batch 5 commercial

8/21/2019 batch 5 commercial

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1. [Citibank, N.A. (Formerly First National City Bank) vs.Sabeniano, 504 SCRA !"(#00$)%

Actions; Pleadings and Practice; Forum Shopping; Motions forExtension of Time; The Petition for Review would constitute theinitiatory pleading efore the Supreme !ourt" upon the timely #lingof which" the case efore the !ourt commences" much in the sameway a case is initiated y the #ling of a !omplaint efore the trialcourt$and" without such a Petition" there is technically no caseefore the !ourt; A Motion for Extension of Time within which to #lea Petition for Review does not serve the same purpose as thePetition for Review itself%$Although it may seem at #rst glance thatrespondent was simultaneously see&ing recourse from the !ourt ofAppeals and this !ourt" a careful and closer scrutiny of the detailsof the case at ar would reveal otherwise% 't should e recalled thatrespondent did nothing more in (%R% )o% *+,-.+ than to #le withthis !ourt a Motion for Extension of Time within which to #le herPetition for Review% For unexplained reasons" respondent failed tosumit to this !ourt her intended Petition within the reglementary

period% !onse/uently" this !ourt was prompted to issue aResolution" dated *0 )ovemer ,11," declaring (%R% )o% *+,-.+terminated" and the therein assailed !ourt of Appeals 2ecision #naland executory% (%R% )o% *+,-.+" therefore" did not progress andrespondent3s appeal was unperfected% The Petition for Reviewwould constitute the initiatory pleading efore this !ourt" upon thetimely #ling of which" the case efore this !ourt commences; muchin the same way a case is initiated y the #ling of a !omplaintefore the trial court% The Petition for Review estalishes theidentity of parties" rights or causes of action" and relief sought fromthis !ourt" and without such a Petition" there is technically no caseefore this !ourt% The Motion #led y respondent see&ing extension

of time within which to #le her Petition for Review does not servethe same purpose as the Petition for Review itself% Such a Motionmerely presents the important dates and the 4usti#cation for theadditional time re/uested for" ut it does not go into the details ofthe appealed case% 5ithout any particular idea as to theassignments of error or the relief respondent intended to see& fromthis !ourt" in light of her failure to #le her Petition for Review" thereis actually no second case involving the same parties" rights orcauses of action" and relief sought" as that in !A6(%R% !7 )o%+*-01%

Same; Same; Same; !erti#cation Against Forum Shopping;

!ontents; The !erti#cation against Forum Shopping is re/uired to

e attached to the initiatory pleading%$'t should also e noted thatthe !erti#cation against Forum Shopping is re/uired to e attachedto the initiatory pleading" which" in (%R% )o% *+,-.+" should haveeen respondent3s Petition for Review% 't is in that !erti#cationwherein respondent certi#es" under oath" that8 9a: she has notcommenced any action or #led any claim involving the same issuesin any court" triunal or /uasi64udicial agency and" to the est ofher &nowledge" no such other action or claim is pending therein; 9:if there is such other pending action or claim" that she is presentinga complete statement of the present status thereof; and 9c: if sheshould thereafter learn that the same or similar action or claim haseen #led or is pending" she shall report that fact within #ve daystherefrom to this !ourt% 5ithout her Petition for Review" respondenthad no oligation to execute and sumit the foregoing !erti#cationagainst Forum Shopping% Thus" respondent did not violate Rule "Section + of the Revised Rules of !ourt; neither did she mislead this!ourt as to the pendency of another similar case%

Appeals; Findings of fact of the !ourt of Appeals are conclusive

upon the Supreme !ourt; Exceptions%$'t is already a well6settledrule that the 4urisdiction of this !ourt in cases rought efore itfrom the !ourt of Appeals y virtue of Rule


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former%$5hat deserves stressing is that" in this 4urisdiction" thereexists a disputale presumption that the RT! 2ecision wasrendered y the 4udge in the regular performance of his ocialduties% 5hile the said presumption is only disputale" it issatisfactory unless contradicted or overcame y other evidence%Encompassed in this presumption of regularity is the presumptionthat the RT! 4udge" in resolving the case and drafting his 2ecision"reviewed" evaluated" and weighed all the evidence on record% That

the said RT! 4udge is not the same 4udge who heard the case andreceived the evidence is of little conse/uence when the records andtranscripts of stenographic notes 9TS)s: are complete and availalefor consideration y the former%

Evidence; Admissions; 2ocumentary Evidence; Promissory )otes;By the admission of the genuineness and due execution of aninstrument is meant that the party whose signature it ears admitsthat he signed it or that it was signed y another for him with hisauthority" that at the time it was signed it was in words and #guresexactly as set out in the pleading of the party relying on it" that thedocument was delivered" and that any formal re/uisites re/uired y

law" are waived y him; The eCect of an admission is such that inthe case of a promissory note a prima facie case is made for theplaintiC which dispenses with the necessity of evidence on his partand entitles him to a 4udgment on the pleadings unless a specialdefense of new matter" such as payment" is interposed y thedefendant%$Petitioner !itian& did not deny the existence nor/uestioned the authenticity of P)s )o% ,00+? and ,00+ it issuedin favor of respondent for her money mar&et placements% 'n fact" itadmitted the genuineness and due execution of the said P)s" ut/uali#ed that they were no longer outstanding% 'n Dierd v% Rohdeand McMillian" 0, Phil%


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some evidence of payment" the urden of going forward with theevidence$as distinct from the general urden of proof$shifts tothe creditor" who is then under the duty of producing someevidence of non6payment%

Same; 5itnesses; Ta&ing into consideration the sustantial lengthof time etween the transactions and the witnesses3 testimonies"as well as the undeniale fact that an& ocers deal with multiple

clients and process numerous transactions during their tenure" the!ourt is reluctant to give much weight to such an& ocials3testimonies regarding the payment of promissory notes and the useof the proceeds thereof for opening time deposit accounts$the!ourt #nds it implausile that they should rememer" after all theseyears" the particular transaction with respondent involving herpromissory notes and her time deposit accounts%$Before anythingelse" it should e noted that when Mr% Pu4eda3s testimony eforethe RT! was made on *, March *--1 and Mr% Tan3s deposition inDong Hong was conducted on 0 Septemer *--1" more than adecade had passed from the time the transactions they weretestifying on too& place% This !ourt had previously recogni=ed the

frailty and unreliaility of human memory with regards to #guresafter the lapse of #ve years% Ta&ing into consideration thesustantial length of time etween the transactions and thewitnesses3 testimonies" as well as the undeniale fact that an&ocers deal with multiple clients and process numeroustransactions during their tenure" this !ourt is reluctant to givemuch weight to the testimonies of Mr% Pu4eda and Mr% Tan regardingthe payment of P)s )o% ,00+? and ,00+ and the use yrespondent of the proceeds thereof for opening T2 accounts% This!ourt #nds it implausile that they should rememer" after all theseyears" this particular transaction with respondent involving her P)s)o% ,00+? and ,00+ and T2 accounts% Both witnesses did not give

any reason as to why" from among all the clients they had dealtwith and all the transactions they had processed as ocers ofpetitioner !itian&" they specially rememered respondent and herP)s )o% ,00+? and ,00+% Their testimonies li&ewise lac&ed detailson the circumstances surrounding the payment of the two P)s andthe opening of the time deposit accounts y respondent" such asthe date of payment of the two P)s" mode of payment" and themanner and context y which respondent relayed her instructionsto the ocers of petitioner !itian& to use the proceeds of her twoP)s in opening the T2 accounts%

