Land Bank vs Monet’s Export

Facts: Petitioner, Land Bank of the Philippines (Land Bank), and Monets Export and
Manufacturing Corporation (Monet) executed an Export Packing Credit Line
Agreement under which Monet was given a credit line, secured by the proceeds of its export
letters of credit, the continuing guaranty of the spouses Tagle, and the third party mortgage
executed by Mendigoria. Owing to the continued failure and refusal of Monet, and failed
demands, a complaint for collection of sum of money with prayer for preliminary attachment
was filed by Land Bank with the RTC. In their joint Answer with Compulsory Counterclaim,
Monet and the Tagle spouses alleged that Land Bank failed and refused to collect the
receivables on their export letter of credit against Wishbone Trading Company of Hong
Kong, while it made unauthorized payments on their import letter of credit to Beautilike
(H.K.) Ltd., which seriously damaged the business interests of Monet. RTC favored Monet’s
while CA affirmed RTC’s decision hoilding that LBP was responsible for the mismanagement
of the Wishbone and Beautilike accounts of Monet. It held that because of the non-collection
and unauthorized payment made by Land Bank on behalf of Monet, and considering that the
latter could no longer draw from its credit line with Land Bank, it suffered from lack of
financial resources sufficient to buy the needed materials to fill up the standing orders from
its customers.

Issue: Whether or not the issuing bank assumes any liability or responsibility over the
performance of the condition of the transaction stated in the letter of credit and for which
such letter of credit is issued?

Held: No. Banks assume no liability or responsibility for the form, sufficiency, accuracy,
genuineness, falsification or legal effect of any documents, or for the general and/or
particular conditions stipulated in the documents or superimposed thereon; nor do they
assume any liability or responsibility for the description, weight, quality, condition, packing,
delivery, value or existence of the goods represented by any documents, or for the good faith
or acts and/or omissions, solvency, performance or standing of the consignor, the carriers, or
the insurers of the goods, or any other person whomsoever. What characterizes letters of
credit, as distinguished from other accessory contracts, is the engagement of the issuing bank
to pay the seller once the draft and the required shipping documents are presented to it. In
turn, this arrangement assures the seller of prompt payment, independent of any breach of the
main sales contract. By this so-called independence principle, the bank determines compliance
with the letter of credit only by examining the shipping documents presented; it is precluded
from determining whether the main contract is actually accomplished or not.
DBP vs Traders Royal Bank

Facts: Phil-Asia obtained a loan accommodation from Traders Royal Bank (TRB) in the form
of four letters of credit. The loan was used for the importation of machineries and equipment
for the establishment of a soya beans processing plant. In a letter, DBP issued a guaranty in
favor of TRB to answer for the cost of the importation covered by the letters of credit. Phil-
Asia and DBP made partial payments on the loan covered by the letters of credit, leaving a
balance. When Phil-Asia and DBP failed to pay the balance despite demands, TRB filed with
the trial court a complaint to collect the unpaid balance of the letters of credit against Phil-
Asia and DBP.

DBP claimed that it was not liable for the importation from the supplier Emi Disc
Corporation since its guaranty covers only importation from Archer Daniels Midland
Corporation. DBP alleged that the change in supplier was without its consent and thus, not
covered by its guaranty. DBP also alleged that there was overpayment of the loan covered by
the letters of credit.

The Court of Appeals held that DBPs act of paying TRBs letters of credit covering the
importation from Emi Disc Corporation constituted implied approval and ratification of the
change of supplier from Archer Daniels Midland Corporation to Emi Disc Corporation. Thus,
DBP is still liable under its guaranty. Citing Articles 2066 and 2067 of the Civil
Code, the Court of Appeals ruled that as guarantor of Phil-Asias obligations to TRB under the
letters of credit, DBP is entitled to indemnity from Phil-Asia.

Issue: Whether or not DBP may be held liable due to its acquiscence to the change of
supplier?

