.519)
.Cur
r
entandsavi
ngdeposi
t
s,
ar
el
oanst
oabankbecausei
tcanuset
hesame.
Thepet
i
t
i
onerher
ei
nmaki
ngt
i
medeposi
t
st
hatear
ni
nt
er
est
swi
l
lr
espondentOver
seasBank
ofMani
l
awasi
nr
eal
i
t
yacr
edi
t
oroft
her
espondentBankandnotadeposi
t
or
.Ther
espondent
Bankwasi
nt
ur
nadebt
orofpet
i
t
i
oner
.Fai
l
ur
eoft
her
espondentBankt
ohonort
het
i
me

deposi
ti
sf
ai
l
ur
et
opayi
t
sobl
i
gat
i
onasadebt
orandnotabr
eachoft
r
ustar
i
si
ngf
r
om a
deposi
t
ar
y'
sf
ai
l
ur
et
or
et
ur
nt
hesubj
ectmat
t
eroft
hedeposi
t(
Emphasi
ssuppl
i
ed)
.
Hence,
t
her
el
at
i
onshi
pbet
weent
hepr
i
vat
er
espondentandt
heNat
i
onSavi
ngsandLoan
Associ
at
i
oni
st
hatofcr
edi
t
oranddebt
or
;consequent
l
y,
t
heowner
shi
poft
heamount
deposi
t
edwast
r
ansmi
t
t
edt
ot
heBankupont
heper
f
ect
i
onoft
hecont
r
actandi
tcanmakeuse
oft
heamountdeposi
t
edf
ori
t
sbanki
ngoper
at
i
ons,
suchast
opayi
nt
er
est
sondeposi
t
sandt
o
paywi
t
hdr
awal
s.Whi
l
et
heBankhast
heobl
i
gat
i
ont
or
et
ur
nt
heamountdeposi
t
ed,
i
thas,
however
,
noobl
i
gat
i
ont
or
et
ur
nordel
i
vert
hesamemoneyt
hatwasdeposi
t
ed.And,
t
hef
ai
l
ur
e
oft
heBankt
or
et
ur
nt
heamountdeposi
t
edwi
l
lnotconst
i
t
ut
eest
af
at
hr
oughmi
sappr
opr
i
at
i
on
puni
shabl
eunderAr
t
i
cl
e315,
par
.l
(
b)oft
heRevi
sedPenalCode,
buti
twi
l
lonl
ygi
ver
i
set
o
ci
vi
ll
i
abi
l
i
t
yoverwhi
cht
hepubl
i
cr
espondent
shaveno-j
ur
i
sdi
ct
i
on.
WEhaveal
r
eadyl
ai
ddownt
her
ul
et
hat
:
t
.

hqw
I
nor
dert
hataper
soncanbeconvi
ct
edundert
heabovequot
edpr
ovi
si
on,
i
tmustbepr
oven
t
hathehast
heobl
i
gat
i
ont
odel
i
verorr
et
ur
nt
hesomemoney,
goodsorper
sonalpr
oper
t
yt
hat
her
ecei
vedPet
i
t
i
oner
shadnosuchobl
i
gat
i
ont
or
et
ur
nt
hesamemoney,
i
.
e.
,
t
hebi
l
l
sorcoi
ns,
whi
cht
heyr
ecei
vedf
r
om pr
i
vat
er
espondent
s.Thi
si
ssobecauseascl
ear
l
yasst
at
edi
n
cr
i
mi
nalcompl
ai
nt
s,
t
her
el
at
edci
vi
lcompl
ai
nt
sandt
hesuppor
t
i
ngswor
nst
at
ement
s,
t
he
sumsofmoneyt
hatpet
i
t
i
oner
sr
ecei
vedwer
el
oans.
Thenat
ur
eofsi
mpl
el
oani
sdef
i
nedi
nAr
t
i
cl
es1933and1953oft
heCi
vi
lCode.
t
.

hqw
"
Ar
t
.1933.Byt
hecont
r
actofl
oan,
oneoft
hepar
t
i
esdel
i
ver
st
oanot
her
,
ei
t
hersomet
hi
ng
notconsumabl
esot
hatt
hel
at
t
ermayuset
hesamef
oracer
t
ai
nt
i
me-andr
et
ur
ni
t
,
i
nwhi
ch
caset
hecont
r
acti
scal
l
edacommodat
um;ormoneyorot
herconsumabl
et
hi
ng,
upont
he
condi
t
i
ont
hatt
hesameamountoft
hesameki
ndandqual
i
t
yshal
lhepai
di
nwhi
chcaset
he
cont
r
acti
ssi
mpl
ycal
l
edal
oanormut
uum.
"
Commodat
um i
sessent
i
al
l
ygr
at
ui
t
ous.
"
Si
mpl
el
oanmaybegr
at
ui
t
ousorwi
t
hast
i
pul
at
i
ont
opayi
nt
er
est
.
"
I
ncommodat
um t
hebai
l
orr
et
ai
nst
heowner
shi
poft
het
hi
ngl
oanedwhi
l
ei
nsi
mpl
el
oan,
owner
shi
ppassest
ot
hebor
r
ower
.
"
Ar
t
.1953.Aper
sonwhor
ecei
vesal
oanofmoneyoranyot
herf
ungi
bl
et
hi
ngacqui
r
est
he
owner
shi
pt
her
eof
,
andi
sboundt
opayt
ot
hecr
edi
t
oranequalamountoft
hesameki
ndand
qual
i
t
y.
"
I
tcanber
eadi
l
ynot
edf
r
om t
heabovequot
edpr
ovi
si
onst
hati
nsi
mpl
el
oan(
mut
uum)
,
as
cont
r
ast
edt
ocommodat
um t
hebor
r
oweracqui
r
esowner
shi
poft
hemoney,
goodsorper
sonal
pr
oper
t
ybor
r
owedBei
ngt
heowner
,
t
hebor
r
owercandi
sposeoft
het
hi
ngbor
r
owed(
Ar
t
i
cl
e
248,
Ci
vi
lCode)andhi
sactwi
l
lnotbeconsi
der
edmi
sappr
opr
i
at
i
ont
her
eof
'
(
Yam vs.Mal
i
k,
94
SCRA30,
34[
1979]
;Emphasi
ssuppl
i
ed)
.

Butevengr
ant
i
ngt
hatt
hef
ai
l
ur
eoft
hebankt
opayt
het
i
meandsavi
ngsdeposi
t
sofpr
i
vat
e
r
espondentDavi
dwoul
dconst
i
t
ut
eavi
ol
at
i
onofpar
agr
aph1(
b)ofAr
t
i
cl
e315oft
heRevi
sed
PenalCode,
never
t
hel
essanyi
nci
pi
entcr
i
mi
nall
i
abi
l
i
t
ywasdeemedavoi
ded,
becausewhen
t
heaf
or
esai
dbankwaspl
acedunderr
ecei
ver
shi
pbyt
heCent
r
alBank,
pet
i
t
i
oner
sGui
ngona
andMar
t
i
nassumedt
heobl
i
gat
i
onoft
hebankt
opr
i
vat
er
espondentDavi
d,
t
her
ebyr
esul
t
i
ng
i
nt
henovat
i
onoft
heor
i
gi
nalcont
r
act
ual
obl
i
gat
i
onar
i
si
ngf
r
om deposi
ti
nt
oacont
r
actof
l
oanandconver
t
i
ngt
heor
i
gi
nalt
r
ustr
el
at
i
onbet
weent
hebankandpr
i
vat
er
espondentDavi
d
i
nt
oanor
di
nar
ydebt
or
cr
edi
t
orr
el
at
i
onbet
weent
hepet
i
t
i
oner
sandpr
i
vat
er
espondent
.
Consequent
l
y,
t
hef
ai
l
ur
eoft
hebankorpet
i
t
i
oner
sGui
ngonaandMar
t
i
nt
opayt
hedeposi
t
sof
pr
i
vat
er
espondentwoul
dnotconst
i
t
ut
eabr
eachoft
r
ustbutwoul
dmer
el
ybeaf
ai
l
ur
et
opay
t
heobl
i
gat
i
onasadebt
or
.
Mor
eover
,
whi
l
ei
ti
st
r
uet
hatnovat
i
ondoesnotext
i
ngui
shcr
i
mi
nall
i
abi
l
i
t
y,
i
tmayhowever
,
pr
eventt
her
i
seofcr
i
mi
nall
i
abi
l
i
t
yasl
ongasi
toccur
spr
i
ort
ot
hef
i
l
i
ngoft
hecr
i
mi
nal
i
nf
or
mat
i
oni
ncour
t
.Thus,
i
nGonzal
esvs.Ser
r
ano(25SCRA64,
69[
1968]
)Wehel
d
t
hat
:
t
.

hqw
Aspoi
nt
edouti
nPeopl
evs.Ner
y,
novat
i
onpr
i
ort
ot
hef
i
l
i
ngoft
hecr
i
mi
nali
nf
or
mat
i
onasi
n
t
hecaseatbarmayconver
tt
her
el
at
i
onbet
weent
hepar
t
i
esi
nt
oanor
di
nar
ycr
edi
t
or
debt
or
r
el
at
i
on,
andpl
acet
hecompl
ai
nanti
nest
oppel
t
oi
nsi
stont
heor
i
gi
nalt
r
ansact
i
onor"
cast
doubtont
het
r
uenat
ur
e"t
her
eof
.
Agai
n,
i
nt
hel
at
estcaseofOngvs.Cour
tofAppeal
s(
L58476,
124SCRA578,
580581[
1983])
,
t
hi
sCour
tr
ei
t
er
at
edt
her
ul
i
ngi
nPeopl
evs.Ner
y(10SCRA244[
1964])
,
decl
ar
i
ng
t
hat
:
t
.

hqw
Thenovat
i
ont
heor
ymayper
hapsappl
ypr
i
ort
ot
hef
i
l
l
i
ngoft
hecr
i
mi
nali
nf
or
mat
i
oni
ncour
t
byt
hest
at
epr
osecut
or
sbecauseupt
ot
hatt
i
met
heor
i
gi
nalt
r
ustr
el
at
i
onmaybeconver
t
ed
byt
hepar
t
i
esi
nt
oanor
di
nar
ycr
edi
t
or
debt
orsi
t
uat
i
on,
t
her
ebypl
aci
ngt
hecompl
ai
nanti
n
est
oppelt
oi
nsi
stont
heor
i
gi
nal
t
r
ust
.Butaf
t
ert
hej
ust
i
ceaut
hor
i
t
i
eshavet
akencogni
zance
oft
hecr
i
meandi
nst
i
t
ut
edact
i
oni
ncour
t
,
t
heof
f
endedpar
t
ymaynol
ongerdi
vestt
he
pr
osecut
i
onofi
t
spowert
oexactt
hecr
i
mi
nall
i
abi
l
i
t
y,
asdi
st
i
ngui
shedf
r
om t
heci
vi
l
.The
cr
i
mebei
nganof
f
enseagai
nstt
hest
at
e,
onl
yt
hel
at
t
ercanr
enouncei
t(
Peopl
evs.Ger
vaci
o,
54Of
f
.Gaz.2898;Peopl
evs.Vel
asco,
42Phi
l
.76;U.
S.vs.Mont
anes,
8Phi
l
.620)
.
I
tmaybeobser
vedi
nt
hi
sr
egar
dt
hatnovat
i
oni
snotoneoft
hemeansr
ecogni
zedbyt
he
PenalCodewher
ebycr
i
mi
nal
l
i
abi
l
i
t
ycanbeext
i
ngui
shed;hence,
t
her
ol
eofnovat
i
onmayonl
y
bet
oei
t
herpr
eventt
her
i
seofcr
i
mi
nal
habi
ht
yort
ocastdoubtont
het
r
uenat
ur
eoft
he
or
i
gi
nalbasi
ct
r
ansact
i
on,
whet
herornoti
twassucht
hati
t
sbr
eachwoul
dnotgi
ver
i
set
o
penalr
esponsi
bi
l
i
t
y,
aswhenmoneyl
oanedi
smadet
oappearasadeposi
t
,
orot
hersi
mi
l
ar
di
sgui
sei
sr
esor
t
edt
o(
cf
.Abet
ovs.Peopl
e,
90Phi
l
.581;U.
S.vs.Vi
l
l
ar
eal
,
27Phi
l
.481)
.
I
nt
hecaseatbar
,
t
her
ei
snodi
sput
et
hatpet
i
t
i
oner
sGui
ngonaandMar
t
i
nexecut
eda
pr
omi
ssor
ynot
eonJune17,
1981assumi
ngt
heobl
i
gat
i
onoft
hebankt
opr
i
vat
er
espondent
Davi
d;whi
l
et
hecr
i
mi
nalcompl
ai
ntf
orest
af
awasf
i
l
edonDecember23,
1981wi
t
ht
heOf
f
i
ce