Same; Preponderance of Evidence; 5ords and Phrases;Preponderant evidence means that" as a whole" the evidenceadduced y one side outweighs that of the adverse party%$Aftergoing through the testimonial and documentary evidencepresented y oth sides to this case" it is this !ourt3s assessmentthat respondent did indeed have outstanding loans with petitioner!itian& at the time it eCected the oC6set or compensation on ,+@uly *-- 9using respondent3s savings deposit with petitioner

!itian&:" + Septemer *-- 9using the proceeds of respondent3smoney mar&et placements with petitioner F)!B Finance: and ,?Kctoer *-- 9using respondent3s dollar accounts remitted from!itian&6(eneva:% The totality of petitioners3 evidence as to theexistence of the said loans preponderates over respondent3s%Preponderant evidence means that" as a whole" the evidenceadduced y one side outweighs that of the adverse party%

Ban&s and Ban&ing; !hec&s; Manager3s !hec&s 9M!s: are drawn ythe an&3s manager upon the an& itself and regarded to e asgood as the money it represents%$'t ears to emphasi=e that theproceeds of the loans were paid to respondent in M!s" with the

respondent speci#cally named as payee% M!s chec&s are drawn ythe an&3s manager upon the an& itself and regarded to e asgood as the money it represents% Moreover" the M!s were crossedchec&s" with the words LPayee3s Account Knly%

Same; Same; !rossed !hec&s; A crossed chec& cannot epresented to the drawee an& for payment in cash$the chec& canonly e deposited with the payee3s an& which" in turn" mustpresent it for payment against the drawee an& in the course ofnormal an&ing hours; The crossed chec& can only e depositedand the drawee an& may only pay to another an& in the payee3sor indorser3s account%$'n general" a crossed chec& cannot e

presented to the drawee an& for payment in cash% 'nstead" thechec& can only e deposited with the payee3s an& which" in turn"must present it for payment against the drawee an& in the courseof normal an&ing hours% The crossed chec& cannot e presentedfor payment" ut it can only e deposited and the drawee an&may only pay to another an& in the payee3s or indorser3s account%The eCect of crossing a chec& was descried y this !ourt inPhilippine !ommercial 'nternational Ban& v% !ourt of Appeals" 0+1S!RA


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in payee3s account only% 't is ound to scrutini=e the chec& and to&now its depositors efore it can ma&e the clearing indorsementLall prior indorsements andor lac& of indorsement guaranteed%

Same; Same; Same; Presumptions; (iven that a chec& is more than4ust an instrument of credit used in commercial transactions for italso serves as a receipt or evidence for the drawee an& of thecancellation of the said chec& due to payment" then" the possession

y the drawee an& of the said Manager3s !hec&s 9M!s:" dulystamped LPaid gives rise to the presumption that the saidManager3s !hec&s 9M!s: were already paid out to the intendedpayee%$The crossed M!s presented y petitioner Ban& wereindeed deposited in several diCerent an& accounts and cleared ythe !learing Kce of the !entral Ban& of the Philippines" asevidenced y the stamp mar&s and notations on the said chec&s%The crossed M!s are already in the possession of petitioner!itian&" the drawee an&" which was ultimately responsile for thepayment of the amount stated in the chec&s% (iven that a chec& ismore than 4ust an instrument of credit used in commercialtransactions for it also serves as a receipt or evidence for the

drawee an& of the cancellation of the said chec& due to payment"then" the possession y petitioner !itian& of the said M!s" dulystamped LPaid gives rise to the presumption that the said M!swere already paid out to the intended payee" who was in this case"the respondent%

Same; Same; Same; Same; 't is presumed that private transactionshave een fair and regular" and that the ordinary course ofusiness has een followed%$This !ourt #nds applicale herein thepresumptions that private transactions have een fair and regular"and that the ordinary course of usiness has een followed% Thereis no /uestion that the loan transaction etween petitioner !itian&

and the respondent is a private transaction% The transactionsrevolving around the crossed M!s$from their issuance ypetitioner !itian& to respondent as payment of the proceeds ofher loans; to its deposit in respondent3s accounts with severaldiCerent an&s; to the clearing of the M!s y an independentclearing house; and #nally" to the payment of the M!s y petitioner!itian& as the drawee an& of the said chec&s$are all privatetransactions which shall e presumed to have een fair and regularto all the parties concerned% 'n addition" the an&s involved in theforegoing transactions are also presumed to have followed theordinary course of usiness in the acceptance of the crossed M!s

for deposit in respondent3s accounts" sumitting them for clearing"and their eventual payment and cancellation%

Same; Same; Same; Same; 5here chec&s crossed for payee3saccount only were actually deposited" cleared" and paid" then thepresumption would e that the said chec&s were properly depositedto the account of the payee" who was clearly named as such in thechec&s; The mere fact that the Manager3s !hec&s 9M!s: do not ear

the payee3s signature at the ac& does not negate deposit thereofin her account%$Respondent denied ever receiving M!s )o% ,,11*and ,,?


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deposition" further explained that provisional receipts were issuedwhen payment to the an& was made using chec&s" since thechec&s would still e su4ect to clearing% The purpose for theprovisional receipts was merely to ac&nowledge the delivery of thechec&s to the possession of the an&" ut not yet of payment% Thisan& practice #nds legitimacy in the pronouncement of this !ourtthat a chec&" whether an M! or an ordinary chec&" is not legaltender and" therefore" cannot constitute valid tender of payment% 'n

Philippine Airlines" 'nc% v% !ourt of Appeals" *.* S!RA ++ 9*--1:"this !ourt elucidated that8 Since a negotiale instrument is only asustitute for money and not money" the delivery of such aninstrument does not" y itself" operate as payment 9Sec% *.-" Act,10* on )egs% 'nsts%; Art% *,


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reasonale notice; 9c: 5hen the original consists of numerousaccounts or other documents which cannot e examined in courtwithout great loss of time and the fact sought to e estalishedfrom them is only the general result of the whole; and 9d: 5hen theoriginal is a pulic record in the custody of a pulic ocer or isrecorded in a pulic oce%

Same; Same; Even with respect to documentary evidence" the est

evidence rule applies only when the content of such document isthe su4ect of the in/uiry%$As the afore6/uoted provision states"the est evidence rule applies only when the su4ect of the in/uiryis the contents of the document% The scope of the rule is moreextensively explained thus$But even with respect to documentaryevidence" the est evidence rule applies only when the content ofsuch document is the su4ect of the in/uiry% 5here the issue is onlyas to whether such document was actually executed" or exists" oron the circumstances relevant to or surrounding its execution" theest evidence rule does not apply and testimonial evidence isadmissile 9+ Moran" op% cit%" pp% ?6??; < Martin" op% cit%" p% .:%Any other sustitutionary evidence is li&ewise admissile without

need for accounting for the original% Thus" when a document ispresented to prove its existence or condition it is oCered not asdocumentary" ut as real" evidence% Parol evidence of the fact ofexecution of the documents is allowed 9Dernae=" et al% vs% Mc(rath"etc%" et al%" -* Phil +?+:% x x x

