3. Dy vs.

Philippine Banking Corporation

689 SCRA 507
2013

FACTS:
Sometime in 1989, Philbanks Internal Auditing Department
conducted a verification and audit of Marinas accounts with the
formers Balintawak, Quezon City branch. The audit team
discovered that there were fraudulent manipulations and
falsification of commercial documents which resulted to a loss to
the bank of the amount of US$1,538,094.49 in Marinas export
accounts with the bank. Philbank filed a complaint for a sum of
money with preliminary attachment against Marina,
Tanjutco, and Alindogan. The complaint was later amended
to include the Dy spouses and Mercado as defendants.
The investigation had revealed that in June 1989, Tanjutco and
Alindogan negotiated with Philbank various export
shipping
documents totaling US$1,538,094.49. Philbank found that its bank
officers, Dy and Mercado, authorized the negotiation of the
abovementioned shipping documents despite these being marked
as non-negotiable. It further alleged that Dy and Mercado
colluded with Tanjutco and Alindogan in the scheme to defraud the
bank.

When Philbank demanded the surrender of the negotiable bills of

lading, with the corresponding stamp merchandise loaded on
board, in order to obtain reimbursement for the face value of the
documents, Tanjutco and Alindogan could not produce them. It was
later found that there was, in fact, no merchandise to be shipped
and the documents presented to the bank were fictitious and
fraudulent.
Philbank also alleged that Dy and Mercado allowed the outright
purchase of said documents knowing them to be fictitious and
fraudulent. It also argued that even assuming the documents were
genuine, Dy and Mercado could still be held liable for the banks
loss because they acted in excess of their authority since they
approved the transaction without the approval by the Board of
Directors and contrary to bank practice and procedure
ALLEGATIONS:

MARINA, Tanjutco, and Alindogan : denied any liability. They

alleged that, assuming they received said amount from the
bank, it was by way of a loan, which was not yet due at the
time of the filing of the case before the RTC, and secured by
the corporate earnings of Marina. If at all, any liability should
be borne by Marina alone. They further alleged that the
bank was bound by its officers actions and could not
belatedly repudiate such actions by claiming that these
transactions were irregular, fraudulent, and prejudicial to it.
They claimed to have transacted with Philbanks officers in
good faith, honestly believing that the latter were acting
under the authority given to them by the bank
DY: while she had general supervision of Area IIwhich
includes the Balintawak branchher participation in every
transaction was not indispensable. She stated that she was
never aware of any false pretenses committed by Tanjutco
and Alindogan and that she never authorized the purchase
of the alleged fraudulent documents.
MERCADO: all the transactions were handled in accordance
with standard operating procedures and were referred to
and duly approved by his immediate superior, defendant
Virginia Judy Dy. He averred that the subject transactions
were considered at the instance of and approved by
defendant Virginia Judy Dy who is the Assistant VicePresident and Area Head of plaintiff bank, and under whose
jurisdiction, direction and supervision defendant works as
branch manager[.]

RULING OF THE RTC: MARINA is held solely liable to Philbank, and

the complaint against Tanjutco, Dy spouses, and Mercado were
dismissed.
RULING OF THE CA: Affirm RTC ruling with modification, insofar as
defendants Tanjutco, Alindogan, and Virginia Dy are held jointly and
solidarily liable with MARINA. As to the liability of the banks
officers, the CA upheld the RTCs judgment absolving Mercado of
liability but reversed the finding on Dys guilt. The CA ruled that Dy
was jointly and solidarily liable with Marina, Tanjutco, and
Alindogan.
The CA stated that the transactions under question transpired
because of Judy Dys approval. Hence, the present petition.
ISSUE:
Whether or not Philbanks evidence have sufficiently proved that
petitioner Judy Dy was in conspiracy/collusion with MARINA,

