LICAROS VS GATMAITAN Facts: Abelardo Licaros, decided to make a fud !lacemet "it# A$lo%Asea &ak i t#e '()*+s Licaros, after #a-i$ i-ested, ecoutered tremedous ad ue.!laied difficulties i retrie-i$, ot ol/ t#e iterest or !rofits, but e-e t#e -er/ i-estmets #e #ad !ut i A$lo%Asea Cofroted "it# t#e dire !ros!ect of ot $etti$ back a/ of #is i-estmets, Licaros t#e decide to seek t#e cousel of Atoio 0 Gatmaita Gatmaita -olutaril/ offered to assume t#e !a/met of A$lo%Asea+s idebtedess to Licar Licaros os I order order to effect effectuat uate e ad forma formali1 li1e e t#e !artie !arties+ s+ res!e res!ecti cti-e -e comm commit itme met ts, s, t#e t#e t"o t"o e.ec e.ecut uted ed a ota otari ri1e 1ed d M2MO M2MORA RAN3 N34M 4M OF AGR22M2NT o 5ul/ 6(, '()) T#ereaft T#ereafter, er, Gatmaita Gatmaita !resete !reseted d to A$lo%Asea A$lo%Asea t#e Memorad Memoradum um of A$reemet for t#e !ur!ose of collecti$ t#e !lacemet t#ereat of 7'8*,*** No forma formall res!o res!ose se "as "as e-er e-er made made b/ said said bak bak to eit#e eit#err Licaro Licaross or Gatmaita To date, A$lo%Asea #as ot acted o Gatmaita+s moetar/ claims 2-idetl/, because of #is iabilit/ to collect from A$lo%Asea, Gatmaita did ot bot#er a/more to make $ood #is !romise to !a/ Licaros t#e amout stated i #is !romissor/ ote Licaros, #o"e-er, felt t#at #e #ad a ri$#t to collect o t#e basis of t#e !romissor/ ote re$ardless of t#e outcome of Gatmaita+s Gatmaita+s reco-er/ efforts T#us, Licaros addressed successi-e demad letters to Gatmaita Gatmaita, #o"e-er, did ot accede to t#ese demads Issue: 9N t#e Memoradum of A$reemet bet"ee !etitioer ad res!odet is oe of assi$me assi$met t of credit credit or co-etio co-etioal al subro$ati subro$atio o Co-etio Co-etioal al subro$atio ;eld: A assi$met of credit #as bee defied as t#e !rocess of trasferri$ t#e ri$#t of t#e assi$or to t#e assi$ee "#o "ould t#e #a-e t#e ri$#t to !roceed a$aist t#e debtor T#e assi$met ma/ be doe $ratuitousl/ or oerousl/, i "#ic# case, t#e assi$met #as a effect similar to t#at of a sale O t#e ot#er #ad, subro$atio #as bee defied as t#e trasfer of all t#e ri$#ts of t#e creditor to a t#ird !erso, "#o substitutes #im i all #is ri$#ts It ma/ eit#er be le$al or co-etioal Le$al subro$atio is t#at "#ic# takes !lace "it#out a$reemet but b/ o!eratio of la" because of certai acts Co-etioal subro$atio is t#at "#ic# takes !lace b/ a$reemet of !arties Co-etio Co-etioal al subro$atio subro$atio is ot idetical idetical to assi$me assi$met t of credit credit I t#e former, t#e debtor+s coset is ecessar/< i t#e latter, it is ot re=uired Subro$ Subro$ati atio o e.ti e.ti$ui $uis#e s#ess t#e obli$a obli$atio tio ad $i-es $i-es rise rise to a e" oe< oe< assi$me assi$mett refers refers to t#e same ri$#t "#ic# !asses from oe !erso to aot#er T#e ullit/ of a old obli$atio ma/ be cured b/ subro$atio, suc# t#at a e" obli$atio "ill be !erfectl/ -alid< but t#e ullit/ of a obli$atio is ot remedies b/ t#e assi$met of t#e creditor+s ri$#t to aot#er I a assi$met of credit, t#e coset of t#e debtor is ot ecessar/ i order t#at t#e assi$met ma/ full/ !roduce le$al effects 9#at t#e la" re=uires i a assi$met of credit is ot t#e coset of t#e debtor but merel/ otice to #im as t#e assi$met takes effect ol/ from t#e time #e #as ko"led$e t#ereof A creditor, ma/, t#erefore, -alidl/ assi$ #is credit ad ad its access accessori ories es "it#o "it#out ut t#e debtor debtor+s +s cose coset t O t#e ot#er ot#er #ad, #ad, co-etio co-etioal al subro$ati subro$atio o re=uires re=uires a a$reeme a$reemett amo$ amo$ t#e > !arties !arties cocered ? t#e ori$ial creditor, t#e debtor, ad t#e e" creditor It is a e" cotractual relatio based o t#e mutual a$reemet amo$ all t#e ecessar/ !arties T#us, Article '>*' of t#e Ci-il Code e.!licitl/ states t#at @Co-eti @Co-etioal oal subro$atio subro$atio of a t#ird t#ird !erso !erso re=uires re=uires t#e coset coset of t#e ori$ial !arties ad of t#e t#ird !erso T#e Memoradum of A$reemet dated 5ul/ 6(, '()) "as i t#e ature of a co-etioal subro$atio "#ic# re=uires t#e coset of t#e debtor, A$lo% Asea &ak, for its -alidit/
Gatmaita Gatmaita ad Licaros iteded t#eir a$reeme a$reemett as oe of co-etio co-etioal al subro$atio as it is !lail/ bore b/ a sti!ulatio i t#eir memoradum, to "it: @9;2R2AS, t#e !arties #erei #a-e come to a a$reemet o t#e ature, form ad e.tet of t#eir mutual !restatios "#ic# t#e/ o" record #erei "it# t#e e.!ress coformit/ of t#e t#ird !arties cocered, "#ic# t#ird !art/ is admittedl/ A$lo%Asea &ak ;ad t#e itetio bee merel/ to cofer o a!!ellat t#e status of a mere @assi$ee of a!!ellee+s credit, t#ere is sim!l/ o sese for t#em to #a-e sti!ulated i t#eir a$reemet t#at t#e same is coditioed o t#e @e.!ress coformit/ t#ereto of A$lo%Asea &ak It bears stressi$ t#at t#e subBect Memoradum of A$reemet e.!ressl/ re=uires t#e coset of A$lo%Asea to t#e subro$atio 4!o "#om t#e task of securi$ suc# coset de-ol-es, be it o Licaros or Gatmaita, is of o si$ificace 9#at couts most is t#e #ard realit/ t#at t#ere #as bee a abBect failure to $et A$lo%Asea+s od of a!!ro-al o-er Gatmaita+s bei$ subro$ated i t#e !lace of Licaros T#e absece of suc# coformit/ o t#e !art !art of A$l A$lo% o%As Asea ea, , "#ic "#ic# # is t#er t#ereb eb// made made a !art !art// to t#e t#e same same Memoradu Memoradum m of A$reeme A$reemet, t, !re-eted !re-eted t#e a$reeme a$reemett from becomi$ becomi$ effecti-e, muc# less from bei$ a source of a/ cause of actio for t#e si$atories t#ereto GARCIA VS LLAMAS Facts: O 3ecember 6>, '((, !etitioer ad 3e 5esus borro"ed 0D**,** from res!odet O t#e same da/, t#e/ e.ecuted a !romissor/ ote "#erei t#e/ boud t#emsel-es Boitl/ ad se-erall/ to !a/ t#e loa o or before 5auar/ 6>, '((E "it# a 8 iterest !er mot# After t#e loa #as lo$ bee o-erdue ad des!ite re!eated re!eated demads, demads, !etitioer ad 3e 5esus #a-e failed ad refused to !a/ it< ad b/ reaso of t#eir uBustified refusal, res!odet "as com!elled to e$a$e t#e ser-ices of a cousel 0etitioer a-erred t#at #e assumed o liabilit/ uder t#e !romissor/ ote because #e si$ed it merel/ as a accommodatio !art/ for 3e 5esus< ad alterati-el/, #e is relie-ed from a/ liabilit/ from t#e ote iasmuc# as t#e load #ad bee !aid b/ 3e 5esus b/ meas of a c#eck dated 'E A!ril '((E ad t#e res!odet+s acce!tace o-ated or su!erseded t#e ote Res!odet re!lied t#at t#e loa remaied u!aid for t#e reaso t#at t#e c#eck issued b/ 3e 5esus bouced 0etitioer seeks to e.tricate #imself from t#e obli$atio as Boit ad solidar/ debtor b/ isisti$ t#at o-atio took !lace, eit#er t#rou$# t#e substitutio of 3e 5esus as sole debtor or t#e re!lacemet of t#e !romissor/ ote b/ t#e c#eck Issue: 9N t#ere "as o-atio of t#e obli$atio No ;eld: No-atio is a mode of e.ti$uis#i$ a obli$atio b/ c#a$i$ its obBects or !rici!al obli$atios, b/ substituti$ a e" debtor i !lace of t#e old oe, or b/ subro$ati$ a t#ird !erso to t#e ri$#ts of t#e creditor I $eeral, t#ere are t"o modes of substituti$ t#e !erso of t#e debtor: 'H e.!romisio ad 6H dele$acio I e.!romisio, t#e iitiati-e for t#e c#a$e does ot come from ad ma/ e-e be made "it#out t#e ko"led$e of t#e debtor, sice it cosists of a t#ird !erso+s assum!tio of t#e obli$atio As suc#, it lo$icall/ re=uires t#e coset of t#e t#ird !erso ad t#e creditor I dele$acio, t#e debtor offers, ad t#e creditor acce!ts, a t#ird !erso "#o cosets to t#e substitutio ad assumes t#e obli$atio< t#us, t#e coset of t#ese t#ree !ersos are ecessar/ &ot# modes of substitutio b/ t#e debtor re=uire t#e coset of t#e creditor No-atio ma/ also be e.ticti-e or modificator/ It is e.ticti-e "#e a old obli$atio is termiated b/ t#e creatio of a e" oe t#at takes t#e !lace of t#e former It is merel/ modificator/ "#e t#e old obli$atio susbsists to t#e
e.tet t#at it remais com!atible "it# t#e amedator/ a$reemet 9#et#er e.ticti-e or modificator/, o-atio is made eit#er b/ c#a$i$ t#e obBect or !rici!al coditios, referred to as obBecti-e or real o-atio< or b/ substituti$ t#e !erso of t#e debtor or subro$ati$ a t#ird !erso to t#e ri$#ts of t#e creditor, a act ko" as subBecti-e or !ersoal o-atio For o-atio to take !lace, t#e follo"i$ re=uisites must cocur: ' T#ere must be a !re-ious -alid obli$atio 6 T#e !arties cocered must a a$ree to a e" cotract > T#e old cotract must be e.ti$uis#ed D T#ere must be a -alid e" cotract No-atio ma/ also be e.!ress or im!lied It is e.!ress "#e t#e e" obli$atio declares i ue=ui-ocal terms t#at t#e old obli$atio is e.ti$uis#ed It is im!lied "#e t#e e" obli$atio is icom!atible "it# t#e old oe o e-er/ !oit T#e test of icom!atibilit/ is "#et#er t#e t"o obli$atios ca stad to$et#er, eac# oe "it# its o" ide!edet e.istece I t#e istat case, o o-atio took !lace T#e !arties did ot ue=ui-ocall/ declare t#at t#e old obli$atio #ad bee e.ti$uis#ed b/ t#e issuace ad t#e acce!tace of t#e c#eck, or t#at t#e c#eck "ould take t#e !lace of t#e ote T#ere is o icom!atibilit/ bet"ee t#e !romissor/ ote ad t#e c#eck As t#e CA correctl/ obser-ed, t#e c#eck #ad bee issued !recisel/ to as"er for t#e obli$atio O t#e oe #ad, t#e ote e-ideces t#e loa obli$atio< ad o t#e ot#er, t#e c#eck as"er"s for it -eril/, t#e t"o ca stad to$et#er Neit#er could t#e !a/met of iterests ? "#ic#, i !etitioer+s -ie", also costitutes o-atio ? c#a$e t#e terms ad coditios of t#e obli$atio Suc# !a/met "as alread/ !ro-ided for i t#e !romissor/ ote ad, like t#e c#eck, "as totall/ i accord "it# t#e terms t#ereof Also umeritorious is !etitioer+s ar$umet t#at t#e obli$atio "as o-ated b/ t#e substitutio of debtors I order to c#a$e t#e !erso of t#e debtor, t#e old oe must be e.!ressl/ released from t#e obli$atio, ad t#e t#ird !erso or e" debtor must assume t#e former+s !lace i t#e relatio 9ell% settled is t#e rule t#at o-atio is e-er !resumed Cose=uetl/, t#at "#ic# arises from a !ur!orted c#a$e i t#e !erso of t#e debtor must be clear ad e.!ress It is t#us icumbet o !etitioer to s#o" clearl/ ad ue=ui-ocall/ t#at o-atio #as ideed take !lace I t#e !reset case, !etitioer #as ot s#o" t#at #e "as e.!ressl/ released from t#e obli$atio, t#at a t#ird !erso "as substituted i #is !lace, or t#at t#e Boit ad solidar/ obli$atio "as cacelled ad substituted b/ t#e solitar/ udertaki$ of 3e 5esus Moreo-er, it must be oted t#at for o-atio to be -alid ad le$al, t#e la" re=uires t#at t#e creditor e.!ressl/ coset to t#e substitutio of a e" debtor 3e 5esus "as ot a t#ird !erso to t#e obli$atio From t#e be$ii$, #e "as a Boit ad solidar/ obli$or of t#e 0D**,*** loa< t#us #e ca be released from it ol/ u!o its e.ti$uis#met Res!odet+s acce!tace of #is c#eck did ot c#a$e t#e !erso of t#e debtor, because a Boit ad solidar/ obli$or is re=uired to !a/ t#e etiret/ of t#e obli$atio CALIFORNIA &4S LIN2S, INC -s STAT2 INV2STM2NT ;O4S2, INC GR No 'DE(8* 3ecember '', 6**> Facts: I '(E(, 3elta Motors Cor!oratioMAN 3i-isio 3eltaH a!!lied for fiacial assistace from res!odet State I-estmet ;ouse, Ic SI;IH, a domestic cor!oratio e$a$ed i t#e busiess of =uasi%baki$ for 068,***,***** i t#ree se!arate credit a$reemets 3elta e-etuall/ became idebted to SI;I i t#e amout of 06D,*'*,6(>6 From A!ril '(E( to Ma/ '()*, !etitioer Califoria &us Lies, Ic C&LIH, !urc#ased o istallmet basis >8 uits of MAN 3iesel &uses ad t"o 6H uits of MAN 3iesel Co-ersio 2$ies from 3elta To secure t#e !a/met
