Benjamin Evangelista vs. Screenex, Inc.

, Represented by Alexander Yu
G.R. No. 211564; November 20, 2017
Sereno, C.J.

FACTS:

In this petition for review on Certiorari under Rule 45, petitioner Evangelista seeks the
reversal of the Decision of the CA which denied his plea to be released from an
order to pay his alleged civil obligation to private complainant.

In 1991, petitioner Evangelista obtained a loan from respondent Screenex, Inc. As

security for the payment of the loan, petitioner gave two open-dated checks, both
payable to the order of respondent. From the time the checks were issued, they
were held in a safe, kept together with other documents and papers of the company
by Philip Gotuaco, Sr., father-in-law of respondent Yu, until Gotuaco’s death on
November 19, 2004. When the checks were discovered, demand was made to the
petitioner who refused to pay. Respondent thus dated, then deposited said checks
on December 22, 2004. Predictably, the checks were dishonored. The petitioner was
charged with the violation of BP Blg. 22 before the MeTC on August 25, 2005.
Among other defenses, petitioner contends that his obligation is deemed paid since
the check delivered to the respondent had been impaired.

ISSUE:
Has petitioner been discharged from liability on the check when it was dated and
deposited more than 10 years after it was issued undated?

RULING:
Yes, the petitioner is already discharged from liability.

Section 119 of the NIL states that a negotiable instrument is discharged by any act
which will discharge a simple contract for the payment of money. A check, therefore,
is subject to prescription of actions upon a written contract which must be brought
within ten years from the time the right of action accrues (Article 1144, Civil Code).

Barring any extrajudicial or judicial demand that may toll the 10-year prescription
period and any evidence which may indicate another time when the obligation to
pay is due, the cause of action based on a check is reckoned from the date indicated
on the check. If the check is undated, however, the cause of action is reckoned from
the date of the issuance of the check. While the space for the date of the check may be
left blank by the issuer, it must, however, be filled up strictly in accordance with the
authority given to the payee and within a reasonable time.

In this case, the cause of action on the checks has prescribed and thus time-barred. No
written extrajudicial or judicial demand was shown to have been made within the 10
years following their issuance in 1991. Prescription has indeed set in.
 Metropolitan Bank vs. Junnel’s Marketing Corporation
G.R. No. 235511 & 235565; June 20, 2018
Velasco Jr., J.

FACTS:
These are two consolidated appeals filed by petitioners Metropolitan Bank and
Trust Company (Metrobank) and the Bank of Commerce (BOC), appealing the
Decision and Resolution of the CA, which affirmed with modification the Decision of
the RTC finding them jointly liable to respondent Junnel’s Marketing Corporation
(JMC) for payment of a sum of money. JMC discovered an anomaly involving 11
checks it had issued to the orders of Jardine Wines and Spirits (Jardine) and
Premiere Wines (Premiere) on various dates from October 1998 to May 1999. The
subject checks, which were all crossed, amounted to P1,481,292.00, and were
charged against JMC’s current account with Metrobank. It was found that the checks
were deposited with BOC to an account which neither Jardine nor Premiere owned.
JMC filed before the RTC of Pasay City a complaint for sum of money against
Metrobank and BOC. Metrobank posits that it should be absolved because it
exercised absolute diligence in verifying the genuineness of the checks. It argues
that it complied with Section 17 of the PCHC Rules and Regulations and relied on
BOC’s express guarantees. JMC alleges that the wrongful conversion of the checks
was caused by the negligent and unlawful acts of Metrobank and BOC. As a counter-
claim, BOC invokes the application of the Doctrine of Comparative Negligence to
reduce its liability.

ISSUE:
Is Metrobank liable to JMC for the payment of the value of the checks despite
compliance with the PCHC Rules on the collecting bank’s express guarantees?

RULING:
Yes, Metrobank is liable to pay JMC for the payment of the value of the checks, without
prejudice to full reimbursement by BOC. The SC ruled in Bank of America vs.
Associated Citizens Bank that the liability of the drawee bank to the drawer in cases
of unauthorized payment of checks is strict by nature. Once an unauthorized payment
on a check has been made, the resulting liability of the drawee bank to the drawer for
such payment attaches even if the former had acted merely upon the guarantees of a
collecting bank. However, the Metrobank can seek reimbursement from BOC, because
of the latter’s warranties. The doctrine of comparative negligence, in which the drawee
bank and the collecting bank are held jointly liable for the wrongful encashment of
checks on a 60% and 40% ratio, are applicable only to cases where the drawee bank is
found guilty of negligence. In this case, the doctrine is not applicable because
Metrobank only acted upon the guarantees made by BOC under prevailing banking
practices. There is no negligence on the part of Metrobank which will preclude it from
recovering fully from BOC as general indorser. Ergo, Metrobank is liable to pay JMC,
is account holder, the value of the checks wrongfully paid, without prejudice to full
reimbursement from BOC as the negligent collecting bank.
 Luis Juan L. Virata vs. Alejandro Ng Wee
G.R. Nos. 220926, 221058, 221109, 221135 & 221218; July 5, 2017
Velasco Jr., J.

