ALS 2025 – Block F

Case Brief (Digest)

Details
Case
Docket Number GR Nos. 206841-42 Armando Go vs East Oceanic Leasing and Finance Corporation
Title
Ponente DEL CASTILLO, J. Date January 19, 2018

Topic
Basis of Decisions
 The Court renders decisions which become the last word in any given controversy in the exercise of its judicial
power.
 A valid decision must comply wit Article VIII, Sec 14 of the Constitution. This provision requires all court decisions
to clearly and distinctly present the facts and the law of which the decision is based.

Case Summary
Armando Go (Go) obtained a loan from East Oceanic Leasing and Finance Corporation (East Oceanic) through Theodore
Sy’s (Sy) recommendation and stated that the loan is for Go’s business. However, upon the supposed-to-be date of
encashment of the post-dated checks issued by Go, the checks were dishonored upon presentment and thereafter, Go
failed to make good and pay the same despite East Oceanic’s demand. The case was taken into RTC and the same court
allegedly issued a ruling without concrete reference as to the legal basis and analysis insofar as the collection case is
concerned.

Relevant Facts
 Armando Go obtained a loan from East Oceanic Leasing and Finance Corporation payable in monthly
installments until fully paid as evidenced by a promissory note.
 Go’s loan was approved based on Theodore Sy’s recommendation. He specified that the purpose of the loan was
for Go’s Oriental Bus Lines business.
 Go issued six post-dated checks from Development Bank of the Philippines.
 Checks were dishonored upon presentment. “Account Under Garnished” were stamped at the back of the checks
and as shown by the check return slips.
 Go failed to make good or pay the same until it became due and demandable.
 East Oceanic filed a Complaint against Go for collection with prayer for preliminary attachment. In the latter’s
counterclaim, he argued that the promissory note is void and it failed to comply with BSP’s requirements and SC’s
decisions interpreting the same.
 Meanwhile, East Oceanic filed a Complaint for Damages against Sy due to false report and recommendation
pertaining to the real purpose of Go’s loan application which is to pay off an existing loan and his financial status.
 RTC consolidated the collection and damages cases. Go moved for reconsideration but was later denied.
Subsequently, he filed a Petition for Review on Certiorari before SC.

Issue
 Whether or not the assailed RTC Decision is void for having no basis in fact and in law as regards his civil liability
to East Oceanic.

Held/Rationale
 Yes. The assailed RTC Decision is void for having no basis in fact and in law as regards his civil liability to East
Oceanic.
ALS 2025 – Block F

 The Constitution expressly provides that "[n]o decision shall be rendered by any court without expressing therein
clearly and distinctly the facts and the law on which it is based. No petition for review or motion for reconsideration
of a decision of the court shall be refused due course or denied without stating the basis therefor." This
constitutional mandate is reflected in Section 1, Rule 36 of the Rules of Court which states that:
Sec. 1. Rendition of judgments and final orders. — A judgment or final order determining the merits of the
case shall be in writing personally and directly prepared by the judge, stating clearly and distinctly the
facts and the law on which it is based, signed by him, and filed with the clerk of court.
 Administrative Circular No. 1 dated January 28, 1988 required all judges to make "complete findings of facts in their
decisions, scrutinize closely the legal aspects of the case in the light of the evidence presented, and avoid the
tendency to generalize and to form conclusions without detailing the facts from which such conclusions are deduced."
 In Yao v. Court of Appeals, the Court emphasized that "[t]he parties to a litigation should be informed of how it was
decided, with an explanation of the factual and legal reasons that led to the conclusions of the court.”
 Upon reviewing the RTC decision, it had failed to clearly and distinctly state the facts and law on which it based its
ruling insofar as Go’s civil liability to East Oceanic is concerned. In its decision, RTC concluded that Sy “did not
observe honesty and good faith and was therefore dishonest and in bad faith in the performance of his duties and is
thus liable to plaintiff for damages.” Moreover, the issues were resolved but these issues pertain to solely the
damages case and not the collection case.
 The assailed RTC decision is void insofar as the collection case is concerned. It does not contain evidence analysis
regarding the Go’s loan or legal basis reference in arriving at Go’s civil liability. RTC failed to meet the standard set in
Section 14, Article VIII of the Constitution, and in so doing, deprived Go of his right to due process "since he was not
accorded a fair opportunity to be heard by a fair and responsible magistrate."
 Case is remanded to RTC for further proceedings.
 Dispositive portion:
WHEREFORE, we GRANT the Petition for Review on Certiorari. The Decision dated July 16, 2012 and the Order
dated April 8, 2013 of the Regional Trial Court, Branch 23, Cebu City, insofar as Civil Case No. CEB18366 is
concerned, are REVERSED and SET ASIDE. The records are hereby REMANDED to said Regional Trial Court for
further proceedings and for the rendition of judgment in accordance with the mandate of Section 14, Article VIII of the
Constitution.