Same; A asic rule of evidence states that Levidence that one didor did not do a certain thing at one time is not admissile to provethat he did or did not do the same or similar thing at another time"ut it may e received to prove a speci#c intent or &nowledge"identity" plan" system" scheme" hait" custom or usage" and theli&e%$5hile the !ourt of Appeals can ta&e 4udicial notice of the

2ecision of its Third 2ivision in the 2y case" it should not havegiven the said case much weight when it rendered the assailed2ecision" since the former does not constitute a precedent% The!ourt of Appeals" in the challenged 2ecision" did not apply anylegal argument or principle estalished in the 2y case ut" rather"adopted the #ndings therein of wrongdoing or misconduct on thepart of herein petitioner !itian& and Mr% Tan% Any #nding ofwrongdoing or misconduct as against herein petitioners should emade ased on the factual ac&ground and pieces of evidencesumitted in this case" not those in another case% 't is apparent thatthe !ourt of Appeals too& 4udicial notice of the 2y case not as alegal precedent for the present case" ut rather as evidence of

similar acts committed y petitioner !itian& and Mr% Tan% A asicrule of evidence" however" states that" LEvidence that one did ordid not do a certain thing at one time is not admissile to provethat he did or did not do the same or similar thing at another time;ut it may e received to prove a speci#c intent or &nowledge"identity" plan" system" scheme" hait" custom or usage" and theli&e% The rationale for the rule is explained thus$The rule isfounded upon reason" pulic policy" 4ustice and 4udicial

convenience% The fact that a person has committed the same orsimilar acts at some prior time aCords" as a general rule" no logicalguaranty that he committed the act in /uestion% This is so ecause"su4ectively" a man3s mind and even his modes of life may change;and" o4ectively" the conditions under which he may #nd himself ata given time may li&ewise change and thus induce him to act in adiCerent way% Besides" if evidence of similar acts are to einvarialy admitted" they will give rise to a multiplicity of collateralissues and will su4ect the defendant to surprise as well as confusethe court and prolong the trial%

Ban&s and Ban&ing; !ompensation; !ompensation ta&es place y

operation of law%$There is little controversy when it comes to theright of petitioner !itian& to compensate respondent3s outstandingloans with her deposit account% As already found y this !ourt"petitioner !itian& was the creditor of respondent for heroutstanding loans% At the same time" respondent was the creditorof petitioner !itian&" as far as her deposit account was concerned"since an& deposits" whether #xed" savings" or current" should econsidered as simple loan or mutuum y the depositor to thean&ing institution% Both dets consist in sums of money% By @une*--" all of respondent3s P)s in the second set had matured andecame demandale" while respondent3s savings account wasdemandale anytime% )either was there any retention or

controversy over the P)s and the deposit account commenced y athird person and communicated in due time to the detorconcerned% !ompensation ta&es place y operation of law"therefore" even in the asence of an expressed authority fromrespondent" petitioner !itian& had the right to eCect" on ,+ @une*--" the partial compensation or oC6set of respondent3soutstanding loans with her deposit account" amounting toP0*"1-%*


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court without further proof of its authenticity%$The 2eeds ofAssignment of the money mar&et placements with petitioner F)!BFinance were notari=ed documents" thus" admissile in evidence%Rule *0," Section 01 of the Rules of !ourt provides that$SE!% 01%Proof of notarial documents%$Every instrument duly ac&nowledgedor proved and certi#ed as provided y law" may e presented inevidence without further proof" the certi#cate of ac&nowledgementeing prima facie evidence of the execution of the instrument or

document involved% Signi#cant herein is this !ourt3s elucidation in2e @esus v% !ourt of Appeals" ,* S!RA 01 9*--0:" which reads$Kn the evidentiary value of these documents" it should e recalledthat the notari=ation of a private document converts it into a pulicone and renders it admissile in court without further proof of itsauthenticity 9@oson vs% Balta=ar" *-< S!RA **< N*--*O:% This is soecause a pulic document duly executed and entered in theproper registry is presumed to e valid and genuine until thecontrary is shown y clear and convincing proof 9Asido vs% (u=man"+ Phil% ?+, N*-*.O; Q%S% vs% Enri/ue=" * Phil% ,


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Mere photocopies of documents are inadmissile pursuant to theest evidence rule% This is especially true when the issue is that offorgery% As a rule" forgery cannot e presumed and must e provedy clear" positive and convincing evidence and the urden of prooflies on the party alleging forgery% The est evidence of a forgedsignature in an instrument is the instrument itself re>ecting thealleged forged signature% The fact of forgery can only eestalished y a comparison etween the alleged forged signature

and the authentic and genuine signature of the person whosesignature is theori=ed upon to have een forged% 5ithout theoriginal document containing the alleged forged signature" onecannot ma&e a de#nitive comparison which would estalish forgery%A comparison ased on a mere xerox copy or reproduction of thedocument under controversy cannot produce reliale results%

Same; Presumptions; 't is presumed that evidence willfullysuppressed y a party would e adverse to said party if theevidence is produced%$Respondent made several attempts to havethe original copy of the pledge produced efore the RT! so as tohave it examined y experts% Iet" despite several Krders y the

RT!" petitioner !itian& failed to comply with the production of theoriginal 2eclaration of Pledge% 't is admitted that !itian&6(enevahad possession of the original copy of the pledge% 5hile petitioner!itian& in Manila and its ranch in (eneva may e separate anddistinct entities" they are still incontestaly related" and etweenpetitioner !itian& and respondent" the former had more in>uenceand resources to convince !itian&6(eneva to return" aleittemporarily" the original 2eclaration of Pledge% Petitioner !itian&did not present any evidence to convince this !ourt that it hadexerted diligent eCorts to secure the original copy of the pledge"nor did it proCer the reason why !itian&6(eneva ostinatelyrefused to give it ac&" when such document would have een very

vital to the case of petitioner !itian&% There is thus no 4usti#cationto allow the presentation of a mere photocopy of the 2eclaration ofPledge in lieu of the original" and the photocopy of the pledgepresented y petitioner !itian& has nil proative value% 'n addition"even if this !ourt cannot ma&e a categorical #nding thatrespondent3s signature on the original copy of the pledge wasforged" it is persuaded that petitioner !itian& willfully suppressedthe presentation of the original document" and ta&es intoconsideration the presumption that the evidence willfullysuppressed would e adverse to petitioner !itian& if produced%

