Pilipinas

Bank vs. Glee Chemical Laboratories

June 15, 2006| Austria-Martinez, J. | Presumptions
PETITIONER: Pilipinas Bank
RESPONDENT: Glee Chemical Laboratories

SUMMARY: GCL applied for a loan from PB, secured by a real estate mortgage. GCL claims that they never received the
proceeds of the loan because PB applied them to a loan contracted by a third person. PB claims that the real estate mortgage
had a stipulation in favor of a third person. SC held that the stipulation is not valid because it was not proven that such was
added with the approval of GCLs president.

DOCTRINE: PB claims that the stipulation is valid, contending that it was notarized, and thus, validly executed. SC said that
notarization only creates a presumption of the due execution of a document, and such may still be overcome by other
evidence. In this case, the presumption cannot even be used by PB in its favor because the clerk admitted that GCLs
president and manager were not present during its notarization.

FACTS:
benefit the third person and it is not sufficient that the

third person may be incidentally benefited by the
1. Glee Chemical Laboratories (GCL) alleged that it
stipulation. In this case, an acceptance of such stipulation
applied for a loan with Pilipinas Bank (PB) in the amount
can take effect only if GCLs president, Cheng Yong,
of P800,000. Payment was secured by a mortgage on its
indeed intended to insert such stipulation in the Real
real property in San Juan, Metro Manila. The mortgage
Estate Mortgage.
specifically stated that the mortgagor shall not apply the

amount obtained from the loans except as additional
2. Cheng Yong and Melecio Hernandez, a manager who
working capital for the purchase of fertilizers.
signed the document as witness, testified that such

stipulation was not typewritten into the blank spaces of
2. GCL claims that PB never delivered the loan proceeds
the pre-printed, pro forma document. Elpidio Guillermo,
and instead applied the amount to a debt owed by a
however, the Senior Loans Clerk of PB, testified that he
certain Rustica Tan from GCL.
typed that stipulation one day before he presented the

same to Cheng yong.
3. Pilipinas Bank insisted that payment of Rustica Tans

debt was secured by the real estate mortgage executed
3. PBs contention that there should be no doubt as to the
by GCL pursuant to a third-party liability inserted
due execution of the document because it was notarized
therein. Since part of Rustica Tans debt remained
and registrered with the Register of Deeds is not tenable.
unpaid, Pilipinas bank served on GCL a notice of
According to Section 3, Rule 131 of the Rules of Court,
foreclosure and auction sale.
the presumption that a notarized document was duly

executed is rebuttable.
4. GCL filed a complaint for annulment of contract and
- In this case, the testimony of Elipdio Guillermo to the
damages with preliminary injunction. In a supplemental
effect that Cheng Yong and Melecio Hernandez did not
complaint, GCL alleged that PB was also attempting to
appear before the notary public destroyed this
foreclose a chattel mortgage over certain chattels owned
presumption. The notary public did not see them affix
and possessed by GCL. It appears that Rustica Tan also
their signatures on the document.
executed a document amending the real estate mortgage,

and adding a chattel mortgage as security for an
4. Such being the case, SC had to rely upon the factual
additional lan of P1,200,000. This document did not bear
findings of the RTC and CA, and both ruled in favor of
the consent or conformity of GCL to the mortgage as
GCL. Therefore, without any reason to review the factual
Rustica Tan stated that she owned the chattels.
findings of the CA, they are deemed final and conclusive

and may not be reviewed on appeal.
5. RTC issued the writs of preliminary injunction, and
after trial, rendered judgment in favor of GCL. CA
affirmed the RTC decision.

ISSUE: W/N the stipulation pour autrui should be given
effect NO.

HELD: CA decision affirmed.

RATIO:

1. To constitute a valid stipulation pour autrui, it must be
the purpose and intent of the stipulating parties to