oft
heCi
t
yFi
scal
.Hence,
i
ti
scl
eart
hatnovat
i
onoccur
r
edl
ongbef
or
et
hef
i
l
i
ngoft
hecr
i
mi
nal
compl
ai
ntwi
t
ht
heOf
f
i
ceoft
heCi
t
yFi
scal
.
Consequent
l
y,
asaf
or
est
at
ed,
anyi
nci
pi
entcr
i
mi
nal
l
i
abi
l
i
t
ywoul
dbeavoi
dedbutt
her
ewi
l
l
st
i
l
lbeaci
vi
ll
i
abi
l
i
t
yont
hepar
tofpet
i
t
i
oner
sGui
ngonaandMar
t
i
nt
opayt
heassumed
obl
i
gat
i
on.
Pet
i
t
i
oner
sher
ei
nwer
el
i
kewi
sechar
gedwi
t
hvi
ol
at
i
onofSect
i
on3ofCent
r
alBankCi
r
cul
arNo.
364andot
herr
el
at
edr
egul
at
i
onsr
egar
di
ngf
or
ei
gnexchanget
r
ansact
i
onsbyaccept
i
ng
f
or
ei
gncur
r
encydeposi
ti
nt
heamountofUS$75,
000.
00wi
t
houtaut
hor
i
t
yf
r
om t
heCent
r
al
Bank.Theycont
endhowever
,
t
hatt
heUSdol
l
ar
si
nt
endedbyr
espondentDavi
df
ordeposi
t
wer
eal
lconver
t
edi
nt
oPhi
l
i
ppi
necur
r
encybef
or
eaccept
anceanddeposi
ti
nt
oNat
i
onSavi
ngs
andLoanAssoci
at
i
on.
Pet
i
t
i
oner
s'
cont
ent
i
oni
swor
t
hyofbehel
ff
ort
hef
ol
l
owi
ngr
easons:
1.
I
tappear
sf
r
om t
her
ecor
dst
hatwhenr
espondentDavi
dwasaboutt
omakeadeposi
t
ofbankdr
af
ti
ssuedi
nhi
snamei
nt
heamountofUS$50,
000.
00wi
t
ht
heNat
i
onSavi
ngsand
LoanAssoci
at
i
on,
t
hesamehadt
obecl
ear
edf
i
r
standconver
t
edi
nt
oPhi
l
i
ppi
necur
r
ency.
Accor
di
ngl
y,
t
hebankdr
af
twasendor
sedbyr
espondentDavi
dt
opet
i
t
i
onerGui
ngona,
whoi
n
t
ur
ndeposi
t
edi
tt
ohi
sdol
l
araccountwi
t
ht
heSecur
i
t
yBankandTr
ustCompany.Pet
i
t
i
oner
Gui
ngonamer
el
yaccommodat
edt
her
equestoft
heNat
i
onSavi
ngsandl
oanAssoci
at
i
oni
n
or
dert
ocl
eart
hebankdr
af
tt
hr
oughhi
sdol
l
araccountbecauset
hebankdi
dnothaveadol
l
ar
account
.I
mmedi
at
el
yaf
t
ert
hebankdr
af
twascl
ear
ed,
pet
i
t
i
onerGui
ngonaaut
hor
i
zedNat
i
on
Savi
ngsandLoanAssoci
at
i
ont
owi
t
hdr
awt
hesamei
nor
dert
obeut
i
l
i
zedbyt
hebankf
ori
t
s
oper
at
i
ons.
2.
I
ti
ssaf
et
oassumet
hatt
heU.
S.dol
l
ar
swer
econver
t
edf
i
r
sti
nt
oPhi
l
i
ppi
nepesos
bef
or
et
heywer
eaccept
edanddeposi
t
edi
nNat
i
onSavi
ngsandLoanAssoci
at
i
on,
because
t
hebanki
spr
esumedt
ohavef
ol
l
owedt
heor
di
nar
ycour
seoft
hebusi
nesswhi
chi
st
oaccept
deposi
t
si
nPhi
l
i
ppi
necur
r
encyonl
y,
andt
hatt
het
r
ansact
i
onwasr
egul
arandf
ai
r
,
i
nt
he
absenceofacl
earandconvi
nci
ngevi
dencet
ot
hecont
r
ar
y(
seepar
agr
aphspandq,
Sec.5,
Rul
e131,
Rul
esofCour
t
)
.
3.
RespondentDavi
dhasnotdeni
edt
heaf
or
esai
dcont
ent
i
onofher
ei
npet
i
t
i
oner
sdespi
t
e
t
hef
actt
hati
twasr
ai
sed.i
npet
i
t
i
oner
s'
r
epl
yf
i
l
edonMay7,
1982t
opr
i
vat
er
espondent
'
s
commentandi
nt
heJul
y27,
1982r
epl
yt
opubl
i
cr
espondent
s'
commentandr
ei
t
er
at
edi
n
pet
i
t
i
oner
s'
memor
andum f
i
l
edonOct
ober30,
1982,
t
her
ebyaddi
ngmor
esuppor
tt
ot
he
concl
usi
ont
hatt
heUS$75,
000.
00wer
er
eal
l
yconver
t
edi
nt
oPhi
l
i
ppi
necur
r
encybef
or
et
hey
wer
eaccept
edanddeposi
t
edi
nt
oNat
i
onSavi
ngsandLoanAssoci
at
i
on.Consi
der
i
ngt
hatt
hi
s
mi
ghtadver
sel
yaf
f
ecthi
scase,
r
espondentDavi
dshoul
dhavepr
ompt
l
ydeni
edpet
i
t
i
oner
s'
al
l
egat
i
on.
I
nconcl
usi
on,
consi
der
i
ngt
hatt
hel
i
abi
l
i
t
yoft
hepet
i
t
i
oner
si
spur
el
yci
vi
li
nnat
ur
eandt
hat
t
her
ei
snocl
earshowi
ngt
hatt
heyengagedi
nf
or
ei
gnexchanget
r
ansact
i
ons,
Wehol
dt
hatt
he
publ
i
cr
espondent
sact
edwi
t
houtj
ur
i
sdi
ct
i
onwhent
heyi
nvest
i
gat
edt
hechar
gesagai
nstt
he

pet
i
t
i
oner
s.Consequent
l
y,
publ
i
cr
espondent
sshoul
dber
est
r
ai
nedf
r
om f
ur
t
herpr
oceedi
ng
wi
t
ht
hecr
i
mi
nalcasef
ort
oal
l
owt
hecaset
ocont
i
nue,
eveni
ft
hepet
i
t
i
oner
scoul
dhave
appeal
edt
ot
heMi
ni
st
r
yofJust
i
ce,
woul
dwor
kgr
eati
nj
ust
i
cet
opet
i
t
i
oner
sandwoul
dr
ender
meani
ngl
esst
hepr
operadmi
ni
st
r
at
i
onofj
ust
i
ce.
Whi
l
easar
ul
e,
t
hepr
osecut
i
oni
nacr
i
mi
nalof
f
ensecannotbet
hesubj
ectofpr
ohi
bi
t
i
onand
i
nj
unct
i
on,
t
hi
scour
thasr
ecogni
zedt
her
esor
tt
ot
heext
r
aor
di
nar
ywr
i
t
sofpr
ohi
bi
t
i
onand
i
nj
unct
i
oni
next
r
emecases,
t
hus:
t
.

hqw
Ont
hei
ssueofwhet
herawr
i
tofi
nj
unct
i
oncanr
est
r
ai
nt
hepr
oceedi
ngsi
nCr
i
mi
nalCaseNo.
3140,
t
hegener
alr
ul
ei
st
hat"
or
di
nar
i
l
y,
cr
i
mi
nal
pr
osecut
i
onmaynotbebl
ockedbycour
t
pr
ohi
bi
t
i
onori
nj
unct
i
on.
"Except
i
ons,
however
,
ar
eal
l
owedi
nt
hef
ol
l
owi
ng
i
nst
ances:
t
.

hqw
"
1.

f
ort
heor
der
l
yadmi
ni
st
r
at
i
onofj
ust
i
ce;

"
2.

t
opr
eventt
heuseoft
hest
r
ongar
m oft
hel
awi
nanoppr
essi
veandvi
ndi
ct
i
vemanner
;

"
3.

t
oavoi
dmul
t
i
pl
i
ci
t
yofact
i
ons;

"
4.

t
oaf
f
or
dadequat
epr
ot
ect
i
ont
oconst
i
t
ut
i
onal
r
i
ght
s;

"
5. i
npr
opercases,
becauset
hest
at
ut
er
el
i
eduponi
sunconst
i
t
ut
i
onalorwashel
di
nval
i
d"
(Pr
i
mi
ci
asvs.Muni
ci
pal
i
t
yofUr
danet
a,
Pangasi
nan,
93SCRA462,
469470[
1979]
;ci
t
i
ng
Ramosvs.Tor
r
es,
25SCRA557[
1968]
;
andHer
nandezvs.Al
bano,
19SCRA95,
96[
1967]
)
.
Li
kewi
se,
i
nLopezvs.TheCi
t
yJudge,
etal
.(18SCRA616,
621622[
1966]
)
,
Wehel
d
t
hat
:
t
.

hqw
Thewr
i
t
sofcer
t
i
or
ar
iandpr
ohi
bi
t
i
on,
asext
r
aor
di
nar
yl
egalr
emedi
es,
ar
ei
nt
heul
t
i
mat
e
anal
ysi
s,
i
nt
endedt
oannulvoi
dpr
oceedi
ngs;t
opr
eventt
heunl
awf
ulandoppr
essi
veexer
ci
se
ofl
egalaut
hor
i
t
yandt
opr
ovi
def
oraf
ai
randor
der
l
yadmi
ni
st
r
at
i
onofj
ust
i
ce.Thus,
i
nYu
KongEngvs.Tr
i
ni
dad,
47Phi
l
.385,
Wet
ookcogni
zanceofapet
i
t
i
onf
orcer
t
i
or
ar
iand
pr
ohi
bi
t
i
onal
t
hought
heaccusedi
nt
hecasecoul
dhaveappeal
edi
nduet
i
mef
r
om t
heor
der
compl
ai
nedof
,
ouract
i
oni
nt
hepr
emi
sesbei
ngbasedont
hepubl
i
cwel
f
ar
epol
i
cyt
he
advancementofpubl
i
cpol
i
cy.I
nDi
mayugavs.Faj
ar
do,
43Phi
l
.304,
Weal
soadmi
t
t
eda
pet
i
t
i
ont
or
est
r
ai
nt
hepr
osecut
i
onofcer
t
ai
nchi
r
opr
act
or
sal
t
hough,
i
fconvi
ct
ed,
t
heycoul
d
haveappeal
ed.Wegaveduecour
set
ot
hei
rpet
i
t
i
onf
ort
heor
der
l
yadmi
ni
st
r
at
i
onofj
ust
i
ce
andt
oavoi
dpossi
bl
eoppr
essi
onbyt
hest
r
ongar
m oft
hel
aw.Andi
nAr
eval
ovs.
Nepomuceno,
63Phi
l
.627,
t
hepet
i
t
i
onf
orcer
t
i
or
ar
i
chal
l
engi
ngt
het
r
i
alcour
t
'
sact
i
on
admi
t
t
i
nganamendedi
nf
or
mat
i
onwassust
ai
neddespi
t
et
heavai
l
abi
l
i
t
yofappealatt
he
pr
opert
i
me.
WHEREFORE,
THEPETI
TI
ONI
SHEREBYGRANTED;
THETEMPORARYRESTRAI
NI
NGORDER
PREVI
OUSLYI
SSUEDI
SMADEPERMANENT.COSTSAGAI
NSTTHEPRI
VATERESPONDENT.
SOORDERED.
1wph
1.
t

Concepci
on,
Jr
.
,
Guer
r
er
o,
DeCast
r
oandEscol
i
n,
JJ.
,
concur
.
AbadSant
os,
J.
,
concuri
nt
her
esul
t
.
Aqui
no,
J.
,
t
ooknopar
t
FI
RSTDI
VI
SI
ON
G.
R.No.180257