of t#e !urc#ase !rice of t#e >8 buses, C&LI ad its !residet, Mr 3ioisio O Llamas, e.ecuted si.tee 'H !romissor/ otes i fa-or of 3elta o I eac# !romissor/ ote, C&LI !romised to !a/ 3elta or order, 06,>'D,*** !a/able i * mot#l/ istallmets "it# iterest at 'D !er aum o I additio to t#e otes, C&LI e.ecuted c#attel mort$a$es o-er t#e >8 buses i 3elta+s fa-or 9#e C&LI defaulted o all !a/mets due, it etered ito a restructuri$ a$reemet o October E, '()' "it# 3elta to co-er its o-erdue obli$atios uder t#e !romissor/ otes o T#e restructuri$ a$reemet !ro-ided for a e" sc#edule of !a/mets of C&LI+s !ast due istallmets, e.tedi$ t#e !eriod to !a/, ad sti!ulati$ dail/ remittace istead of t#e !re-iousl/ a$reed mot#l/ remittace of !a/mets I case of default, 3elta "ould #a-e t#e aut#orit/ to take o-er t#e maa$emet ad o!eratios of C&LI util C&LI ador its !residet remitted ador u!dated C&LI+s !ast due accout C&LI ad 3elta also icreased t#e iterest rate to ' !a ad added a documetatio fee of 6 !a ad a D !a restructuri$ fee 3elta e.ecuted a Cotiui$ 3eed of Assi$met of Recei-ables i fa-or of SI;I as securit/ for t#e !a/met of its obli$atios to SI;I !er t#e credit a$reemets C&LI cotiued #a-i$ trouble meeti$ its obli$atios to 3elta T#is !rom!ted 3elta to t#reate C&LI "it# t#e eforcemet of t#e maa$emet takeo-er clause To !re%em!t t#e take%o-er, C&LI filed a com!lait for iBuctio O Se!tember '8, '()>, !ursuat to t#e Memoradum of A$reemet, 3elta e.ecuted a 3eed of Sale assi$i$ to SI;I fi-e 8H of t#e si.tee 'H !romissor/ otes from Califoria &us Lies, Ic At t#e time of assi$met, t#ese fi-e !romissor/ otes #ad a total -alue of 0','86,)'()* iclusi-e of iterest at 'D !er aum SI;I subse=uetl/ set a demad letter to C&LI re=uiri$ C&LI to remit t#e !a/mets due o t#e fi-e !romissor/ otes directl/ to it C&LI re!lied iformi$ SI;I of Ci-il Case No **6>%0 ad of t#e fact t#at 3elta #ad take o-er its maa$emet ad o!eratios 9#e SI;I "as uable to take !ossessio of t#e buses, SI;I filed a !etitio for reco-er/ of !ossessio "it# !ra/er for issuace of a "rit of re!le-i before t#e RTC T#ereafter, 3elta ad C&LI etered ito a com!romise a$reemet C&LI a$reed t#at 3elta "ould e.ercise its ri$#t to e.traBudiciall/ foreclose o t#e c#attel mort$a$es o-er t#e >8 bus uits o C&LI refused to !a/ SI;I t#e -alue of t#e fi-e !romissor/ otes, cotedi$ t#at t#e com!romise a$reemet "as i full settlemet of all its obli$atios to 3elta icludi$ its obli$atios uder t#e !romissor/ otes SI;I filed a com!lait a$aist C&LI i t#e RTC to collect o t#e fi-e 8H !romissor/ otes "it# iterest at 'D !a SI;I also !ra/ed for t#e issuace of a "rit of !relimiar/ attac#met a$aist t#e !ro!erties of C&LI Issue: 9#et#er t#e Restructuri$ A$reemet dated October E, '()', bet"ee !etitioer C&LI ad 3elta Motors, Cor! o-ated t#e fi-e !romissor/ otes 3elta Motors, Cor! assi$ed to res!odet SI;I ;eld: T#ere "as o o-atio i t#is case T#e restructuri$ a$reemet bet"ee 3elta ad C&LI e.ecuted o October E, '()', s#o"s t#at t#e !arties did ot e.!ressl/ sti!ulate t#at t#e restructuri$ a$reemet o-ated t#e !romissor/ otes Abset a ue=ui-ocal declaratio of e.ti$uis#met of t#e !re%e.isti$ obli$atio, ol/ a s#o"i$ of com!lete icom!atibilit/ bet"ee t#e old ad t#e e" obli$atio "ould sustai a fidi$ of o-atio b/ im!licatio ;o"e-er, i re-ie"i$ its terms /ields o icom!atibilit/ bet"ee t#e !romissor/ otes ad t#e restructuri$ a$reemet T#e restructuri$ a$reemet, istead of cotaii$ !ro-isios @absolutel/ icom!atible "it# t#e obli$atios of t#e Bud$met, e.!ressl/ ratifies !re-ious obli$atios ad cotais !ro-isios for satisf/i$ t#em T#ere "as o c#a$e i t#e obBect of t#e !rior obli$atios T#e restructuri$ a$reemet merel/ !ro-ided for a e" sc#edule of !a/mets ad additioal securit/ $i-i$ 3elta aut#orit/ to take o-er t#e maa$emet ad o!eratios of C&LI i case C&LI fails to !a/ istallmets e=ui-alet to * da/s 9#ere t#e !arties to t#e e" obli$atio e.!ressl/ reco$i1e t#e cotiui$ e.istece ad -alidit/ of t#e old oe, t#ere ca be o o-atio Moreo-er, t#e Court #as ruled t#at
a a$reemet subse=uetl/ e.ecuted bet"ee a seller ad a bu/er t#at !ro-ided for a differet sc#edule ad maer of !a/met, to restructure t#e mode of !a/mets b/ t#e bu/er so t#at it could settle its outstadi$ obli$atio i s!ite of its deli=uec/ i !a/met, is ot tatamout to o-atio
CA correctl/ foud t#at res!odets obli$atio to !a/ t#e balace of t#eir accout "it# !etitioer "as e.ti$uis#ed, !ro tato, b/ t#e deeds of assi$met of credit e.ecuted b/ res!odet Felicidad i fa-or of !etitioer
AGRIFINA AJ4INT2K -s S0O4S2S F2LICI3A3 AN3 RICO TI&ONG GR No 'E*D 3ecember 6*, 6**
No Case la" is t#at, a assi$met "ill, ordiaril/, be iter!reted or costrued i accordace "it# t#e rules of costructio $o-eri$ cotracts $eerall/, t#e !rimar/ obBect bei$ al"a/s to ascertai ad carr/ out t#e itetio of t#e !arties T#is itetio is to be deri-ed from a cosideratio of t#e "#ole istrumet, all !arts of "#ic# s#ould be $i-e effect, ad is to be sou$#t i t#e "ords ad la$ua$e em!lo/ed Ideed, t#e Court must ot $o be/od t#e ratioal sco!e of t#e "ords used i costrui$ a assi$met, "ords s#ould be costrued accordi$ to t#eir ordiar/ meai$, uless somet#i$ i t#e assi$met idicates t#at t#e/ are bei$ used i a s!ecial sese So, if t#e "ords are free from ambi$uit/ ad e.!ressed !lail/ t#e !ur!ose of t#e istrumet, t#ere is o occasio for iter!retatio< but "#ere ecessar/, "ords must be iter!reted i t#e li$#t of t#e !articular subBect matter Ad surroudi$ circumstaces ma/ be cosidered i order to uderstad more !erfectl/ t#e itetio of t#e !arties T#us, t#e obBect to be accom!lis#ed t#rou$# t#e assi$met, ad t#e relatios ad coduct of t#e !arties ma/ be cosidered i costrui$ t#e documet
Facts: O Ma/ , '(((, !etitioer A$rifa filed before RTC a com!lait for sum of moe/ ad dama$es a$aist res!odets o A$rifia alle$ed t#at Felicidad secured loas from #er o se-eral occasios at mot#l/ iterest rates of to E 3es!ite demads, s!ouses Tibo$ failed to !a/ t#eir outstadi$ loas of 0EE>,***,** e.clusi-e of iterests ;o"e-er, s!ouses Tio$ alle$ed t#at t#e/ #ad e.ecuted deeds of assi$met i fa-or of A$rifia amouti$ to 08D,D8( ad t#at t#eir debtors #ad e.ecuted !romissor/ otes i fa-or of A$rifia S!ouses isisted t#at b/ -irtue of t#ese documets, A$rifia became t#e e" collector of t#eir debts A$rifia "as able to collect t#e total amout of 0>*',*** from Felicdad+s debtors S#e tried to collect t#e balace of Felicidad ad "#e t#e latter ree$ed o #er !romise, A$rifia filed a com!lait i t#e office of t#e bara$a/ for t#e collectio of 0EE>,***** T#ere "as o settlemet
... A$rifia alle$ed t#at Felicidad #ad secured loas from #er o se-eral occasios, totali$ 0EE>,*** but t#e s!ouses failed to !a/ des!ite re!eated demads T#e s!ouses, for t#eir !art, admitted t#at t#e/ #ad secured loas from A$rifia but t#e/ assert t#at t#e !roceeds of t#e loa "ere re%let to ot#er borro"ers at #i$#er iterest rates T#e/ like"ise alle$ed t#at t#e/ #ad e.ecuted deeds of assi$met i fa-or of !etitioer, ad t#at t#eir debtors #ad e.ecuted !romissor/ otes i A$rifia+s fa-or It is o" t#e s!ouses+ cotetio t#at re%ledi$ t#e loa resulted i a o-atio of t#e ori$ial obli$atio to A$rifia< as suc#, s#e became t#e e" collector of t#e debtors, ad t#e s!ouses+ obli$atio to !a/ t#e balace #as bee e.ti$uis#ed T#e trial court ruled t#at t#e deeds of assi$met ad !romissor/ otes did ot cotai a/ e.!ress a$reemet to o-ate ad e.ti$uis# Felicidad+s obli$atio T#e CA affirmed "it# modificatio t#e decisio of t#e RTC ad stated t#at, t#e secured loas amout to 0>E,***, ad ot 0EE>,***
Issue: 9#et#er or ot res!odets obli$atio is e.ti$uis#ed t#rou$# t#e assi$met of credit ;eld: No-atio "#ic# cosists i substituti$ a e" debtor dele$adoH i t#e !lace of t#e ori$ial oe dele$ateH ma/ be made e-e "it#out t#e ko"led$e or a$aist t#e "ill of t#e latter but ot "it#out t#e coset of t#e creditor Substitutio of t#e !erso of t#e debtor ma/ be effected b/ dele$acio, meai$, t#e debtor offers, ad t#e creditor dele$atarioH, acce!ts a t#ird !erso "#o cosets to t#e substitutio ad assumes t#e obli$atio T#us, t#e coset of t#ose t#ree !ersos is ecessar/ I t#is kid of o-atio, it is ot eou$# to e.ted t#e Buridical relatio to a t#ird !erso< it is ecessar/ t#at t#e old debtor be released from t#e obli$atio, ad t#e t#ird !erso or e" debtor take #is !lace i t#e relatio 9it#out suc# release, t#ere is o o-atio< t#e t#ird !erso "#o #as assumed t#e obli$atio of t#e debtor merel/ becomes a codebtor or a suret/ If t#ere is o a$reemet as to solidarit/, t#e first ad t#e e" debtor are cosidered obli$ated Boitl/ T#e t#eor/ of o-atio is t#at t#e e" debtor cotracts "it# t#e old debtor t#at #e "ill !a/ t#e debt, ad also to t#e same effect "it# t#e creditor, "#ile t#e latter a$rees to acce!t t#e e" debtor for t#e old Moreo-er, t#e a$reemet must be based o t#e cosideratio of t#e creditors a$reemet to look to t#e e" debtor istead of t#e old
..