Appeals; Review of matters" even those not assigned as errors inthe appeal" may e authori=ed if the consideration thereof isnecessary in arriving at a 4ust decision of the case" and there is aclose interrelation etween the omitted assignment of error andthose actually assigned and discussed y the appellant%$5hile it istrue that the general rule is that only errors which have een statedin the assignment of errors and properly argued in the rief shall econsidered" this !ourt has also recogni=ed exceptions to the

general rule" wherein it authori=ed the review of matters" eventhose not assigned as errors in the appeal" if the considerationthereof is necessary in arriving at a 4ust decision of the case" andthere is a close interrelation etween the omitted assignment oferror and those actually assigned and discussed y the appellant%Thus" the !ourt of Appeals did not err in awarding the damageswhen it already made #ndings that would 4ustify and support thesaid award%

Ban&s and Ban&ing; Ban&ing is impressed with pulic interest andits #duciary character re/uires high standards of integrity andperformance$a an& is under the oligation to treat the accounts

of its depositors with meticulous care whether such accountsconsist only of a few hundred pesos or of millions of pesos%$Although this !ourt appreciates the right of petitioner !itian& toeCect legal compensation of respondent3s local deposits" as well asits right to the proceeds of P)s )o% ,1*0. and ,1*0- y virtue ofthe notari=ed 2eeds of Assignment" to partly extinguishrespondent3s outstanding loans" it #nds that petitioner !itian& didcommit wrong when it failed to pay and properly account for theproceeds of respondent3s money mar&et placements" evidenced yP)s )o% ,00+? and ,00+" and when it sought the remittance ofrespondent3s dollar accounts from !itian&6(eneva y virtue of ahighly6suspect 2eclaration of Pledge to e applied to the remaining

alance of respondent3s outstanding loans% 't ears to emphasi=ethat an&ing is impressed with pulic interest and its #duciarycharacter re/uires high standards of integrity and performance% Aan& is under the oligation to treat the accounts of its depositorswith meticulous care whether such accounts consist only of a fewhundred pesos or of millions of pesos% The an& must record everysingle transaction accurately" down to the last centavo" and aspromptly as possile% Petitioner !itian& evidently failed to exercisethe re/uired degree of care and transparency in its transactionswith respondent" thus" resulting in the wrongful deprivation of herproperty%

.


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2amages; The award of moral damages is meant to compensatefor the actual in4ury suCered y a party" not to enrich her%$For themental anguish" serious anxiety" esmirched reputation" moralshoc& and social humiliation suCered y the respondent" the awardof moral damages is ut proper% Dowever" this !ourt reduces theamount thereof to P011"111%11" for the award of moral damages ismeant to compensate for the actual in4ury suCered y therespondent" not to enrich her%

C&'CNA*AR',J.:

Kn *? Kctoer ,11?" this !ourt promulgated its 2ecision*in theaove6entitled case" the dispositive portion of which reads

') 7'E5 KF TDE FKRE(K')(" the instant Petition is +AR-/RAN% The assailed 2ecision of the !ourt of Appeals in !A6(%R%)o% +*-01" dated ,? March ,11," as already modi#ed y itsResolution" dated ,1 )ovemer ,11," is herey AFF'R2 3'&2'F'CA'N, as follows

*% P)s )o% ,00+? and ,00+ are C-ARsusisting andoutstanding% Petitioner !itian& is RRto return torespondent the principal amounts of the said P)s"amounting to Three Dundred Eighteen Thousand EightDundred )inety6Seven Pesos and Thirty6Four !entavos9P0*.".-%0


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s8 petitioner F)!B Finance 9principal and interest as of +Septemer *--:

2eposits in respondent3s an& accounts with petitioner!itian&

Proceeds of respondent3s money mar&et placements and

dollar accounts with !itian&6(eneva 9peso e/uivalent as of,? Kctoer *--:

Balance of respondent3s oligation

Respondent" however" denied having any outstanding loans withpetitioner !itian&% She li&ewise denied that she was duly informedof the oC6setting or compensation thereof made y petitioner!itian& using her deposits and money mar&et placements with

petitioners% Dence" respondent sought to recover her deposits andmoney mar&et placements%

Respondent instituted a complaint for UAccounting" Sum of Moneyand 2amagesU against petitioners" doc&eted as !ivil !ase )o%**00?" efore the Regional Trial !ourt 9RT!: of Ma&ati !ity% Aftertrial proper" which lasted for a decade" the RT! rendered a2ecision


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9i: !itian& ))P) Serial )o% 1,00+? 9!ancels andSupersedes ))P) )o% ,,+,?: issued on * March*-" P0*.".-%0< with *


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notes 9P)s: she signed for her loans" as well as sanctioned yArticles *,. to *,-1 of the !ivil !ode% This alternative argument isanchored on the premise that all ranches of petitioner !itian& inthe Philippines and aroad are part of a single worldwide corporateentity and share the same 4uridical personality% 'n connectiontherewith" petitioners deny that they ever admitted that !itian&6Manila and !itian&6(eneva are distinct and separate entities%

Petitioners call the attention of this !ourt to the following provisionfound in all of the P)sexecuted y respondent for her loans

At or after the maturity of this note" or when same ecomes dueunder any of the provisions hereof" any money" stoc&s" onds" orother property of any &ind whatsoever" on deposit or otherwise" tothe credit of the undersigned on the oo&s of !'T'BA)H" )%A% intransit or in their possession" may without notice e applied at thediscretion of the said an& to the full or partial payment of thisnote%

't is the petitioners3 contention that the term U!itian&" )%A%U used

therein should e deemed to refer to all ranches of petitioner!itian& in the Philippines and aroad; thus" giving petitioner!itian& the authority to apply as payment for the P)s evenrespondent3s dollar accounts with !itian&6(eneva% Still proceedingfrom the premise that all ranches of petitioner !itian& should econsidered as a single entity" then it should not matter that therespondent otained the loans from !itian&6Manila and herdeposits were with !itian&6(eneva% Respondent should econsidered the detor 9for the loans: and creditor 9for her deposits:of the same entity" petitioner !itian&% Since petitioner !itian&and respondent were principal creditors of each other" incompliance with the re/uirements under Article *,- of the !ivil

!ode". then the former could have very well used oC6setting orcompensation to extinguish the parties3 oligations to one another%And even without the P)s" oC6setting or compensation was stillauthori=ed ecause according to Article *,.? of the !ivil !ode"U!ompensation ta&es place y operation of law" even though thedets may e payale at diCerent places" ut there shall e anindemnity for expenses of exchange or transportation to the placeof payment%U

Pertinent provisions of Repulic Act )o% .-*" otherwise &nown asthe (eneral Ban&ing Gaw of ,111" governing an& ranches are

reproduced elow

SE!% ,1% #an #ranches. Qniversal or commercial an&s mayopen ranches or other oces within or outside the Philippinesupon prior approval of the #ango $entral%

Branching y all other an&s shall e governed y pertinent laws%

A an& may" su4ect to prior approval of the Monetary Board" useany or all of its ranches as outlets for the presentation andor sale

of the #nancial products of its allied underta&ing or its investmenthouse units%

A an& authori=ed to estalish ranches or other oces shall eresponsile for all usiness conducted in such ranches and ocesto the same extent and in the same manner as though suchusiness had all een conducted in the head oce% A an& and itsranches and oces shall e treated as one unit%

x x x x

SE!% ,% %ransacting #usiness in the &hilippines. The entry offoreign an&s in the Philippines through the estalishment ofranches shall e governed y the provisions of the Foreign Ban&sGierali=ation Act%

