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PRUDENTIAL BANK, petitioner,

vs.
INTERMEDIATE APPELLATE COURT, PHILIPPINE RAYON MILLS, INC. and ANACLETO R. CHI, respondents.
FACTS:
Philippine Rayon Mills, Inc.(PRMI) entered into a contract with Nissho Co., Ltd. of Japan for the
importation of textile machineries under a 5-year deferred payment plan. To effect the payment,
PRMI applied for a commercial letter of credit with the Prudential Bank and Trust Company in
favor of Nissho. Prudential Bank opened Letter of Credit No. DPP-63762 for $128,548.78
Against this letter of credit, drafts were drawn and issued by Nissho, which were all paid by the
Prudential Bank through its correspondent in Japan, the Bank of Tokyo, Ltd. Two of the original
drafts were accepted by PRMI through its president, Anacleto R. Chi, while the others were
not. Upon the arrival of the machineries, the Prudential Bank indorsed the shipping documents
to the PRMI which accepted delivery of the same. To enable PRMI to take delivery of the
machineries, it executed, by prior arrangement with the Prudential Bank, a trust receipt which
was signed by Anacleto R. Chi in his capacity as President of PRMI company. At the back of
the trust receipt was printed a form to be accomplished by 2 sureties who, by the very terms
and conditions thereof, were to be jointly and severally liable to the Prudential Bank should the
PRMI fail to pay the total amount or any portion of the drafts issued by Nissho and paid for by
Prudential Bank. . PRMI was able to take delivery of the textile machineries and installed the
same at its factory site. Chi argued that presentment for acceptance was necessary to make
PRMI liable. The trial court ruled that that presentment for acceptance was an indispensable
requisite for Philippine Rayons liability on the drafts to attach.

G.R. No. 146717. November 22, 2004]


TRANSFIELD PHILIPPINES, INC., petitioner, vs. LUZON HYDRO CORPORATION, AUSTRALIA and NEW
ZEALAND BANKING GROUP LIMITED and SECURITY BANK CORPORATION, respondents.
FACTS:
petitioner and respondent Luzon Hydro Corporation (hereinafter, LHC) entered into a Turnkey
Contract[3] whereby petitioner, as Turnkey Contractor, undertook to construct, on a turnkey basis, a
seventy (70)-Megawatt hydro-electric power station at the Bakun River in the provinces of Benguet and
Ilocos Sur (hereinafter, the Project). Petitioner was given the sole responsibility for the design,
construction, commissioning, testing and completion of the Project. [4]
To secure performance of petitioners obligation on or before the target completion date, or such time
for completion as may be determined by the parties agreement, petitioner opened in favor of LHC two
(2) standby letters of credit. In the course of the construction of the project, petitioner sought various
EOT to complete the Project. The extensions were requested allegedly due to several factors which
prevented the completion of the Project on target date, such as force majeure occasioned by
typhoon Zeb, barricades and demonstrations. LHC denied the requests, however. This gave rise to a
series of legal actions between the parties which culminated in the instant petition.
ISSUE:
whether the independence principle on letters of credit may be invoked by a beneficiary thereof where
the beneficiarys call thereon is wrongful or fraudulent.