Alt#ou$# it #as bee said t#at a ambi$uous or ucertai assi$met s#ould be costrued most strictl/ a$aist t#e assi$or, t#e $eeral rule is t#at a/ ambi$uit/ or ucertait/ i t#e meai$ of a assi$met "ill be resol-ed a$aist t#e !art/ "#o !re!ared it< #ece, if t#e assi$met "as !re!ared b/ t#e assi$ee, it "ill be costrued most strictl/ a$aist #im or #er Oe "#o c#ooses t#e "ords b/ "#ic# a ri$#t is $i-e ou$#t to be #eld to t#e strict iter!retatio of t#em, rat#er t#a t#e ot#er "#o ol/ acce!ts t#em Cosideri$ all t#e fore$oi$, "e fid t#at res!odets still #a-e a balace o t#eir accout to !etitioer i t#e !rici!al amout of 0>>,)D'**
RICAR2 VS CA Facts: 2duardo G Ricar1e "as em!lo/ed as a collector%messe$er b/ Cit/ Ser-ice Cor!oratio, a domestic cor!oratio e$a$ed i messe$erial ser-ices ;e "as assi$ed to t#e mai office of Calte. "#ere #is !rimar/ task "as to collect c#ecks !a/able to Calte. ad deli-er t#em to t#e cas#ier I '((E Calte. filed a crimial com!lait a$aist Ricar1e for estafa t#rou$# falsificatio of commercial documets "#e Calte. disco-ered t#at se-eral c#ecks "ere missi$ ad for$ed ad #a-e subse=uetl/ bee cleared t#rou$#t its de!ositar/ bak 0CI& 4!o furt#er i-esti$atio, it "as foud out t#at t#e cleared c#ecks "ere de!osited i a accout o!eed b/ Ricar1e Mea"#ile, t#e 0CI& credited t#e amout of 08)',66(** to t#e accout of Calte. "it#out iformi$ t#e Cit/ !rosecutor ;ece 6 iformatios for estafa "ere filed a$aist Ricar1e "it# Calte. 0#ili!!ies as t#e !ri-ate com!laiat Ricar1e "as t#e arrai$ed 3uri$ trial, SRMO La" Office !reseted e-idece i be#alf of 0CI&, Ricar1e t#e o!!osed suc# !leadi$ cotedi$ t#at t#e !ri-ate com!laiat is Calte. ad ot 0CI& SRMO t#e coteded t#at "#e 0CI& re%credited t#e amout to Calte. to t#e e.tet of t#e idemit/< 0CI& #ad bee subro$ated to t#e ri$#ts ad iterests of Calte. as !ri-ate com!laiat 0etitioer #o"e-er ar$ues t#at 0CI& caot be subro$ated to t#e ri$#ts of Calte., cosideri$ t#at #e #as o ko"led$e of t#e subro$atio muc# less $a-e #is coset to it Issue: 9ON T#ere is a -alid subro$atio bet"ee 0CI&ak ad Calte. Ruli$: 0etitioer+s ar$umet o subro$atio is mis!laced T#e Court a$rees "it# res!odet 0CI&+s commet t#at !etitioer failed to make a distictio bet"ee le$al ad co-etioal subro$atio Subro$atio is t#e trasfer of all t#e ri$#ts of t#e creditor to a t#ird !erso, "#o substitutes #im i all #is ri$#ts6) It ma/ eit#er be le$al or co-etioal Le$al subro$atio is t#at "#ic# takes !lace "it#out a$reemet but b/ o!eratio of la" because of certai acts6( Istaces of le$al subro$atio are t#ose !ro-ided i Article '>*6 of t#e Ci-il Code Co-etioal subro$atio, o t#e ot#er #ad, is t#at
"#ic# takes !lace b/ a$reemet of t#e !arties>' T#us, !etitioer+s ac=uiescece is ot ecessar/ for subro$atio to take !lace because t#e istat case is oe of le$al subro$atio t#at occurs b/ o!eratio of la", ad "it#out eed of t#e debtor+s ko"led$e T#us, bei$ subro$ated to t#e ri$#t of Calte., 0CI&, t#rou$# cousel, #as t#e ri$#t to iter-ee i t#e !roceedi$s, ad uder substati-e la"s is etitled to restitutio of its !ro!erties or fuds, re!aratio, or idemificatio L23ONIO VS CA0ITOL 32V2LO0M2NT Facts: Ledoio o a certai date obtaied from a Ms 0icac#e t"o loas co-ered b/ !romissor/ otes Subse=uetl/, Ms 0icac#e e.ecuted a Assi$met of Credit i fa-or of Ca!itol 3e-elo!met Cor!oraito 9#e t#e loas became due #o"e-er, !etitioer failed to settle #is idebtedess des!ite Ca!itol+s demads ;ece, Ca!itol istituted a Com!lait for t#e collectio of a sum of moe/ a$aist #erei !etitioer 2d$ar Ledoio Ledoio o t#e ot#er#ad sou$#t t#e dismissal of t#e com!lait a-erri$ t#at Ca!itol #ad o cause of actio a$aist #im as #e e-er coseted or a$reed to t#e said assi$met It is #is cotetio t#at coset of t#e debtor to t#e assi$met of credit is a basicessetial elemet i order for t#e assi$ee to #a-e a cause of actio a$aist t#e debtor Accordi$ to !etitioer, t#e assi$met of credit costitutes co-etioal subro$atio "#ic# re=uires t#e coset of t#e ori$ial !arties to t#e loa cotract, amel/, Ms 0icac#e t#e creditorH ad Ledoio t#e debtorH< ad t#e t#ird !erso, Ca!itolt#e assi$eeH Sice !etitioer e-er $a-e #is coset to t#e assi$met of credit, t#e t#e subro$atio of res!odet i t#e ri$#ts of Ms 0icac#e as creditor b/ -irtue of said assi$met is "it#out force ad effect I su!!ort of said ar$umet, !etitioer i-okes t#e follo"i$ !ro-isios of t#e Ci-il Code ? ART '>** Subro$atio of a t#ird !erso i t#e ri$#ts of t#e creditor is eit#er le$al or co-etioal T#e former is ot !resumed, e.ce!t i cases e.!ressl/ metioed i t#is Code< t#e latter must be clearl/ establis#ed i order t#at it ma/ take effect ART '>*' Co-etioal subro$atio of a t#ird !erso re=uires t#e coset of t#e ori$ial !arties ad t#e t#ird !erso Issue: 9ON t#e coset of Ledoio to t#e assi$met of credit is essetial i order for Ca!itol to #a-e a cause of actio a$aist ;im No Ruli$: T#e trasactio bet"ee Ms 0icac#e ad Ca!itol "as a assi$met of credit ad ot co-etioal subro$atioo-atioH, ad does ot re=uire Ledoio+s coset asdebtor for its -alidit/ ad eforceabilit/ A assi$met of credit #as bee defied as a a$reemet b/ -irtue of "#ic# t#e o"er of a credit ko" as t#e assi$orH, b/ a le$al cause % suc# as sale, datio i !a/met or e.c#a$e or doatio % ad "it#out eed of t#e debtors coset, trasfers t#at credit ad its accessor/ ri$#ts to aot#er ko" as t#e assi$eeH, "#o ac=uires t#e !o"er to eforce it, to t#e same e.tet as t#e assi$or could #a-e eforced it a$aist t#e debtor O t#e ot#er #ad, subro$atio, b/ defiitio, is t#e trasfer of all t#e ri$#ts of t#e creditor to a t#ird !erso, "#o substitutes #im i all #is ri$#ts It ma/ eit#er be le$al or co-etioal Le$al subro$atio is t#at "#ic# takes !lace "it#out a$reemet but b/ o!eratio of la" because of certai acts Co-etioal subro$atio is t#at "#ic# takes !lace b/ a$reemet of !arties Alt#ou$# it ma/ be said t#at t#e effect of t#e assi$met of credit is to subro$ate t#e assi$ee i t#e ri$#ts of t#e ori$ial creditor, t#is Court still caot defiiti-el/ rule t#at assi$met of credit ad co-etioal subro$atio are oe ad t#e same 4der our Code, co-etioal subro$atio is ot idetical to assi$met of credit I t#e former, t#e debtors coset is ecessar/< i t#e latter, it is ot
re=uired Subro$atio e.ti$uis#es a obli$atio ad $i-es rise to a e" oe< "#ile assi$met refers to t#e same ri$#t "#ic# !asses from oe !erso to aot#er T#e ullit/ of a old obli$atio ma/ be cured b/ subro$atio, suc# t#at t#e e" obli$atio "ill be !erfectl/ -alid< but t#e ullit/ of a obli$atio is ot remedied b/ t#e assi$met of t#e creditors ri$#t to aot#er 2m!#asis su!!liedH T#e Courts #as cosistetl/ ad#ered to t#e fore$oi$ distictio bet"ee a assi$met of credit ad a co-etioal subro$atio Suc# distictio is crucial because it "ould determie t#e ecessit/ of t#e debtors coset I a assi$met of credit, t#e coset of t#e debtor is ot ecessar/ i order t#at t#e assi$met ma/ full/ !roduce t#e le$al effects 9#at t#e la" re=uires i a assi$met of credit is ot t#e coset of t#e debtor, but merel/ otice to #im as t#e assi$met takes effect ol/ from t#e time #e #as ko"led$e t#ereof A creditor ma/, t#erefore, -alidl/ assi$ #is credit ad its accessories "it#out t#e debtors coset O t#e ot#er #ad, co-etioal subro$atio re=uires a a$reemet amo$ t#e !arties cocered ? t#e ori$ial creditor, t#e debtor, ad t#e e" creditor It is a e" cotractual relatio based o t#e mutual a$reemet amo$ all t#e ecessar/ !arties VAL2N42LA VS ALAKAAN 32V2LO0M2NT Facts: ala/aa is t#e o"er of a !arcel of lad "#ic# "as bei$ ille$all/ occu!ied b/ !etitioer s!s Vale1uela 4!o disco-er/ of suc#, ala/aa demaded t#e !etitioers to immediatel/ -acate t#e !remises T#e !etitiors #o"e-er e$otiated "it# ala/aa to !urc#ase t#e !ortio of t#e lot t#at t#e/ "ere alread/ occu!