Held: Yes, DBP was duly informed by TRB of the change of supplier from Archer Daniels
Midland Corporation to Emi Disc Corporation. DBP did not object to the change of supplier
and even paid TRBs letters of credit covering the importation from Emi Disc Corporation.
We agree with the conclusion of the Court of Appeals that such acts of DBP clearly indicate
its acquiescence or approval of the amendment on the letters of credit as regards the change
of supplier. Thus, the importation from EMI Disc Corporation is still covered by the DBP
guaranty.
Sarmiento vs CA

Facts: Defendant Gregorio Limpin, Jr. and Antonio Apostol, doing business as Davao Libra
Industrial Sales, filed an application for an Irrevocable Domestic Letter of Credit with the
plaintiff Bank in favor of LS Parts for the purchase of assorted scrap irons. Said application
was signed by defendant Limpin and Apostol. Thereafter, a Trust Receipt, was executed by
defendant Limpin and Apostol. Limpin and Apostol failed to comply their undertaking for
which both criminal and civil cases were filed. The cases were filed independently.

Issue: Is the court correct in proceeding independently although a criminal case is also
instituted?

Held: Yes, the complaint against the defendants is based on the failure of the latter to comply
with his obligation under the Trust Receipt. This breach of obligation is separate and distinct
from any criminal liability for “misuse and or misappropriation of goods or proceeds realized
from the sale of goods, documents or instruments under the trust receipts” punishable under
the PD 115. Being based on an obligation ex contractu and not ex delictu, the civil action
may proceed independently from the criminal proceedings instituted against petitioners
regardless of the result of the latter.
Rosario textile vs Home Bankers

Facts: Sometime in 1989, Rosario Textile Mills Corporation (RTMC) applied from Home
Bankers Savings & Trust Co. for an Omnibus Credit Line. The bank approved RTMC’s credit
line but for less. The bank notified RTMC of the grant of the said loan thru a letter which
contains terms and conditions conformed by RTMC thru Yujuico. Yujuico signed a Surety
Agreement in favor of the bank, in which he bound himself jointly and severally with RTMC
for the payment of all RTMC’s indebtedness to the bank from 1989 to 1990. RTMC availed of
the credit line by making numerous drawdowns, each drawdown being covered by a separate
promissory note and trust receipt. RTMC, represented by Yujuico, executed in favor of the
bank a total of eleven (11) promissory notes. Yujuico contend that he should be absolved
from liability. They claimed that although the grant of the credit line and the execution of
the suretyship agreement. They alleged that the bank gave assurance that the suretyship
agreement was merely a formality under which Yujuico will not be personally liable.
He theorized that when RTMC imported the raw materials needed for its manufacture,
using the credit line, it was merely acting on behalf of the bank, the true owner of the goods
by virtue of the trust receipts.

Issue: Whether or not Yujuico is absolved from liability by the grant of the credit line and
the execution of the suretyship agreement

Held: No. Yujuico’s argument conveniently ignores the true nature of its transaction with the
bank. A trust receipt is a security agreement pursuant to which a bank acquires a ‘security
interest’ in the goods. In Vintola vs. Insular Bank of Asia and America, we elucidated further
that “a trust receipt, therefore, is a security agreement, pursuant to which a bank acquires a
‘security interest’ in the goods. It secures an indebtedness and there can be no such thing as
security interest that secures no obligation.” In Samo vs. People, we described a trust receipt
as “a security transaction intended to aid in financing importers and retail dealers who do not
have sufficient funds or resources to finance the importation or purchase of merchandise,
and who may not be able to acquire credit except through utilization, as collateral, of the
merchandise imported or purchased.”

“If under the trust receipt, the bank is made to appear as the owner, it was but an artificial
expedient, more of legal fiction than fact, for if it were really so, it could dispose of the goods
in any manner it wants, which it cannot do, just to give consistency with purpose of the trust
receipt of giving a stronger security for the loan obtained by the importer. To consider the
bank as the true owner from the inception of the transaction would be to disregard the loan
feature thereof.
RTMC filed with the bank an application for a credit line in the amount of P10 million, but
only P8 million was approved. RTMC then made withdrawals from this credit line and
issued several promissory notes in favor of the bank. In banking and commerce, a credit line
is “that amount of money or merchandise which a banker, merchant, or supplier agrees to
supply to a person on credit and generally agreed to in advance.”[3]It is the fixed limit of
credit granted by a bank, retailer, or credit card issuer to a customer, to the full extent of
which the latter may avail himself of his dealings with the former but which he must not
exceed and is usually intended to cover a series of transactions in which case, when the
customer’s line of credit is nearly exhausted, he is expected to reduce his indebtedness by
payments before making any further drawings.