Febr
uar
y23,
2011

EUSEBI
OGONZALES,
Pet
i
t
i
oner
,
vs.
PHI
LI
PPI
NECOMMERCI
ALANDI
NTERNATI
ONALBANK,
EDNAOCAMPO,
andROBERTO
NOCEDA,
Respondent
s.
DECISION
VELASCO,
JR.
,
J.
:
TheCase
Thi
si
sanappealvi
aaPet
i
t
i
onf
orRevi
ewonCer
t
i
or
ar
iunderRul
e45f
r
om t
heDeci
si
on1
dat
edOct
ober22,
2007oft
heCour
tofAppeal
s(
CA)i
nCAG.
R.CVNo.74466,
whi
chdeni
ed
pet
i
t
i
oner

sappealf
r
om t
heDecember10,
2001Deci
si
on2i
nCi
vi
lCaseNo.991324oft
he
Regi
onalTr
i
alCour
t(
RTC)
,
Br
anch138i
nMakat
i
Ci
t
y.TheRTCf
oundj
ust
i
f
i
cat
i
onf
or
r
espondent
s
di
shonorofpet
i
t
i
oner

scheckandf
oundpet
i
t
i
onersol
i
dar
i
l
yl
i
abl
ewi
t
ht
he
spousesJoseandJocel
ynPanl
i
l
i
o(
spousesPanl
i
l
i
o)f
ort
het
hr
eepr
omi
ssor
ynot
est
hey
execut
edi
nf
avorofr
espondentPhi
l
i
ppi
neCommer
ci
alandI
nt
er
nat
i
onalBank(
PCI
B)
.
TheFact
s
Pet
i
t
i
onerEusebi
oGonzal
es(
Gonzal
es)wasacl
i
entofPCI
Bf
oragood15year
sbef
or
ehe
f
i
l
edt
hei
nst
antcase.Hi
saccountwi
t
hPCI
Bwashandl
edbyr
espondentEdnaOcampo
(
Ocampo)unt
i
lshewasr
epl
acedbyr
espondentRober
t
oNoceda(
Noceda)
.
I
nOct
ober1992,
PCI
Bgr
ant
edacr
edi
tl
i
net
oGonzal
est
hr
ought
heexecut
i
onofaCr
edi
t
OnHandLoanAgr
eement
3(
COHLA)
,
i
nwhi
cht
heaggr
egat
eamountoft
heaccount
sofGonzal
es
wi
t
hPCI
Bser
vedascol
l
at
er
al
f
orandhi
savai
l
mentl
i
mi
tundert
hecr
edi
tl
i
ne.Gonzal
esdr
ew
f
r
om sai
dcr
edi
tl
i
net
hr
ought
hei
ssuanceofcheck.Att
hei
nst
i
t
ut
i
onoft
hei
nst
antcase,
Gonzal
eshadaFor
ei
gnCur
r
encyDeposi
t(
FCD)ofUSD8,
715.
72wi
t
hPCI
B.
OnOct
ober30,
1995,
Gonzal
esandhi
swi
f
eobt
ai
nedal
oanf
orPhP500,
000.Subsequent
l
y,
on
December26,
1995andJanuar
y3,
1999,
t
hespousesPanl
i
l
i
oandGonzal
esobt
ai
nedt
wo
addi
t
i
onall
oansf
r
om PCI
Bi
nt
heamount
sofPhP1,
000,
000andPhP300,
000,
r
espect
i
vel
y.
Theset
hr
eel
oansamount
i
ngt
oPhP1,
800,
000wer
ecover
edbyt
hr
eepr
omi
ssor
ynot
es.
4To
secur
et
hel
oans,
ar
ealest
at
emor
t
gage(
REM)overapar
celofl
andcover
edbyTr
ansf
er

Cer
t
i
f
i
cat
eofTi
t
l
e(
TCT)No.38012wasexecut
edbyGonzal
esandt
hespousesPanl
i
l
i
o.
Not
abl
y,
t
hepr
omi
ssor
ynot
esspeci
f
i
ed,
amongot
her
s,
t
hesol
i
dar
yl
i
abi
l
i
t
yofGonzal
esand
t
hespousesPanl
i
l
i
of
ort
hepaymentoft
hel
oans.However
,
i
twast
hespousesPanl
i
l
i
owho
r
ecei
vedt
hel
oanpr
oceedsofPhP1,
800,
000.
Themont
hl
yi
nt
er
estduesoft
hel
oanswer
epai
dbyt
hespousesPanl
i
l
i
ot
hr
ought
he
aut
omat
i
cdebi
t
i
ngoft
hei
raccountwi
t
hPCI
B.Butt
hespousesPanl
i
l
i
o,
f
r
om t
hemont
hofJul
y
1998,
def
aul
t
edi
nt
hepaymentoft
heper
i
odi
ci
nt
er
estduesf
r
om t
hei
rPCI
Baccountwhi
ch
appar
ent
l
ywasnotmai
nt
ai
nedwi
t
henoughdeposi
t
s.PCI
Bal
l
egedl
ycal
l
edt
heat
t
ent
i
onof
Gonzal
esr
egar
di
ngt
heJul
y1998def
aul
t
sandt
hesubsequentaccumul
at
i
ngper
i
odi
ci
nt
er
est
dueswhi
chwer
el
ef
tst
i
l
ll
ef
tunpai
d.
I
nt
hemeant
i
me,
Gonzal
esi
ssuedacheckdat
edSept
ember30,
1998i
nf
avorofReneUnson
(
Unson)f
orPhP250,
000dr
awnagai
nstt
hecr
edi
tl
i
ne(
COHLA)
.However
,
onOct
ober13,
1998,
uponpr
esent
mentf
orpaymentbyUnsonofsai
dcheck,
i
twasdi
shonor
edbyPCI
Bduet
ot
he
t
er
mi
nat
i
onbyPCI
Boft
hecr
edi
tl
i
neunderCOHLAonOct
ober7,
1998f
ort
heunpai
dper
i
odi
c
i
nt
er
estduesf
r
om t
hel
oansofGonzal
esandt
hespousesPanl
i
l
i
o.PCI
Bl
i
kewi
sef
r
ozet
heFCD
accountofGonzal
es.
Consequent
l
y,
Gonzal
eshadaf
al
l
i
ngoutwi
t
hUnsonduet
ot
hedi
shonoroft
hecheck.They
hadaheat
edar
gumenti
nt
hepr
emi
sesoft
hePhi
l
i
ppi
neCol
umbi
anAssoci
at
i
on(
PCA)wher
e
t
heyar
ebot
hmember
s,
whi
chcausedgr
eatembar
r
assmentandhumi
l
i
at
i
ont
oGonzal
es.
Ther
eaf
t
er
,
onNovember5,
1998,
Unsonsentademandl
et
t
er
5t
oGonzal
esf
ort
hePhP
250,
000.AndonDecember3,
1998,
t
hecounsel
ofUnsonsentaseconddemandl
et
t
er
6t
o
Gonzal
eswi
t
ht
het
hr
eatofl
egal
act
i
on.Wi
t
hhi
sFCDaccountt
hatPCI
Bf
r
oze,
Gonzal
eswas
f
or
cedt
osour
ceoutandpayt
hePhP250,
000heowedt
oUnsoni
ncash.
OnJanuar
y28,
1999,
Gonzal
es,
t
hr
oughcounsel
,
wr
ot
ePCI
Bi
nsi
st
i
ngt
hatt
hecheckhei
ssued
hadbeenf
ul
l
yf
unded,
anddemandedt
her
et
ur
noft
hepr
oceedsofhi
sFCDaswel
las
damagesf
ort
heunj
ustdi
shonoroft
hecheck.
7PCI
Br
epl
i
edonMar
ch22,
1999andst
oodi
t
s
gr
oundi
nf
r
eezi
ngGonzal
es
account
sduet
ot
heout
st
andi
ngduesoft
hel
oans.
8OnMay26,
1999,
Gonzal
esr
ei
t
er
at
edhi
sdemand,
r
emi
ndi
ngPCI
Bt
hati
tknewwel
lt
hatt
heact
ual
bor
r
ower
swer
et
hespousesPanl
i
l
i
oandheneverbenef
i
t
edf
r
om t
hepr
oceedsoft
hel
oans,
whi
chwer
eser
vi
cedbyt
hePCI
Baccountoft
hespousesPanl
i
l
i
o.
9
PCI
B
sr
ef
usalt
oheedhi
sdemandscompel
l
edGonzal
est
of
i
l
et
hei
nst
antcasef
ordamages
wi
t
ht
heRTC,
onaccountoft
heal
l
egedunj
ustdi
shonoroft
hechecki
ssuedi
nf
avorofUnson.
TheRul
i
ngoft
heRTC
Af
t
erduet
r
i
al
,
onDecember10,
2001,
t
heRTCr
ender
edaDeci
si
oni
nf
avorofPCI
B.The
decr
et
alpor
t
i
onr
eads:
WHEREFORE,
j
udgmenti
sr
ender
edasf
ol
l
ows
(
a)ont
hef
i
r
sti
ssue,
pl
ai
nt
i
f
fi
sl
i
abl
et
opaydef
endantBankaspr
i
nci
palundert
hepr
omi
ssor
y

not
es,
Exhi
bi
t
sA,
BandC;
(
b)ont
hesecondi
ssue,
t
heCour
tf
i
ndst
hatt
her
ei
sj
ust
i
f
i
cat
i
ononpar
toft
hedef
endantBank
t
odi
shonort
hecheck,
Exhi
bi
tH;
(
c)ont
het
hi
r
di
ssue,
pl
ai
nt
i
f
fanddef
endant
sar
enotent
i
t
l
edt
odamagesf
r
om eachot
her
.
Nopr
onouncementast
ocost
s.
SOORDERED.
10
TheRTCf
oundGonzal
essol
i
dar
i
l
yl
i
abl
ewi
t
ht
hespousesPanl
i
l
i
oont
het
hr
eepr
omi
ssor
y
not
esr
el
at
i
vet
ot
heout
st
andi
ngREM l
oan.Thet
r
i
al
cour
tf
oundnof
aul
ti
nt
het
er
mi
nat
i
onby
PCI
Boft
heCOHLAwi
t
hGonzal
esandi
nf
r
eezi
ngt
hel
at
t
er

saccount
st
oanswerf
ort
hepast
duePhP1,
800,
000l
oan.Thet
r
i
al
cour
tr
ul
edt
hatt
hedi
shonoroft
hechecki
ssuedby
Gonzal
esi
nf
avorofUnsonwaspr
operconsi
der
i
ngt
hatt
hecr
edi
tl
i
neundert
heCOHLAhad
al
r
eadybeent
er
mi
nat
edorr
evokedbef
or
et
hepr
esent
mentoft
hecheck.
Aggr
i
eved,
Gonzal
esappeal
edt
heRTCDeci
si
onbef
or
et
heCA.
TheRul
i
ngoft
heCA
OnSept
ember26,
2007,
t
heappel
l
at
ecour
tr
ender
edi
t
sDeci
si
ondi
smi
ssi
ngGonzal
es
appeal
andaf
f
i
r
mi
ngi
nt
ot
ot
heRTCDeci
si
on.Thef
al
l
or
eads:
WHEREFORE,
i
nvi
ewoft
hef
or
egoi
ng,
t
hedeci
si
on,
dat
edDecember10,
2001,
i
nCi
vi
lCaseNo.
991324i
sher
ebyAFFI
RMEDi
nt
ot
o.
SOORDERED.
11
I
ndi
smi
ssi
ngGonzal
es
appeal
,
t
heCA,
f
i
r
st
,
conf
i
r
medt
heRTC
sf
i
ndi
ngst
hatGonzal
eswas
i
ndeedsol
i
dar
i
l
yl
i
abl
ewi
t
ht
hespousesPanl
i
l
i
of
ort
het
hr
eepr
omi
ssor
ynot
esexecut
edf
or
t
heREM l
oan;second,
i
tl
i
kewi
sef
oundnei
t
herf
aul
tnornegl
i
genceont
hepar
tofPCI
Bi
n
di
shonor
i
ngt
hechecki
ssuedbyGonzal
esi
nf
avorofUnson,
r
at
i
oci
nat
i
ngt
hatPCI
Bwas
mer
el
yexer
ci
si
ngi
t
sr
i
ght
sundert
hecont
r
act
ual
st
i
pul
at
i
onsi
nt
heCOHLAbr
oughtaboutby
t
heout
st
andi
ngpastduesoft
heREM l
oanandi
nt
er
est
sf
orwhi
chGonzal
eswassol
i
dar
i
l
y
l
i
abl
ewi
t
ht
hespousesPanl
i
l
i
ot
opayundert
hepr
omi
ssor
ynot
es.
Thus,
wehavet
hi
spet
i
t
i
on.
TheI
ssues
Gonzal
es,
asbef
or
et
heCA,
r
ai
sesagai
nt
hef
ol
l
owi
ngassi
gnmentofer
r
or
s:
I-I
NNOTCONSI
DERI
NGTHATTHELI
ABI
LI
TYARI
SI
NGFROM PROMI
SSORYNOTES
(
EXHI
BI
TS"
A"
,
"
B"AND"
C"
,
PETI
TI
ONER;EXHI
BI
TS"
1"
,
"
2"AND"
3"
,
RESPONDENT)
PERTAI
NEDTOBORROWERJOSEMA.PANLI
LI
OANDNOTTOAPPELLANTASRECOGNI
ZED
ANDACKNOWLEDGE[
D]BYRESPONDENTPHI
LI
PPI
NECOMMERCI
AL&I
NDUSTRI
ALBANK