/i$ ad b/ -irtue of "#ic#, t#e !arties e.ecuted a Cotract to Sell 0etitioers commeced t#e !a/i$ of mot#l/ istallmets, #o"e-er, u!o t#eir !a/met of oe%#alf of t#e !urc#ase !rice,t#e/ maifested t#eir iabilit/ to !a/ t#e remaii$ balace ad !ro!osed to ala/aa, t#ate substitutio of 5uliet Flores Gilo "#o "as "illi$ to assume t#e !a/met of t#e remaii$ balace !a/able to ala/aa T#ereafter, 5uliet made !a/mets of '*,*** !er mot#t to ala/aa, "#ic# t#e latter acce!ted for ad i be#alf of Gloria Vale1uela T#ereafter, ala/aa demaded t#at S!s Vale1uela !a/ t#eir outstadi$ obli$atio but t#esedemads remaied u#eeded t#us ala/aa filed a Com!lait for Rescissio of Cotract ad 3ama$es a$aist S!s Vale1uela 0etitioers o t#e ot#er#ad claim t#at t#ere "as alread/ a -alid o-atio i t#e !reset case T#e/ a-er t#at t#e CA failed to see t#at t#e ori$ial cotract bet"ee t#e !etitioers ad ala/aa "as altered, c#a$ed, modified ad restructured, as a cose=uece of t#e c#a$e i t#e !erso of t#e !rici!al debtor ad t#e mot#l/ amorti1atio to be !aid for t#e subBect !ro!ert/ 9#e t#e/ a$reed to a mot#l/ amorti1atio of 0'*,***** !er mot#, t#e ori$ial cotract "as c#a$ed< ad ala/aa reco$i1ed 5uliet+s ca!acit/ to !a/, as "ell as #er desi$atio as t#e e" debtor T#e ori$ial cotract "as o-ated ad t#e !rici!al obli$atio to !a/ for t#e remaii$ #alf of t#e subBect !ro!ert/ "as trasferred from !etitioers to 5uliet 9#e ala/aa acce!ted t#e !a/mets made b/ t#e e" debtor, 5uliet, it "ai-ed its ri$#t to rescid t#e !re-ious cotract T#us, t#e actio for rescissio filed b/ ala/aa a$aist t#em, "as ufouded, sice t#e cotract sou$#t to be rescided "as o lo$er i e.istece Issue: 9ON t#ere is o-atio i t#is case No Ruli$: No-atio is t#e e.ti$uis#met of a obli$atio b/ t#e substitutio or c#a$e of t#e obli$atio b/ a subse=uet oe "#ic# e.ti$uis#es or modifies t#e first, eit#er b/ c#a$i$ t#e obBect or !rici!al coditios, or b/ substituti$ aot#er i !lace of t#e debtor, or b/ subro$ati$ a t#ird !erso i t#e ri$#ts of t#e creditor Article '6(6 of t#e Ci-il Code !ro-ides t#at PQi order t#at a obli$atio ma/ be e.ti$uis#ed b/ aot#er "#ic# substitutes t#e same, it is im!erati-e t#at it be so declared i ue=ui-ocal terms, or t#at t#e old ad t#e e" obli$atios be o e-er/ !oit icom!atible "it# eac# ot#erP No-atio is e-er !resumed 0arties to a cotract must e.!ressl/ a$ree t#at t#e/ are abro$ati$ t#eir old cotract i fa-or of a e" oe I t#e absece of a e.!ress a$reemet, o-atio takes !lace ol/ "#e t#e old ad t#e e"
obli$atios are icom!atible o e-er/ !oit T#e test of icom!atibilit/ is "#et#er or ot t#e t"o obli$atios ca stad to$et#er, eac# oe #a-i$ its ide!edet e.istece If t#e/ caot, t#e/ are icom!atible ad t#e latter obli$atio o-ates t#e first T#us, i order t#at a o-atio ca take !lace, t#e cocurrece of t#e follo"i$ re=uisites are idis!esable: 'H T#ere must be a !re-ious -alid obli$atio< 6H T#ere must be a a$reemet of t#e !arties cocered to a e" cotract< >H T#ere must be t#e e.ti$uis#met of t#e old cotract< ad DH T#ere must be t#e -alidit/ of t#e e" cotract I t#e istat case, oe of t#e re=uisites are !reset T#ere is ol/ oe e.isti$ ad bidi$ cotract bet"ee t#e !arties, because ala/aa e-er a$reed to t#e creatio of a e" cotract bet"ee t#em or 5uliet True, !etitioers ma/ #a-e offered t#at t#e/ be substituted b/ 5uliet as t#e e" debtor to !a/ for t#e remaii$ obli$atio Noet#eless, ala/aa did ot ac=uiesce to t#e !ro!osal Its acce!tace of se-eral !a/mets after it demaded t#at !etitioers !a/ t#eir outstadi$ obli$atio did ot modif/ t#eir ori$ial cotract 0etitioers, admittedl/, #a-e bee i default< ad ala/aa+s acce!tace of t#e late !a/mets is, at best, a act of tolerace o t#e !art of ala/aa t#at could ot #a-e modified t#e cotract TOMIM&ANG VS TOMIM&ANG Facts: 0etitioer ad res!odet are sibli$s T#e !etitioer i t#is case "at>ed to reo-ate t#e !ro!ert/ t#eir !arets #as $i-e #im so #e etered ito a loa a$reemet "it# t#e res!odet "it#t t#e a$reemet t#at t#e !etitioer "ill ol/ start !a/i$ after t#e com!letio of t#e reo-atio ;o"e-er due to certai misuderstadi$s, t#e !arties etered ito a e" a$reemet stati$ t#at t#e !etitioer s#all start !a/i$ off t#e loa i a mot#l/ basis ad t#is "as iitiall/ com!lied "it# b/ t#e !etitioer ;o"e-er, "#e aot#er misuderstad arouse bet"ee t#e !arties, t#e !etitioer sto!!ed !a/i$ #is mot#l/ obli$atios t#us !rom!ti$ res!odet to file t#e istad case for t#e !a/met of t#e loa !lus iterest from date of default 0etitioer does ot de/ t#at s#e obtaied a loa from res!odet S#e, #o"e-er, coteds t#at t#e loa is ot /et due ad demadable because t#e sus!esi-e coditio ? t#e com!letio of t#e reo-atio of t#e a!artmet uits % #as ot /et bee fulfilled Issue: 9ON t#e !etitioers obli$atio #as alread/ become due ad demadable Kes Ruli$: T#e e-idece o record clearl/ s#o"s t#at after reo-atio of se-e out of t#e ei$#t a!artmet uits #ad bee com!leted, !etitioer ad res!odet a$reed t#at t#e former s#all alread/ start maki$ mot#l/ !a/mets o t#e loa e-e if reo-atio o t#e last uit "as still !edi$ 2-idetl/, b/ -irtue of t#e subse=uet a$reemet, t#e !arties mutuall/ dis!esed "it# t#e coditio t#at !etitioer s#all ol/ be$i !a/i$ after t#e com!letio of all reo-atios T#ere "as, i effect, a modificator/ or !artial o-atio, of !etitioers obli$atio Article '6(' of t#e Ci-il Code !ro-ides, t#us: Art '6(' Obli$atios ma/ be modified b/: 'H C#a$i$ t#eir obBect or !rici!al coditios< 6H Substituti$ t#e !erso of t#e debtor< >H Subro$ati$ a t#ird !erso i t#e ri$#ts of t#e creditor 2m!#asis su!!liedH I Iloilo Traders Fiace, Ic - ;eirs of S!s Soriao,'* t#e Court e.!ouded o t#e ature of o-atio, to "it: No-atio ma/ eit#er be e.ticti-e or modificator/, muc# bei$ de!edet o t#e ature of t#e c#a$e ad t#e itetio of t#e !arties 2.ticti-e o-atio is e-er !resumed< t#ere must be a e.!ress itetio to o-ate
A e.ticti-e o-atio "ould t#us #a-e t#e t"i effects of, first, e.ti$uis#i$ a e.isti$ obli$atio ad, secod, creati$ a e" oe i its stead T#is kid of o-atio !resu!!oses a cofluece of four essetial re=uisites: 'H a !re-ious -alid obli$atio< 6H a a$reemet of all !arties cocered to a e" cotract< >H t#e e.ti$uis#met of t#e old obli$atio< ad DH t#e birt# of a e" -alid obli$atio No-atio is merel/ modificator/ "#ere t#e c#a$e brou$#t about b/ a/ subse=uet a$reemet is merel/ icidetal to t#e mai obli$atio e$, a c#a$e i iterest rates or a e.tesio of time to !a/H< i t#is istace, t#e e" a$reemet "ill ot #a-e t#e effect of e.ti$uis#i$ t#e first but "ould merel/ su!!lemet it or su!!lat some but ot all of its !ro-isios As ca be $leaed from t#e fore$oi$, t#e aforemetioed four essetial elemets ad t#e re=uiremet t#at t#ere be total icom!atibilit/ bet"ee t#e old ad e" obli$atio, a!!l/ ol/ to e.ticti-e o-atio I !artial o-atio, ol/ t#e terms ad coditios of t#e obli$atio are altered, t#us, t#e mai obli$atio is ot c#a$ed ad it remais i force 0etitioer stated i #er As"er "it# Couterclaim t#at s#e a$reed ad com!lied "it# res!odets demad for #er to be$i !a/i$ #er loa, sice s#e belie-ed t#is "as i accordace "it# #er commitmet to !a/ "#ee-er s#e "as able ;er !artial !erformace of #er obli$atio is umistakable !roof t#at ideed t#e ori$ial a$reemet bet"ee #er ad res!odet #ad bee o-ated b/ t#e deletio of t#e coditio t#at !a/mets s#all be made ol/ after com!letio of reo-atios ;ece, b/ #er -er/ o" admissio ad !artial !erformace of #er obli$atio, t#ere ca be o ot#er coclusio but t#at uder t#e o-ated a$reemet, !etitioers obli$atio is alread/ due ad demadable MILLA VS 02O0L2 Facts: I t#is case, a crimial case "as filed a$aist Milla for #a-i$ committed estafa t#rou$# falsificatio of t#e otari1ed deed of absolute sale ad TCT !ur!ortedl/ issued b/ t#e RO3 of Makati Milla b/ misre!reseti$ #imself ad t#rou$# falsificatio of t#e said documets "as ableto $et t#e total amout of 06m from Carlo Lo!e1 of Market 0ursuits, Ic 9#e Lo!e1 disco-ered Milla+s sc#eme #o"e-er, Lo!e1 demaded t#e retur of t#e amout of 06m "#ic# Milla ac=uiesced ito b/ issui$ 6 c#ecks for t#e said amout T#ese c#ecks "ere later o dis#oored ad Milla for #is !art cosistetl/ i$ored t#e demads made b/ Lo!e1 T#is led to t#e fili$ of t#e !reset case No" Milla coteds t#at #is issuace of t#e 6 c#ecks re!reti$ t#e amout of 6m before t#e istitutio of t#e crimial com!lait a$aist #im o-ated #is obli$atio to M0I, t#ereb/ eabli$ #im to a-oid a/ ici!iet crimial liabilit/ ad co-erti$ #is obli$atio ito a !urel/ ci-il oe Issue: So t#e issue i t#is cse is "#et#er or ot t#e !a/met of a obli$atio before t#e istitutio of a crimial com!lait, i itself costitute o-atio t#at ma/ !re-et crimial liabilit/ or 9ON t#ere is o-atio i t#is case No Ruli$: I Juito - 0eo!le, t#is Court e.#austi-el/ e.!laied t#e coce!t of o-atio i relatio to ici!iet crimial liabilit/, -i1: No-atio is e-er !resumed, ad t#e aimus o-adi, "#et#er totall/ or !artiall/, must a!!ear b/ e.!ress a$reemet of t#e !arties, or b/ t#eir acts t#at are too clear ad ue=ui-ocal to be mistake T#ere are t"o "a/s "#ic# could idicate, i fie, t#e !resece of o-atio ad t#ereb/ !roduce t#e effect of e.ti$uis#i$ a obli$atio b/ aot#er "#ic# substitutes t#e same T#e first is "#e o-atio #as bee e.!licitl/ stated ad declared i ue=ui-ocal terms T#e secod is "#e t#e old ad t#e e" obli$atios are icom!atible o e-er/ !oit T#e test of icom!atibilit/ is "#et#er or ot t#e t"o obli$atios ca stad to$et#er, eac# oe #a-i$ its ide!edet e.istece If t#e/ caot, t#e/ are icom!atible ad t#e latter obli$atio o-ates t#e first Corollaril/, c#a$es t#at breed icom!atibilit/ must be essetial i ature ad ot merel/ accidetal T#e icom!atibilit/ must take !lace i a/ of t#e essetial elemets of t#e obli$atio, suc# as its obBect, cause or !rici!al coditios