The entrustee. A trust receipt has two features, the loan and security features. The loan is
brought about by the fact that the entruster financed the importation or purchase of the
goods under TR. Until and unless this loan is paid, the obligation to pay subsists. If the
entrustee is made to appear as the owner, it was but an artificial expedient, more of legal
fiction than fact, for if it were really so, it could dispose of the goods in any manner that it
wants, which it cannot do. To consider the entrustee as the true owner from the inception of
the transaction would be to disregard the loan feature thereof.
PNB vs Sayo, Jr.

Facts: Noahs Ark Sugar Refinery issued on several dates, Warehouse Receipts. Subsequently,
Warehouse Receipts Nos. 18080 and 18081 were negotiated and endorsed to Luis T. Ramos,
and Receipts Nos. 18086, 18087 and 18062 were negotiated and endorsed to Cresencia K.
Zoleta. Ramos and Zoleta then used the quedans as security for two loan agreements
obtained by them from the Philippine National Bank. The aforementioned quedans were
endorsed by them to the Philippine National Bank.

Ramos and Zoleta failed to pay their loans upon maturity. Consequently, PNB, wrote to
Noahs Ark demanding delivery of the sugar stocks covered by the quedans endorsed to it by
Zoleta and Ramos. Noahs Ark refused to comply with the demand alleging ownership
thereof, for which reason the Philippine National Bank filed with the Regional Trial Court of
Manila a verified complaint for Specific Performance with Damages and Application for Writ
of Attachment against Noahs Ark et al

Noahs Ark and its co-defendants filed an Answer with Counterclaim and Third-Party
Complaint in which they claimed that they [were] the owners of the subject quedans and the
sugar represented therein, averring as they did that:

Issue: In case where a warehouse receipt is transferred to secure payment of a loan by way of
pledge or mortgage, does the pledge or mortgagee automatically become the owner of the
goods?

Held: No, they do not automatically become the owner of the goods, but merely retains the
right to keep and with the consent of the owner, to sell them, so as to satisfy the obligations
from the proceeds for the simple reason that the transaction is not a sale but only a pledge or
mortgage. Likewise, if the property is lost without the fault or negligence of the mortgagee or
pledge, then said goods are to be regarded as lost on account of the real owner, mortgagor or
pledgor.
Rural bank of sta Catalina vs Land Bank

Facts: Respondent, Land Bank of the Philippines, filed a complaint against the petitioner, Sta.
Catalina Rural Bank, Inc., in the Regional Trial Court of Vigan, Ilocos Sur, Branch 20, for the
collection of the sum of P2,809,280.25, capitalized and accrued interests, penalties and
surcharges, and for such other equitable reliefs. On motion of the respondent bank, the trial
court issued an Order on January 23, 1997 declaring the petitioner bank in default for its
failure to file its answer to the complaint.[3] Despite its receipt of the copy of the said order,
the petitioner bank failed to file a motion to set aside the order of default. The assets and
affairs of the rural Bank were however placed under receivership.

Issue: Whether Rural bank can be held liable for penalties and interests when it is placed
under receivership?