(
RESPONDENTBANK)
.
I
I-I
NFI
NDI
NGTHATTHERESPONDENTSWERENOTATFAULTNORGUI
LTYOFGROSS
NEGLI
GENCEI
NDI
SHONORI
NGPETI
TI
ONER
SCHECKDATED30SEPTEMBER1998I
NTHE
AMOUNTOFP250,
000.
00FORTHEREASON"
ACCOUNTCLOSED"
,
I
NSTEADOFMERELY
"
REFERTODRAWER"GI
VENTHEFACTTHATEVENAFTERDI
SHONOR,
RESPONDENT
SI
GNEDACERTI
FI
CATI
ONDATED7DECEMBER1998THATCREDI
TONHAND(
COH)LOAN
AGREEMENTWASSTI
LLVALI
DWI
THACOLLATERALOFFOREI
GNCURRENCYDEPOSI
T
(
FCD)OF[
USD]48,
715.
72.
I
I
I-I
NNOTAWARDI
NGDAMAGESAGAI
NSTRESPONDENTSDESPI
TEPRESENTATI
ONOF
CLEARPROOFTOSUPPORTACTI
ONFORDAMAGES.
12
TheCour
t

sRul
i
ng
Thecor
ei
ssuescanbesummar
i
zed,
asf
ol
l
ows:f
i
r
st
,
whet
herGonzal
esi
sl
i
abl
ef
ort
het
hr
ee
pr
omi
ssor
ynot
escover
i
ngt
hePhP1,
800,
000l
oanhemadewi
t
ht
hespousesPanl
i
l
i
owher
ea
REM overapar
cel
ofl
andcover
edbyTCTNo.38012wasconst
i
t
ut
edassecur
i
t
y;andsecond,
whet
herPCI
Bpr
oper
l
ydi
shonor
edt
hecheckofGonzal
esdr
awnagai
nstt
heCOHLAhehad
wi
t
ht
hebank.
Thepet
i
t
i
oni
spar
t
l
ymer
i
t
or
i
ous.
Fi
r
stI
ssue:Sol
i
dar
i
l
yLi
abi
l
i
t
yonPr
omi
ssor
yNot
es
Acl
oseper
usaloft
her
ecor
dsshowst
hatt
hecour
t
saquocor
r
ect
l
yf
oundGonzal
essol
i
dar
i
l
y
l
i
abl
ewi
t
ht
hespousesPanl
i
l
i
of
ort
het
hr
eepr
omi
ssor
ynot
es.
Thepr
omi
ssor
ynot
escover
i
ngt
hePhP1,
800,
000l
oanshowt
hef
ol
l
owi
ng:
(
1)Pr
omi
ssor
yNot
eBD090176695,
13dat
edOct
ober30,
1995,
f
orPhP500,
000wassi
gned
byGonzal
esandhi
swi
f
e,
Jessi
caGonzal
es;
(
2)Pr
omi
ssor
yNot
eBD090212295,
14dat
edDecember26,
1995,
f
orPhP1,
000,
000was
si
gnedbyGonzal
esandt
hespousesPanl
i
l
i
o;and
(
3)Pr
omi
ssor
yNot
eBD09001196,
15dat
edJanuar
y3,
1996,
f
orPhP300,
000wassi
gnedby
Gonzal
esandt
hespousesPanl
i
l
i
o.
Cl
ear
l
y,
Gonzal
esi
sl
i
abl
ef
ort
hel
oanscover
edbyt
heabovepr
omi
ssor
ynot
es.Fi
r
st
,
Gonzal
es
admi
t
t
edt
hathei
sanaccommodat
i
onpar
t
ywhi
chPCI
Bdi
dnotdi
sput
e.I
nhi
st
est
i
mony,
Gonzal
esadmi
t
t
edt
hathemer
el
yaccommodat
edt
hespousesPanl
i
l
i
oatt
hesuggest
i
onof
Ocampo,
whowast
henhandl
i
nghi
saccount
s,
i
nor
dert
of
aci
l
i
t
at
et
hef
astr
el
easeoft
hel
oan.
Gonzal
est
est
i
f
i
ed:
ATTY.DEJESUS:
Nowi
nt
hi
scaseyouf
i
l
edagai
nstt
hebankyoument
i
onedt
her
ewasal
oanal
soappl
i
edf
orby

t
hePanl
i
l
i
o
si
nt
hesum ofP1.
8Mi
l
l
i
onPesos.Wi
l
lyoupl
easet
el
lt
hi
sCour
thowt
hi
scame
about
?
GONZALES:
Mr
.Panl
i
l
i
or
equest
edhi
saccountof
f
i
cer....att
hatt
i
mei
ti
saP42.
0Mi
l
l
i
onl
oanandi
fhe
secur
esanot
herP1.
8Mi
l
l
i
onl
oant
her
el
easewi
l
lbel
ongerbecausei
thast
opasst
oXO.
Q:Af
t
ert
hatwhathappened?
A:Soaspersuggest
i
onsi
nceMr
.Panl
i
l
i
oi
sagoodf
r
i
endofmi
neandwecoownedt
he
pr
oper
t
yIagr
eedi
ni
t
i
al
l
yt
ousemynamesot
hatt
hel
oancanbeut
i
l
i
zedi
mmedi
at
el
ybyMr
.
Panl
i
l
i
o.
Q:Whoi
sact
ual
l
yt
hebor
r
oweroft
hi
sP1.
8Mi
l
l
i
onPesos?
A:Wel
l
,
i
npapermeandMr
.Panl
i
l
i
o.
Q:Whor
ecei
vedt
hepr
oceedsofsai
dl
oan?
A:Mr
.Panl
i
l
i
o.
Q:Doyouhaveanypr
ooft
hati
twasMr
.Panl
i
l
i
owhoact
ual
l
yr
ecei
vedt
hepr
oceedsoft
hi
s
P1.
8Mi
l
l
i
onPesosl
oan?
A:Acheckwasdeposi
t
edi
nt
heaccountofMr
.Panl
i
l
i
o.
16
xxxx
Q:Byt
hewayuponwhosesuggest
i
onwast
hel
oanofMr
.Panl
i
l
i
oal
sopl
acedunderyour
namei
ni
t
i
al
l
y?
A:Wel
l
i
twasact
ual
l
ysuggest
edbyt
heaccountof
f
i
ceratt
hatt
i
meEdnaOcampo.
Q:Howaboutt
hi
sMr
.Rodol
f
oNoceda?
A:Asyoul
ookatt
heaut
hor
i
zat
i
onaspectoft
hel
oanMr
.Nocedai
st
hebossofEdnasohe
hasbeenf
ami
l
i
arwi
t
hmyaccounteversi
ncei
t
si
ncept
i
on.
Q:Sot
heset
woof
f
i
cer
sOcampoandNocedaknewt
hatt
hi
swasact
ual
l
yt
heaccountofMr
.
Panl
i
l
i
oandnotyouraccount
?
A:Yes,
si
r
.I
nf
acteveni
ft
her
ei
sachangeofaccountof
f
i
cert
heyar
eal
waysi
nf
or
mi
ngme
t
hatt
heaccountwi
l
lbedebi
t
edt
oMr
.Panl
i
l
i
o
saccount
.
17
Mor
eover
,
t
hef
i
r
stnot
ef
orPhP500,
000wassi
gnedbyGonzal
esandhi
swi
f
easbor
r
ower
s,
whi
l
et
het
wosubsequentnot
esshowedt
hespousesPanl
i
l
i
osi
gnasbor
r
ower
swi
t
hGonzal
es.
I
ti
s,
t
hus,
evi
dentt
hatGonzal
essi
gned,
asbor
r
ower
,
t
hepr
omi
ssor
ynot
escover
i
ngt
hePhP
1,
800,
000l
oandespi
t
enotr
ecei
vi
nganyoft
hepr
oceeds.

Second,
t
her
ecor
dsofPCI
Bi
ndeedbearout
,
andwasadmi
t
t
edbyNoceda,
t
hatt
hePhP
1,
800,
000l
oanpr
oceedswentt
ot
hespousesPanl
i
l
i
o,
t
hus:
ATTY.DEJESUS:[
onCr
ossExami
nat
i
on]
I
si
tnotaf
actt
hatasf
arast
her
ecor
dsoft
hebank[
ar
e]concer
nedt
hepr
oceedsoft
he1.
8
mi
l
l
i
onl
oanwasr
ecei
vedbyMr
.Panl
i
l
i
o?
NOCEDA:
Yessi
r
.
18
Thef
actt
hatt
hel
oanswer
eunder
t
akenbyGonzal
eswhenhesi
gnedasbor
r
owerorcobor
r
owerf
ort
hebenef
i
toft
hespousesPanl
i
l
i
oasshownbyt
hef
actt
hatt
hepr
oceedswent
t
ot
hespousesPanl
i
l
i
owhower
eser
vi
ci
ngorpayi
ngt
hemont
hl
yduesi
sbesi
det
hepoi
nt
.
Forsi
gni
ngasbor
r
owerandcobor
r
oweront
hepr
omi
ssor
ynot
eswi
t
ht
hepr
oceedsoft
he
l
oansgoi
ngt
ot
hespousesPanl
i
l
i
o,
Gonzal
eshasext
endedanaccommodat
i
ont
osai
d
spouses.
Thi
r
d,
asanaccommodat
i
onpar
t
y,
Gonzal
esi
ssol
i
dar
i
l
yl
i
abl
ewi
t
ht
hespousesPanl
i
l
i
of
or
t
hel
oans.I
nAngv.Associ
at
edBank,
19quot
i
ngt
hedef
i
ni
t
i
onofanaccommodat
i
onpar
t
y
underSect
i
on29oft
heNegot
i
abl
eI
nst
r
ument
sLaw,
t
heCour
tci
t
edt
hatanaccommodat
i
on
par
t
yi
saper
son"
whohassi
gnedt
hei
nst
r
umentasmaker
,
dr
awer
,
accept
or
,
ori
ndor
ser
,
wi
t
houtr
ecei
vi
ngval
uet
her
ef
or
,
andf
ort
hepur
poseofl
endi
nghi
snamet
osomeot
her
per
son.
"
20TheCour
tf
ur
t
herexpl
ai
ned:
[
A]
naccommodat
i
onpar
t
yi
sonewhomeet
sal
lt
het
hr
eer
equi
si
t
es,
vi
z:(
1)hemustbeapar
t
y
t
ot
hei
nst
r
ument
,
si
gni
ngasmaker
,
dr
awer
,
accept
or
,
ori
ndor
ser
;(
2)hemustnotr
ecei
ve
val
uet
her
ef
or
;and(
3)hemustsi
gnf
ort
hepur
poseofl
endi
nghi
snameorcr
edi
tt
osome
ot
herper
son.Anaccommodat
i
onpar
t
yl
endshi
snamet
oenabl
et
heaccommodat
edpar
t
yt
o
obt
ai
ncr
edi
tort
or
ai
semoney;her
ecei
vesnopar
toft
heconsi
der
at
i
onf
ort
hei
nst
r
umentbut
assumesl
i
abi
l
i
t
yt
ot
heot
herpar
t
y/
i
est
her
et
o.Theaccommodat
i
onpar
t
yi
sl
i
abl
eont
he
i
nst
r
umentt
oahol
derf
orval
ueevent
hought
hehol
der
,
att
het
i
meoft
aki
ngt
hei
nst
r
ument
,
knewhi
m orhert
obemer
el
yanaccommodat
i
onpar
t
y,
asi
ft
hecont
r
actwasnotf
or
accommodat
i
on.
Aspet
i
t
i
oneracknowl
edgedi
tt
obe,
t
her
el
at
i
onbet
weenanaccommodat
i
onpar
t
yandt
he
accommodat
edpar
t
yi
soneofpr
i
nci
pal
andsur
et
yt
heaccommodat
i
onpar
t
ybei
ngt
he
sur
et
y.Assuch,
hei
sdeemedanor
i
gi
nal
pr
omi
soranddebt
orf
r
om t
hebegi
nni
ng;hei
s
consi
der
edi
nl
awast
hesamepar
t
yast
hedebt
ori
nr
el
at
i
ont
owhat
everi
sadj
udgedt
ouchi
ng
t
heobl
i
gat
i
onoft
hel
at
t
ersi
ncet
hei
rl
i
abi
l
i
t
i
esar
ei
nt
er
wovenast
obei
nsepar
abl
e.Al
t
hougha
cont
r
actofsur
et
yshi
pi
si
nessenceaccessor
yorcol
l
at
er
alt
oaval
i
dpr
i
nci
palobl
i
gat
i
on,
t
he
sur
et
y
sl
i
abi
l
i
t
yt
ot
hecr
edi
t
ori
si
mmedi
at
e,
pr
i
mar
yandabsol
ut
e;hei
sdi
r
ect
l
yandequal
l
y
boundwi
t
ht
hepr
i
nci
pal
.Asanequi
val
entofar
egul
arpar
t
yt
ot
heunder
t
aki
ng,
asur
et
y
becomesl
i
abl
et
ot
hedebtanddut
yoft
hepr
i
nci
pal
obl
i
gorevenwi
t
houtpossessi
ngadi
r
ect
orper
sonal
i
nt
er
esti
nt
heobl
i
gat
i
onsnordoesher
ecei
veanybenef
i
tt
her
ef
r
om.
21

