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345 6" 789:;

lalnLlffs: PLn8? CPlnC 1lu, CP8lS1CPL8 PALln CC, and CLC8CL CC

uefendanL: PlLllnL 8Ank Cl CCMMunlCA1lCnS

CASL: AW8l (represenLed by peLlLloners) have loans whlch Lhey applled
for wlLh 8CCM. 1he flrsL was secured by real esLaLe, and Lhe second
was supporLed by a sureLy agreemenL where Lhe 8oard of ulrecLors of
AW8l were requlred Lo be sureLles. 8ecause AW8l defaulLed ln lLs
paymenLs, 8CCM sued for collecLlon agalnsL AW8l and Lhe members of
Lhe board ln Lhelr personal capaclLles. ln Lhe Answer of peLlLloners, Lhey
clalmed LhaL Lhe SureLy AgreemenL aLLached Lo Lhe complalnL were
falslfled, conslderlng LhaL when Lhey slgned Lhe same, Lhe words "ln hls
personal capaclLy" dld noL yeL appear ln Lhe documenL and were merely
lnLercalaLed Lhereon wlLhouL Lhelr knowledge and consenL. 8CCM
Lhen flled a reply wlLh a moLlon for leave of courL Lo subsLlLuLe Lhe
amended sureLy agreemenL wlLh Lhe orlglnal sureLy agreemenL whlch lL
clalmed had been flled by mlsLake. AW8l clalms LhaL because Lhe cause
of acLlon was founded solely on Lhe documenL, Lhen lLs wlLhdrawal
amounLed Lo wlLhdrawal of Lhe complalnL.

1he CourL ruled LhaL 8ule 10 allows amendmenL of complalnL wlLh leave
of CourL, and as such, Lhe submlsslon of Lhe orlglnal sureLy agreemenL
as an amendmenL Lo Lhe complalnL should be allowed. rlor Lo Lhe 1997
amendmenLs, you cannoL flle an amendmenL whlch would subsLanLlally
alLer Lhe cause of acLlon, 8u1 Loday, an amendmenL Lo a complalnL may
now subsLanLlally alLer Lhe cause of acLlon. Such amendmenL ls
dlscreLlonary Lo Lhe CourL and wlll be allowed lf lL serves Lhe hlgher
lnLeresL of subsLanLlal [usLlce. 1here was no fraudulenL lnLenL on Lhe
parL of 8CCM when Lhey submlLLed Lhe alLered verslon of Lhe sureLy
agreemenL. lurLhermore, Lhe peLlLloners can sLlll use Lhe subsLlLuLed
alLered sureLy agreemenLs as evldence ln Lhelr afflrmaLlve defenses and
are noL precluded from flllng crlmlnal charges agalnsL 8CCM for Lhe
alLered documenLs.

uCC18lnL: 1he granLlng of leave of courL Lo amend a pleadlng ls
dlscreLlonary. And even lf Lhe amendmenL subsLanLlally alLers Lhe cause
of acLlon or defense, such amendmenL could sLlll be allowed when lL ls
soughL Lo serve Lhe hlgher lnLeresL of subsLanLlal [usLlce.