Held: It bears stressing that a defending party declared in default loses his standing in court
and his right to adduce evidence and to present his defense. He, however, has the right to
appeal from the judgment by default and assail said judgment on the ground, inter alia, that
the amount of the judgment is excessive or is different in kind from that prayed for, or that
the plaintiff failed to prove the material allegations of his complaint, or that the decision is
contrary to law. Such party declared in default is proscribed from seeking a modification or
reversal of the assailed decision on the basis of the evidence submitted by him in the Court of
Appeals, for if it were otherwise, he would thereby be allowed to regain his right to adduce
evidence, a right which he lost in the trial court when he was declared in default, and which
he failed to have vacated. In this case, the petitioner sought the modification of the decision
of the trial court based on the evidence submitted by it only in the Court of Appeals.
Marquez vs Desierto

Facts: Lourdes Marquez received an Order from respondent Ombudsman Desierto to produce
bank documents for inspection in camera relative to various accounts maintained at the bank
where petitioner is the branch manager. The accounts to be inspected are involved in a case
pending with the Ombudsman entitled, Fact-Finding and Intelligence Bureau (FFIB) against
Amado Lagdameo. It appears that a certain George Trivinio purchased trail managers check
and deposited part of it to an account maintained at petitioner’s branch. Petitioner after
meeting with the FFIB Panel to ensure the veracity of the checks agreed to the in camera
inspection. Petitioner being unable to readily identify the accounts in question, the
Ombudsman issued an order directing petitioner to produce the bank documents. Thus,
petitioner sought a declaration of her rights from the court due to the clear conflict between
RA 6770 and RA 1405. Meanwhile, FFIB moved to cite petitioner in contempt before the
Ombudsman.

Issue: Whether or not the case is an exception to the Law on Secrecy of Bank Deposits?

Held: No. The Court held that before an in camera inspection may be allowed, there must be
a pending case before a court of competent jurisdiction. Further, the account must be clearly
identified, the inspection limited to the subject matter of the pending case before the court of
competent jurisdiction. The bank personnel and the account holder must be notified to be
present during the inspection, and such inspection may cover only the account identified in
the pending case.
Consolidated Bank vs CA

Facts: George Pua was granted several loans by the plaintiff bank which were secured by
promissory notes, both in his personal and executive capacity of George and George Trade
Inc. Defendants were charged handling fee which were not included in the loan agreement
and the promissory note.

Issue: Whether or not the bank may charge handling fee?

Held: No. As to handling charges, banks are authorized under Central Bank Circular No. 504
to collect such charges on loans over P500,000.00 with a maturity of 730 days or less at the
rate of 2% per annum, on the principal or the outstanding balance thereof, whichever is
lower; 1.75% on loans over P500,000.00 but not over P1,000,000.00; 1.50% on loans over
P1,000,000.00 but not over 2,000,000.00, etc. Section 7 of the same Circular, however,
provides that all banks and non-bank financial intermediaries authorized to engage in quasi-
banking functions are required to strictly adhere to the provisions of Republic Act No. 3765
otherwise known as the "Truth in Lending Act" and shall make the true and effective cost of
borrowing an integral part of every loan contract. The promissory notes signed by private
respondents do not contain any stipulation on the payment of handling charges. Petitioner
bank cannot, therefore, charge private respondents such handling charges.
Manalo vs CA

Facts: Villanueva Enterprises, obtained a loan from the respondent PAIC Savings and
Mortgage Bank and the Philippine American Investments Corporation (PAIC),
respectively. To secure payment of both debts, Vargas executed in favor of the respondent
and PAIC a Joint First Mortgage over two parcels of land registered under her name. After
default and failure of demands, respondent instituted extrajudicial foreclosure proceedings
over the mortgaged lots. The property was sold at a public auction to the respondent itself,
after tendering the highest bid. After, the Central Bank of the Philippines filed a Petition for
assistance in the liquidation of the respondent with the Regional Trial Court. The petition
was given due course in an Order dated May 19, 1987.
Respondent petitioned the RTC, herein court a quo, for the issuance of a writ of
possession for the subject property. This is in view of the consolidation of its ownership over
the same as mentioned earlier. Vargas and S. Villanueva Enterprises, Inc. filed their
opposition thereto. After which, trial ensued.
Issue: Whether the issuance of the writ should have been lodged in the liquidation court and
not the RTC?