The conduct of oCshore an&ing usiness in the Philippines shall egoverned y the provisions of Presidential 2ecree )o% *10


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Residents and citi=ens of the Philippines who are creditors of aranch in the Philippines of a foreign an& shall have preferentialrights to the assets of such ranch in accordance with existinglaws%

Repulic Act )o% ,*" otherwise &nown as the Foreign Ban&sGierali=ation Gaw" lays down the policies and regulationsspeci#cally concerning the estalishment and operation of local

ranches of foreign an&s% Relevant provisions of the said statuteread

Sec% ,% Modes of ,ntr.6 The Monetary Board may authori=e foreignan&s to operate in the Philippine an&ing system through any ofthe following modes of entry8 9i: y ac/uiring" purchasing or owningup to sixty percent 9?1: of the voting stoc& of an existing an&;9ii: y investing in up to sixty percent 9?1: of the voting stoc& of anew an&ing susidiary incorporated under the laws of thePhilippines; or 9iii: y estalishing ranches with full an&ingauthority8 Provided" That a foreign an& may avail itself of only one9*: mode of entry8 Provided" further" That a foreign an& or a

Philippine corporation may own up to a sixty percent 9?1: of thevoting stoc& of only one 9*: domestic an& or new an&ingsusidiary%

Sec% +% )ead *+ce !uarantee. 6 The head oce of foreign an&ranches shall guarantee prompt payment of all liailities of itsPhilippine ranches%

't is true that the afore6/uoted Section ,1 of the (eneral Ban&ingGaw of ,111 expressly states that the an& and its ranches shalle treated as one unit% 't should e pointed out" however" that thesaid provision applies to a universal-or commercial an&"*1dulyestalished and organi=ed as a Philippine corporation in accordancewith Section . of the same statute"**and authori=ed to estalishranches within or outside the Philippines%

The (eneral Ban&ing Gaw of ,111" however" does not ma&e thesame categorical statement as regards to foreign an&s and theirranches in the Philippines% 5hat Section < of the said lawprovides is that in case of a foreign an& with several ranches inthe country" all such branches shall be treated as one unit% As tothe relations etween the local ranches of a foreign an& and itshead oce" Section + of the (eneral Ban&ing Gaw of ,111 and

Section + of the Foreign Ban&s Gierali=ation Gaw provide for a

UDome Kce (uarantee"U in which the head oce of the foreignan& shall guarantee prompt payment of all liailities of itsPhilippine ranches% 5hile the Dome Kce (uarantee is in accordwith the principle that these local ranches" together with its headoce" constitute ut one legal entity" it does not necessarilysupport the view that said principle is true and applicale in allcircumstances%

The Dome Kce (uarantee is included in Philippine statutes clearlyfor the protection of the interests of the depositors and othercreditors of the local ranches of a foreign an&%*,Since the headoce of the an& is located in another country or state" such aguarantee is necessary so as to ring the head oce withinPhilippine 4urisdiction" and to hold the same answerale for theliailities of its Philippine ranches% Dence" the principle of thesingular identity of that the local ranches and the head oce of aforeign an& are more often invo&ed y the clients in order toestalish the accountaility of the head oce for the liailities of itslocal ranches% 't is under such attendant circumstances in whichthe American authorities and 4urisprudence presented y

petitioners in their Motion for Partial Reconsideration wererendered%

)ow the /uestion that remains to e answered is whether theforeign an& can use the principle for a reverse purpose" in order toextend the liaility of a client to the foreign an&3s Philippineranch to its head oce" as well as to its ranches in othercountries% Thus" if a client otains a loan from the foreign an&3sPhilippine ranch" does it asolutely and automatically ma&e theclient a detor" not 4ust of the Philippine ranch" ut also of thehead oce and all other ranches of the foreign an& around theworldV This !ourt rules in the negative%

There eing a dearth of Philippine authorities and 4urisprudence onthe matter" this !ourt" 4ust as what petitioners have done" turns toAmerican authorities and 4urisprudence% American authorities and4urisprudence are signi#cant herein considering that the head oceof petitioner !itian& is located in )ew Ior&" Qnited States ofAmerica 9Q%S%A%:%

Qnli&e Philippine statutes" the American legislation explicitlyde#nes the relations among foreign ranches of an American an&%Section ,+ of the Qnited States Federal Reserve Act*0states that

*0
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Every national an&ing association operating foreign ranches shallconduct the accounts of each foreign ranch independently of theaccounts of other foreign ranches estalished y it and of itshome oce" and shall at the end of each #scal period transfer to itsgeneral ledger the pro#t or loss accrued at each ranch as aseparate item%

!ontrary to petitioners3 assertion that the accounts of !itian&6

Manila and !itian&6(eneva should e deemed as a single accountunder its head oce" the foregoing provision mandates that theaccounts of foreign ranches of an American an& shall econducted independently of each other% Since the head oce ofpetitioner !itian& is in the Q%S%A%" then it is ound to treat itsforeign ranches in accordance with the said provision% 't is only atthe end of its #scal period that the an& is re/uired to transfer to itsgeneral ledger the pro#t or loss accrued at each ranch" ut stillreporting it as a separate item% 't is y virtue of this provision thatthe !ircuit !ourt of Appeals of )ew Ior& declared in &an-American#an and %rust Co. ". ational Cit #an of ew /or*


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(oing ac& to the instant Petition" although this !ourt concedesthat all the Philippine ranches of petitioner !itian& should etreated as one unit with its head oce" it cannot e persuaded todeclare that these Philippine ranches are li&ewise a single unitwith the (eneva ranch% 't would e stretching the principle wayeyond its intended purpose%

Therefore" this !ourt maintains its original position in the 2ecision

that the oC6setting or compensation of respondent3s loans with!itian&6Manila using her dollar accounts with !itian&6(enevacannot e eCected% The parties cannot e considered principalcreditor of the other% As for the dollar accounts" respondent was thecreditor and !itian&6(eneva was the detor; and as for theoutstanding loans" petitioner !itian&" particularly !itian&6Manila"was the creditor and respondent was the detor% Since legalcompensation was not possile" petitioner !itian& could only userespondent3s dollar accounts with !itian&6(eneva to li/uidate herloans if she had expressly authori=ed it to do so y contract%

Respondent cannot e deemed to have authori=ed the use of her

dollar deposits with !itian&6(eneva to li/uidate her loans withpetitioner !itian& when she signed the P)s*?for her loans whichall contained the provision that

At or after the maturity of this note" or when same ecomes dueunder any of the provisions hereof" any money" stoc&s" onds" orother property of any &ind whatsoever" on deposit or otherwise" tothe credit of the undersigned on the oo&s of !'T'BA)H" )%A% intransit or in their possession" may without notice e applied at thediscretion of the said an& to the full or partial payment of thisnote%

