CASE DIGEST

Unlad Resources Development Corporation, et. al vs. Renato P. Dragon, et. al

G.R. No. 149338, July 28, 2008

Unlad Resources Development Corporation, Unlad Rural Bank Of Noveleta, Inc., Unlad
Commodities, Inc., Helena Z. Benitez, And Conrado L. Benitez Ii, Petitioners
vs.
Renato P. Dragon, Tarcisius R. Rodriguez, Vicente D. Casas, Romulo M. Virata, Flaviano
Perdito, Teotimo Benitez, Elena Benitez, And Rolando Suarez, Respondents.

Facts:

a) December 29, 1981- The parties entered into a Memorandum of Agreement that
UNLAD will invest in additional stocks worth Php 4.8M and pay up immediately Php
1.2M for the said subscription while the respondents, Dragon and company, shall
transfer control and management over the Rural Bank to UNLAD Resources.
b) August 10, 1984- The Board of Directors of Unlad Resources passed Resolution No.
84-041 authorizing the President and the General Manager to lease a mango
plantation, the Bank as lessee entered into a Contract of Lease with the petitioner,
Helena Z. Benitez as lessor.
c) May 20, 1987- Unlad Rural Bank wrote regarding Central Bank’s approval to retire its
preferred shares. The respondents complied with their obligation but the petitioners
did not.
d) July 3, 1987- The respondents filed a complaint before the Regional Trial Court for
rescission of the agreement and the return of control and management of the Rural
Bank from petitioners to respondents, plus damages.

Issue:
The main issue in this case is the rescission of the Memorandum of Agreement.

Rulings:
Decision of the Regional Trial Court
The Regional Trial Court rendered the following:

1) Memorandum of Agreement declared rescinded ordering the Defendant UNLAD

Resources to return control and management over the Rural Bank to Plaintiffs; and
the UNLAD Rural Bank to return to Defendants the sum of Php 1,003,070.00;
2) The Director for Rural Bank of Bangko Sentral ng Pilipinas appointed as Receiver of
the Rural Bank;
3) UNLAD Rural Bank is hereby enjoined from placing the retired preferred shares
available for subscription and ordered to be placed under a sinking fund;
4) UNLAD Resources is ordered to pay Plaintiffs the actual compensatory damages
amounting to Php 4,601,765.38; pay moral damages in the amount of Php
500,000.00; pay exemplary and corrective damages in the amount of Php 100,000.00;
and pay attorney’s fees in the sum of Php 100,000.00, plus cost of suit.