Thus,
t
heknowl
edge,
acqui
escence,
orevendemandbyOcampof
oranaccommodat
i
onby
Gonzal
esi
nor
dert
oext
endt
hecr
edi
torl
oanofPhP1,
800,
000t
ot
hespousesPanl
i
l
i
odoes
notexoner
at
eGonzal
esf
r
om l
i
abi
l
i
t
yont
het
hr
eepr
omi
ssor
ynot
es.
Four
t
h,
t
hesol
i
dar
yl
i
abi
l
i
t
yofGonzal
esi
scl
ear
l
yst
i
pul
at
edi
nt
hepr
omi
ssor
ynot
eswhi
ch
uni
f
or
ml
ybegi
n,
"
Forval
uer
ecei
ved,
t
heunder
si
gned(
t
he"
BORROWER"
)j
oi
nt
l
yandsever
al
l
y
pr
omi
set
opayxxx.
"Sol
i
dar
yl
i
abi
l
i
t
ycannotbepr
esumedbutmustbeest
abl
i
shedbyl
awor
cont
r
act
.
22Ar
t
i
cl
e1207oft
heCi
vi
lCodeper
t
i
nent
l
yst
at
est
hat"
t
her
ei
ssol
i
dar
yl
i
abi
l
i
t
yonl
y
whent
heobl
i
gat
i
onexpr
essl
ysost
at
es,
orwhent
heobl
i
gat
i
onr
equi
r
essol
i
dar
i
t
y.
"Thi
si
st
r
ue
i
nt
hei
nst
antcasewher
eGonzal
es,
asaccommodat
i
onpar
t
y,
i
si
mmedi
at
el
y,
equal
l
y,
and
absol
ut
el
yboundwi
t
ht
hespousesPanl
i
l
i
oont
hepr
omi
ssor
ynot
eswhi
chi
ndubi
t
abl
y
st
i
pul
at
edsol
i
dar
yl
i
abi
l
i
t
yf
oral
lt
hebor
r
ower
s.Mor
eover
,
t
het
hr
eepr
omi
ssor
ynot
esser
veas
t
hecont
r
actbet
weent
hepar
t
i
es.Cont
r
act
shavet
hef
or
ceofl
awbet
weent
hepar
t
i
esand
mustbecompl
i
edwi
t
hi
ngoodf
ai
t
h.
23
SecondI
ssue:I
mpr
operDi
shonorofCheck
Havi
ngr
ul
edt
hatGonzal
esi
ssol
i
dar
i
l
yl
i
abl
ef
ort
het
hr
eepr
omi
ssor
ynot
es,
Weshal
lnow
t
ouchupont
hequest
i
onofwhet
heri
twaspr
operf
orPCI
Bt
odi
shonort
hechecki
ssuedby
Gonzal
esagai
nstt
hecr
edi
tl
i
neundert
heCOHLA.
Weansweri
nt
henegat
i
ve.
Asar
ul
e,
anappealbycer
t
i
or
ar
i
underRul
e45oft
heRul
esofCour
ti
sl
i
mi
t
edt
or
evi
ewof
er
r
or
sofl
aw.
24Thef
act
ualf
i
ndi
ngsoft
het
r
i
al
cour
t
,
especi
al
l
ywhenaf
f
i
r
medbyt
he
appel
l
at
ecour
t
,
ar
egener
al
l
ybi
ndi
ngonusunl
esst
her
ewasami
sappr
ehensi
onoff
act
sor
whent
hei
nf
er
encedr
awnf
r
om t
hef
act
swasmani
f
est
l
ymi
st
aken.
25Thei
nst
antcasef
al
l
s
wi
t
hi
nt
heexcept
i
on.
Thecour
t
saquof
oundandhel
dt
hatt
her
ewasapr
operdi
shonoroft
hePhP250,
000check
i
ssuedbyGonzal
esagai
nstt
hecr
edi
tl
i
ne,
becauset
hecr
edi
tl
i
newasal
r
eadycl
osedpr
i
ort
o
t
hepr
esent
mentoft
hecheckbyUnson;andt
hecl
osi
ngoft
hecr
edi
tl
i
newasl
i
kewi
sepr
oper
pur
suantt
ot
hest
i
pul
at
i
onsi
nt
hepr
omi
ssor
ynot
esont
hebank
sr
i
ghtt
osetof
forappl
yal
l
moneysoft
hedebt
ori
nPCI
B
shandandt
hest
i
pul
at
i
onsi
nt
heCOHLAont
hePCI
B
sr
i
ghtt
o
t
er
mi
nat
et
hecr
edi
tl
i
neongr
oundsofdef
aul
tbyGonzal
es.
Gonzal
esar
guesot
her
wi
se,
poi
nt
i
ngoutt
hathewasnoti
nf
or
medaboutt
hedef
aul
toft
he
spousesPanl
i
l
i
oandt
hatt
heSept
ember21,
1998accountst
at
ementoft
hecr
edi
tl
i
neshowsa
bal
anceofPhP270,
000whi
chwasl
i
kewi
sebor
neoutbyt
heDecember7,
1998PCI
B
s
cer
t
i
f
i
cat
i
ont
hathehasUSD8,
715.
72i
nhi
sFCDaccountwhi
chi
smor
et
hansuf
f
i
ci
ent
col
l
at
er
alt
oguar
ant
eet
hePhP250,
000check,
dat
edSept
ember30,
1998,
hei
ssuedagai
nst
t
hecr
edi
tl
i
ne.
Acar
ef
ulscr
ut
i
nyoft
her
ecor
dsshowst
hatt
hecour
t
saquocommi
t
t
edr
ever
si
bl
eer
r
ori
nnot
f
i
ndi
ngnegl
i
gencebyPCI
Bi
nt
hedi
shonoroft
hePhP250,
000check.

Fi
r
st
.Ther
ewasnopr
opernot
i
cet
oGonzal
esoft
hedef
aul
tanddel
i
nquencyoft
hePhP
1,
800,
000l
oan.I
tmustbebor
nei
nmi
ndt
hatwhi
l
esol
i
dar
i
l
yl
i
abl
ewi
t
ht
hespousesPanl
i
l
i
oon
t
hePhP1,
800,
000l
oancover
edbyt
het
hr
eepr
omi
ssor
ynot
es,
Gonzal
esi
sonl
yan
accommodat
i
onpar
t
yandassuchonl
yl
enthi
snameandcr
edi
tt
ot
hespousesPanl
i
l
i
o.Whi
l
e
notexoner
at
i
nghi
ssol
i
dar
yl
i
abi
l
i
t
y,
Gonzal
eshasar
i
ghtt
obepr
oper
l
yappr
i
sedoft
hedef
aul
t
ordel
i
nquencyoft
hel
oanpr
eci
sel
ybecausehei
sacosi
gnat
or
yoft
hepr
omi
ssor
ynot
esand
ofhi
ssol
i
dar
yl
i
abi
l
i
t
y.
Wenot
et
hati
ti
si
ndeedunder
st
andabl
ef
orGonzal
est
opusht
hespousesPanl
i
l
i
ot
opayt
he
out
st
andi
ngduesoft
hePhP1,
800,
000l
oan,
si
ncehewasonl
yanaccommodat
i
onpar
t
yand
wasnotper
sonal
l
yi
nt
er
est
edi
nt
hel
oan.Thus,
ameet
i
ngwassetbyGonzal
eswi
t
ht
he
spousesPanl
i
l
i
oandt
hePCI
Bof
f
i
cer
s,
NocedaandOcampo,
i
nt
hespousesPanl
i
l
i
o
sj
ewel
r
y
shopi
nSM Megamal
l
onOct
ober5,
1998.Unf
or
t
unat
el
y,
t
hemeet
i
ngdi
dnotpusht
hr
oughdue
t
ot
heheavyt
r
af
f
i
cNocedaandOcampoencount
er
ed.
Suchknowl
edgeoft
hedef
aul
tbyGonzal
eswas,
however
,
notenought
opr
oper
l
yappr
i
se
Gonzal
esaboutt
hedef
aul
tandt
heout
st
andi
ngdues.Ver
i
l
y,
i
ti
snotenought
obemer
el
y
i
nf
or
medt
opayoverahundr
edt
housandwi
t
houtbei
ngf
or
mal
l
yappr
i
sedoft
heexact
aggr
egat
eamountandt
hecor
r
espondi
ngduesper
t
ai
ni
ngt
ospeci
f
i
cl
oansandt
hedat
est
hey
becamedue.
Gonzal
est
est
i
f
i
edt
hathewasnotdul
ynot
i
f
i
edaboutt
heout
st
andi
ngi
nt
er
estduesoft
hel
oan:
ATTY.DEJESUS:
NowwhenMr
.Panl
i
l
i
o
swasencount
er
i
ngpr
obl
emswi
t
ht
hebankdi
dt
hedef
endantbank
[
advi
se]youofanypr
obl
em wi
t
ht
hesameaccount
?
GONZALES:
Theynever[
advi
sed]mei
nwr
i
t
i
ng.
Q:Howdi
dyoucomet
oknowt
hatt
her
ewasapr
obl
em?
A:Whenmycheckbouncedsi
r
.
26
Ont
heot
herhand,
t
hePCI
Bcont
endsot
her
wi
se,
asCor
azonNepomucenot
est
i
f
i
ed:
ATTY.PADI
LLA:
Canyout
el
lt
hi
sHonor
abl
eCour
twhati
si
tt
hatyout
ol
dMr
.Gonzal
eswhenyouspoket
ohi
m
att
hecel
phone?
NEPOMUCENO:
Ij
ustt
ol
dhi
mt
oupdat
et
hei
nt
er
estsot
hatwewoul
dnothavet
ocancelt
heCOHLi
neandhe
coul
dwi
t
hdr
awt
hemoneyt
hatwasi
nt
hedeposi
tbecauset
echni
cal
l
y,
i
fanaccounti
spast
duewear
enotal
l
owedt
ol
ett
hecl
i
entwi
t
hdr
awf
undsbecauset
heyar
eal
l
owedt
oof
f
set

f
undsso,
j
ustt
ohel
phi
m gethi
smoney,
j
ustt
oupdat
et
hei
nt
er
estsot
hatwecoul
dal
l
owhi
m
t
owi
t
hdr
aw.
Q:Wi
t
hdr
awwhat
?
A:Hi
smoneyont
heCOH,
what
everdeposi
thehaswi
t
hus.
Q:Di
dyoui
nf
or
m hi
mt
hati
fhedi
dnotupdat
et
hei
nt
er
esthewoul
dnotbeabl
et
owi
t
hdr
aw
hi
smoney?
A:Yessi
r
,
wewi
l
lbef
or
cedt
ohol
dont
oanyasset
st
hathehaswi
t
hussot
hat

swhywe
suggest
edj
ustt
oupdat
et
hei
nt
er
estbecauseatt
heendofever
yt
hi
ng,
hewoul
dbeabl
et
o
wi
t
hdr
awmor
ef
undst
hant
hei
nt
er
estt
hatt
hemoneyhewoul
dbeneededt
oupdat
et
he
i
nt
er
est
.
27
Fr
om t
hef
or
egoi
ngt
est
i
moni
es,
bet
weent
hedeni
alofGonzal
esandt
heasser
t
i
onbyPCI
B
t
hatGonzal
eswaspr
oper
l
yappr
i
sed,
wef
i
ndf
orGonzal
es.Wef
i
ndt
het
est
i
moni
esoft
he
f
or
merPCI
Bempl
oyeest
obesel
f
ser
vi
ngandt
enuousatbest
,
f
ort
her
ewasnopr
operwr
i
t
t
en
not
i
cegi
venbyt
hebank.Ther
ecor
di
sber
ef
tofanydocumentshowi
ngt
hat
,
i
ndeed,
Gonzal
es
wasf
or
mal
l
yi
nf
or
medbyPCI
Baboutt
hepastdueper
i
odi
ci
nt
er
est
s.
PCI
Bi
swel
l
awar
eanddi
dnotdi
sput
et
hef
actt
hatGonzal
esi
sanaccommodat
i
onpar
t
y.I
t
al
soact
edi
naccor
dancewi
t
hsuchf
actbyr
el
easi
ngt
hepr
oceedsoft
hel
oant
ot
hespouses
Panl
i
l
i
oandl
i
kewi
seonl
yi
nf
or
medt
hespousesPanl
i
l
i
ooft
hei
nt
er
estdues.Thespouses
Panl
i
l
i
o,
t
hr
ought
hei
raccount
28wi
t
hPCI
B,
wer
epayi
ngt
heper
i
odi
ci
nt
er
estduesandwer
e
t
heonesper
i
odi
cal
l
yi
nf
or
medbyt
hebankoft
hedebi
t
i
ngoft
heamount
sf
ort
heper
i
odi
c
i
nt
er
estpayment
s.Gonzal
esneverpai
danyoft
heper
i
odi
ci
nt
er
estdues.PCI
B
sNoceda
admi
t
t
edasmuchi
nhi
scr
ossexami
nat
i
on:
ATTY.DEJESUS:[
onCr
ossExami
nat
i
on]
Andt
her
ewasnoi
nst
ancet
hatMr
.Gonzal
esevermadeeveni
nt
er
estf
ort
hi
sl
oan,
i
si
tnot
,
i
t

s
al
waysMr
.Panl
i
l
i
owhowaspayi
ngt
hei
nt
er
estf
ort
hi
sl
oan?
NOCEDA:
Yessi
r
.
29
I
ndeed,
noevi
dencewaspr
esent
edt
endi
ngt
oshowt
hatGonzal
eswasper
i
odi
cal
l
ysent
not
i
cesornot
i
f
i
edoft
hevar
i
ousper
i
odi
ci
nt
er
estduescover
i
ngt
het
hr
eepr
omi
ssor
ynot
es.
Nei
t
herdot
her
ecor
dsshowt
hatGonzal
eswasawar
eofamount
sf
ort
heper
i
odi
ci
nt
er
est
s
andt
hepaymentf
ort
hem.Suchwer
eser
vi
cedbyt
hespousesPanl
i
l
i
o.
Thus,
PCI
Boughtt
ohavenot
i
f
i
edGonzal
esaboutt
hest
at
usoft
hedef
aul
tordel
i
nquencyof
t
hei
nt
er
estduest
hatwer
enotpai
dst
ar
t
i
ngJul
y1998.Andsuchnot
i
f
i
cat
i
onmustbef
or
mal
ori
nwr
i
t
t
enf
or
m consi
der
i
ngt
hatt
heout
st
andi
ngper
i
odi
ci
nt
er
est
sbecamedueatvar
i
ous
dat
es,
i
.
e.
,
onJul
y8,
17,
and28,
1998,
andt
hevar
i
ousamount
shavet
obecer
t
ai
nsot
hat

Gonzal
esi
snotonl
ypr
oper
l
yappr
i
sedbuti
sgi
vent
heoppor
t
uni
t
yt
opayt
hem bei
ngsol
i
dar
i
l
y
l
i
abl
ef
ort
hel
oanscover
edbyt
hepr
omi
ssor
ynot
es.
I
ti
st
hebankwhi
chcomput
est
heseper
i
odi
ci
nt
er
est
sandsuchduesmustbeputi
nt
owr
i
t
i
ng
andf
or
mal
l
yser
vedt
oGonzal
esi
fhewer
easkedt
opayt
hem,
mor
esowhent
hepayment
sby
t
hespousesPanl
i
l
i
ower
echar
gedt
hr
ought
heaccountoft
hespousesPanl
i
l
i
owher
et
he
i
nt
er
estdueswer
esi
mpl
ydebi
t
ed.Suchar
r
angementdi
dnotcoverGonzal
es
bankaccount
wi
t
hPCI
B,
si
ncehei
sonl
yanaccommodat
i
onpar
t
ywhohasnoper
sonali
nt
er
esti
nt
hePhP
1,
800,
000l
oan.Wi
t
houtacl
earanddet
er
mi
nat
edemandt
hr
oughaf
or
malwr
i
t
t
ennot
i
cef
or
t
heexactper
i
odi
ci
nt
er
estduesf
ort
hel
oans,
Gonzal
escannotbeexpect
edt
opayf
ort
hem.
I
nbusi
ness,
mor
esof
orbanks,
t
heamount
sdemandedf
r
om t
hedebt
ororbor
r
owerhavet
o
bedef
i
ni
t
e,
cl
ear
,
andwi
t
houtambi
gui
t
y.I
ti
snotsuf
f
i
ci
entsi
mpl
yt
obei
nf
or
medt
hatone
mustpayoverahundr
edt
housandaggr
egat
eout
st
andi
ngi
nt
er
estdueswi
t
houtcl
earand
cer
t
ai
nf
i
gur
es.Thus,
Wef
i
ndPCI
Bnegl
i
genti
nnotpr
oper
l
yi
nf
or
mi
ngGonzal
es,
whoi
san
accommodat
i
onpar
t
y,
aboutt
hedef
aul
tandt
heexactout
st
andi
ngper
i
odi
ci
nt
er
estdues.
Wi
t
houtbei
ngpr
oper
l
yappr
i
sed,
Gonzal
eswasnotgi
vent
heoppor
t
uni
t
yt
opr
oper
l
yacton
t
hem.
I
twasonl
yt
hr
oughal
et
t
er
30sentbyPCI
Bdat
edOct
ober2,
1998buti
ncongr
uousl
yshowi
ng
t
hedel
i
nquenci
esoft
hePhP1,
800,
000l
oanatamuchl
at
erdat
e,
i
.
e.
,
asofOct
ober31,
1998,
whenGonzal
eswasf
or
mal
l
yappr
i
sedbyPCI
B.I
ni
t
,
t
hei
nt
er
estduewasPhP106,
1616.
71and
penal
t
i
esf
ort
heunpai
di
nt
er
estdueofPhP64,
766.
66,
orat
ot
alaggr
egat
edueofPhP
171,
383.
37.Buti
ti
snotcer
t
ai
nandt
her
ecor
dsdonotshowwhent
hel
et
t
erwassentand
whenGonzal
esr
ecei
vedi
t
.Whati
scl
eari
st
hatsuchl
et
t
erwasbel
at
edl
ysentbyPCI
Band
r
ecei
vedbyGonzal
esaf
t
ert
hef
actt
hatt
hel
at
t
er

sFCDwasal
r
eadyf
r
ozen,
hi
scr
edi
tl
i
ne
undert
heCOHLAwast
er
mi
nat
edorsuspended,
andhi
sPhP250,
000checki
nf
avorofUnson
wasdi
shonor
ed.
Andwaymuchl
at
er
,
oronMay4,
1999,
wasademandl
et
t
erf
r
om t
hecounselofPCI
Bsentt
o
Gonzal
esdemandi
ngpaymentoft
hePhP1,
800,
000l
oan.Obvi
ousl
y,
t
hesef
or
malwr
i
t
t
en
not
i
cessentt
oGonzal
eswer
et
ool
at
ei
nt
hedayf
orGonzal
est
oactpr
oper
l
yont
he
del
i
nquencyandheal
r
eadysuf
f
er
edt
hehumi
l
i
at
i
onandembar
r
assmentf
r
om t
hedi
shonorof
hi
scheckdr
awnagai
nstt
hecr
edi
tl
i
ne.
Tor
ei
t
er
at
e,
awr
i
t
t
ennot
i
ceont
hedef
aul
tanddef
i
ci
encyoft
hePhP1,
800,
000l
oancover
ed
byt
het
hr
eepr
omi
ssor
ynot
eswasr
equi
r
edt
oappr
i
seGonzal
es,
anaccommodat
i
onpar
t
y.
PCI
Bi
sobl
i
gedt
of
or
mal
l
yi
nf
or
m andappr
i
seGonzal
esoft
hedef
aul
t
sandt
heout
st
andi
ng
obl
i
gat
i
ons,
mor
esowhenPCI
Bwasi
nvoki
ngt
hesol
i
dar
yl
i
abi
l
i
t
yofGonzal
es.Thi
sPCI
B
f
ai
l
edt
odo.
Second.PCI
Bwasgr
ossl
ynegl
i
genti
nnotgi
vi
ngpr
i
ornot
i
cet
oGonzal
esabouti
t
scour
seof
act
i
ont
osuspend,
t
er
mi
nat
e,
orr
evoket
hecr
edi
tl
i
ne,
t
her
ebyvi
ol
at
i
ngt
hecl
earst
i
pul
at
i
oni
n
t
heCOHLA.
TheCOHLA,
i
ni
t
sef
f
ect
i
vi
t
ycl
ause,
cl
ear
l
ypr
ovi
des:

4.EFFECTI
VI
TYTheCOHshal
lbeef
f
ect
i
vef
oraper
i
odofone(
1)yearcommenci
ngf
r
om
t
her
ecei
ptbyt
heCLI
ENToft
heCOHcheckbooki
ssuedbyt
heBANK,
subj
ectt
oaut
omat
i
c
r
enewal
sf
orsameper
i
odsunl
esst
er
mi
nat
edbyt
heBANKuponpr
i
ornot
i
ceser
vedon
CLI
ENT.
31(
Emphasi
sour
s.
)
I
ti
sundi
sput
edt
hatt
hebankuni
l
at
er
al
l
yr
evoked,
suspended,
andt
er
mi
nat
edt
heCOHLA
wi
t
houtgi
vi
ngGonzal
espr
i
ornot
i
ceasr
equi
r
edbyt
heabovest
i
pul
at
i
oni
nt
heCOHLA.
Nocedat
est
i
f
i
edoncr
ossexami
nat
i
onont
heOf
f
er
i
ngTi
cket
32r
ecommendi
ngt
he
t
er
mi
nat
i
onoft
hecr
edi
tl
i
ne,
t
hus:
ATTY.DEJESUS:[
onCr
ossExami
nat
i
on]
Thi
sExhi
bi
t8,
youhavenotf
ur
ni
shedatanyt
i
meacopyt
ot
hepl
ai
nt
i
f
fMr
.Gonzal
esi
si
tnot
?
NOCEDA:
Nosi
rbutver
bal
l
yi
twasr
el
ayedt
ohi
m.
Q:Butyouhavenopr
ooft
hatMr
.Gonzal
escamet
oknowaboutt
hi
sExhi
bi
t8?
A:I
twasr
el
ayedt
ohi
m ver
bal
l
y.
Q:Butt
her
ei
snowr
i
t
t
enpr
oof
?
A:Nosi
r
.
Q:Andi
ti
sonl
ynowt
hatyoucl
ai
mt
hati
twasver
bal
l
yr
el
ayedt
ohi
m,
i
t

sonl
ynowwhenyou
t
est
i
f
i
edi
nCour
t
?
A:Bef
or
e...
Q:Towhom di
dyour
el
ayt
hi
si
nf
or
mat
i
on?
A:I
twasdur
i
ngt
het
i
met
hatwewer
egoi
ngt
oMegamal
l
,
i
twasr
el
ayedbyLi
zat
hathehast
o
payhi
sobl
i
gat
i
onsorel
sei
twi
l
ladver
sel
yaf
f
ectt
hest
at
usoft
heaccount
.
33
Ont
heot
herhand,
t
het
est
i
monyofCor
azonNepomucenoshows:
ATTY.DEJESUS:[
onCr
ossExami
nat
i
on]
Nowwegot
ot
heot
hercr
edi
tf
aci
l
i
t
ywhi
chi
st
hecr
edi
tonhandext
endedsol
el
yofcour
set
o
Mr
.Eusebi
oGonzal
eswhoi
st
hepl
ai
nt
i
f
fher
e,
Mr
.Panl
i
l
i
oi
snoti
ncl
udedi
nt
hi
scr
edi
ton
handf
aci
l
i
t
y.Di
dIgat
herf
r
om youasperyourExhi
bi
t7asofOct
ober2,
1998youwer
et
he
onewhor
ecommendedt
hecancel
l
at
i
onoft
hi
scr
edi
tonhandf
aci
l
i
t
y?
NEPOMUCENO:
I
twasr
ecommendedbyt
heaccountof
f
i
cerandIsuppor
t
edi
t
.
Q:Andyouappr
ovedi
t
?

A:Yessi
r
.
Q:Di
dyoui
nf
or
m Mr
.Gonzal
est
hatyouhaveal
r
eadycancel
l
edhi
scr
edi
tonhandf
aci
l
i
t
y?
A:Asf
arasIknow,
i
ti
st
heaccountof
f
i
cerwhowi
l
li
nf
or
m hi
m.
Q:Butyouhavenor
ecor
dt
hathewasi
nf
or
med?
A:Idon
tr
ecal
landwehavet
ol
ookatt
hef
ol
dert
odet
er
mi
nei
ft
heywer
ei
nf
or
med.
Q:I
fyouwi
l
lnot
i
ce,
t
hi
sl
et
t
er...whatdoyoucal
lt
hi
sl
et
t
erofyour
s?
A:Thati
sourl
et
t
eradvi
si
ngt
hem orr
emi
ndi
ngt
hem oft
hei
runpai
di
nt
er
estandt
hati
fhei
s
abl
et
oupdat
ehi
si
nt
er
esthecanext
endt
hepr
omi
ssor
ynot
eorr
est
r
uct
ur
et
heout
st
andi
ng.
Q:Now,
Ical
l
yourat
t
ent
i
onmadam wi
t
ness,
t
her
ei
snot
hi
ngi
nt
hi
sl
et
t
ert
ot
hecl
i
ent
s
advi
si
ngt
hem orMr
.Gonzal
est
hathi
scr
edi
tonhandf
aci
l
i
t
ywasal
r
eadycancel
l
ed?
A:Idon
tknowi
ft
her
ear
eot
herl
et
t
er
sasi
def
r
om t
hi
s.
Q:Soi
nt
hi
sl
et
t
ert
her
ei
snot
hi
ngt
oi
nf
or
m ort
omakeMr
.Eusebi
oawar
et
hathi
scr
edi
ton
handf
aci
l
i
t
ywasal
r
eadycancel
l
ed?
A:Noact
ual
l
yhecanunder
st
andi
tf
r
om t
hel
astsent
ence."
I
fyouwi
l
lbeabl
et
oupdat
eyour
out
st
andi
ngi
nt
er
est
,
wecanappl
yt
heext
ent
i
onofyourpr
omi
ssor
ynot
e"soi
not
herwor
dswe
ar
esayi
ngt
hati
fyoudon
t
,
youcannotext
endt
hepr
omi
ssor
ynot
e.
Q:Youwi
l
l
not
i
cet
hatt
hesubj
ectmat
t
eroft
hi
sOct
ober2,
1998l
et
t
eri
sonl
yt
hel
oanof1.
8
mi
l
l
i
oni
si
tnot
,
asyoucanseef
r
om t
hel
et
t
er
?Okay?
A:Ah...
Q:Okay.Ther
ei
snot
hi
ngt
her
et
hatwi
l
lshowt
hatt
hatal
sor
ef
er
st
ot
hecr
edi
tonhandf
aci
l
i
t
y
whi
chwasbei
ngut
i
l
i
zedbyMr
.Gonzal
esi
si
tnot
?
A:ButIdon
tknowi
ft
her
ear
eot
herl
et
t
er
st
hatar
enotpr
esent
edt
omenow.
34
Thef
or
egoi
ngt
est
i
moni
esofPCI
Bof
f
i
cer
scl
ear
l
yshowt
hatnotonl
ydi
dPCI
Bf
ai
lt
ogi
vepr
i
or
not
i
cet
oGonzal
esaboutt
heOf
f
er
i
ngTi
cketf
ort
hepr
ocessoft
er
mi
nat
i
on,
suspensi
on,
or
r
evocat
i
onoft
hecr
edi
tl
i
neundert
heCOHLA,
butPCI
Bl
i
kewi
sef
ai
l
edt
oi
nf
or
m Gonzal
esof
t
hef
actt
hathi
scr
edi
tl
i
nehasbeent
er
mi
nat
ed.Thus,
wef
i
ndPCI
Bgr
ossl
ynegl
i
genti
nt
he
t
er
mi
nat
i
on,
r
evocat
i
on,
orsuspensi
onoft
hecr
edi
tl
i
neundert
heCOHLA.Whi
l
ePCI
Bi
nvokes
i
t
sr
i
ghtont
hesocal
l
ed"
cr
ossdef
aul
tpr
ovi
si
ons,
"i
tmaynotwi
t
hi
mpuni
t
yi
gnor
et
her
i
ght
sof
Gonzal
esundert
heCOHLA.
I
ndeed,
t
hebusi
nessofbanki
ngi
si
mpr
essedwi
t
hpubl
i
ci
nt
er
estandgr
eatr
el
i
ancei
smade
ont
hebank
sswor
npr
of
essi
onofdi
l
i
genceandmet
i
cul
ousnessi
ngi
vi
ngi
r
r
epr
oachabl
e
ser
vi
ce.Li
keacommoncar
r
i
erwhosebusi
nessi
si
mbuedwi
t
hpubl
i
ci
nt
er
est
,
abankshoul
d
exer
ci
seext
r
aor
di
nar
ydi
l
i
gencet
onegat
ei
t
sl
i
abi
l
i
t
yt
ot
hedeposi
t
or
s.
35I
nt
hi
si
nst
ance,