As has een estalished in the preceding discussion" U!itian&")%A%U can only refer to the local ranches of petitioner !itian&together with its head oce% Qnless there is any showing thatrespondent understood and expressly agreed to a more far6reaching interpretation" the reference to !itian&" )%A% cannot eextended to all other ranches of petitioner !itian& all over theworld% Although theoretically" oo&s of the ranches form part ofthe oo&s of the head oce" operationally and practically" eachranch maintains its own oo&s which shall only e later integratedand alanced with the oo&s of the head oce% Thus" it is verypossile to identify and segregate the oo&s of the Philippineranches of petitioner !itian& from those of !itian&6(eneva" and

to limit the authority granted for application as payment of the P)sto respondent3s deposits in the oo&s of the former%

Moreover" the P)s can e considered a contract of adhesion" theP)s eing in standard printed form prepared y petitioner !itian&%(enerally" stipulations in a contract come aout after delieratedrafting y the parties thereto" there are certain contracts almostall the provisions of which have een drafted only y one party"

usually a corporation% Such contracts are called contracts ofadhesion" ecause the only participation of the party is the axingof his signature or his UadhesionU thereto% This eing the case" theterms of such contract are to e construed strictly against the partywhich prepared it%*

As for the supposed 2eclaration of Pledge of respondent3s dollaraccounts with !itian&6(eneva as security for the loans" this !ourtstands #rm on its ruling that the non6production thereof is fatal topetitioners3 cause in light of respondent3s claim that her signatureon such document was a forgery% 't ears to note that the originalof the 2eclaration of Pledge is with !itian&6(eneva" a ranch of

petitioner !itian&% As etween respondent and petitioner !itian&"the latter has etter access to the document% The constant excuseforwarded y petitioner !itian& that !itian&6(eneva refused toreturn possession of the original 2eclaration of Pledge to !itian&6Manila only supports this !ourt3s #nding in the precedingparagraphs that the two ranches are actually operating separatelyand independently of each other%

Further" petitioners &eep playing up the fact that respondent" at theeginning of the trial" refused to give her specimen signatures tohelp estalish whether her signature on the 2eclaration of Pledgewas indeed forged% Petitioners seem to forget that suse/uently"

respondent" on advice of her new counsel" already oCered tocooperate in whatever manner so as to ring the original2eclaration of Pledge efore the RT! for inspection% The exchangeof the counsels for the opposing sides during the hearing on ,< @uly*--* efore the RT! reveals the apparent willingness ofrespondent3s counsel to underta&e whatever course of actionnecessary for the production of the contested document" and theevasive" non6committal" and uncooperative attitude of petitioners3counsel%*.

Gastly" this !ourt3s ruling stri&ing down the 2eclaration of Pledge isnot entirely ased on respondent3s allegation of forgery% 'n its

*+
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2ecision" this !ourt already extensively discussed why it found thesaid 2eclaration of Pledge highly suspicious and irregular" to wit

First of all" it escapes this !ourt why petitioner !itian& too& care tohave the 2eeds of Assignment of the P)s notari=ed" yet left the2eclaration of Pledge unnotari=ed% This !ourt would thin& thatpetitioner !itian& would ta&e greater cautionary measures withthe preparation and execution of the 2eclaration of Pledge ecause

it involved respondent3s Uall present and future #duciaryplacementsU with a !itian& ranch in another country" speci#cally"in (eneva" Swit=erland% 5hile there is no express legal re/uirementthat the 2eclaration of Pledge had to e notari=ed to e eCective"even so" it could not en4oy the sameprima faciepresumption ofdue execution that is extended to notari=ed documents" andpetitioner !itian& must discharge the urden of proving dueexecution and authenticity of the 2eclaration of Pledge%

Second" petitioner !itian& was unale to estalish the date whenthe 2eclaration of Pledge was actually executed% The photocopy ofthe 2eclaration of Pledge sumitted y petitioner !itian& efore

the RT! was undated% 't presented only a photocopy of the pledgeecause it already forwarded the original copy thereof to !itian&6(eneva when it re/uested for the remittance of respondent3s dollaraccounts pursuant thereto% Respondent" on the other hand" wasale to secure a copy of the 2eclaration of Pledge" certi#ed y anocer of !itian&6(eneva" which ore the date ,< Septemer*--% Respondent" however" presented her passport and planetic&ets to prove that she was out of the country on the said dateand could not have signed the pledge% Petitioner !itian& insistedthat the pledge was signed efore ,< Septemer *--" ut couldnot provide an explanation as to how and why the said date waswritten on the pledge% Although Mr% Tan testi#ed that the

2eclaration of Pledge was signed y respondent personally eforehim" he could not give the exact date when the said signing too&place% 't is important to note that the copy of the 2eclaration ofPledge sumitted y the respondent to the RT! was certi#ed y anocer of !itian&6(eneva" which had possession of the originalcopy of the pledge% 't is dated ,< Septemer *--" and this !ourtshall aide y the presumption that the written document is trulydated% Since it is undeniale that respondent was out of the countryon ,< Septemer *--" then she could not have executed thepledge on the said date%

Third" the 2eclaration of Pledge was irregularly #lled6out% Thepledge was in a standard printed form% 't was constituted in favor of!itian&" )%A%" otherwise referred to therein as the Ban&% 't shoulde noted" however" that in the space which should have named thepledgor" the name of petitioner !itian& was typewritten" to wit

The pledge right herewith constituted shall secure all claims whichthe Ban& now has or in the future ac/uires against !itian&" )%A%"

Manila 9full name and address of the 2etor:" regardless of thelegal cause or the transaction 9for example current account"securities transactions" collections" credits" payments" documentarycredits and collections: which gives rise thereto" and includingprincipal" all contractual and penalty interest" commissions"charges" and costs%

The pledge" therefore" made no sense" the pledgor and pledgeeeing the same entity% 5as a mista&e made y whoever #lled6outthe formV Ies" it could e a possiility% )onetheless" considering thevalue of such a document" the mista&e as to a signi#cant detail inthe pledge could only e committed with gross carelessness on the

part of petitioner !itian&" and raised serious douts as to theauthenticity and due execution of the same% The 2eclaration ofPledge had passed through the hands of several an& ocers in thecountry and aroad" yet" surprisingly and implausily" no onenoticed such a glaring mista&e%

Gastly" respondent denied that it was her signature on the2eclaration of Pledge% She claimed that the signature was a forgery%5hen a document is assailed on the asis of forgery" the estevidence rule applies

Basic is the rule of evidence that when the su4ect of in/uiry is thecontents of a document" no evidence is admissile other than theoriginal document itself except in the instances mentioned inSection 0" Rule *01 of the Revised Rules of !ourt% Mere photocopiesof documents are inadmissile pursuant to the est evidencerule% This is especially true when the issue is that of forgery.

As a rule" forgery cannot e presumed and must e proved yclear" positive and convincing evidence and the urden of proof lieson the party alleging forgery% The est evidence of a forgedsignature in an instrument is the instrument itself re>ecting thealleged forged signature% The fact of forgery can only e

estalished y a comparison etween the alleged forged signature*?