FACTS:
These are consolidated petitions appealing the Decision and the Resolution of the
CA which affirmed the trial court’s judgment declaring petitioners Luis Virata
(Virata), the majority stockholder and Director of Power Merge Corporation (Power
Merge) among others, solidarily liable to Alejandro Ng Wee (Ng Wee), plus interests
and damages. Ng Wee was a valued client of Westmont Bank. Sometime in 1998, he
was enticed by the bank manager to make money placements with Westmont
Investment Corporation (Wincorp), a domestic corporation organized and licensed
to operate as an investment house, and one of the bank's affiliates. Offered to him
were "sans recourse" transactions which paired him up with Power Merge
Corporation (Power Merge) despite its glaring inability to pay back the loans as
shown by its measly subscribed capital. Notably, Wincorp also failed to disclose the
existence of “side agreements” to its investors. In his Complaint, Ng Wee thus
claimed that he fell prey to the intricate scheme of fraud and deceit that was
hatched by Wincorp and Power Merge. Sought to be held personally liable by Ng
Wee, Virata invoked that he may not be held liable for business judgments of Power
Merge on the doctrine of separate juridical personality. The RTC and the CA both
ruled that since Power Merge was merely an alter-ego of Virata, he was solidarily
liable for Power Merge’s liabilities. Hence this appeal.

ISSUE:
May the veil of corporate fiction of Power Merge be pierced to hold Virata liable?

RULING:
Yes, the veil of corporate fiction of Power Merge may be pierced to hold Virata liable.
Concept Builders, Inc. v. NLRC instructs that the distinct personality of a corporation
may be disregarded when the corporation is merely an adjunct, a business conduit or
an alter ego of another corporation. The SC uses a three-pronged test to determine the
application of the alterego theory, namely: (1) Control, not mere majority or complete
stock control, but complete domination, not only of finances but of policy and business
practice in respect to the transaction attacked so that the corporate entity as to this
transaction had at the time no separate mind, will or existence of its own; (2) Such
control must have been used by the defendant to commit fraud or wrong, to
perpetuate the violation of a statutory or other positive legal duty, or dishonest and
unjust act in contravention of plaintiff’s legal right; and, (3) The aforesaid control and
breach of duty must have proximately caused the injury or unjust loss complained of.
In the present case, Virata not only owned majority of the Power Merge shares; he
exercised complete control thereof. He is the company president and owns 374,996 out
of 375,000 of its subscribed capital stock. The clearest indication of all is that Power
Merge never operated to perform its business functions, but for the benefit of Virata.
Therefore, the lower courts did not err when they found that Power Merge was merely
an alter-ego of Virata and correctly pierced the veil.
 International Academy of Management and Economics vs. Litton and Co., Inc.
G.R. No. 191525; December 13, 2017
Sereno, C.J.

FACTS:
This is a Petition for Review on Certiorari under Rule 45 seeking the reversal of the
CA’s decision affirming the RTC’s decision to pierce the veil of petitioner corporation
and execute upon its properties a judgement debt of one of its corporate officers. Litton
had obtained a favorable judgement against Atty. Emmanuel Santos (Santos) for
unlawful detainer before the MeTC which included a judgement for unpaid rents and
damages. The MeTC sheriff, on execution, levied on a piece of real property and
registered in the name of petitioner International Academy of Management and
Economics Incorporated (I/AME). I/AME questioned the levy and claimed that it has
a separate and distinct personality from Santos, and hence, its properties should not
be made to answer for the latter's liabilities. The MeTC annulled the execution but the
RTC reversed and ruled that the levy was valid based on the existence of grounds to
pierce the corporate veil. It found that I/AME was formed shortly after Santos was
adjudge to be liable in the unlawful detainer case and that almost all of his properties
subject to execution were assigned to I/AME. Thus, the RTC ruled that I/AME was
merely Santos’ alter-ego and that the corporation was created to defraud Santos’
creditors. The CA affirmed the RTC, hence this appeal.

ISSUE:
Did the CA err in ruling that the RTC correctly pierced the corporate veil to make the
properties of I/AME answerable for Santos’ liabilities?

