1.

Teodoro Banas, et al vs. Asia Pacific Finance Corporation

GR. No. 128703, October 18, 2003

Facts: Teodoro Bañas executed a Promissory Note in favor of C. G. Dizon Construction whereby
for value received he promised to pay to the order of C. G. Dizon Construction the sum
of P390,000.00 in installments of “P32,500.00 every 25th day of the month starting from
September 25, 1980 up to August 25, 1981.”Later, C. G. Dizon Construction endorsed with
recourse the Promissory Note to ASIA PACIFIC, and to secure payment thereof, C. G. Dizon
Construction, through its corporate officers, Cenen Dizon, President, and Juliette B. Dizon, Vice
President and Treasurer, executed a Deed of Chattel Mortgage covering three heavy equipment
units of Caterpillar Bulldozer Crawler Tractors Moreover, Cenen Dizon executed a Continuing
Undertaking wherein he bound himself to pay the obligation jointly and severally with C. G. Dizon
Construction.

In compliance thereof, C. G. Dizon Construction made three installment payments to ASIA

PACIFIC for a total of P130,000.00. Thereafter, however, C. G. Dizon Construction defaulted in
the payment of the remaining installments, prompting ASIA PACIFIC to send a Statement of
Account to Cenen Dizon for the unpaid balance of P267,737.50 inclusive of interests and charges,
and P66,909.38 representing attorney’s fees. As the demand was unheeded, ASIA PACIFIC filed
a complaint for a sum of money with prayer for a writ of replevin against Teodoro Bañas, C. G.
Dizon Construction and Cenen Dizon. The trial court issued a writ of replevin against defendant
C. G. Dizon Construction for the surrender of the bulldozer crawler tractors. Of the three bulldozer
crawler tractors, only two were actually turned over by defendants which units were subsequently
foreclosed by ASIA PACIFIC to satisfy the obligation. The two bulldozers were sold both to ASIA
PACIFIC as the highest bidder.
Petitioners insist that ASIA PACIFIC was organized as an investment house which could not
engage in the lending of funds obtained from the public through receipt of deposits. The disputed
Promissory Note, Deed of Chattel Mortgage and Continuing Undertaking were not intended to be
valid and binding on the parties as they were merely devices to conceal their real intention which
was to enter into a contract of loan in violation of banking laws. The Regional Trial Court ruled in
favor of ASIA PACIFIC holding the defendants jointly and severally liable for the unpaid balance
of the obligation under the Promissory Note. The Court of Appeals affirmed the decision of the
trial court

Issues: Whether the disputed transaction between ASIA PACIFIC was engaged in banking
activities.

Held: An investment company refers to any issuer which is or holds itself out as being engaged
or proposes to engage primarily in the business of investing, reinvesting or trading in securities.
As defined in Revised Securities Act, securities “shall include commercial papers evidencing
indebtedness of any person, financial or non-financial entity, irrespective of maturity, issued,
endorsed, sold, transferred or in any manner conveyed to another with or without recourse, such
as promissory notes” Clearly, the transaction between petitioners and respondent was one

1|Page
involving not a loan but purchase of receivables at a discount, well within the purview of
“investing, reinvesting or trading in securities” which an investment company, like ASIA
PACIFIC, is authorized to perform and does not constitute a violation of the General Banking Act.

What is prohibited by law is for investment companies to lend funds obtained from the public
through receipts of deposit, which is a function of banking institutions. But here, the funds
supposedly “lent” to petitioners have not been shown to have been obtained from the public by
way of deposits, hence, the inapplicability of banking laws. Wherefore, the assailed decision of
the Court of Appeals was affirmed.

2.
Phil. Commercial International Bank vs Balmaceda,
658 SCRA 33 (2011)

FACTS:
PCIB filed an action for recovery of sum of money with damages before the RTC against Antonio
Balmaceda, the Branch Manager of its Sta. Cruz, Manila branch. In its complaint, PCIB alleged
that between 1991 and 1993, Balmaceda, by taking advantage of his position as branch manager,
fraudulently obtained and encashed 31 Manager’s checks. PCIB then moved to be allowed to file
an amended complaint to implead Rolando Ramos as one of the recipients of a portion of the
proceeds from Balmaceda’s alleged fraud. PCIB also increased the number of fraudulently
obtained and encashed Manager’s checks to 34 in which the RTC granted.
Since Balmaceda did not file an Answer, he was declared in default. On the other hand, Ramos
filed an Answer denying any knowledge of Balmaceda’s scheme. The RTC then issued a decision
in favor of PCIB, where the RTC found that Balmaceda, took undue advantage of his position and
authority as branch manager and Ramos acted in collusion with Balmaceda. On appeal, the CA
dismissed the complaint against Ramos, holding that no sufficient evidence existed to prove that
Ramos colluded with Balmaceda in the latter’s fraudulent manipulations and thus CA SET ASIDE
the Decision of the trial court insofar as Ramos is concerned. Hence this petition for review on
certiorari, filed by the Philippine Commercial International Bank.