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and the authentic and genuine signature of the person whosesignature is theori=ed upon to have een forged% 5ithout theoriginal document containing the alleged forged signature" onecannot ma&e a de#nitive comparison which would estalish forgery%A comparison ased on a mere xerox copy or reproduction of thedocument under controversy cannot produce reliale results%

Respondent made several attempts to have the original copy of the

pledge produced efore the RT! so as to have it examined yexperts% Iet" despite several Krders y the RT!" petitioner !itian&failed to comply with the production of the original 2eclaration ofPledge% 't is admitted that !itian&6(eneva had possession of theoriginal copy of the pledge% 5hile petitioner !itian& in Manila andits ranch in (eneva may e separate and distinct entities" theyare still incontestaly related" and etween petitioner !itian& andrespondent" the former had more in>uence and resources toconvince !itian&6(eneva to return" aleit temporarily" the original2eclaration of Pledge% Petitioner !itian& did not present anyevidence to convince this !ourt that it had exerted diligent eCortsto secure the original copy of the pledge" nor did it proCer the

reason why !itian&6(eneva ostinately refused to give it ac&"when such document would have een very vital to the case ofpetitioner !itian&% There is thus no 4usti#cation to allow thepresentation of a mere photocopy of the 2eclaration of Pledge inlieu of the original" and the photocopy of the pledge presented ypetitioner !itian& has nil proative value% 'n addition" even if this!ourt cannot ma&e a categorical #nding that respondent3ssignature on the original copy of the pledge was forged" it ispersuaded that petitioner !itian& willfully suppressed thepresentation of the original document" and ta&es into considerationthe presumption that the evidence willfully suppressed would eadverse to petitioner !itian& if produced%

As far as the 2eclaration of Pledge is concerned" petitioners failedto sumit any new evidence or argument that was not alreadyconsidered y this !ourt when it rendered its 2ecision%

As to the "alue of the dollar deposits in Citiban-!ene"a orderedrefunded to respondent

'n case petitioners are still ordered to refund to respondent theamount of her dollar accounts with !itian&6(eneva" petitionerseseech this !ourt to ad4ust the nominal values of respondent3sdollar accounts andor her overdue peso loans y using the values

of the currencies stipulated at the time the oligations wereestalished in *--" to address the alleged ine/uitaleconse/uences resulting from the extreme and extraordinarydevaluation of the Philippine currency that occurred in the course ofthe Asian crisis of *--% Petitioners ase their re/uest on Article*,+1 of the !ivil !ode which reads" U'n case an extraordinaryin>ation or de>ation of the currency stipulated should supervene"the value of the currency at the time of the estalishment of theoligation shall e the asis of payment" unless there is anagreement to the contrary%U

't is well6settled that Article *,+1 of the !ivil !ode ecomesapplicale only when there is extraordinary in>ation or de>ation ofthe currency% 'n>ation has een de#ned as the sharp increase ofmoney or credit or oth without a corresponding increase inusiness transaction% There is in>ation when there is an increase inthe volume of money and credit relative to availale goodsresulting in a sustantial and continuing rise in the general pricelevel%*-'n $ingson ". Calte4 5&hilippines6 0nc.",1this !ourt alreadyprovided a discourseas to what constitutes as extraordinary

in>ation or de>ation of currency" thus

5e have held extraordinary in>ation to exist when there is adecrease or increase in the purchasing power of the Philippinecurrency which is unusual or eyond the common >uctuation in thevalue of said currency" and such increase or decrease could nothave een reasonaly foreseen or was manifestly eyond thecontemplation of the parties at the time of the estalishment of theoligation%

An example of extraordinary in>ation" as cited y the !ourtin (ilipino &ipe and (oundr Corporation "s. A7A$A"supra" is that

which happened to the deutschmarin *-,1% Thus8

UMore recently" in the *-,1s" (ermany experienced a case ofhyperin>ation% 'n early *-,*" the value of the (erman mar& was


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could rush out and exchange their money for something of valueefore what little purchasing power was left dissolved in theirhands% Some wor&ers tried to eat the constantly rising prices ythrowing their money out of the windows to their waiting wives"who would rush to unload the nearly worthless paper% A postagestamp cost millions of mar&s and a loaf of read" illions%U 9SidneyRuterg" 8%he Mone #alloon8" )ew Ior&8 Simon and Schuster"*-+" p% *-" cited in 8,conomics An 0ntroduction8y 7illegas Aola" 0rd ed%:

The supervening of extraordinary in>ation is never assumed% Theparty alleging it must lay down the factual asis for the applicationof Article *,+1%

Thus" in the (ilipino &ipecase" the !ourt ac&nowledged that thevoluminous records and statistics sumitted y plaintiC6appellantproved that there has een a decline in the purchasing power ofthe Philippine peso" ut this downward fall cannot e consideredUextraordinaryU ut was simply a universal trend that has notspared our country% Similarly" in )uibonhoa "s. Court of Appeals"

the !ourt dismissed plaintiC6appellantXs unsustantiated allegationthat the A/uino assassination in *-.0 caused uilding andconstruction costs to doule during the period @uly *-.0 toFeruary *-.ation% The existence of extraordinaryin>ation must e ocially proclaimed y competent authorities"and the only competent authority so far recogni=ed y this !ourt toma&e such an ocial proclamation is the BSP%,,

)either can this !ourt" y merely ta&ing 4udicial notice of the Asiancurrency crisis in *--" already declare that there had eenextraordinary in>ation% 't should e recalled that the Philippinesli&ewise experienced economic crisis in the *-.1s" yet this !ourtdid not #nd that extraordinary in>ation too& place during the said

*.
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period so as to warrant the application of Article *,+1 of the !ivil!ode%

Furthermore" it is incontrovertile that Article *,+1 of the !ivil !odeis ased on e/uitale considerations% Among the maxims of e/uityare 9*: he who see&s e/uity must do e/uity" and 9,: he who comesinto e/uity must come with clean hands% The latter is a fre/uentlystated maxim which is also expressed in the principle that he who

has done ine/uity shall not have e/uity%,0

Petitioner !itian&"hence" cannot invo&e Article *,+1 of the !ivil !ode ecause it doesnot come to court with clean hands% The delay in the recovery ,


20/31

. [Baviera vs. +a7linaan, 515 SCRA 1!0(#00!)%

/.R. No. 1$""0 Febr8ary ", #00!