Held: Sec. 29 of RA 265 of the Central Bank Act states that: “The liquidator designated as
hereunder provided shall, by the Solicitor General, file a petition in the Regional Trial Court
reciting the proceedings which have been taken and praying the assistance of the court in
the liquidation of such institution. The court shall have jurisdiction in the same proceedings
to assist in the adjudication of disputed claims against the bank or non-bank financial
intermediary performing quasi-banking functions and the enforcement of individual
liabilites of the stockholders and do all that is necessary to preserve the assets of such
institution and to implement the liquidation plan approved by the Monetary Board.”

Petitioner apparently failed to appreciate the correct meaning and import of the above-
quoted law. The legal provision only finds operation in cases where there are claims against
an insolvent bank. In fine, the exclusive jurisdiction of the liquidation court pertains only
to the adjudication of claims against the bank. It does not cover the reverse situation where it
is the bank which files a claim against another person or legal entity.
Merrill Lynch vs CA

Facts: ML FUTURES filed a complaint with the RTC against the Spouses Lara for the
recovery of a debt and interest thereon, damages, and attorney's fees. In its complaint ML
FUTURES described itself as (a) "a non-resident foreign corporation, not doing business in
the Philippines, duly organized and existing under and by virtue of the laws of the state of
Delaware, U.S.A.;" as well as (b) a 'futures commission merchant' duly licensed to act as such
in the futures markets and exchanges in the United States, . . . essentially functioning as a
broker (executing) orders to buy and sell futures contracts received from its customers on
U.S. futures exchanges." In its complaint ML FUTURES alleged (1) that it entered into a
Futures Customer Agreement with the spouses in virtue of which it agreed to act as the
latter's broker for the purchase and sale of futures contracts in the U.S.; (2) that pursuant to
the contract, orders to buy and sell futures contracts were transmitted to ML FUTURES by
the Lara Spouses "through the facilities of Merrill Lynch Philippines, Inc., a Philippine
corporation and a company servicing ML Futures' customers;" (3) that from the outset, the
Lara Spouses "knew and were duly advised that Merrill Lynch Philippines, Inc. was not a
broker in futures contracts," and that it "did not have a license from the Securities and
Exchange Commission to operate as a commodity trading advisor (i.e., "and entity which, not
being a broker, furnishes advice on commodity futures to persons who trade in futures
contracts"); (4) that in line with the above mentioned agreement and through said Merill
Lynch Philippines, Inc., the Lara Spouses actively traded in futures contracts, including
"stock index futures" for four years or so, i.e., from 1983 to October, 1987, there being more
or less regular accounting and corresponding remittances of money (or crediting or debiting)
made between the spouses and ML FUTURES; (5) that because of a loss amounting to US
$160,749.69 incurred in respect of 3 transactions involving "index futures," and after setting
this off against an amount of US $75,913.42 then owing by ML FUTURES to the Lara
Spouses, said spouses became indebted to ML FUTURES for the ensuing balance of US
$84,836.27, which the latter asked them to pay; (6) that the Lara Spouses however refused to
pay this balance, "alleging that the transactions were null and void because Merrill Lynch
Philippines, Inc., the Philippine company servicing accounts of ML Futures, had no license
to operate as a "commodity and/or financial futures broker."

Issue: Whether or not Sps. Lara are stopped from question the capacity to sue of ML Futures
Held: The doctrine of estoppel to deny corporate existence applies to foreign as well as to
domestic corporations. The rule is that a party is estopped to challenge the personality of a
corporation after having acknowledged the same by entering into a contract with it.
Manzano vs CA

FACTS: The petitioner filed an action for the cancellation of Letters of Patent covering a
gasburner registered in the name of responded Melecia Madolaria who subsequently assigned
theletter of patent to United Foundry. Petitioner alleged that the private respondent was not
theoriginal, true and actual inventor nor did she derive her rights from the original, true and
actualinventor of the utility model covered by the letter of patent; further alleged that the
utilitymodel covered by the subject letter of patent had been known or used by others in
thePhilippines for than one (1) year before she filed her application for letter of patent on
Dec1979. For failure to present substantive proof of her allegations, the lower court and
Court of Appeals denied the action for cancellation. Hence, the present petition.