8,9<!#:5%=>
! Aslan WaLer 8esources, lnc. (AW8l), represenLed by hereln
peLlLloners Penry 1lu, ChrlsLopher Co, and Ceorge Co, applled
for a real esLaLe loan wlLh Lhe hlllpplne 8ank of
CommunlcaLlons (8CCM).
! 1he flrsL loan was secured by a plece of land as collaLeral.
SubsequenLly, a blgger loan was applled for by AW8l buL
wlLhouL an addlLlonal real esLaLe collaLeral. lnsLead, Lhe
members of Lhe 8oard of ulrecLors of AW8l were requlred Lo
become sureLles under a SureLy AgreemenL.
o All Lhe coples of Lhe sureLy agreemenL were kepL by
8CCM, LxCL1 for 2.
! Cne was reLalned by Lhe noLary publlc
! Cne wlLh Lhe 8ecords and ManagemenL Cfflce
! AW8l defaulLed on lLs obllgaLlon and offered all lLs properLles Lo
be applled ln a daclon en pago arrangemenL.
o 8CCM, however, re[ecLed Lhls offer and sued for
collecLlon agalnsL Lhe peLlLloner who Lhey clalm were
llable ln Lhelr personal capaclLy by vlrLue of Lhe words
ln hls personal capaclLy" as wrlLLen ln documenL.
! ln Lhe Answer of peLlLloners, Lhey clalmed LhaL Lhe SureLy
AgreemenL aLLached Lo Lhe complalnL were falslfled,
conslderlng LhaL when Lhey slgned Lhe same, Lhe words "ln hls
personal capaclLy" dld noL appear ln Lhe orlglnal documenL
lncludlng ln Lhe copy reLalned by Lhe noLary publlc.
! lL was dlscovered LhaL Lhe phrase was lnserLed laLer under Lhe
lnsLrucLlons of Lhe bank audlLor. 8CCM reallzed Lhls mlsLake
!"#"$ &'(!)*+') *",)-.- /0123 4 01256 7..89 .'7:;+"$ -7$#7*('


'7!<)$$) 7::) *9 ,+.")'')=
and explalned LhaL Lhe lnserLlon was ordered by Lhe bank
audlLor slnce sLandard procedures warranLed LhaL Lhe words ln
hls personal capaclLy" be lndlcaLed under Lhe name of each
sureLy. lL was alleged Lo have been made Lo reflecL Lhe parLles'
Lrue lnLenLlons.
! 8CCM Lhen flled a 8eply and Answer Lo CounLerclalm wlLh
MoLlon for Leave of CourL Lo SubsLlLuLe Annex "A" of Lhe
ComplalnL, whereln lL aLLached Lhe dupllcaLe orlglnal copy
reLrleved from Lhe flle of Lhe noLary publlc.
o 1hls verslon dld noL anymore lnclude Lhe alleged
lnLercalaLed words.
! 8CCM urged Lhe Lrall courL Lo LreaL lLs moLlon as a moLlon for
leave of courL Lo amend and admlL Lhe amended complalnL
pursuanL Lo SecLlon 3, 8ule 10 of Lhe 8ules of CourL.
! eLlLloners meanwhlle malnLaln LhaL 8CCM's cause of acLlon
was solely and prlnclpally founded on Lhe alleged falslfled
documenL orlglnally marked as Lhe Annex. 1hus, Lhe wlLhdrawal
of Lhe documenL resulLs ln Lhe auLomaLlc wlLhdrawal of Lhe
whole complalnL on Lhe ground LhaL Lhere ls no more cause of
acLlon Lo be malnLalned or enforced by plalnLlff agalnsL
peLlLloners.
o Also, peLlLloners argue LhaL lf Lhe subsLlLuLlon wlll be
allowed, Lhelr defenses LhaL were anchored on Lhe
alleged falslfled copy of Lhe AgreemenL would be
gravely affecLed.

4??5@? 3: 8@ #@?:AB@=>
1. WheLher or noL lL was proper for Lhe courL Lo allow Lhe
subsLlLuLlon of Lhe falslfled documenL by relylng on Lhe
provlslon of secLlon 3, rule 10 of Lhe rules of CourL.

#@?:A534:%? ,%= ,#!5;@%3?
4??5@ ' " WheLher or noL lL was proper for Lhe courL Lo allow Lhe
subsLlLuLlon of Lhe falslfled documenL by relylng on Lhe provlslon of
secLlon 3, rule 10 of Lhe rules of CourL " ?LS.

;,C:# 7:4%3 '> 1he rule wlLh regard Lo acLlonable documenLs ls
?DE0F&G H1 #-ID J whlch sLaLes LhaL when a cause of acLlon ls anchored
on a documenL, lLs subsLance musL be seL forLh, and Lhe orlglnal or a
copy Lhereof shall be aLLached Lo Lhe pleadlng as an exhlblL and deemed
a parL Lhereof.