Tanjutco, and Alindogan to defraud PHILBANK of the value of the

subject export shipping documents.
RULING:
The Court AFFIRMS the Court of Appeals. The evidence on
record clearly bears out Dys liability. Based on the testimonies of
the witnesses, Dy brought in Marinas account to Philbank and she
directly transacted with Marinas officers. More importantly, there
would have been no completed transaction without Dys approval.
Her act of approving the transaction was the single most important
factor that allowed Tanjutco and Alindogans scheme to succeed.
As the CA noted, only Dy could have supplied the key element that
Tanjutco and Alindogan needed: the banks approval. Mercado, by
himself, could not approve the subject transactions. He had no such
authority. He only signed the export documents because Dy
approved the same. Dys liability was further explained by
Philbanks internal auditor, Laurito Abalos (Abalos). Abalos testified
that Dy acted beyond her authority, considering that the
transaction was not considered a regular bank transaction. A
regular bank transaction, according to Abalos means all the
documents are complete - that means if there is no discrepancy in
the export bills that the bank is purchasing then, all the documents
are clean and in accordance with the terms and conditions. In this
case, there is a very important vital document that is missing here
and this is the negotiable Bills of Lading because the Letters of
Credit states (sic) the terms and conditions that it has to be
supported by a negotiable Bills of Lading, therefore, it is a violation
of the terms and conditions and Mrs. Judy Dy has no authority over
it.
Finally, the Court agrees with the CAs finding that Dy colluded with
Tanjutco and Alindogan in the latters scheme to divest the bank of
its funds. Dy knew that Marina could not present the negotiable
Bills of Lading; yet, she still approved the purchase of Marinas
export bills. Tanjutco and Alindogan were holding non-negotiable
export documents, which they knew they could not negotiate with
any other bank in the regular course of business. Thus, the
assurance of Dys approval was indispensable to their plans. The
more logical conclusion is that Dy was fully aware that Tanjutco and
Alindogan were out to defraud Philbank and allowed herself to be
part of the scheme. For that, she must be held accountable.

4. ANG vs. ANG G.R. No. 201675

June 19, 2013

FACTS:
Sunrise Marketing Bacolod, Inc. (SMBI) is a duly registered
corporation owned by the Ang family. Juanito and Roberto are
siblings. Anecita is Juanitos wife and Jeannevie is their daughter.
Roberto was elected President of SMBI, while Juanito was elected as
its Vice President. Rachel and Anecita are SMBIs Corporate
Secretary and Treasurer, respectively.
Nancy the sister of Juanito and Roberto, and her husband,
Theodore, agreed to extend a loan to settle the obligations of SMBI
and other corporations owned by the Ang family. Nancy and
Theodore issued a check payable to Juanito Ang and/or Anecita
Ang and/or Roberto Ang and/or Rachel Ang. Nancy was a former
stockholder of SMBI, but she no longer appears in SMBIs General
Information Sheets. Nancy and Theodore are now currently residing
in the US. There was no written loan agreement, in view of the
close relationship between the parties. Part of the loan was also
used to purchase real properties for SMBI, for Juanito, and for
Roberto.
In 2005, SMBI increased its authorized capital stock.. The
Certificate of Increase of Capital Stock was signed by Juanito,
Anecita, Roberto, and Rachel as directors of SMBI. Juanito claimed,
however, that the increase of SMBIs capital stock was done in
contravention of the Corporation Code.

Juanito claimed that payments to Nancy and Theodore ceased

sometime after 2006. Nancy and Theodore, through their counsel
here in the Philippines, sent a demand letter to "Spouses Juanito L.
Ang/Anecita L. Ang and Spouses Roberto L. Ang/Rachel L. Ang" for
payment of the principal plus interest.
Roberto and Rachel then sent a letter to Nancy and Theodores
counsel saying that they are not complying with the demand letter
because they have not personally contracted a loan from Nancy
and Theodore.
Juanito and Anecita executed a Deed of Acknowledgment and
Settlement Agreement and an Extra-Judicial Real Estate Mortgage.
Under the foregoing instruments, Juanito and Anecita admitted that
they, together with Roberto and Rachel, obtained a loan from
Nancy and Theodore.
A certain Kenneth C. Locsin signed on behalf of Nancy and
Theodore, under an SPA which was not attached as part of the
Settlement Agreement or the Mortgage, nor included in the records
of this case.
Thereafter, Juanito filed a "Stockholder Derivative Suit with prayer
for an ex-parte Writ of Attachment/Receivership" alleging that "the
intentional and malicious refusal of defendant Sps. Roberto and
Rachel Ang to settle their 50% share of the total obligation will
definitely affect the financial viability of plaintiff SMBI." Juanito also
claimed that he has been "illegally excluded from the management
and participation in the business of [SMBI through] force, violence
and intimidation" and that Rachel and Roberto have seized and
carted away SMBIs records from its office.