2 E ! ' S ' K )

SAN9A-/:'RR*, J.:

Before us are two consolidated Petitions for Review on !ertiorariassailing the 2ecisions of the !ourt of Appeals in !A6(%R% SP )o%.0,.*and in !A6(%R% SP )o% .+1.%,

The common factual antecedents of these cases as shown y therecords are8

Manuel Baviera" petitioner in these cases" was the former head ofthe DR Service 2elivery and 'ndustrial Relations of Standard!hartered Ban&6Philippines 9S!B:" one of herein respondents% S!Bis a foreign an&ing corporation duly licensed to engage in an&ing"

trust" and other #duciary usiness in the Philippines% Pursuant toResolution )o% **


21/31

Apparently" S!B did not comply with the aove conditions% 'nstead"as early as *--?" it acted as a stoc& ro&er" soliciting from localresidents foreign securities called U(GKBAG TD'R2 PARTI MQTQAGFQ)2SU 9(TPMF:" denominated in QS dollars% These securities werenot registered with the Securities and Exchange !ommission 9SE!:%These were then remitted outwardly to S!B6Dong Hong and S!B6Singapore%

S!B3s counsel" Romulo Maanta Buenaventura Sayoc and 2elosAngeles Gaw Kce" advised the an& to proceed with the selling ofthe foreign securities although unregistered with the SE!" underthe guise of a Ucustodianship agreement;U and should it e/uestioned" it shall invo&e Section ,0of the (eneral Ban&ing Act9Repulic Act )o%00:%


22/31

'%S% )o% ,1106*1+-6A; and lac&mail and per4ury" doc&eted as '%S%)o% ,1106*,.%

Kn Septemer ,-" ,110" petitioner also #led a complaint for per4uryagainst private respondents Paul Simon Morris and Marivel(on=ales" doc&eted as '%S% )o% ,1106*,.6A%

Kn 2ecemer 8rities Re78lation Co?e

Section +0%* of the Securities Regulation !ode provides8

SE!% +0% 0n"estigations 0n


23/31

+0% *% The !ommission may" in its discretion" ma&e suchinvestigation as it deems necessary to determine whether anyperson has violated or is aout to violate any provision of this !ode"any rule" regulation or order thereunder" or any rule of anExchange" registered securities association" clearing agency" otherself6regulatory organi=ation" and may re/uire or permit any personto #le with it a statement in writing" under oath or otherwise" as the!ommission shall determine" as to all facts and circumstancesconcerning the matter to e investigated% The !ommission maypulish information concerning any such violations and toinvestigate any fact" condition" practice or matter which it maydeem necessary or proper to aid in the enforcement of theprovisions of this !ode" in the prescriing of rules and regulationsthereunder" or in securing information to serve as a asis forrecommending further legislation concerning the matters to whichthis !ode relates8 &ro"ided howe"er" That any person re/uested orsupoenaed to produce documents or testify in any investigationshall simultaneously e noti#ed in writing of the purpose of suchinvestigation8 &ro"ided further" 6at all >riminal >om@laints =orviolations o= t6is Co?e an? t6e im@lementin7 r8les an?re78lations en=or>e? or a?ministere? by t6e Commissions6all be re=erre? to t6e e@artment o= 8sti>e =or@reliminary investi7ation an? @rose>8tion be=ore t6e @ro@er>o8rt;&ro"ided furthermoreThat in instances where the lawallows independent civil or criminal proceedings of violationsarising from the act" the !ommission shall ta&e appropriate actionto implement the same8 &ro"ided :nall; That the investigation"prosecution" and trial of such cases shall e given priority%

The !ourt of Appeals held that under the aove provision" acriminal complaint for violation of any law or rule administered ythe SE! must #rst e #led with the latter% 'f the !ommission #nds

that there is proale cause" then it should refer the case to the2K@% Since petitioner failed to comply with the foregoing proceduralre/uirement" the 2K@ did not gravely ause its discretion indismissing his complaint in '%S% )o% ,11


24/31

investigation designed to secure the respondent from hasty"malicious and oppressive prosecution% A preliminary investigation isessentially an in/uiry to determine whether 9a: a crime has eencommitted; and 9: whether there is proale cause that theaccused is guilty thereof%*?'n &ontetof hereinpulic prosecutors were reached in an aritrary or despotic manner%

The !ourt of Appeals held that petitioner3s evidence is insucientto estalish proale cause for syndicatedestafa% There is noshowing from the record that private respondents herein did inducepetitioner y false representations to invest in the (TPMFsecurities% )or did they act as a syndicate to misappropriate hismoney for their own ene#t% Rather" they invested it in accordancewith his written instructions% That he lost his investment is not theirfault since it was highly speculative%

Records show that pulic respondents examined petitioner3sevidence with care" well aware of their duty to prevent materialdamage to his constitutional right to lierty and fair play%'n $uare3 previously cited" this !ourt made it clear that a pulicprosecutor3s duty is two6fold% Kn one hand" he is ound y his oathof oce to prosecute persons where the complainant3s evidence isample and sucient to showprimafacieguilt of a crime% Iet" onthe other hand" he is li&ewise duty6ound to protect innocentpersons from groundless" false" or malicious prosecution%,,

Dence" we hold that the !ourt of Appeals was correct in dismissing

the petition for review against private respondents and inconcluding that the 2K@ did not act with grave ause of discretiontantamount to lac& or excess of 4urisdiction%

Kn petitioner3s complaint for violation of the Securities Regulation!ode" suce it to state that" as aptly declared y the !ourt ofAppeals" he should have #led it with the SE!" not the 2K@% Again"there is no indication here that in dismissing petitioner3s complaint"the 2K@ acted capriciously or aritrarily%

3&RFR" we Nthe petitions and AFF'R2the assailed2ecisions of the !ourt of Appeals in !A6(%R% SP )o% .0,. and in

!A6(%R% SP )o% .+1.%

!osts against petitioner%

S RR.

,ect this fact" the !T2s were in realitydelivered to it as a security for 2e la !ru=X purchases of its fuelproducts% Any dout as to whether the !T2s were delivered aspayment for the fuel products or as a security has een dissipatedand resolved in favor of the latter y petitionerXs own authori=ed

and responsile representative himself%

'n a letter dated )ovemer ,?" *-., addressed to respondentSecurity Ban&" @%Y% Aranas" @r%" !altex !redit Manager" wrote8 U% % %These certi#cates of deposit were negotiated to us y Mr% Angeldela !ru= to guarantee his purchases of fuel productsU 9Emphasisours%: 1This admission is conclusive upon petitioner" itsprotestations notwithstanding% Qnder the doctrine of estoppel" anadmission or representation is rendered conclusive upon the personma&ing it" and cannot e denied or disproved as against the personrelying thereon% 14A party may not go ac& on his own acts andrepresentations to the pre4udice of the other party who relied upon

them%15

'n the law of evidence" whenever a party has" y his owndeclaration" act" or omission" intentionally and delierately ledanother to elieve a particular thing true" and to act upon suchelief" he cannot" in any litigation arising out of such declaration"act" or omission" e permitted to falsify it% 1$

'f it were true that the !T2s were delivered as payment and not assecurity" petitionerXs credit manager could have easily said so"instead of using the words Uto guaranteeU in the letter afore/uoted%Besides" when respondent an&" as defendant in the court elow"moved for a ill of particularity therein 1!praying" among others"that petitioner" as plaintiC" e re/uired to aver with sucientde#niteness or particularity 9a: the due date or dates ofpament of

the alleged indetedness of Angel de la !ru= to plaintiC and 9:whether or not it issued a receipt showing that the !T2s weredelivered to it y 2e la !ru= aspament of the latterXs allegedindetedness to it" plaintiC corporation opposed the motion% 1"Dadit produced the receipt prayed for" it could have proved" if suchtruly was the fact" that the !T2s were delivered as payment andnot as security% Daving opposed the motion" petitioner now laorsunder the presumption that evidence willfully suppressed would eadverse if produced% 1

batch 5 commercial

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Transcript of batch 5 commercial