ISSUE:Whether or not the respondent court wrongfully denied the cancellation of letter of
patent registered under the private respondent.

HELD:No. The issuance of such patent creates a presumption which yields only to clear
andcogent evidence that the patentee was the original and first inventor. The burden of
provingwant of novelty is on him who avers it and the burden is a heavy one which is met
only by clearand satisfactory proof which overcomes every reasonable doubt. Clearly
enough, the petitionerfailed to present clear and satisfactory proof to overcome every
reasonable doubt to afford thecancellation of the patent to the private respondent
Philipp Morris vs Fortune Tobacco

Facts: Respondent contends that petitioner was not in danger of sustaining irreparable
damage by the usage of the former of the product name “MARK”, same as that of petitioner’s
product, since petitioner was not doing business in the Philippines.

Issue: Whether there is trademark infringement?

Held: Yes, the Court ruled that petitioner, although not doing business in the Philippines,
has the legal right to sue for infringement anyone who uses their duly registered mark. Sec 2
of RA 166 provides that foreign corporations and corporations domiciled in a foreign country
are not disabled from bringing suit in Philippine courts to protect their rights as holders of
trademarks registered in the Philippines. It was further reinforced by the Paris convention
which affords foreign signatories to the said treaty the advantages and protections which
Philippine law grants to Philippine nationals. There is no legal requirement that the foreign
registrant itself manufacture and sell its products here. All the statute requires is the use in
trade and commerce in the Philippines. The trademark infringement by a local company
may, for one thing, affect the volume of importation into the Philippines of cigarettes
bearing petitioners' trademarks by independent or third party traders. The Court was led to
believe there was a prima facie basis for holding, as the Patent Office had held and as the
Court of Appeals did originally hold, that private respondent's "MARK" infringes upon
petitioners' registered trademarks in view of the fact that out of all the words in the English
language, respondents chose the word "mark" to refer to its cigarettes.
Filipino Society of Composers vs Tan

Facts: Plaintiff-appellant:*is the owner of certain musical compositions among which are the
songs entitled: "Dahil SaIyo", "Sapagkat Ikaw Ay Akin," "Sapagkat Kami Ay Tao Lamang" and
"The Nearness Of You."*filed a complaint with the lower court for infringement of copyright
against defendant-appelleefor allowing the playing in defendant-appellee's restaurant of said
songs copyrighted in thename of the former.Defendant-appellee,*countered that the
complaint states no cause of action. While not denying the playing of saidcopyrighted
compositions in his establishment, appellee maintains that the mere singing andplaying of
songs and popular tunes even if they are copyrighted do not constitute aninfringement under
the provisions of Section 3 of the Copyright Law.

Issue: Does the singing and playing inside an establishment constitute public performance for
profit?

Held: Yes, In the case at bar, it is admitted that the patrons of the restaurant in question pay
only for the food and drinks and apparently not for listening to the music. As found by the
trial court, the music provided is for the purpose of entertaining and amusing the customers
in order to make the establishment more attractive and desirable. It will be noted that for the
playing and singing the musical compositions involved, the combo was paid as independent
contractors by the appellant. It is therefore obvious that the expenses entailed thereby are
added to the overhead of the restaurant which are either eventually charged in the price of
the food and drinks or to the overall total of additional income produced by the bigger
volume of business which the entertainment was programmed to attract. Consequently, it is
beyond question that the playing and singing of the combo in defendant-appellee's
restaurant constituted performance for profit contemplated by the Copyright Law.
Habana vs Robles

Facts: Pacita Habana et al., are authors and copyright owners of duly issued of the book,
College English For Today (CET). Respondent Felicidad Robles was the author of the book
Developing English Proficiency (DEP). Petitioners found that several pages of the
respondent's book are similar, if not all together a copy of petitioners' book. Habana et al.
filed an action for damages and injunction, alleging respondent’s infringement of copyrights,
in violation of P.D. 49. They allege respondent Felicidad C. Robles being substantially
familiar with the contents of petitioners' works, and without securing their permission,
lifted, copied, plagiarized and/or transposed certain portions of their book CET.