PCI
Bi
ssor
el
yr
emi
ssi
nt
hedi
l
i
gencer
equi
r
edi
nt
r
eat
i
ngwi
t
hi
t
scl
i
ent
,
Gonzal
es.I
tmaynot
want
onl
yexer
ci
sei
t
sr
i
ght
swi
t
houtr
espect
i
ngandhonor
i
ngt
her
i
ght
sofi
t
scl
i
ent
s.
Ar
t
.19oft
heNewCi
vi
lCodecl
ear
l
ypr
ovi
dest
hat"
[
e]
ver
yper
sonmust
,
i
nt
heexer
ci
seofhi
s
r
i
ght
sandi
nt
heper
f
or
manceofhi
sdut
i
es,
actwi
t
hj
ust
i
ce,
gi
veever
yonehi
sdue,
andobser
ve
honest
yandgoodf
ai
t
h.
"Thi
si
st
hebasi
soft
hepr
i
nci
pl
eofabuseofr
i
ghtwhi
ch,
i
nt
ur
n,
i
s
basedupont
hemaxi
m suum j
ussummai
nj
ur
i
a(
t
heabuseofr
i
ghti
st
hegr
eat
estpossi
bl
e
wr
ong)
.
36
I
nor
derf
orAr
t
.19t
obeact
i
onabl
e,
t
hef
ol
l
owi
ngel
ement
smustbepr
esent
:"
(
1)t
heexi
st
ence
ofal
egalr
i
ghtordut
y,
(
2)whi
chi
sexer
ci
sedi
nbadf
ai
t
h,
and(
3)f
ort
hesol
ei
nt
entof
pr
ej
udi
ci
ngori
nj
ur
i
nganot
her
.
"
37Wef
i
ndt
hatsuchel
ement
sar
epr
esenti
nt
hei
nst
antcase.
Theef
f
ect
i
vi
t
ycl
auseoft
heCOHLAi
scr
yst
al
cl
eart
hatt
er
mi
nat
i
onoft
heCOHshoul
dbedone
onl
yuponpr
i
ornot
i
ceser
vedont
heCLI
ENT.Thi
si
st
hel
egaldut
yofPCI
Bt
oi
nf
or
m
Gonzal
esoft
het
er
mi
nat
i
on.However
,
asshownbyt
heabovet
est
i
moni
es,
PCI
Bf
ai
l
edt
ogi
ve
pr
i
ornot
i
cet
oGonzal
es.
Mal
i
ceorbadf
ai
t
hi
satt
hecor
eofAr
t
.19.Mal
i
ceorbadf
ai
t
h"
i
mpl
i
esaconsci
ousand
i
nt
ent
i
onaldesi
gnt
odoawr
ongf
ul
actf
oradi
shonestpur
poseormor
alobl
i
qui
t
y.
"
38I
nt
he
i
nst
antcase,
PCI
Bwasabl
et
osendal
et
t
eradvi
si
ngGonzal
esoft
heunpai
di
nt
er
estont
he
l
oans39butf
ai
l
edt
oment
i
onanyt
hi
ngaboutt
het
er
mi
nat
i
onoft
heCOHLA.Mor
esi
gni
f
i
cant
l
y,
nol
et
t
erwaseversentt
ohi
m aboutt
het
er
mi
nat
i
onoft
heCOHLA.Thef
ai
l
ur
et
ogi
vepr
i
or
not
i
ceont
hepar
tofPCI
Bi
sal
r
eadypr
i
maf
aci
eevi
denceofbadf
ai
t
h.
40Ther
ef
or
e,
i
ti
s
abundant
l
ycl
eart
hatt
hi
scasef
al
l
ssquar
el
ywi
t
hi
nt
hepur
vi
ewoft
hepr
i
nci
pl
eofabuseof
r
i
ght
sasembodi
edi
nAr
t
.19.
Thi
r
d.Ther
ei
snodi
sput
eont
her
i
ghtofPCI
Bt
osuspend,
t
er
mi
nat
e,
orr
evoket
heCOHLA
undert
he"
cr
ossdef
aul
tpr
ovi
si
ons"ofbot
ht
hepr
omi
ssor
ynot
esandt
heCOHLA.However
,
t
hesecr
ossdef
aul
tpr
ovi
si
onsdonotconf
erabsol
ut
euni
l
at
er
alr
i
ghtt
oPCI
B,
ast
heyar
e
qual
i
f
i
edbyt
heot
herst
i
pul
at
i
onsi
nt
hecont
r
act
sorspeci
f
i
cci
r
cumst
ances,
l
i
kei
nt
hei
nst
ant
caseofanaccommodat
i
onpar
t
y.
Thepr
omi
ssor
ynot
esuni
f
or
ml
ypr
ovi
de:
Thel
enderi
sher
ebyaut
hor
i
zed,
ati
t
sopt
i
onandwi
t
houtnot
i
ce,
t
osetof
forappl
yt
ot
he
paymentoft
hi
sNot
eanyandal
lmoneyswhi
chmaybei
ni
t
shandsondeposi
torot
her
wi
se
bel
ongi
ngt
ot
heBor
r
ower
.TheBor
r
oweri
r
r
evocabl
yappoi
nt
/
st
heLender
,
ef
f
ect
i
veupont
he
nonpaymentoft
hi
sNot
eondemand/
atmat
ur
i
t
yorupont
hehappeni
ngofanyoft
heevent
sof
def
aul
t
,
butwi
t
houtanyobl
i
gat
i
onont
heLender

spar
tshoul
di
tchoosenott
oper
f
or
mt
hi
s
mandat
e,
ast
heat
t
or
neyi
nf
actoft
heBor
r
ower
,
t
osel
landdi
sposeofanypr
oper
t
yoft
he
Bor
r
ower
,
whi
chmaybei
nt
heLender

spossessi
onbypubl
i
corpr
i
vat
esal
e,
andt
oappl
yt
he
pr
oceedst
her
eoft
ot
hepaymentoft
hi
sNot
e;t
heBor
r
ower
,
however
,
shal
lr
emai
nl
i
abl
ef
or
anydef
i
ci
ency.
41(
Emphasi
sour
s.
)
Theabovepr
ovi
sosar
ei
ndeedqual
i
f
i
edwi
t
ht
hespeci
f
i
cci
r
cumst
anceofanaccommodat
i
on
par
t
ywho,
assuch,
hasnotbeenser
vi
ci
ngt
hepaymentoft
heduesoft
hel
oans,
andmustf
i
r
st

bepr
oper
l
yappr
i
sedi
nwr
i
t
i
ngoft
heout
st
andi
ngduesi
nor
dert
oanswerf
orhi
ssol
i
dar
y
obl
i
gat
i
on.
Thesamei
st
r
uef
ort
heCOHLA,
whi
chi
ni
t
sdef
aul
tcl
ausepr
ovi
des:
16.DEFAULTTheCLI
ENTshal
l
beconsi
der
edi
ndef
aul
tundert
heCOHi
fanyoft
he
f
ol
l
owi
ngevent
sshal
loccur
:
1.xxx
2.Vi
ol
at
i
onoft
het
er
msandcondi
t
i
onsoft
hi
sAgr
eementoranycont
r
actoft
heCLI
ENTwi
t
h
t
heBANKoranybank,
per
sons,
cor
por
at
i
onsorent
i
t
i
esf
ort
hepaymentofbor
r
owedmoney,
oranyot
hereventofdef
aul
ti
nsuchcont
r
act
s.
42
Theaboveper
t
i
nentdef
aul
tcl
ausemustber
eadi
nconj
unct
i
onwi
t
ht
heef
f
ect
i
vi
t
ycl
ause(
No.
4oft
heCOHLA,
quot
edabove)
,
whi
chexpr
essl
ypr
ovi
desf
ort
her
i
ghtofcl
i
entt
opr
i
ornot
i
ce.
Ther
at
i
onal
ei
ssi
mpl
e:i
ncaseswher
et
hebankhast
her
i
ghtt
ot
er
mi
nat
e,
r
evoke,
orsuspend
t
hecr
edi
tl
i
ne,
t
hecl
i
entmustbenot
i
f
i
edofsuchi
nt
enti
nor
derf
ort
hel
at
t
ert
oact
accor
di
ngl
ywhet
hert
ocor
r
ectanygr
oundgi
vi
ngr
i
set
ot
her
i
ghtoft
hebankt
ot
er
mi
nat
et
he
cr
edi
tl
i
neandt
odi
shonoranychecki
ssuedort
oacti
naccor
dwi
t
hsucht
er
mi
nat
i
on,
i
.
e.
,
not
t
oi
ssueanycheckdr
awnf
r
om t
hecr
edi
tl
i
neort
or
epl
aceanycheckst
hathadbeeni
ssued.
Thi
s,
t
hebankwi
t
hgr
ossnegl
i
gencef
ai
l
edt
oaccor
dGonzal
es,
aval
uedcl
i
entf
ormor
et
han
15year
s.
Four
t
h.Wef
i
ndt
het
est
i
mony43ofOcampoi
ncr
edi
bl
eont
hepoi
ntt
hatt
hepr
i
nci
palbor
r
ower
oft
hePhP1,
800,
000l
oancover
edbyt
het
hr
eepr
omi
ssor
ynot
esi
sGonzal
esf
orwhi
cht
he
bankof
f
i
cer
shadspeci
ali
nst
r
uct
i
onst
ogr
antandt
hati
twast
hr
ought
hei
nst
r
uct
i
onsof
Gonzal
est
hatt
hepaymentoft
heper
i
odi
ci
nt
er
estdueswer
edebi
t
edf
r
om t
heaccountoft
he
spousesPanl
i
l
i
o.
Forone,
whi
l
et
hef
i
r
stpr
omi
ssor
ynot
edat
edOct
ober30,
1995i
ndeedshowsGonzal
esast
he
pr
i
nci
palbor
r
ower
,
t
heot
herpr
omi
ssor
ynot
esdat
edDecember26,
1995andJanuar
y3,
1996
evi
dent
l
yshowt
hati
twasJosePanl
i
l
i
owhowast
hepr
i
nci
palbor
r
owerwi
t
hGonzal
esascobor
r
ower
.Foranot
her
,
Ocampocannotf
ei
gni
gnor
anceont
hear
r
angementoft
hepayment
s
byt
hespousesPanl
i
l
i
ot
hr
ought
hedebi
t
i
ngoft
hei
rbankaccount
.I
ti
si
ncr
edul
oust
hatt
he
paymentar
r
angementi
smer
el
yatt
hebehestofGonzal
esandatamer
ever
baldi
r
ect
i
vet
odo
so.Thef
actt
hatt
hespousesPanl
i
l
i
onotonl
yr
ecei
vedt
hepr
oceedsoft
hel
oanbutwer
e
ser
vi
ci
ngt
heper
i
odi
ci
nt
er
estduesr
ei
nf
or
cest
hef
actt
hatGonzal
eswasonl
yan
accommodat
i
onpar
t
y.
Thus,
duet
oPCI
B
snegl
i
gencei
nnotgi
vi
ngGonzal
esanaccommodat
i
onpar
t
ypr
oper
not
i
cer
el
at
i
vet
ot
hedel
i
nquenci
esi
nt
hePhP1,
800,
000l
oancover
edbyt
het
hr
eepr
omi
ssor
y
not
es,
t
heunj
ustt
er
mi
nat
i
on,
r
evocat
i
on,
orsuspensi
onoft
hecr
edi
tl
i
neundert
heCOHLA
f
r
om PCI
B
sgr
ossnegl
i
gencei
nnothonor
i
ngi
t
sobl
i
gat
i
ont
ogi
vepr
i
ornot
i
cet
oGonzal
es
aboutsucht
er
mi
nat
i
onandi
nnoti
nf
or
mi
ngGonzal
esoft
hef
actofsucht
er
mi
nat
i
on,
t
r
eat
i
ng
Gonzal
es
accountascl
osedanddi
shonor
i
nghi
sPhP250,
000check,
wascer
t
ai
nl
yar
eckl
ess