t#ereof< ot#er"ise, t#e c#a$e "ould be merel/ modificator/ i ature ad isufficiet to e.ti$uis# t#e ori$ial obli$atio I t#e case at bar, t#e acce!tace b/ M0I of t#e 2=uitable 0CI c#ecks tedered b/ Milla could ot #a-e o-ated t#e ori$ial trasactio, as t#e c#ecks "ere ol/ iteded to secure t#e retur of t#e 06 millio t#e former #ad alread/ $i-e #im 2-e t#e, t#ese c#ecks bouced ad "ere t#us uable to satisf/ #is liabilit/ Moreo-er, t#e estafa i-ol-ed #ere "as ot for sim!le misa!!ro!riatio or co-ersio, but "as committed t#rou$# Milla+s falsificatio of !ublic documets, t#e liabilit/ for "#ic# caot be e.ti$uis#ed b/ mere o-atio I -ie" of t#e fore$oi$, t#e !etitio of Milla "as deied ;2IRS OF S2RVAN3O FRANCO -s S0O4S2S V2RONICA AN3 3ANILO GONAL2S GR No '8(E*( 5ue 6E, 6*'6 Facts: O No-ember E, '()8, Ser-ado Fraco ad Leticia Medel obtaied a loa from Veroica R Go1ales, "#o "as e$a$ed i t#e moe/ ledi$ busiess uder t#e ame @Go1ales Credit 2ter!rises, i t#e amout of 08*,*****, !a/able i t"o mot#s Veroica $a-e ol/ t#e amout of 0DE,*****, to t#e borro"ers, as s#e retaied 0>,*****, as ad-ace iterest for oe mot# at !er mot# Ser-ado ad Leticia e.ecuted a !romissor/ ote for 08*,*****, to e-idece t#e loa, !a/able o 5auar/ E, '() O No-ember '(, '()8, Ser-ado ad Leticia obtaied from Veroica aot#er loa i t#e amout of 0(*,*****, !a/able i t"o mot#s, at iterest !er mot# T#e/ e.ecuted a !romissor/ ote to e-idece t#e loa, maturi$ o 5auar/ '(, '() T#e/ recei-ed ol/ 0)D,*****, out of t#e !roceeds of t#e loa O 5ue '', '(), Ser-ado ad Leticia secured from Veroica still aot#er loa i t#e amout of 0>**,*****, maturi$ i oe mot#, secured b/ a real estate mort$a$e o-er a !ro!ert/ belo$i$ to Leticia Makalital Ka!tic#a/, "#o issued a s!ecial !o"er of attore/ i fa-or of Leticia Medel, aut#ori1i$ #er to e.ecute t#e mort$a$e Ser-ado ad Leticia e.ecuted a !romissor/ ote i fa-or of Veroica to !a/ t#e sum of 0>**,*****, after a mot#, or o 5ul/ '', '() ;o"e-er, ol/ t#e sum of 06E8,*****, "as $i-e to t#em out of t#e !roceeds of t#e loa O 5ul/ 6>, '(), Ser-ado ad Leticia "it# t#e latter+s #usbad, cosolidated all t#eir !re-ious u!aid loas totali$ 0DD*,*****, ad sou$#t from Veroica aot#er loa i t#e amout of 0*,*****, bri$i$ t#eir idebtedess to a total of 08**,*****, !a/able o Au$ust 6>, '() T#e/ e.ecuted a !romissor/ ote O maturit/ of t#e loa, t#e borro"ers failed to !a/ t#e idebtedess of 08**,*****, !lus iterests ad !ealties, e-ideced b/ t#e abo-e%=uoted !romissor/ ote Veroica R Go1ales, Boied b/ #er #usbad filed "it# t#e RTC a com!lait for collectio of t#e full amout of t#e loa icludi$ iterests ad ot#er c#ar$es Issue:9#et#er or ot a o-atio of t#e Au$ust 6>, '() !romissor/ ote "#e res!odet Veroica Go1ales issued t#e Februar/ 8, '((6 recei!t "as !reset ;eld: T#e Court #eld t#at o-atio did ot tras!ire because o irrecocilable icom!atibilit/ e.isted bet"ee t#e !romissor/ ote ad t#e recei!t A o-atio arises "#e t#ere is a substitutio of a obli$atio b/ a subse=uet oe t#at e.ti$uis#es t#e first, eit#er b/ c#a$i$ t#e obBect or t#e !rici!al coditios, or b/ substituti$ t#e !erso of t#e debtor, or b/ subro$ati$ a t#ird !erso i t#e ri$#ts of t#e creditor For a -alid o-atio to take !lace, t#ere must be, t#erefore: aH a !re-ious -alid obli$atio< bH a a$reemet of t#e !arties to make a e" cotract< cH a e.ti$uis#met of t#e old cotract< ad dH a -alid e" cotract I s#ort, t#e e" obli$atio e.ti$uis#es t#e !rior a$reemet ol/ "#e t#e substitutio is ue=ui-ocall/ declared, or t#e old ad t#e e" obli$atios are icom!atible o e-er/ !oit A com!romise of a fial Bud$met o!erates as a o-atio of t#e Bud$met obli$atio u!o com!liace "it# eit#er of t#ese t"o coditios No-atio is ot !resumed T#is meas t#at t#e !arties to a cotract s#ould e.!ressl/ a$ree to abro$ate t#e old cotract i fa-or of a e" oe I t#e absece of t#e e.!ress a$reemet, t#e old ad t#e e" obli$atios must be icom!atible o e-er/ !oit
T#ere is icom!atibilit/ "#e t#e t"o obli$atios caot stad to$et#er, eac# oe #a-i$ its ide!edet e.istece If t#e t"o obli$atios caot stad to$et#er, t#e latter obli$atio o-ates t#e first C#a$es t#at breed icom!atibilit/ must be essetial i ature ad ot merel/ accidetal T#e icom!atibilit/ must affect a/ of t#e essetial elemets of t#e obli$atio, suc# as its obBect, cause or !rici!al coditios t#ereof< ot#er"ise, t#e c#a$e is merel/ modificator/ i ature ad isufficiet to e.ti$uis# t#e ori$ial obli$atio I li$#t of t#e fore$oi$, t#e issuace of t#e recei!t created o e" obli$atio Istead, t#e res!odets ol/ t#ereb/ reco$i1ed t#e ori$ial obli$atio b/ stati$ i t#e recei!t t#at t#e 0D**,***** "as @!artial !a/met of loa ad b/ referri$ to @t#e !romissor/ ote subBect of t#e case i im!osi$ t#e iterest T#e loa metioed i t#e recei!t "as still t#e same loa i-ol-i$ t#e 08**,***** e.teded to Ser-ado Ad-ertece to t#e iterest sti!ulated i t#e !romissor/ ote idicated t#at t#e cotract still subsisted, ot re!laced ad e.ti$uis#ed, as t#e !etitioers claim
G.R. No. 164051
October 3, 2012
PHILIPPINE NATIONAL !. LILIAN ". "ORIANO, Re!#on$ent.
BANK, Petitioner,
%E&I"IO N PERE', J.: (e )rc *r+e$ in ti! #etition -or reie on certiorari to reer!e )n$ !et )!i$e te %eci!ion o- te &o*rt o- A##e)/! in & AG.R. "P No. 62431 -in$in+ no +r)e )b*!e o- $i!cretion in te r*/in+ o- te "ecret)r o- te %e#)rtent o- *!tice %O ic, in t*rn, $i!i!!e$ te criin)/ co#/)int -or Estafa, i.e., io/)tion o- "ection 13 o- Pre!i$enti)/ %ecree No. 1 15 Tr*!t Recei#t! L), in re/)tion to Artic/e 315, #)r)+r)# b o- te Rei!e$ Pen)/ &o$e, -i/e$ b #etitioner Pi/i##ine N)tion)/ B)n7 PNB )+)in!t re!#on$ent Li/i)n ". "ori)no "ori)no.2 8ir!t, te o!ten!ib/ !i#/e -)ct! )! -o*n$ b te &o*rt o- A##e)/! )n$ )$o#te$ b PNB in it! #etition )n$ eor)n$*9 On :)rc 20, 1;;,
ten$e$ ) cre$it -)ci/it in te -or o- <)= 8/oor "toc7 Line 8"L in te incre)!e$ )o*nt o- Tirt :i//ion Pe!o! ?30 :i//ion to Li!) Enter#ri!e!, Inc. > >. "ori)no i! te c)ir)n )n$ #re!i$ent o- LI"A:, !e i! )/!o te )*torie$ !i+n)tor in )// LI"A:! Tr)n!)ction! it H*n$re$ 8ort 8ie To*!)n$ Nine H*n$re$ 8ort 8o*r Pe!o! )n$ 8i-t 8ie &ent)o! P2;,645,;44.55, te #rocee$! o- ic ere cre$ite$ to it! c*rrent )cco*nt it ec*te$ 52 Tr*!t Recei#t! TR!. In )$$ition to te #roi!!or note!, !oin+ it! recei#t o- te ite! in tr*!t it te $*t to t*rnoer te #rocee$! o- te !)/e tereo- to H*n$re$ 8ort 8o*r To*!)n$ Nine H*n$re$ 8ort 8o*r Pe!o! )n$ 8i-t 8ie &ent)o! ?2;,644,;44.55 )! te o*t!t)n$in+ #rinci#)/ b)/)nce
