CASE DIGEST

Astrid A. Van de Brug v. Philippine National Bank, G.R. No. 207004, Jun. 6,
2018;

FACTS

The late spouses Romulus and Evelyn Aguilar were borrowing clients of the Philippine National
Bank, Victoria Branch. They secured their sugar crop loans by mortgages over four registered
parcels of land located in Escalante, Negros Occidental, obtained sometime between the late
1970s and the early 1980s. However, they failed to pay their obligations with PNB which
resulted in the foreclosure of the mortgage in 1985 and led to the transfer of ownership of the
four properties to PNB.

Upon the enactment of Republic Act No. 7202 (Sugar Restitution Law) on February 29, 1992, the
late Romulus Aguilar wrote the Philippine National Bank on July 5, 1995, asking the bank to
reconsider the late spouses’ account that had been foreclosed.

The PNB informed the late Evelyn Aguilar dated September 17, 1997 that even though the
subject loan account was covered by RA No. 7202 and had been audited by the Commission on
Audit (COA), the Aguilars were still required to comply with the following matters:
1. to arrange and implement the restructuring of accounts within 60 days of
receipt of notice;
2. to signify her conformity to the computation of the account; and
3. to submit the 10-year crop production for the period 1974/1975 to
1984/1985.

The Aguilars claimed that they complied with the requirements. In response to the Aguilars'
claims, PNB provided them with Statements of Account, the first of which was a COA-audited
statement dated December 15, 1996, and the latest of which was on November 30, 1999, which
revealed a total sum outstanding of P2,236,337.91.

Further, the Aguilars were advised to follow-up the payment for these pieces of realty with the
Land Bank of the Philippines (LBP). They were likewise assured by PNB that if the proceeds from
LBP would exceed the obligations of the late spouses Aguilar, the excess amount would be
returned to them including the subject residential property.

Following the Memorandum of Valuation dated November 23, 1999, the Aguilars sought that
the loan account be restructured. Through his letters, Glenn Aguilar also cited an allegedly
similar case, docketed as Civil Case No. 7212 Sps. Fred and Mildred Pfleider vs. PNB, et al., then
pending before Regional Trial, Branch 45, Bacolod City, where PNB purportedly entered into a
compromise agreement with Sps. Pfleider, despite the consolidation of the foreclosed property
under the bank's name.
A letter from PNB stated that since PNB already owned the properties at the foreclosure sale, it
now has the right to convey the same to the DAR and receive the proceeds from LBP without
any right to the excess proceeds incurring to the Aguilars.

The PNB upheld that the Aguilars have no cause of action against PNB because whatever rights
the Aguilars may have under RA 7202 were already forfeited when they failed to comply with
the requirements.

ISSUE

Whether PNB have an obligation to accord the Aguilars the same treatment as it accorded the
spouses Pfleider regarding the crediting of the VOS or CARP proceeds of their respective
agricultural lots against their respective sugar crop loans covered by RA 7202?

RULING

No. The PNB has no obligation to accord the Aguilars the same treatment as it accorded the
Pfleider spouses.

There are five sources of obligations under Article 1157 of the Civil Code: (1) law; (2) contracts;
(3) quasi-contracts; (4) acts or omissions punishable by law; and (5) quasi-delicts.

Promptly, sources (2), (3), and (4) are inapplicable in this case. The Aguilars are not privies to the
Compromise Agreement between PNB and the spouses Pfleider. Regarding law, as PNB's source
of obligation, the CA correctly determined that the Aguilars are not entitled to restitution under
RA 7202. Therefore, RA 7202 cannot be invoked as a statutory basis to require PNB to treat the
Aguilars similarly to the Pfleider spouses.

The court also pointed out that the accounts of the Pfleider spouses were crop loans and, as a
result, were covered by RA No. 7202, as opposed to the Aguilars' accounts, which included non-
RA No. 7202 accounts. PNB was forced to foreclose the mortgage given that the Aguilars were
delinquent in all of their accounts.
 RAMON E. REYES AND CLARA R. PASTOR, PETITIONERS, VS.
BANCOM DEVELOPMENT CORP., RESPONDENT.

FACTS
The Reyes Group and others signed a Continuing Guaranty in favor of Bancom Development
Corp. The Reyes Group agreed to guarantee that all obligations incurred by Marbella under an
Underwriting Agreement with Bancom will be paid in full and on time. These obligations
included certain Promissory Notes issued by Marbella in favor of Bancom on 24 May 1979
totalling P2,828,140.32.

Marbella was unable to pay back the notes at the time of their maturity. Consequently, it issued
a set of replacement Promissory Note for the increased amount of P2.9 million. It defaulted
again, leading to the execution of a third set for the total amount of P3 million , and finally a
fourth set for the same amount.

For failure to settle the obligations despite repeated demands, Bancom filed a case for damages
with the Makati Regional Trial Court. The case named the Reyes Group members as guarantors
of the loan and Marbella as the principal debtor.

Marbella and the Reyes Group argued that they had been forced to execute the Promissory
Notes and the Continuing Guaranty against their will. Fereit Realty Development Corporation
(Fereit), a sister company of Bancom, obtained loans from Bancom for the development of the
project, but the former soon encountered financial difficulties. The Reyes Group was forced to
enter into a Memorandum of Understanding to take on part of those loans. Marbella, for its
part, was allegedly compelled to assume Fereit's obligation to cause the release of P2.8 million
in receivables that were assigned to State Financing.

Marbella and the Reyes Group provided a document titled Amendment of Memorandum of
Agreement[17] to support their argument that the promissory notes were issued in connection
with Fereit's obligations. In this instrument, Fereit agreed to reimburse Marbella for the P2.8
million the latter had paid, and for all penalties, fees, and charges incurred to obtain additional
financing.

ISSUE

Whether the CA correctly ruled that petitioners are liable to Bancom for (a) the payment of the
loan amounts indicated on the Promissory Notes issued by Marbella; and (b) attorney's fees

RULING
Yes, as guarantors of the loans of Marbella, the Reyes group is liable to Bancom.
The obligations of Marbella and the Reyes Group under the Promissory Notes and the
Continuing Guaranty are plain and unqualified. The obligations of Marbella and the Reyes
Group under the Promissory Notes and the Continuing Guaranty are plain and unqualified.
Marbella committed to paying Bancom the amounts indicated on the given maturity dates.
There is no proof to substantiate the claim that these agreements were not intended to be
legally enforceable. The Reyes Group, on the other hand, promised to assume the liabilities if
any of Marbella's guaranteed obligations were not duly paid on the due date.

The result would be the same whether or not the other agreements mentioned are taken into
consideration. They would still be held liable since the two contracts they cited only establish
the following conditions: (a) Fereit assumed responsibility for causing the release of certain
receivables from State Financing; (b) Marbella assumed performance of the obligation of Fereit
after the latter failed to do so; (c) Bancom would provide Marbella with additional financing for
that purpose, with the obligation to be paid within three years; and (d) Fereit would reimburse
Marbella.

It was clear that Bancom provided Marbella with additional financing on the condition that the
loan would be paid when it was due. Similarly, the latter has obliged itself to pay the specified
amount to Bancom without any conditions. The Promissory Notes issued in favor of Bancom
also reflect Marbella's unequivocal obligation to pay Bancom for the loan amount, plus interest
and penalties. Marbella was also granted the authority to collect reimbursement from Fereit,
an entirely distinct legal entity. Although it was claimed that Bancom had total control over
Fereit's assets and operations, the petitioners failed to present sufficient evidence to support
this assertion.