actbyPCI
B.Thi
sr
esul
t
edi
nt
heact
ual
i
nj
ur
yofPhP250,
000t
oGonzal
eswhoseFCDaccount
wasf
r
ozenandhadt
ol
ookel
sewher
ef
ormoneyt
opayUnson.
Wi
t
hbanks,
t
hedegr
eeofdi
l
i
gencer
equi
r
edi
smor
et
hant
hatofagoodf
at
heroft
hef
ami
l
y
consi
der
i
ngt
hatt
hebusi
nessofbanki
ngi
si
mbuedwi
t
hpubl
i
ci
nt
er
estduet
ot
henat
ur
eof
t
hei
rf
unct
i
on.Thel
awi
mposesonbanksahi
ghdegr
eeofobl
i
gat
i
ont
ot
r
eatt
heaccount
sof
i
t
sdeposi
t
or
swi
t
hmet
i
cul
ouscar
e,
al
wayshavi
ngi
nmi
ndt
hef
i
duci
ar
ynat
ur
eofbanki
ng.
44
HadGonzal
esbeenpr
oper
l
ynot
i
f
i
edoft
hedel
i
nquenci
esoft
hePhP1,
800,
000l
oanandt
he
pr
ocessoft
er
mi
nat
i
nghi
scr
edi
tl
i
neundert
heCOHLA,
hecoul
dhaveact
edaccor
di
ngl
yand
t
hedi
shonoroft
hecheckwoul
dhavebeenavoi
ded.
Thi
r
dI
ssue:Awar
dofDamages
Thebanki
ngsyst
em hasbecomeani
ndi
spensabl
ei
nst
i
t
ut
i
oni
nt
hemoder
nwor
l
dandpl
aysa
vi
t
alr
ol
ei
nt
heeconomi
cl
i
f
eofever
yci
vi
l
i
zedsoci
et
ybankshaveat
t
ai
nedaubi
qui
t
ous
pr
esenceamongt
hepeopl
e,
whohavecomet
or
egar
dt
hem wi
t
hr
espectandevengr
at
i
t
ude
andmostofal
l
,
conf
i
dence,
andi
ti
sf
ort
hi
sr
eason,
banksshoul
dguar
dagai
nsti
nj
ur
y
at
t
r
i
but
abl
et
onegl
i
genceorbadf
ai
t
honi
t
spar
t
.
45
I
nt
hei
nst
antcase,
Gonzal
essuf
f
er
edf
r
om t
henegl
i
genceandbadf
ai
t
hofPCI
B.Fr
om t
he
t
est
i
moni
esofGonzal
es
wi
t
nesses,
par
t
i
cul
ar
l
yt
hoseofDomi
nadorSant
os46andFr
eddy
Gomez,
47t
heembar
r
assmentandhumi
l
i
at
i
onGonzal
eshast
oendur
enotonl
ybef
or
ehi
s
f
or
mercl
osef
r
i
endUnsonbutmor
ef
r
om t
hemember
sandf
ami
l
i
esofhi
sf
r
i
endsand
associ
at
esi
nt
hePCA,
whi
chhecont
i
nuest
oexper
i
enceconsi
der
i
ngt
heconf
r
ont
at
i
onhehad
wi
t
hUnsonandt
heconsequentl
ossofst
andi
ngandcr
edi
bi
l
i
t
yamongt
hem f
r
om t
hef
actof
t
heappar
entbounci
ngcheckhei
ssued.Cr
edi
ti
sver
yi
mpor
t
antt
obusi
nessmenandi
t
sl
oss
ori
mpai
r
mentneedst
ober
ecogni
zedandcompensat
ed.
48
Thet
er
mi
nat
i
onoft
heCOHLAbyPCI
Bwi
t
houtpr
i
ornot
i
ceandt
hesubsequentdi
shonoroft
he
checki
ssuedbyGonzal
esconst
i
t
ut
eact
sofcont
r
abonusmor
es.Ar
t
.21oft
heCi
vi
lCode
r
ef
er
st
osuchact
swheni
tsays,
"
Anyper
sonwhowi
l
l
f
ul
l
ycausesl
ossori
nj
ur
yt
oanot
heri
na
mannert
hati
scont
r
ar
yt
omor
al
s,
goodcust
omsorpubl
i
cpol
i
cyshal
lcompensat
et
hel
at
t
er
f
ordamage.
"
Accor
di
ngl
y,
t
hi
sCour
tf
i
ndst
hatsuchact
swar
r
antt
hepaymentofi
ndemni
t
yi
nt
hef
or
m of
nomi
naldamages.
1avvphi
1Nomi
nal
damages"
ar
er
ecover
abl
ewher
eal
egalr
i
ghti
s
t
echni
cal
l
yvi
ol
at
edandmustbevi
ndi
cat
edagai
nstani
nvasi
ont
hathaspr
oducednoact
ual
pr
esentl
ossofanyki
ndxxx.
"
49Wef
ur
t
herexpl
ai
nedt
henat
ur
eofnomi
naldamagesi
n
Al
medav.Car
i
o:
xxxI
t
sawar
di
st
husnotf
ort
hepur
poseofi
ndemni
f
i
cat
i
onf
oral
ossbutf
ort
her
ecogni
t
i
on
andvi
ndi
cat
i
onofar
i
ght
.I
ndeed,
nomi
nal
damagesar
edamagesi
nnameonl
yandnoti
nf
act
.
Whengr
ant
edbyt
hecour
t
s,
t
heyar
enott
r
eat
edasanequi
val
entofawr
ongi
nf
l
i
ct
edbut
si
mpl
yar
ecogni
t
i
onoft
heexi
st
enceofat
echni
cal
i
nj
ur
y.Avi
ol
at
i
onoft
hepl
ai
nt
i
f
f

sr
i
ght
,
eveni
fonl
yt
echni
cal
,
i
ssuf
f
i
ci
entt
osuppor
tanawar
dofnomi
naldamages.Conver
sel
y,
so
l
ongast
her
ei
sashowi
ngofavi
ol
at
i
onoft
her
i
ghtoft
hepl
ai
nt
i
f
f
,
anawar
dofnomi
nal

damagesi
spr
oper
.
50(
Emphasi
sOur
s.
)
I
nt
hepr
esentcase,
Gonzal
eshadt
her
i
ghtt
obei
nf
or
medoft
heaccr
uedi
nt
er
estandmost
especi
al
l
y,
f
ort
hesuspensi
onofhi
sCOHLA.Forf
ai
l
ur
et
odoso,
t
hebanki
sl
i
abl
et
opay
nomi
naldamages.Theamountofsuchdamagesi
saddr
essedt
ot
hesounddi
scr
et
i
onoft
he
cour
t
,
t
aki
ngi
nt
oaccountt
her
el
evantci
r
cumst
ances.
51I
nt
hi
scase,
t
heCour
tf
i
ndst
hatt
he
gr
antofPhP50,
000asnomi
naldamagesi
spr
oper
.
Mor
eover
,
asWehel
di
nMERALCOv.CA,
52f
ai
l
ur
et
ogi
vepr
i
ornot
i
cewhenr
equi
r
ed,
suchas
i
nt
hei
nst
antcase,
const
i
t
ut
esabr
eachofcont
r
actandi
sacl
earvi
ol
at
i
onofAr
t
.21oft
he
Code.I
ncasessuchast
hi
s,
Ar
t
.2219oft
heCodepr
ovi
dest
hatmor
aldamagesmaybe
r
ecover
edi
nact
sr
ef
er
r
edt
oi
ni
t
sAr
t
.21.Fur
t
her
,
Ar
t
.2220oft
heCodepr
ovi
dest
hat"
[
w]
i
l
l
f
ul
i
nj
ur
yt
opr
oper
t
ymaybeal
egalgr
oundf
orawar
di
ngmor
aldamagesi
ft
hecour
tshoul
df
i
nd
t
hat
,
undert
heci
r
cumst
ances,
suchdamagesar
ej
ust
l
ydue.Thesamer
ul
eappl
i
est
o
br
eachesofcont
r
actwher
et
hedef
endantact
edf
r
audul
ent
l
yori
nbadf
ai
t
h.
"Si
mi
l
ar
l
y,
"
ever
y
per
sonwho,
cont
r
ar
yt
ol
aw,
wi
l
l
f
ul
l
yornegl
i
gent
l
ycausesdamaget
oanot
her
,
shal
li
ndemni
f
y
t
hel
at
t
erf
ort
hesame.
"
53Evi
dent
l
y,
Gonzal
esi
sent
i
t
l
edt
or
ecovermor
aldamages.
Eveni
nt
heabsenceofmal
i
ceorbadf
ai
t
h,
adeposi
t
orst
i
l
lhast
her
i
ghtt
or
ecoverr
easonabl
e
mor
aldamages,
i
ft
hedeposi
t
orsuf
f
er
edment
alangui
sh,
ser
i
ousanxi
et
y,
embar
r
assment
,
and
humi
l
i
at
i
on.
54Al
t
houghi
ncapabl
eofpecuni
ar
yest
i
mat
i
on,
mor
aldamagesar
ecer
t
ai
nl
y
r
ecover
abl
ei
ft
heyar
et
hepr
oxi
mat
er
esul
toft
hedef
endant

swr
ongf
ulactoromi
ssi
on.The
f
act
ualant
ecedent
sbol
st
er
edbyundi
sput
edt
est
i
moni
esl
i
kewi
seshowt
hement
alangui
sh
andanxi
et
yGonzal
eshadt
oendur
ewi
t
ht
het
hr
eatofUnsont
of
i
l
easui
t
.Gonzal
eshadt
opay
UnsonPhP250,
000,
whi
l
ehi
sFCDaccounti
nPCI
Bwasf
r
ozen,
pr
ompt
i
ngGonzal
est
o
demandf
r
om PCI
Bandt
of
i
l
et
hei
nst
antsui
t
.
Theawar
dofmor
aldamagesi
sai
medatar
est
or
at
i
onwi
t
hi
nt
hel
i
mi
t
soft
hepossi
bl
e,
oft
he
spi
r
i
t
ualst
at
usquoant
ei
tmustal
waysr
easonabl
yappr
oxi
mat
et
heext
entofi
nj
ur
yandbe
pr
opor
t
i
onalt
ot
hewr
ongcommi
t
t
ed.
55Thus,
anawar
dofPhP50,
000i
sr
easonabl
emor
al
damagesf
ort
heunj
ustdi
shonoroft
hePhP250,
000whi
chwast
hepr
oxi
mat
ecauseoft
he
consequenthumi
l
i
at
i
on,
embar
r
assment
,
anxi
et
y,
andment
alangui
shsuf
f
er
edbyGonzal
es
f
r
om hi
sl
ossofcr
edi
bi
l
i
t
yamonghi
sf
r
i
ends,
col
l
eaguesandpeer
s.
Fur
t
her
mor
e,
t
hei
ni
t
i
alcar
el
essnessoft
hebank
somi
ssi
oni
nnotpr
oper
l
yi
nf
or
mi
ng
Gonzal
esoft
heout
st
andi
ngi
nt
er
estduesaggr
avat
edbyi
t
sgr
ossnegl
ecti
nomi
t
t
i
ngt
o
gi
vepr
i
ornot
i
ceasst
i
pul
at
edundert
heCOHLAandi
nnotgi
vi
ngact
ualnot
i
ceoft
he
t
er
mi
nat
i
onoft
hecr
edi
tl
i
nej
ust
i
f
i
est
hegr
antofexempl
ar
ydamagesofPhP10,
000.Such
anawar
di
si
mposedbywayofexampl
eorcor
r
ect
i
onf
ort
hepubl
i
cgood.
Fi
nal
l
y,
anawar
df
orat
t
or
ney
sf
eesi
sl
i
kewi
secal
l
edf
orf
r
om PCI
B
snegl
i
gencewhi
ch
compel
l
edGonzal
est
ol
i
t
i
gat
et
opr
ot
ecthi
si
nt
er
est
.I
naccor
dancewi
t
hAr
t
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