8i-t 8ie &ent)o! ?2;,4@,@44.55. %e!#ite !eer)/ -or)/ $e)n$!, re!#on$ent "ori)no -)i/e$ )n$ re-*!e$ to t*rn oer te !)i$ <)o*nt to= te #reC*$ice o- A ereo-, )n$ in con!i$er)tion tereo-, te tr*!tee ereb )+ree! to o/$ te :otor Deic/e! in !tor)+e )! te #ro#ert o- PNB, it te /ibert to !e// te !)e -or c)! -or te Tr*!tee! )cco*nt )n$ to $e/ier te #rocee$! tereo- to PNB to be )##/ie$ )+)in!t it! )cce#t)nce on te Tr*!tee! )cco*nt. n$er te ter! o- te Inoice! )n$ sic te Tr*!tee -*rter )+ree! to o/$ te !)i$ eic/e! )n$ #rocee$! o- te !)/e tereo- in Tr*!t -or te #)ent o- !)i$ )cce#t)nce )n$ o- )n >>> 8or te #*r#o!e o- e--ectie/ c)rrin+ o*t )// te ter! )n$ con$ition! o- te Tr*!t erein cre)te$ )n$ to in!*re t)t te Tr*!tee i// co#/ !trict/ )n$ -)it-*// it )// *n$ert)7in+! ere*n$er, te Tr*!tee ereb )+ree! )n$ con!ent! to )//o )n$ #erit PNB or it! re#re!ent)tie! to in!#ect )// o- te Tr*!tee! boo7!, e!#eci)// to!e #ert)inin+ to it! $i!#o!ition o- te :otor Deic/e! )n$For te #rocee$! o- te !)/e ereo-, )t )n tie )n$ eneer PNB, )t it! $i!cretion, ) -in$ it nece!!)r to $o !o. Te Tr*!tee! -)i/*re to )cco*nt to PNB -or te :otor Deic/e! receie$ in Tr*!t )n$For -or te #rocee$! o- te !)/e tereo- itin tirt 30 $)! -ro $e)n$ )$e b PNB !)// con!tit*te prima facie ei$ence t)t te Tr*!tee )! conerte$ or i!)##ro#ri)te$ !)i$ eic/e! )n$For #rocee$! tereo- -or it! bene-it to te $etrient )n$ #reC*$ice o- PNB.4 )n$ "ori)no! -)i/*re to )cco*nt -or te #rocee$! o- te !)/e o- te otor eic/e!, PNB, )! #reio*!/ )$erte$ to, -i/e$ ) co#/)int )--i$)it be-ore te O--ice o- te &it Pro!ec*tor o- N)+) &it c)r+in+ "ori)no it -i-t to 52 co*nt! o- io/)tion o- te Tr*!t Recei#t! L), in re/)tion to Artic/e 315, #)r)+r)# 1b o- te Rei!e$ Pen)/ &o$e. In re-*t)tion, "ori)no -i/e$ ) co*nter)--i$)it )!!ertin+ t)t9 1. Te ob/i+)tion o- c)n+e! o- !eer)/ /etter! )n$ te/e#one c)//!, :r. o!e-ino G)bo), "enior Dice Pre!i$ent o- PNB on 12 :) 1;;@ rote > >. 2. On "e#teber 22, 1;;@ :r. Aen+o) !ent ) /etter to i!tin+ cre$it -)ci/itie! )t
PNB, ic inc/*$e! te 8"L on ic te Tr*!t recei#t! )re ))i/ent!, to <)n= Onib*! Line OL ))i/)b/e b ) o- Reo/in+ &re$it Line R&L, %i!co*ntin+ Line A+)in!t Po!t%)te$ &ec7! %LAP&, )n$ %oe!tic Bi//! P*rc)!e$ Line %BPL )n$ it ) 8*// )ier o- #en)/t c)r+e! on R&L, 8"L ic i! te 8/oor "toc7 Line on ic te tr*!t recei#t! )re ))i/ent! )n$ Tie Lo)n. > > >. 3. Te <8"L= )n$ te ))i/ent! tereon )//e+e$/ !ec*re$ b Tr*!t Recei#t!, tere-ore, )! !ic )/re)$ conerte$ into<,= )n$ inc/*$e$ in<,= )n Onib*! Line OL o- ?106 i//ion on "e#teber 22, 1;;@, ic )! )ct*)// ) Reo/in+ &re$it Line R&L<.=5 PNB -i/e$ ) re#/)--i$)it )int)inin+ "ori)no! criin)/ /i)bi/it *n$er te TR!9 2. > > >. ( i/e it i! tr*e t)t !)i$ re!tr*ct*rin+ )! )##roe$, te !)e )! neer i#/eente$ bec)*!e > > T)n$)n+ "or), *eon &it, )! )on+ te coon con$ition! !t)te$ in #)r)+r)# D, o- BFR 6. Te noni#/eent)tion o- te )##roe$ re!tr*ct*rin+ o- te )cco*nt o-
Recor$! !o t)t ) co# o- te Re!o/*tion -ro te %e#)rtent o- *!tice #ro*/+)te$ on October 2@, 2002 )! receie$ b ti! &o*rt, sic $enin+ te :otion -or Recon!i$er)tion o- te Re!o/*tion No. 320, !erie! o- 2002 reer!in+ t)t o- te &it Pro!ec*tor o- N)+) &it )n$ )t te !)e tie $irectin+ te /)tter to oe it /e)e o- co*rt -or te it$r))/ o- te in-or)tion! -or E!t)-) )+)in!t Li/i)n "ori)no. Accor$in+/, te #ro!ec*tion i! ereb +ien -i-teen 15 $)! -ro recei#t ereo- itin ic to co#/ it te $irectie o- te %e#)rtent o- *!tice.
&)!e No!. 20010641 *# to 06;3 con!i$erin+ te e// e!t)b/i!e$ r*/e t)t once C*ri!$iction i! e!te$ in co*rt, it i! ret)ine$ *# to te en$ o- te /iti+)tion. III. (eter or not te rein!t)teent o- te 51 co*nt! &riin)/ &)!e No. 2001061 )! )/re)$ $i!i!!e$ o- criin)/ c)!e! -or e!t)-) )+)in!t "ori)no o*/$ io/)te er con!tit*tion)/ ri+t )+)in!t $o*b/e Ceo#)r$.15
2. 21 8ebr*)r 200312
(innoe$ -ro te -ore+oin+, e -in$ t)t te b)!ic *e!tion i! eter te &o*rt o- A##e)/! +r)e/ erre$ in )--irin+ te %O! r*/in+ t)t te re!tr*ct*rin+ o- LI"A:! /o)n !ec*re$ b tr*!t recei#t! e>tin+*i!e$ "ori)no! criin)/ /i)bi/it tere-or.
8in$in+ te :otion to (it$r) In-or)tion! -i/e$ b Pro!. E$+)r I#eri)/ $*/ )##roe$ b te &it Pro!ec*tor o- N)+) &it to be eritorio*! te !)e i! ereb +r)nte$. A! #r)e$ -or, te In-or)tion! in &ri. &)!e! No!. RT& 20010641 to 200106;3 entit/e$, Peo#/e o- te Pi/i##ine! !. Li/i)n ". "ori)no, con!i!tin+ o- -i-tto 52 c)!e! e>ce#t -or &ri. &)!e No. RT& 2001061 ic )$ been #reio*!/ $i!i!!e$, )re ereb or$ere$ ( ITH%RA(N.
It )! not e!c)#e$ *! t)t PNB! !econ$ )n$ tir$ i!!*e! $e/e into te tree 3 Or$er! o- te RT& ic )re not te !*bCect o- te #etition be-ore *!. To c/)ri-, te in!t)nt #etition )!!)i/! te %eci!ion o- te )##e//)te co*rt in &AG.R. "P No. 6243 ic, e!!enti)//, )--ire$ te r*/in+ o- te %O in I.". No!. 20001123, 20001133 )n$ 200011@4. A! #reio*!/ n)rr)te$, te %O Re!o/*tion bec)e te b)!i! o- te RT&! Or$er! +r)ntin+ te it$r))/ o- te In-or)tion! )+)in!t "ori)no. 8ro te!e RT& Or$er!, te ree$ o- PNB )! to -i/e ) #etition -or certiorari be-ore te &o*rt o- A##e)/! )//e+in+ +r)e )b*!e o- $i!cretion in te i !!*)nce tereo-.
3. 15 */ 200313
Hoeer, -or c/)rit )n$ to obi)te con-*!ion, e !)// -ir!t $i!#o!e o- te #eri#er)/ i!!*e! r)i!e$ b PNB9
Te #ro!ec*tion o- te criin)/ c)!e! erein -i/e$ bein+ *n$er te contro/ o- te &it Pro!ec*tor, te it$r))/ o- te !)i$ c)!e! b te Pro!ec*tion /e)e! ti! &o*rt ito*t )*torit to rein!t)te, reie or re-i/e te !)e. (ere-ore, te :otion -or Recon!i$er)tion -i/e$ b te #ri)te co#/)in)nt i! ereb %ENIE%. (it te $eni)/ o- it! :otion -or Recon!i$er)tion o- te 25 *ne 2002 Re!o/*tion o- te "ecret)r o- te %O, PNB -i/e$ ) #etition -or certiorari be-ore te &o*rt o- A##e)/! )//e+in+ t)t9 A. THE "E&RETARJ O8 THE %O &O::ITTE% GRADE AB"E O8 %I"&RETION A:ONTING TO (ANT OR E&E"" O8 RI"%I&TION IN REDER"ING AN% "ETTING A"I%E THE RE"OLTON O8 THE &ITJ PRO"E&TOR O8 NAGA &ITJ 8IN%ING A PRI:A 8A&IE &A"E AGAIN"T PRIDATE RE"PON%ENT <"ORIANO=, 8OR THE "A:E HA" NO LEGAL BA"E" AN% I" NOT IN A&&OR% (ITH THE RI"PR%ENTIAL RLING" ON THE :ATTER.14 A! !t)te$ )t te o*t!et, te )##e//)te co*rt $i$ not -in$ +r)e )b*!e o- $i!cretion in te *e!tione$ re!o/*tion o- te %O, )n$ $i!i!!e$ PNB! #etition -or certiorari . Hence, ti! )##e)/ b certiorari . Be-ore )ntin+ e/!e, e note t)t re!#on$ent "ori)no, $e!#ite !eer)/ o##ort*nitie! to $o !o, -)i/e$ to -i/e ) :eor)n$* )! re*ire$ in o*r Re!o/*tion $)te$ 16 )n*)r 200@. T*!, on @ */ 200;, e re!o/e$ to $i!#en!e it te -i/in+ o- "ori)no! :eor)n$*. In it! :eor)n$*, PNB #o!it! te -o//oin+ i!!*e!9 I. (eter or not te &o*rt o- A##e)/! +r)e/ erre$ in conc*rrin+ it te -in$in+ o- te %O t)t te )##ro)/ b PNB o-
1. (eter te it$r))/ o- &riin)/ &)!e! No!. 20010641 to 2001 06;3 )+)in!t "ori)no )! $irecte$ b te %O io/)te! te e// e!t)b/i!e$ r*/e t)t once te tri)/ co*rt )c*ire! C*ri!$iction oer ) c)!e, it i! ret)ine$ *nti/ terin)tion o- /iti+)tion. 2. (eter te rein!t)teent o- &riin)/ &)!e! No!. 20010641 to 200106;3 io/)te te con!tit*tion)/ #roi!ion )+)in!t $o*b/e Ceo#)r$. (e r*/e in te ne+)tie. Preci!e/, te it$r))/ o- &riin)/ &)!e! No!. 20010641 to 2001 06;3 )! or$ere$ b te RT&. In #)rtic*/)r, te "ecret)r o- te %O $irecte$ &it Pro!ec*tor o- N)+) &it to oe, it /e)e o- co*rt, -or te it$r))/ o- te In-or)tion! -or estafa )+)in!t "ori)no. "i+ni-ic)nt/, te tri)/ co*rt +)e te #ro!ec*tion -i-teen 15 $)! itin ic to co#/ it te %O! $irectie, )n$ tere*#on, re)$i/ +r)nte$ te otion. In$ee$, te it$r))/ o- te criin)/ c)!e! $i$ not occ*r, nay , co*/$ not )e occ*rre$, ito*t te tri)/ co*rt! imprimatur . A! !*c, te %O! $irectie -or te it$r))/ o- te criin)/ c)!e! )+)in!t "ori)no $i$ not $ie!t nor o*!t te tri)/ co*rt o- it! C*ri!$iction. Re+rett)b/, ) #er*!)/ o- te RT&! Or$er! ree)/! t)t te tri)/ co*rt re/ie$ !o/e/ on te Re!o/*tion o- te %O "ecret)r )n$ i! $eterin)tion t)t te In-or)tion! -or estafa )+)in!t "ori)no o*+t to be it$r)n. Te tri)/ co*rt )b$ic)te$ it! C*$ici)/ #oer )n$ re-*!e$ to #er-or ) #o!itie $*t enCoine$ b /). On one occ)!ion, e )e $ec/)re$ t)t i/e te recoen$)tion o- te #ro!ec*tor or te r*/in+ o- te "ecret)r o- *!tice i! #er!*)!ie, it i! not bin$in+ on co*rt!.16 (e !)// ret*rn to ti! #oint !ort/. In te !)e ein, te rein!t)teent o- te criin)/ c)!e! )+)in!t "ori)no i// not io/)te er con!tit*tion)/ ri+t )+)in!t $o*b/e Ceo#)r$. "ection ,1 R*/e 11 o- te R*/e! o- &o*rt #roi$e! -or te re*i!ite! -or $o*b/e Ceo#)r$ to !et in9 1 ) -ir!t Ceo#)r$ )tt)ce$ #rior to te !econ$ 2 te -ir!t Ceo#)r$ )! been )/i$/ terin)te$ )n$ 3 ) !econ$ Ceo#)r$ i! -or te !)e o--en!e )! in te -ir!t. A -ir!t Ceo#)r$ )tt)ce! on/ ) )-ter ) )/i$ in$ictent b be-ore ) co#etent co*rt c )-ter )rr)i+nent $ en ) )/i$ #/e) )! been entere$ )n$ e en te )cc*!e$ )! been )c*itte$ or conicte$, or te c)!e $i!i!!e$ or oteri!e terin)te$ ito*t i! e>#re!! con!ent.1@ In te #re!ent c)!e, te it$r))/ o- te criin)/ c)!e! $i$ not inc/*$e ) c)te+oric)/ $i!i!!)/ tereo- b te RT&. %o*b/e Ceo#)r$ )$ not !et in bec)*!e "ori)no )! not )c*itte$ nor )! tere ) )/i$ )n$ /e+)/ $i!i!!)/ or terin)tion o- te -i-t one 51 c)!e! )+)in!t er. It !t)n$! to re)!on tere-ore t)t te -i-t re*i!ite ic re*ire! coniction or )c*itt)/ o- te )cc*!e$, or te $i!i!!)/ o- te c)!e ito*t te )##ro)/ o- te )cc*!e$, )! not et.
On bot i!!*e!, te recent c)!e o- Cerezo v. People,1; i! en/i+tenin+. In Cerezo, te tri)/ co*rt !i#/ -o//oe$ te #ro!ec*tion! /e)$ on o to #rocee$ it te /ibe/ c)!e )+)in!t te tree )cc*!e$. Te #ro!ec*tion tice c)n+e$ teir in$ on eter tere )! #rob)b/e c)*!e to in$ict te )cc*!e$ -or /ibe/. On bot occ)!ion!, te tri)/ co*rt +r)nte$ te #ro!ec*tor! otion!. /ti)te/, te %O "ecret)r $irecte$ te #ro!ec*tor to re-i/e te In-or)tion )+)in!t te )cc*!e$ ic te tri)/ co*rt -ortit rein!t)te$. R*/in+ on te !)e i!!*e! r)i!e$ b PNB in ti! c)!e, e e#)!ie$, t*!9 > > >. In t*! re!o/in+ ) otion to $i!i!! ) c)!e or to it$r) )n In-or)tion, te tri)/ co*rt !o*/$ not re/ !o/e/ )n$ ere/ on te -in$in+! o- te #*b/ic #ro!ec*tor or te "ecret)r o- *!tice. It i! te co*rt! bo*n$en $*t to )!!e!! in$e#en$ent/ te erit! o- te otion, )n$ ti! )!!e!!ent *!t be ebo$ie$ in ) ritten or$er $i!#o!in+ o- te otion. > > >. In ti! c)!e, it i! obio*! -ro te :)rc 1, 2004 Or$er o- te RT&, $i!i!!in+ te criin)/ c)!e, t)t te RT& C*$+e -)i/e$ to )7e i! on $eterin)tion o- eter or not tere )! ) prima faciec)!e to o/$ re!#on$ent! -or tri)/. He -)i/e$ to )7e )n in$e#en$ent e)/*)tion or )!!e!!ent o- te erit! o- te c)!e. Te RT& C*$+e b/in$/ re/ie$ on te )ni-e!t)tion )n$ recoen$)tion o- te #ro!ec*tor en e !o*/$ )e been ore circ*!#ect )n$ C*$icio*! in re!o/in+ te :otion to %i!i!! )n$ (it$r) In-or)tion e!#eci)// !o en te #ro!ec*tion )##e)re$ to be *ncert)in, *n$eci$e$, )n$ irre!o/*te on eter to in$ict re!#on$ent!. Te !)e o/$! tr*e it re!#ect to te October 24, 2006 Or$er, ic rein!t)te$ te c)!e. Te RT& C*$+e -)i/e$ to )7e ) !e#)r)te e)/*)tion )n$ ere/ ))ite$ te re!o/*tion o- te %O "ecret)r. Ti! i! ei$ent -ro te +ener)/ tenor o- te Or$er )n$ i+/i+te$ in te -o//oin+ #ortion tereo-9 A! $i!c*!!e$ $*rin+ te e)rin+ o- te :otion -or Recon!i$er)tion, te &o*rt i// re!o/e it $e#en$in+ on te o*tcoe o- te Petition -or Reie. &on!i$erin+ te -in$in+! o- te %e#)rtent o- *!tice reer!in+ te re!o/*tion o- te &it Pro!ec*tor, te &o*rt +ie! -)or)b/e )ction to te :otion -or Recon!i$er)tion. B re/in+ !o/e/ on te )ni-e!t)tion o- te #*b/ic #ro!ec*tor )n$ te re!o/*tion o- te %O "ecret)r, te tri)/ co*rt )b$ic)te$ it! C*$ici)/ #oer )n$ re-*!e$ to #er-or ) #o!itie $*t enCoine$ b /). Te !)i$ Or$er! ere t*! !t)ine$ it +r)e )b*!e o- $i!cretion )n$ io/)te$ te co#/)in)nt! ri+t to $*e #roce!!. Te ere oi$, )$ no /e+)/ !t)n$in+, )n$ #ro$*ce$ no e--ect )t!oeer. >>>> It i! beon$ c)i/ t)t $o*b/e Ceo#)r$ $i$ not !et in. %o*b/e Ceo#)r$ e>i!t! en te -o//oin+ re*i!ite! )re #re!ent9 1 ) -ir!t Ceo#)r$ )tt)ce$ #rior to te !econ$ 2 te -ir!t Ceo#)r$ )! been )/i$/ terin)te$ )n$ 3 ) !econ$ Ceo#)r$ i! -or te !)e o--en!e )! in te -ir!t. A -ir!t Ceo#)r$ )tt)ce! on/ ) )-ter ) )/i$ in$ictent b be-ore ) co#etent co*rt c )-ter )rr)i+nent $ en ) )/i$ #/e) )! been entere$ )n$ e en te )cc*!e$ )! been )c*itte$ or conicte$, or te c)!e $i!i!!e$ or oteri!e terin)te$ ito*t i! e>#re!! con!ent.
)c*itte$ nor )! tere ) )/i$ )n$ /e+)/ $i!i!!)/ or terin)tion o- te c)!e. Er+o, te -i-t re*i!ite ic re*ire! te coniction )n$ )c*itt)/ o- te )cc*!e$, or te $i!i!!)/ o- te c)!e ito*t te )##ro)/ o- te )cc*!e$, )! not et. T*!, $o*b/e Ceo#)r$ )! not !et in.20 E#)!i! !*##/ie$ (e no coe to te cr*> o- te )tter9 eter te re!tr*ct*rin+ o- LI"A:! /o)n )cco*nt e>tin+*i!e$ "ori)no! criin)/ / i)bi/it. PNB )$it! t)t )/to*+ it )$ )##roe$ LI"A:! re!tr*ct*rin+ #ro#o!)/, te )ct*)/ re!tr*ct*rin+ o- LI"A:! )cco*nt con!i!tin+ o- !eer)/ cre$it /ine! )! neer re$*ce$ into ritin+. PNB )r+*e! t)t te !ti#*/)tion! terein !*c )! te #roi!ion! on te !ce$*/e o- #)ent o- te #rinci#)/ ob/i+)tion, intere!t!, )n$ #en)/tie!, *!t be in ritin+ to be )/i$ )n$ bin$in+ beteen te #)rtie!. PNB -*rter #o!t*/)te! t)t )!!*in+ te re!tr*ct*rin+ )! re$*ce$ into ritin+, LI"A: -)i/e$ to co#/ it te con$ition! #rece$ent -or it! e--ectiit, !#eci-ic)//, te #)ent o- intere!t )n$ oter c)r+e!, )n$ te !*bi!!ion o- te tit/e! to te re)/ #ro#ertie! in Tandang Sora, *eon &it. On te o/e, PNB i! )$))nt t)t te eent! concernin+ te re!tr*ct*rin+ o- LI"A:! /o)n $i$ not )--ect te TR !ec*rit, t*!, "ori)no! criin)/ /i)bi/it tere*n$er !*b!i!t!. On te oter )n$, te )##e//)te co*rt )+ree$ it te r*/in+ o- te %O "ecret)r t)t te )##ro)/ o- LI"A:! re!tr*ct*rin+ #ro#o!)/, een i- not re$*ce$ into ritin+, c)n+e$ te !t)t*! o- LI"A:! /o)n -ro bein+ !ec*re$ it Tr*!t Recei#t! TR! to one o- )n or$in)r /o)n, non#)ent o- ic $oe! not +ie ri!e to criin)/ /i)bi/it. Te &o*rt o- A##e)/! $ec/)re$ t)t tere )! no bre)c o- tr*!t con!tit*tie o- estafa tro*+ i!)##ro#ri)tion or coner!ion ere te re/)tion!i# beteen te #)rtie! i! !i#/ t)t o- cre$itor )n$ $ebtor, not )! entr*!ter )n$ entr*!tee. (e c)nnot !*b!cribe to te )##e//)te co*rt! re)!onin+. Te %O "ecret)r! )n$ te &o*rt o- A##e)/! o/$in+ t)t, te !*##o!e$ re!tr*ct*rin+ no)te$ te /o)n )+reeent beteen te #)rtie! i! o#ic. To be+in it, te #*r#orte$ re!tr*ct*rin+ o- te /o)n )+reeent $i$ not con!tit*te no)tion. No)tion i! one o- te o$e! o- e>tin+*i!ent o- ob/i+)tion! 21 it i! ) !in+/e C*ri$ic)/ )ct it ) $i#tc -*nction. Te !*b!tit*tion or c)n+e o- te ob/i+)tion b ) !*b!e*ent one e>tin+*i!e! te -ir!t, re!*/tin+ in te cre)tion o- ) ne ob/i+)tion in /ie* o- te o/$. 22 It i! not ) co#/ete ob/iter)tion o- te ob/i+orob/i+ee re/)tion!i#, b*t o#er)te! )! ) re/)tie e>tinction o- te ori+in)/ ob/i+)tion. Artic/e 12;2 o- te &ii/ &o$e ic #roi$e!9 Art. 12;2. In or$er t)t )n ob/i+)tion ) be e>tin+*i!e$ b )noter ic !*b!tit*te! te !)e, it i! i#er)tie t)t it be !o $ec/)re$ in *ne*ioc)/ ter!, or t)t te o/$ )n$ te ne ob/i+)tion! be on eer #oint inco#)tib/e it e)c oter. conte#/)te! to 7in$! o- no)tion9 e>#re!! or i#/ie$. Te e>tin+*i!ent o- te o/$ ob/i+)tion b te ne one i! ) nece!!)r e/eent o- no)tion, ic ) be e--ecte$ eiter e>#re!!/ or i#/ie$/. In or$er -or no)tion to t)7e #/)ce, te conc*rrence o- te -o//oin+ re*i!ite! i! in$i!#en!)b/e9 1 Tere *!t be ) #reio*! )/i$ ob/i+)tion 2 Tere *!t be )n )+reeent o- te #)rtie! concerne$ to ) ne contr)ct 3 Tere *!t be te e>tin+*i!ent o- te o/$ contr)ct )n$ 4 Tere *!t be te )/i$it o- te ne contr)ct. 23
"ince e )e e/$ t)t te :)rc 1, 2004 Or$er +r)ntin+ te otion to $i!i!! )! coitte$ it +r)e )b*!e o- $i!cretion, ten re!#on$ent! ere not
No)tion i! neer #re!*e$, )n$ te animus novandi , eter tot)// or #)rti)//, *!t )##e)r b e>#re!! )+reeent o- te #)rtie!, or b
teir )ct! t)t )re too c/e)r )n$ *ni!t)7)b/e. Te contr)ctin+ #)rtie! *!t incontroertib/ $i!c/o!e t)t teir obCect in e>ec*tin+ te ne contr)ct i! to e>tin+*i! te o/$ one. #on te oter )n$, no !#eci-ic -or i! re*ire$ -or )n i#/ie$ no)tion, )n$ )// t)t i! #re!cribe$ b /) o*/$ be )n inco#)tibi/it beteen te to contr)ct!. 24 Nonete/e!!, bot 7in$! o- no)tion *!t !ti// be c/e)r/ #roen.25 In ti! c)!e, ito*t ) ritten contr)ct !t)tin+ in *ne*ioc)/ ter! t)t te #)rtie! ere no)tin+ te ori+in)/ /o)n )+reeent, t*! *n$o*bte$/ e/iin)tin+ )n e>#re!! no)tion, e /oo7 to eter tere i! )n inco#)tibi/it beteen te 8/oor "toc7 Line !ec*re$ b T R! )n$ te !*b!e*ent re!tr*ct*re$ Onib*! Line ic )! !*##o!e$/ )##roe$ b PNB. "ori)no i! con-i$ent it er )!!ertion t)t PNB! )##ro)/ o- er #ro#o!)/ to re!tr*ct*re LI"A:! /o)n no)te$ te /o)n )+reeent !ec*re$ b TR!. "ori)no re/ie! on te -o//oin+9 1. > > >. A// te )//e+e$ tr*!t recei#t )+reeent! ere ))i/ent! )$e b c)n+e! o- !eer)/ /etter! )n$ te/e#one c)//!, :r. o!e-ino G)bo), "enior Dice Pre!i$ent o- PNB on 12 :) 1;;@ rote > >. 2. On "e#teber 22, 1;;@, :r. Aen+o) !ent ) /etter to i!tin+ cre$it -)ci/itie! )t PNB, ic inc/*$e! te 8"L on ic te tr*!t recei#t! )re ))i/ent!, to <)n= Onib*! Line OL ))i/)b/e b ) o- Reo/in+ &re$it Line R&L, %i!co*ntin+ Line A+)in!t Po!t%)te$ &ec7! %LAP&, )n$ %oe!tic Bi//! P*rc)!e$ Line %BPL )n$ it ) 8*// )ier o- #en)/t c)r+e! on R&L, 8"L ic i! te 8/oor "toc7 Line on ic te tr*!t recei#t! )re ))i/ent! )n$ Tie Lo)n. > > >.26 "ori)no! re/i)nce tereon i! i!#/)ce$. Te )##ro)/ o- LI"A:! re!tr*ct*rin+ #ro#o!)/ i! not te bone o- contention in ti! c)!e. Te #it o- te i!!*e /ie! in eter, )!!*in+ ) re!tr*ct*rin+ )! e--ecte$, it e>tin+*i!e$ te criin)/ /i)bi/it on te /o)n ob/i+)tion !ec*re$ b tr*!t recei#t!, b e>tin+*i!in+ te entr*!terentr*!tee re/)tion!i# )n$ !*b!tit*tin+ it it t)t o- )n or$in)r cre$itor$ebtor re/)tion!i#. "t)te$ $i--erent/, e e>)ine eter te 8/oor "toc7 Line i! inco#)tib/e it te #*r#orte$ re!tr*ct*re$ Onib*! Line. Te te!t o- inco#)tibi/it i! eter te to ob/i+)tion! c)n !t)n$ to+eter, e)c one )in+ it! in$e#en$ent e>i!tence. I- te c)nnot, te )re inco#)tib/e )n$ te /)tter ob/i+)tion no)te! te -ir!t. &oro//)ri/, c)n+e! t)t bree$ inco#)tibi/it *!t be e!!enti)/ in n)t*re )n$ not ere/ )cci$ent)/. Te inco#)tibi/it *!t t)7e #/)ce in )n o- te e!!enti)/ e/eent! o- te ob/i+)tion, !*c )! it! obCect, c)*!e or #rinci#)/ con$ition! tereo- oteri!e, te c)n+e o*/$ be ere/ o$i-ic)tor in n)t*re )n$ in!*--icient to e>tin+*i! te ori+in)/ ob/i+)tion.2 (e )e !co*re$ te recor$! )n$ -o*n$ no inco#)tibi/it beteen te 8/oor "toc7 Line )n$ te #*r#orte$ re!tr*ct*re$ Onib*! Line. (i/e te re!tr*ct*rin+ )! )##roe$ in #rinci#/e, te e--ectiit tereo- )! !*bCect to con$ition! #rece$ent !*c )! te #)ent o- intere!t )n$ oter c)r+e!, )n$ te !*bi!!ion o- te tit/e! to te re)/ #ro#ertie! in Tandang Sora, *eon &it. Te!e con$ition! #rece$ent i#o!e$ on te re!tr*ct*re$ Onib*! Line ere neer re-*te$ b "ori)no o, o$$/ eno*+, -)i/e$ to -i/e ) :eor)n$*. To o*r in$, "ori)no! b)re )!!ertion t)t te re!tr*ct*rin+ )! )##roe$ b PNB c)nnot e*)te to ) -in$in+ o- )n i#/ie$ no)tion ic e>tin+*i!e$ "ori)no! ob/i+)tion )! entr*!tee *n$er te TR!. :oreoer, )! )!!erte$ b "ori)no in er co*nter)--i$)it, te )ier #ert)in! to #en)/t c)r+e! on te 8/oor "toc7 Line. Tere i! no !oin+ t)t te )ier e>tin+*i!e$ "ori)no! ob/i+)tion to !e// te <erc)n$i!e= -or c)! -or
#re!!/ reco+nie! te o/$, c)n+e! on/ te ter! o- #)ent, )$$! oter ob/i+)tion! not inco#)tib/e it te o/$ one!, or te ne contr)ct ere/ !*##/eent! te o/$ one.2@ Be!i$e!, no)tion $oe! not e>tin+*i! criin)/ /i)bi/it.2; It !t)n$! to re)!on tere-ore, t)t "ori)no! criin)/ /i)bi/it *n$er te TR! !*b!i!t! con!i$erin+ t)t te cii/ ob/i+)tion! *n$er te 8/oor "toc7 Line !ec*re$ b TR! ere not e>tin+*i!e$ b te #*r#orte$ re!tr*ct*re$ Onib*! Line. In Transpacific Battery Corporation v. Security Bank and Trust Company ,30 e e/$ t)t te re!tr*ct*rin+ o- ) /o)n )+reeent !ec*re$ b ) TR $oe! not per se no)te or e>tin+*i! te criin)/ /i)bi/it inc*rre$ tere*n$er9 > > > Neiter i! tere )n i#/ie$ no)tion !ince te re!tr*ct*rin+ )+reeent i! not inco#)tib/e it te tr*!t recei#t tr)n!)ction!. In$ee$, te re!tr*ct*rin+ )+reeent reco+nie! te ob/i+)tion $*e *n$er te tr*!t recei#t! en it re*ire$ #)ent o- )// intere!t )n$ oter c)r+e! #rior to re!tr*ct*rin+. (it re!#ect to :ic)e/, tere )! een ) #roi!o *n$er te )+reeent t)t te )o*nt $*e i! !*bCect to te Coint )n$ !o/i$)r /i)bi/it o- "#o*!e! :i+*e/ )n$ :)r ") )n$ :ic)e/ Go "). (i/e te n)e! o- :e/cor )n$ o!e#ine $o not )##e)r on te re!tr*ct*rin+ )+reeent, it c)nnot be #re!*e$ t)t te )e been re/iee$ -ro te ob/i+)tion. Te o/$ ob/i+)tion contin*e! to !*b!i!t !*bCect to te o$i-ic)tion! )+ree$ *#on b te #)rtie!. Te circ*!t)nce t)t oti)te$ te #)rtie! to enter into ) re!tr*ct*rin+ )+reeent )! te -)i/*re o- #etitioner! to )cco*nt -or te +oo$! receie$ in tr*!t )n$For $e/ier te #rocee$! tereo-. To ree$ te !it*)tion, te #)rtie! e>ec*te$ )n )+reeent to re!tr*ct*re Tr)n!#)ci-icM! ob/i+)tion!. Te B)n7 on/ e>ten$e$ te re#)ent ter o- te tr*!t recei#t! -ro ;0 $)! to one e)r it ont/ in!t)//ent )t 5 #er )nn* oer #rie r)te or 30 #er )nn* iceer i! i+er. 8*rterore, te intere!t r)te! ere -/e>ib/e in t)t te )re !*bCect to reie eer )orti)tion $*e. (eter te ter! )##e)re$ to be ore onero*! or not i! i)teri)/.1#i1 &o*rt! )re not )*torie$ to e>tric)te #)rtie! -ro te nece!!)r con!e*ence! o- teir )ct!. Te #)rtie! i// not be re/iee$ -ro teir ob/i+)tion! )! tere )! )b!o/*te/ no intention b te #)rtie! to !*#er!e$e or )bro+)te te tr*!t recei#t tr)n!)ction!. Te intention o- te ne )+reeent )! #reci!e/ to reie te o/$ ob/i+)tion )-ter te ori+in)/ #erio$ e>#ire$ )n$ te /o)n re)ine$ *n#)i$. (e// !ett/e$ i! te r*/e t)t, it re!#ect to ob/i+)tion! to #) ) !* o- one, te ob/i+)tion i! not no)te$ b )n in!tr*ent t)t e>#re!!/ reco+nie! te o/$, c)n+e! on/ te ter! o- #)ent, )$$! oter ob/i+)tion! not inco#)tib/e it te o/$ one!, or te ne contr)ct ere/ !*##/eent! te o/$ one .31 B)!e$ on )// te -ore+oin+, e -in$ +r)e error in te &o*rt o- A##e)/! $i!i!!)/ o- PNB! #etition -or certiorari . &ert)in/, i/e te $eterin)tion o- #rob)b/e c)*!e to in$ict ) re!#on$ent -or ) crie /ie! it te #ro!ec*tor, te $i!cretion *!t not be e>erci!e$ in ) i!ic)/ or $e!#otic )nner t)nt)o*nt to +r)e )b*!e o- $i!cretion. (HERE8ORE, te #etition i! GRANTE%. Te %eci!ion o- te &o*rt o- A##e)/! in &AG.R. "P No. 6243 -in$in+ no +r)e )b*!e o- $i!cretion on te #)rt o- te "ecret)r o- *!tice i! REDER"E% )n$ "ET A"I%E. Te Re!o/*tion o- te "ecret)r o- *!tice $)te$ 25 *ne 2002, $irectin+ te &it Pro!ec*tor o- N)+) &it to oe -or te it$r))/ o- te In-or)tion! -or estafa in re/)tion to te Tr*!t Recei#t! L) )+)in!t re!#on$ent Li/i)n ". "ori)no, )n$ i! 2; October 2002 Re!o/*tion,
$enin+ #etitionerM! :otion -or Recon!i$er)tion, )re ANNLLE%)n$ "ET A"I%E -or )in+ been i!!*e$ it +r)e )b*!e o- $i!cretion )n$ te Re!o/*tion or te N)+) &it Pro!ec*torM! O--ice $)te$ 1; :)rc 2001, -in$in+ #rob)b/e c)*!e )+)in!t erein re!#on$ent, i! REIN"TATE%.&on!e*ent/, te Or$er! o- te Re+ion)/ Tri)/ &o*rt, Br)nc 21 o- N)+) &it in &riin)/ &)!e! No!. 20010641 to 200106;3, e>ce#t &riin)/ &)!e No. 2001061, $)te$ 2 Noeber 2002, 21 8ebr*)r 2003 )n$ 15 */ 2003 )re "ET A"I%E )n$ it! Or$er o- 16 October 2002 re!ettin+ te contin*)tion or te #retri)/ i! REIN"TATE%.Te RT& i! -*rter or$ere$ to con$*ct te #retri)/ it $i!#)tc. "O OR%ERE%.