ISSUE: Whether or not Ramos who received a portion of the money that Balmaceda took from
PCIB, should also be held liable for the return of this money to the Bank.

RULING: No, Ramos is not liable.

The Supreme Court PARTIALLY GRANTED the petition and AFFIRMED the decision of the
Court of Appeals dated with the MODIFICATION that the award of moral and exemplary
damages in favor of Rolando N. Ramos is DELETED.
PCIB, as plaintiff, had to prove, by preponderance of evidence, its positive assertion that Ramos
conspired with Balmaceda in perpetrating the latter’s scheme to defraud the Bank. All that PCIB’s
evidence proves is that Balmaceda used Ramos’ name as a payee when he filled up the application
forms for the Manager’s checks. But, as the CA correctly observed, the mere fact that Balmaceda

2|Page
made Ramos the payee on some of the Manager’s checks is not enough basis to conclude that
Ramos was complicit in Balmaceda’s fraud; a number of other people were made payees on the
other Manager’s checks yet PCIB never alleged them to be liable, nor did the Bank adduce any
other evidence pointing to Ramos’ participation that would justify his separate treatment from the
others. Also, while Ramos is Balmaceda’s brother-in-law, their relationship is not sufficient, by
itself, to render Ramos liable, absent concrete proof of his actual participation in the fraudulent
scheme.
The party carrying the burden of proof must establish his case by a preponderance of evidence, or
evidence which, to the court, is more worthy of belief than the evidence offered in opposition. In
Encinas v. National Bookstore, Inc., defined "preponderance of evidence" in the following manner:
"Preponderance of evidence" is the weight, credit, and value of the aggregate evidence on either
side and is usually considered to be synonymous with the term "greater weight of the evidence" or
"greater weight of the credible evidence." Preponderance of evidence is a phrase which, in the last
analysis, means probability of the truth. It is evidence which is more convincing to the court as
worthy of belief than that which is offered in opposition thereto.
Ramos’ participation in Balmaceda’s scheme was not proven by PCIB by preponderance of
evidence. Given that PCIB failed to establish Ramos’ participation in Balmaceda’s scheme, it was
not even necessary for Ramos to provide an explanation for the money he received from
Balmaceda. Even if the evidence adduced by the plaintiff appears stronger than that presented by
the defendant, a judgment cannot be entered in the plaintiff’s favor if his evidence still does not
suffice to sustain his cause of action;25 to reiterate, a preponderance of evidence as defined must
be established to achieve this result.

Simex International Inc. vs Court of Appeals,

GR. No. 880313, March 19, 1990

Facts: Simex International is a private corporation engaged in the exportation of food

products. It buys these products from various local suppliers and then sells them abroad to
the Middle East and the United States. Most of its exports are purchased by the petitioner on
credit. Simex was a depositor of the Far East Savings Bank and maintained a checking
account in its branch in Cubao, Quezon City which issued several checks against its deposit
but was surprised to learn later that they had been dishonored for insufficient funds. As a
consequence, several suppliers sent a letter of demand to the petitioner, threatening
prosecution if the dishonored check issued to it was not made good and also withheld delivery
of the order made by the petitioner. One supplier also cancelled the petitioner’s credit line
and demanded that future payments be made by it in cash or certified check. The petitioner
complained to the respondent bank. Investigation disclosed that the sum of P100,000.00
deposited by the petitioner on May 25, 1981, had not been credited to it. The error was
rectified only a month after, and the dishonored checks were paid after they were re-
deposited. The petitioner then filed a complaint in the then Court of First Instance of Rizal
against the bank for its gross and wanton negligence.

3|Page
 Issue: Whether or not the bank can be held liable for negligence by reason of its unjustified
dishonor of a check

Held: The depositor expects the bank to treat his account with the utmost fidelity whether
such account consists only of a few hundred pesos or of millions. The bank must record every
single transaction accurately, down to the last centavo, and as promptly as possible. This has
to be done if the account is to reflect at any given time the amount of money the depositor
can dispose of as he sees fit, confident that the bank will deliver it as and to whomever he
directs. A blunder on the part of the bank, such as the dishonour of a check without good
reason, can cause the depositor not a little embarrassment if not also financial loss and
perhaps even civil and criminal litigation.

Article 2205 of the Civil Code provides that actual or compensatory damages may be received
“(2) for injury to the plaintiff s business standing or commercial credit.” There is no question
that the petitioner did sustain actual injury as a result of the dishonored checks and that the
existence of the loss having been established “absolute certainty as to its amount is not
required.” 7 Such injury should bolster all the more the demand of the petitioner for moral
damages and justifies the examination by this Court of the validity and reasonableness of the
said claim.

Development Bank of the Philippines vs. Gaurina Agricultural and

Realty Development Corporation,
GR. No. 160758, January 15, 2014

4|Page