On the other hand, Robles contends that the book DEP is the product of her own intellectual
creation, and was not a copy of any existing valid copyrighted book and that the similarities
may be due to the authors' exercise of the "right to fair use of copyrighted materials, as
guides."

The trial court ruled in favor of the respondents, absolving them of any liability. Later, the
Court of Appeals rendered judgment in favor of respondents Robles and Goodwill Trading
Co., Inc. In this appeal, petitioners submit that the appellate court erred in affirming the trial
court's decision.

ISSUE: Whether Robles committed infringement in the production of DEP.

HELD: A perusal of the records yields several pages of the book DEP that are similar if not
identical with the text of CET. The court finds that respondent Robles' act of lifting from the
book of petitioners substantial portions of discussions and examples, and her failure to
acknowledge the same in her book is an infringement of petitioners' copyrights.

In the case at bar, the least that respondent Robles could have done was to acknowledge
petitioners Habana et. al. as the source of the portions of DEP. The final product of an
author's toil is her book. To allow another to copy the book without appropriate
acknowledgment is injury enough.
PDIC vs Citibank

Facts: PDIC argues that the head offices of Citibank and BA and their individual foreign
branches are separate and independent entities. It insists that under American jurisprudence,
a bank's head office and its branches have a principal-agentrelationship only if they operate
in the same jurisdiction. In the case of foreign branches, however, no such relationship e!ists
because the head office and saidforeign branches are deemed to be two distinct entities.
PDIC contends that the law treats a branch of a foreign bank as a separate and independent
banking unit. Citibank and BA argue that the money placements are not deposits. 1hey
postulate that for a deposit to e!ist, there must be at least two parties 2 a depositor and a
depository 2 each with a legal personality distinct from the other. Because the respondents'
respective head offices and their branches form only a single legal entity, there is no
creditor-debtor relationship and the funds placed in the Philippine branch belong to one and
the same bank. A bank cannot have a deposit with itself

Issue: 1. whether the branch has separate legal personality?

2. Whether the funds placed in the Philippine branch by the head office and foreign
branches of Citibank and BA are insurable deposits under the PDIC Charter and, as such, are
subject to assessment for insurance premiums?

1. The head office of a foreign bank and its branches are deemed one legal entity.

2. In the case of Citibank and BA, it is apparent that they both did not incorporate a separate
domestic corporation to represent its business interests in the Philippines. their Philippine
branches are, as the name implies, merely branches, without a separate legal personality from
their parent company, Citibank and BA. 1hus, being one and the same entity, the funds
placed by the respondents in their respective branches in the Philippines should not be
treated as deposits made by third parties subject to deposit insurance under the PDIC
Charter.
Professional Services Inc. vs CA

Facts: Enrique Agana told his wife Natividad Agana to go look for their neighbor, Dr. Ampil,
a surgeon staff member of Medical City, a prominent and known hospital Natividad suffered
from injury due to 2 gauges left inside her body so they sued Professional Inc. (PSI) Despite,
the report of 2 missing gauzes after the operation PSI did NOT initiate an investigation.

Issue May the PSI be held liable?

Held: Yes. As it happened, PSI took no heed of the record of operation and consequently did
not initiate a review of what transpired during Natividads operation. Rather, it shirked its
responsibility and passed it on to others to Dr. Ampil whom it expected to inform Natividad,
and to Natividad herself to complain before it took any meaningful step. By its inaction,
therefore, PSI failed its own standard of hospital care. It committed corporate negligence.

It should be borne in mind that the corporate negligence ascribed to PSI is different from the
medical negligence attributed to Dr. Ampil. The duties of the hospital are distinct from those
of the doctor-consultant practicing within its premises in relation to the patient; hence, the
failure of PSI to fulfill its duties as a hospital corporation gave rise to a direct liability to the
Aganas distinct from that of Dr. Ampil.