RULING:
No, the Supreme Court agrees with the CA that Santos used I/AME as means to
overthrow judicial process and escape his responsibilities to Litton. Alter-ego piercing
is based upon the misuse of the corporate vehicle by an individual for wrongful or
inequitable purposes, and in such case the court merely disregards the corporate
entity and holds the individual responsible for acts knowingly and intentionally done
in the name of the corporation. I/AME is merely an alter ego of Santos. Santos falsely
represented himself as President of I/AME in the Deed of Absolute Sale when he
bought the Makati real property at a time when I/AME had not yet existed.
Uncontroverted facts in this case also reveal the findings of lower court showing
Santos and I/AME as being one and the same person. As in Arcilla vs. Court of
Appeals, Santos (1) was adjudged liable to pay on a judgment against him; (2) became
President of a corporation; (3) formed a corporation to conceal assets which were
supposed to pay for the
judgment against his favor. The doctrine may be applied to execute upon corporate
assets when it is shown by clear and convincing evidence that the judgement debtor
merely formed a corporation to conceal assets which were supposed to pay for the
judgment against him.
 Apex Bancrights Holdings, Inc. vs. Bangko Sentral ng Pilipinas Deposit Corp.
G.R. No. 214866; October 2, 2017
Perlas-Bernabe, J.

FACTS:
In a petition for review on certiorari under Rule 45, petitioner Apex Bancrights
Holdings, Inc. (Apex) appeals the Decision of CA, which affirmed the Resolution of
the Monetary Board of respondent Bangko Sentral ng Pilipinas (BSP) ordering the
liquidation of the Export and Industry Bank (EIB). EIB entered a three-way merger
with Urban Bank, Inc. (UBI) and Urbancorp Investments, Inc. (UII). However, EIB
encountered financial difficulties which prompted the BSP, through the Monetary
Board, to issue a Resolution prohibiting EIB from doing business and placing it
under the receivership of PDIC, in accordance with Sec. 30 of the New Central Bank
Act. Apex, who are stockholders representing the majority stock of EIB, insist that
the Monetary Board must first make its own independent finding that the bank
could no longer be rehabilitated - instead of merely relying on the findings of the
PDIC - before ordering the liquidation of a bank. The BSP however, maintained that
it had ample factual and legal bases to order EIB's liquidation.

ISSUE:
Is the BSP, through the Monetary Board, required to make an independent
determination of whether a bank may still be rehabilitated or not?

RULING:
No, the Monetary Board is not required to make an independent determination of
whether a bank may still be rehabilitated. Nothing in Section 30 of R.A. No. 7653
requires the BSP, through the Monetary Board, to make an independent determination
of whether a bank may still be rehabilitated or not. As expressly stated in the said
provision, once the receiver determines that rehabilitation is no longer feasible, the
Monetary Board is simply obligated to: (a) notify in writing the bank's board of
directors of the same; and (b) direct the PDIC to proceed with liquidation. Here, the
resolution ordering the liquidation of EIB cannot be said to be tainted with grave abuse
of discretion as it was amply supported by the factual circumstances at hand and made
in accordance with prevailing law and jurisprudence. Hence, petitioner is mistaken
to contend that the Monetary Board must make its own independent determination
to affirm the receiver’s findings.
 Banco Filipino Savings and Mortgage Bank vs. Bangko Sentral ng Pilipinas and
the Monetary
Board
G.R. No. 200678; June 04, 2018
Leonen, J.

FACTS:
This is a Petition for Review on Certiorari, appealing the CA’s decision and
resolution ruling that the trial court had no jurisdiction over petitions for certiorari
under Rule 65 assailing the acts of the Bangko Sentral (BSP), particularly of the
Monetary Board (MB). In a controversy involving the existence and legality of
conditions imposed by the respondents on Banco Filipino Savings and Mortgage
Bank (Banco Filipino) for financial assistance, Banco Filipino filed a Petition for
Certiorari with prayer for issuance of TRO before the RTC on October 20, 2010,
assailing the acts of the BSP and MB. The RTC issued the TRO prayed for so the
respondents in turn filed its own petition for certiorari before the CA alleging that
the RTC’s TRO was issued without jurisdiction. While the petition before the CA was
pending, the CA promulgated a decision on a separate case, dated January 27, 2012,
(Separate Case) where it declared that Banco Filipino had been illegally closed. Then
on February 16, 2012, the CA affirmed that the RTC had no jurisdiction over the
original petition for certiorari. Thus, on April 10, 2012, the petitioner filed this appeal
from the CA’s February 16 decision. However, while this appeal was pending, the CA
reconsidered its own ruling on the Separate Case, and ruled that Banco Filipino was
a closed bank under receivership. Thus, considering the turn of events, the
respondents raised the question of whether this present appeal is proper when it
was filed without joining the Philippine Deposit Insurance Corporation (PDIC), as
an indispensable party.

ISSUE:
Can Banco Filipino, as a closed bank under receivership, file a Petition for Review
without joining its statutory receiver, the PDIC, as a party to the case?

RULING:
No, a closed bank under receivership can only sue or be sued through its receiver, the
PDIC. Considering that the receiver has the power to take charge of all the assets of
the closed bank and to institute for or defend any action against it, only the receiver,
in its fiduciary capacity, may sue and be sued on behalf of the closed bank. The
inclusion of the PDIC as a representative party in the case is therefore grounded on its
statutory role as the fiduciary of the closed bank which is authorized to conserve the
latter's property for the benefit of its creditors. Banco Filipino cannot rely on the
January 27, 2012 decision of the CA (on the Separate Case) as the same had not become
final and executory at the time this appeal was filed. Thus, despite the pendency of
such case, Banco Filipino was still deemed to be a closed bank under receivership.
Moreover, it was speculative on petitioner's part to presume the PDIC might not allow
the suit. If the PDIC refused, the PDIC could have been joined as a respondent
(unwilling co-petitioner) Since petitioner’s case involved matters that could have
affected the status of its insolvency, the PDIC’s participation was necessary for the
discharge of its duty as receiver. Ergo, the PDIC should have been joined in Banco
Filipino’s action as Banco Filipino was still presumed to be a closed bank under
receivership.
Spouses Kishore Ladho Chugani and Prisha Kishore Chugani, et al. vs. Philippine
Deposit
Insurance Corporation
G.R. No. 230037; March 19, 2018
Tijam, J.

FACTS:
This is a petition for review on certiorari seeking to correct the CA’s ruling that the
proper forum for the petition for certiorari assailing the PDIC’s denial of a deposit
insurance claim is the CA and not the RTC. Petitioners allege that they had Time
Deposit Accounts with Rural Bank of Mawab (Davao) Inc. (RBMI). Sometime in
September 2011, petitioners came to know that the Monetary Board of the Bangko
Sentral ng Pilipinas placed RBMI under receivership and thereafter closed the bank.
Petitioners thus filed claims for deposit insurance on their time deposits. Respondent
Philippine Deposit Insurance Corporation (PDIC) denied the claims on the following
grounds: 1) based on bank records submitted by RBMI, petitioners' deposit accounts
are not part of RBMI's outstanding deposit liabilities; 2) the time deposits of petitioners
are fraudulent and the Certificates of Time Deposit (CTDs) were not duly issued by
RBMI, but were mere replicas of unissued CTD's in the inventory submitted by RBMI
to PDIC; and 3) the amounts purportedly deposited by the petitioners were credited
to the personal account of as certain Garan, hence, they could not be construed as valid
liabilities of RBMI. Petitioners filed a request for reconsideration of PDIC's denial of
their claim. PDIC however rejected the same. Petitioners thus filed a petition for
certiorari before the RTC but it was dismissed for lack of jurisdiction. The CA likewise
denied the appeal of the petitioners holding that the RTC is correct since the PDIC is
a quasi-judicial agency, a petition for certiorari to assail the PDIC’s denial of a deposit
insurance claim is within the original and exclusive jurisdiction of the CA.

ISSUE:
Did the CA err in holding the the PDIC exercises quasi-judicial power when it denies
deposit insurance claims?

RULING:
No, the CA did not err because the PDIC is a quasi-judicial agency and therefore a
Petition for Certiori to assail its decisions is within the jurisdiction of the CA and not
of the RTC. The PDIC was created by Republic Act (R.A.) No. 3591 on June 22, 1963
as an insurer of deposits in all banks entitled to the benefits of insurance under the
PDIC Charter to promote and safeguard the interests of the depositing public by
way of providing permanent and continuing insurance coverage of all insured
deposits. Based on its charter, the PDIC has the duty to grant or deny claims for
deposit insurance. The PDIC has the power to prepare and issue rules and
regulations to effectively discharge its responsibilities. The power of the PDIC as to
whether it will deny or grant the claim for deposit insurance based on its rules and
regulations partakes of a quasi-judicial function. Also, R.A. No. 3591, as amended,
provides that decisions of the PDIC with respect to deposit insurance shall be final
and executory. Such decisions therefore can only be set aside by a petition for
certiorari.