;,C:# 7:4%3 +> WlLh respecL Lo 8CCM's rlghL Lo amend lLs complalnL,
lncludlng Lhe documenLs annexed LhereLo, ?DE0F&G *1 #-ID '2 of Lhe
8ules of CourL speclflcally allows amendmenL wlLh leave of courL.
Moreover, by vlrLue of Lhe amendmenL of Lhe 8ules ln 1997, an
amendmenL may now subsLanLlally alLer Lhe cause of acLlon or
defense.

;,C:# 7:4%3 *> 1he granLlng of leave of courL Lo amend a pleadlng ls
dlscreLlonary.
And even lf Lhe amendmenL subsLanLlally alLers Lhe cause of
acLlon or defense, such amendmenL could sLlll be allowed when
lL ls soughL Lo serve Lhe hlgher lnLeresL of subsLanLlal [usLlce.
CourLs should be llberal ln allowlng amendmenLs Lo pleadlngs Lo
avold a mulLlpllclLy of sulLs and ln order LhaL Lhe real
conLroversles beLween Lhe parLles are presenLed, Lhelr rlghLs
deLermlned, and Lhe case declded on Lhe merlLs wlLhouL
unnecessary delay.
o lurLhermore, amendmenLs Lo pleadlngs are generally
favored and should be llberally allowed ln furLherance
of [usLlce ln order LhaL every case, may so far as
posslble, be deLermlned on lLs real facLs and ln order Lo
speed up Lhe Lrlal of Lhe case or prevenL Lhe clrculLy of
acLlon and unnecessary expense.
ln Lhe presenL case, Lhere was no fraudulenL lnLenL on Lhe parL
of 8CCM ln submlLLlng Lhe alLered sureLy agreemenL.
o ln facL, Lhe bank admlLLed LhaL lL was a mlsLake on Lhelr
parL Lo have submlLLed lL ln Lhe flrsL place lnsLead of Lhe
orlglnal agreemenL.
!"#"$ &'(!)*+') *",)-.- /0123 4 01256 7..89 .'7:;+"$ -7$#7*('


'7!<)$$) 7::) *9 ,+.")'')=
o 8CCM's counsel had no ldea LhaL whaL lL submlLLed
was Lhe alLered documenL, Lhereby necesslLaLlng Lhe
subsLlLuLlon of Lhe sureLy agreemenL wlLh Lhe orlglnal
Lhereof, ln order LhaL Lhe case would be [udlclously
resolved.

;,C:#3 7:4%3 K> 1he subsLlLuLlon was also ln accordance Lo Lhe besL
evldence rule.
lL ls also a maLLer of boLh prlnclple and pollcy LhaL when Lhe
wrlLLen conLracL ls esLabllshed as Lhe reposlLory of Lhe parLles'
sLlpulaLlons, any oLher evldence ls excluded, and Lhe same
cannoL be used Lo subsLlLuLe for such conLracL, or even Lo alLer
or conLradlcL Lhe laLLer.
1he orlglnal sureLy agreemenL ls Lhe besL evldence LhaL could
esLabllsh Lhe parLles' respecLlve rlghLs and obllgaLlons.
1he 81C merely allowed Lhe amendmenL of Lhe complalnL,
whlch consequenLly lncluded Lhe subsLlLuLlon of Lhe alLered
sureLy agreemenL wlLh a copy of Lhe orlglnal.

;,C:# 7:4%3 (> ConLrary Lo peLlLloners' conLenLlon, Lhey could noL be
pre[udlced by Lhe subsLlLuLlon slnce Lhey can sLlll presenL Lhe
subsLlLuLed documenLs as parL of Lhe evldence of Lhelr afflrmaLlve
defenses.
lurLher, Lhe peLlLloners are noL precluded from flllng Lhe
approprlaLe crlmlnal acLlon agalnsL 8CCM for aLLachlng Lhe
alLered copy of Lhe sureLy agreemenL Lo Lhe complalnL. lL
cannoL Lhus malnLaln LhaL lL was pre[udlced by Lhe
subsLlLuLlon/amendmenL.

L4%,A B@#=493> eLlLlon ls dlsmlssed.

%: ?@7,#,3@ :74%4:%?