All this notwithstanding, we make it clear that PSIs hospital liability based on ostensible
agency and corporate negligence applies only to this case, pro hac vice. It is not intended to
set a precedent and should not serve as a basis to hold hospitals liable for every form of
negligence of their doctors-consultants under any and all circumstances. The ruling is unique
to this case, for the liability of PSI arose from an implied agency with Dr. Ampil and an
admitted corporate duty to Natividad.
GSIS vs CA

Facts: The annual stockholders meeting (annual meeting) of MERALCO was scheduled on 27
May 2008. In connection with the annual meeting, proxies were required to be submitted on
or before 17 May 2008, and the proxy validation was slated for five days later, or 22 May.

In view of the resignation of Quiason, the position of corporate secretary of Meralco became
vacant. On 15 May 2008, the board of directors of Meralco designated Jose Vitug to act as
corporate secretary for the annual meeting. However, when the proxy validation began on
22 May, the proceedings were presided over by respondent Anthony Rosete (Rosete),
assistant corporate secretary and in-house chief legal counsel of Meralco. Private respondents
nonetheless argue that Rosete was the acting corporate secretary of Meralco. Petitioner
Government Service Insurance System (GSIS), a major shareholder in Meralco, was
distressed over the proxy validation proceedings, and the resulting certification of proxies in
favor of the Meralco management.

GSIS filed a complaint with the RTC, seeking the declaration of certain proxies as invalid.
Despite the Cease and Desist Order issued ON May 26, 2006 by the SEC, MERALCO
announced the following day through the OIC Corporate Secretary, Rosete that the annual
meeting will push through.

Issues: Whether or not the RTC has jurisdiction over the question in relation to the election
of a corporate officer?

Held: Yes. Under Section 5(c) of PD No. 902-A, in relation to the SRC, the jurisdiction of the
regular trial courts with respect to election-related controversies is specifically confined to
"controversies in the election or appointment of directors, trustees, officers or managers of
corporations, partnerships, or associations." Evidently, the jurisdiction of the regular courts
over so-called election contests or controversies under S. 5(c) does not extend to every
potential subject that may be voted on by shareholders, but only to the election of directors
or trustees, in which stockholders are authorized to participate under Section 24 of the
Corporation Code.

This qualification allows for a useful distinction that gives due effect to the statutory right of
the SEC to regulate proxy solicitation, and the statutory jurisdiction of regular courts over
election contests or controversies. The power of the SEC to investigate violations of its rules
on proxy solicitation is unquestioned when proxies are obtained to vote on matters unrelated
to the cases enumerated under Section 5 of Presidential Decree No. 902-A. However, when
proxies are solicited in relation to the election of corporate directors, the resulting
controversy, even if it ostensibly raised the violation of the SEC rules on proxy solicitation,
should be properly seen as an election controversy within the original and exclusive
jurisdiction of the trial courts by virtue of Section 5.2 of the SRC in relation to Section 5(c) of
Presidential Decree No. 902-A.
Lisam Enterprises, Inc. vs Banco de Oro

Facts: On August 13, 1999, petitioners filed a Complaint against respondents for Annulment
of Mortgage with Prayer for Temporary Restraining Order & Preliminary Injunction with
Damages with the RTC of Legaspi City.

Issue Whether the complaint falls under the jurisdiction of SEC?

Held: No, pronouncements of the Court in Saura vs Saura, Jr. are exactly in point with the
issues in the present case. Here, the complaint is for annulment of mortgage with the
mortgagee bank as one of the defendants, thus, as held in Saura, jurisdiction over said
complaint is lodged with the regular courts because the mortgagee bank has no intra-
corporate relationship with the stockholders. There can also be no forum shopping, because
there is no identity of issues. The issue being threshed out in the SEC case is the due
execution, authenticity or validity of board resolutions and other documents used to facilitate
the execution of the mortgage, while the issue in the case filed by petitioners with the RTC is
the validity of the mortgage itself executed between the bank and the corporation,
purportedly represented by the spouses Leandro and Lilian Soriano, the President and
Treasurer of petitioner LEI, respectively. Thus, there is no reason to dismiss the complaint in
this case.