these directors or officers will never be willing to sue themselves,

or impugn their wrongful or fraudulent decisions, stockholders are
permitted by law to bring an action in the name of the corporation
to hold these directors and officers accountable. In derivative suits,
the real party in interest is the corporation, while the stockholder is
a mere nominal party.
The Court has recognized in Yu vs. Yukayguan that a stockholders
right to institute a derivative suit is not based on any express
provision of the Corporation Code, or even the Securities Regulation
Code, but is impliedly recognized when the said laws make
corporate directors or officers liable for damages suffered by the
corporation and its stockholders for violation of their fiduciary
duties. Hence, a stockholder may sue for mismanagement, waste
or dissipation of corporate assets because of a special injury to him
for which he is otherwise without redress. In effect, the suit is an
action for specific performance of an obligation owed by the
corporation to the stockholders to assist its rights of action when
the corporation has been put in default by the wrongful refusal of
the directors or management to make suitable measures for its
protection. The basis of a stockholders suit is always one in equity.
However, it cannot prosper without first complying with the legal
requisites for its institution.

NO.

The Complaint failed to show how the acts of Rachel and Roberto
resulted in any detriment to SMBI. The Complaint failed to show
how the acts of Rachel and Roberto resulted in any detriment to
SMBI. The CA-Cebu correctly concluded that the loan was not a
corporate obligation, but a personal debt of the Ang brothers and
their spouses. The check was issued to "Juanito Ang and/or Anecita
Ang and/or Roberto Ang and/or Rachel Ang" and not SMBI. The
proceeds of the loan were used for payment of the obligations of
the other corporations owned by the Angs as well as the purchase
of real properties for the Ang brothers. SMBI was never a party to
the Settlement Agreement or the Mortgage. It was never named as
a co-debtor or guarantor of the loan. Both instruments were
executed by Juanito and Anecita in their personal capacity, and not
in their capacity as directors or officers of SMBI. Thus, SMBI is under
no legal obligation to satisfy the obligation.

The Complaint is not a derivative suit. A derivative suit is an action

brought by a stockholder on behalf of the corporation to enforce
corporate rights against the corporations directors, officers or
other insiders. Under Sections 23 and 36 of the Corporation Code,
the directors or officers, as provided under the by-laws, have the
right to decide whether or not a corporation should sue. Since

The fact that Juanito and Anecita attempted to constitute a

mortgage over "their" share in a corporate asset cannot affect
SMBI. The Civil Code provides that in order for a mortgage to be
valid, the mortgagor must be the "absolute owner of the thing x x x
mortgaged." Corporate assets may be mortgaged by authorized
directors or officers on behalf of the corporation as owner, "as the

ISSUE:
Is the instant suit a mere complaint for sum of money masked as a
derivative suit?
RULING:

transaction of the lawful business of the corporation may

reasonably and necessarily require." However, the wording of the
Mortgage reveals that it was signed by Juanito and Anecita in their
personal capacity as the "owners" of a pro-indiviso share in SMBIs
land and not on behalf of SMBI. Juanito and Anecita, as
stockholders of SMBI, are not co-owners of SMBI assets. They do
not own pro-indiviso shares, and therefore, cannot mortgage the
same except in their capacity as directors or officers of SMBI.
Since damage to the corporation was not sufficiently proven by
Juanito, the Complaint cannot be considered a bona fide derivative
suit. A derivative suit is one that seeks redress for injury to the
corporation, and not the stockholder. No such injury was proven in
this case.