G.R. No.

74886 December 8, 1992

PRUDENTIAL BANK vs. IAC, PHILIPPINE RAYON MILLS, INC. and ANACLETO R. CHI.
DAVIDE, JR., J.

Facts:
Philippine Rayon Mills (PRM) entered into a contract with Nissho Co., Ltd. of Japan for the importation of textile
machineries under a five-year deferred payment plan.
To effect payment, PRM applied for a commercial letter of credit with the Prudential Bank and Trust Company in
favor of Nissho.
Upon the arrival of the machineries, the Prudential Bank indorsed the shipping documents to the defendant-
appellant which accepted delivery of the same. To enable the defendant-appellant to take delivery of the
machineries, it executed, by prior arrangement with the Prudential Bank, a trust receipt which was signed by
Anacleto R. Chi in his capacity as President (sic) of defendant-appellant company.
Issue:
Held: