3/20/2019 G.R. No. 185590, December 03, 2014 - METROPOLITAN BANK AND TRUST COMPANY, Petitioner, v.

ner, v. LEY CONSTRUCTION AND DE…

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Philippine Supreme Court Jurisprudence > Year 2014 > December 2014 Decisions > G.R. No. 185590, December
03, 2014 - METROPOLITAN BANK AND TRUST COMPANY, Petitioner, v. LEY CONSTRUCTION AND DEVELOPMENT
CORPORATION AND SPOUSES MANUEL LEY AND JANET LEY, Respondents.:

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G.R. No. 185590, December 03, 2014 - METROPOLITAN BANK AND TRUST COMPANY, Petitioner, v. LEY
CONSTRUCTION AND DEVELOPMENT CORPORATION AND SPOUSES MANUEL LEY AND JANET LEY,
Respondents.

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FIRST DIVISION

G.R. No. 185590, December 03, 2014

METROPOLITAN BANK AND TRUST COMPANY, Petitioner, v. LEY CONSTRUCTION AND

DEVELOPMENT CORPORATION AND SPOUSES MANUEL LEY AND JANET LEY, Respondents.

DECISION

LEONARDO-DE CASTRO, J.:

This petition for review on certiorari under Rule 45 of the Rules of Court seeks the reversal of the Court
of Appeals’ Decision1 dated September 4, 2008 in CA-G.R. CV No. 75590 dismissing the appeal of
petitioner Metropolitan Bank and Trust Company assailing the dismissal of its complaint by the Regional
Trial Court (RTC) of Makati City, Branch 56, and the Resolution2 dated December 5, 2008 denying the
Bank’s motion for reconsideration.

The Court of Appeals adopted the following recital of facts in the Decision3 dated July 3, 2001 of the RTC
in Civil Case No. 91-1878:

DebtKollect Company, Inc.
This is an action for recovery of a sum of money and damages with a prayer for the
issuance of writ of preliminary attachment filed by the plaintiff Philippine Banking
Corporation4 against the defendants, namely: Ley Construction and Development
Corporation (hereafter “LCDC”) and Spouses Manuel and Janet C. Ley (hereafter
“[defendant]-spouses”).

The complaint alleges that: Defendant LCDC, a general contracting firm, through the oral
representations of defendant-spouses, applied with plaintiff, a commercial bank, for the
opening of a Letter of Credit. Plaintiff issued, on April 26, 1990, Letter of Credit DC
90[-]303-C in favor of the supplier-beneficiary Global Enterprises Limited, in the amount of
Eight Hundred Two Thousand Five Hundred U.S. Dollars (USD 802,500.00). The letter of
credit covered the importation by defendant LCDC of Fifteen Thousand (15,000) metric
tons of Iraqi cement from Iraq. Defendant applied for and filed with plaintiff two (2)

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3/20/2019 G.R. No. 185590, December 03, 2014 - METROPOLITAN BANK AND TRUST COMPANY, Petitioner, v. LEY CONSTRUCTION AND DE…
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Division
December-2014 Jurisprudence
G.R. No. 193670, December 03, 2014 - PEOPLE OF
THE PHILIPPINES, Plaintiff-Appellee, v. VENERANDO
DELA CRUZ Y SEBASTIAN, Accused-Appellant.
G.R. No. 205136, December 02, 2014 - OLIVIA DA
SILVA CERAFICA, Petitioner, v. COMMISSION ON
ELECTIONS, Respondent.
A.C. No. 8103, December 03, 2014 - ATTY. AURELIO
C. ANGELES, JR., PROVINCIAL LEGAL OFFICER,
BATAAN CAPITOL, BALANGA CITY, BATAAN,
Complainant, v. ATTY. RENATO C. BAGAY,
Respondent.
G.R. No. 193385, December 01, 2014 - PEOPLE OF
THE PHILIPPINES, Plaintiff-Appellee, v. DATS
GANDAWALI Y GAPAS AND NOL PAGALAD Y ANAS,
Accused-Appellants.
A.M. No. P-13-3163 [Formerly OCA IPI No. 12-
3861-P], December 01, 2014 - MARCIDITO A.
MIRANDA, Complainant, v. ERNESTO G. RAYMUNDO,
JR., SHERIFF III, METROPOLITAN TRIAL COURT,
BRANCH 74, TAGUIG CITY, Respondent.
A.C. No. 7687, December 03, 2014 - RAUL C.
LANUZA AND REYNALDO C. RASING, Complainants, v.
ATTYS. FRANKIE O. MAGSALIN III AND PABLO R.
CRUZ, Respondents.; A.C. No. 7688 - RAUL C. LANUZA
AND REYNALDO C. RASING, Complainants, v. ATTYS.
FRANKIE O. MAGSALIN III, PETER ANDREW S. GO
AND PABLO R. CRUZ, Respondents.
G.R. No. 179597, December 03, 2014 - IGLESIA
FILIPINA INDEPENDIENTE, Petitioner, v. HEIRS OF
BERNARDINO TAEZA, Respondents.
A.M. No. P-11-2917, December 02, 2014 - MARIVIC
C. VITOR, Complainant, v. CAROLINE GRACE ZAFRA,
COURT STENOGRAPHER II, METROPOLITAN TRIAL
COURT, BRANCH 71, PASIG CITY, Respondent.
G.R. No. 183161, December 03, 2014 - OFFICE OF
THE OMBUDSMAN, Petitioner, v. AMALIO A. MALLARI,
http://www.chanrobles.com/cralaw/2014decemberdecisions.php?id=1050
Applications for Amendment of Letter of Credit on May 3, 1990 and May 11, 1990,
respectively.
Thereafter, the supplier-beneficiary Global Enterprises, Inc. negotiated its Letter of Credit
with the negotiating bank Credit Suisse of Zurich, Switzerland. Credit Suisse then sent a
reimbursement claim by telex to American Express Bank Ltd., New York on July 25, 1990
for the amount of Seven Hundred Sixty[-]Six Thousand Seven Hundred Eight U.S. Dollars
(USD 766,708.00) with a certification that all terms and conditions of the credit were
complied with. Accordingly, on July 30, 1990, American Express Bank debited plaintiff’s
account Seven Hundred Seventy Thousand Six Hundred Ninety[-]One U.S. Dollars and
Thirty Cents (USD 770,691.30) and credited Credit Suisse Zurich Account with American
Express Bank, Ltd., New York for the negotiation of Letter of Credit. On August 6, 1990,
plaintiff received from Credit Suisse the necessary shipping documents pertaining to Letter
of Credit DC 90-303-C that were in turn delivered to the defendant. Upon receipt of the
aforesaid documents, defendants executed a trust receipt. However, the cement that was
to be imported through the opening of the subject Letter of Credit never arrived in the
Philippines.
The prompt payment of the obligation of the defendant LCDC was guaranteed by
[defendant]-spouses under the Continuing Surety Agreement executed by the latter in
favor of the defendant.
The obligation covered by the subject Letter of Credit in the amount of USD 802,500.00
has long been overdue and unpaid, notwithstanding repeated demands for payment
thereof. Plaintiff, therefore, instituted the instant complaint for recovery of the following
amounts: Twenty[-]Three [M]illion Two Hundred [F]ifty[-]Nine Thousand One Hundred
Twenty[-]Four Pesos and Fourteen Centavos (PHP23,259,124.14) as of June 15, 1991,
inclusive of interest and penalty, plus additional interest thereon of Thirty percent (30%)
per annum; attorney’s fees equivalent to Twenty[-]Five percent [25%] of the total
obligation; and costs of suit.
In support of its cause of action against defendant, plaintiff presented the testimony of Mr.
Fenelito Cabrera, Head of the Foreign Department of plaintiff’s Head Office. (T.S.N. dated
June 16, 1995, p. 4) There being no other witness to be presented by the plaintiff (Order
dated June 27, 1997), the plaintiff filed its formal offer of exhibits dated July 18, 1997 to
which defendant filed its comments/objections to formal offer of evidence dated February
23, 1998. In an order dated March 4, 1998, Exhibits “A” to “N” to “N-4” including [their]
sub-markings were admitted for the purposes they were respectively offered. However, on
defendants’ motion for reconsideration dated [March 30,] 1998 that was duly opposed by
the plaintiff in its opposition dated June 3, 1998, this Court partially granted defendants’
motion for reconsideration. Consequently, Exhibits “D”, “E”, “H”, “I”, “J”, “K”, “L”, and “M”
and their sub-markings were not admitted for not being properly identified and
authenticated by a competent witness. Only Exhibits “A”, “B”, “C”, “C-1”, and “N”, “N-1” to
“N-4” remain admitted in evidence. (Order dated September 9, 1998)
Defendant filed a motion to dismiss by way of demurrer to evidence on the ground that
plaintiff’s witness Mr. Fenelito Cabrera was incompetent to testify with respect to the
transaction between the plaintiff and the defendant and that the plaintiff’s documentary
exhibits were not properly identified and authenticated.5
The trial court found that the Bank’s only witness, Fenelito Cabrera, was incompetent to testify on the
documents presented by the Bank during the trial. Cabrera was with the Bank’s Dasmariñas Branch and
not with the Head Office from March 1990 to June 1991, the period the transaction covered by the
documents took place. Thus, he could not have properly identified and authenticated the Bank’s
documentary exhibits. His lack of competence was even admitted by the Bank’s counsel who did not
even ask Cabrera to identify the documents. As the documents were not identified and duly
authenticated, the Bank’s evidence was not preponderant enough to establish its right to recover from
LCDC and the spouses Ley. 6
The trial court further ruled that only the following documents remained admitted in evidence:
Exhibit Document
“A” Continuing Surety Agreement dated July 25, 1989
“B” Application and Agreement for Commercial Letter of Credit
“C” and “C-1” Letter of Credit No. DC 90-303-C
“N” and “N-1” to “N-4” Statement of Outstanding Obligations
For the trial court, these were insufficient to show that LCDC and the spouses Ley were responsible for
the improper negotiation of the letter of credit. Thus, the trial court concluded in its Decision dated July
3, 2001 that the Bank failed to establish its cause of action and to make a sufficient or preponderant
case.7 The dispositive portion of the decision reads:
WHEREFORE, the demurrer to evidence is granted. The case is dismissed.8
The Bank appealed to the Court of Appeals. It claimed that the trial court erred in granting the demurrer
to evidence of LCDC and the spouses Ley on the ground that the Bank failed to establish its cause of
action. The Bank insisted that, even without considering the exhibits excluded in evidence by the trial
court, the Bank was able to prove by preponderant evidence that it had a right and that right was
violated by LCDC and the spouses Ley. It explained that the trial court was wrong in considering only
Exhibits “A,” “B,” “C,” “C-1,” “N” and “N-1” to “N-4” as the following documents were also admitted in
evidence and should have been considered in the resolution of the demurrer to evidence.9
Exhibit Document
“F” Register Copy or Memorandum on the Letter of Credit
“G” Trust Receipt No. TRI432/90 dated August 16, 1990
“G-1” Bank Draft
“G-2” Bill of Exchange
The Bank asserted that the consideration of Exhibits “F,” “G” and “G-1” to “G-2” would have established
the following:
2/8
3/20/2019 G.R. No. 185590, December 03, 2014 - METROPOLITAN BANK AND TRUST COMPANY, Petitioner, v. LEY CONSTRUCTION AND DE…
Respondent.
G.R. No. 199886, December 03, 2014 - CAGAYAN II
ELECTRIC COOPERATIVE, INC., REPRESENTED BY ITS
MANAGER AND CHIEF EXECUTIVE OFFICER, GABRIEL
A. TORDESILLAS, Petitioner, v. ALLAN RAPANAN AND
MARY GINE TANGONAN, Respondents.
G.R. No. 206162, December 10, 2014 - ALEX M.
VALENCERINA, Petitioner, v. PEOPLE OF THE
PHILIPPINES, Respondent.
(a) On August 16, 1990, LCDC and the spouses Ley received from the Bank the necessary
shipping documents relative to the Letter of Credit evidencing title to the goods subject
matter of the importation which the Bank had previously received from Credit Suisse;
(b) Upon receipt of the shipping documents, LCDC and the spouses Ley executed a trust
receipt, Trust Receipt No. TRI432/90, in favor of the Bank covering the importation of
cement under Letter of Credit No. DC 90-303-C;
(c) The issuance of the trust receipt was an acknowledgement by LCDC and the spouses
Ley of their receipt of the shipping documents and of their liability to the Bank;

G.R. No. 192232, December 10, 2014 - PEOPLE OF (d) By signing the trust receipt, constituted an admission by LCDC and the spouses Ley
THE PHILIPPINES, Plaintiff-Appellee, v. JOSE that the Letter of Credit was in order, including the Bank’s payment of the amount of
ESTALIN PRODENCIADO, Accused-Appellant. US$766,708.00 under the Letter of Credit.10
G.R. No. 190349, December 10, 2014 - PEOPLE OF
THE PHILIPPINES, Plaintiff-Appellee, v. FRANCASIO Thus, even with only the testimony of Cabrera and Exhibits “A,” “B,” “C,” “C-1,” “N” and “N-1” to “N-4”
DELFIN, Accused-Appellant.
and “F,” “G” and “G-1” to “G-2,” the demurrer should have been denied and LCDC and the spouses Ley
G.R. No. 211465, December 03, 2014 - PEOPLE OF held liable to the Bank.
THE PHILIPPINES, Plaintiff-Appellee, v. SHIRLEY A.
CASIO, Accused-Appellant. Moreover, the Bank contended that its Exhibits “D,” “E,” “H,” and “I” should have been also admitted in
evidence because LCDC and the spouses Ley effectively admitted the authenticity of the said documents
G.R. No. 208462, December 10, 2014 - SPOUSES when they stated in the pre-trial brief which they submitted during the pre-trial of the case at the trial
CARLOS J. SUNTAY AND ROSARIO R. SUNTAY, court:
Petitioners, v. KEYSER MERCANTILE, INC.,
Respondent.
III. DOCUMENTARY EXHIBITS
G.R. No. 193108, December 10, 2014 - MARILYN
VICTORIO-AQUINO, Petitioner, v. PACIFIC PLANS, Defendants shall adopt the documents submitted by plaintiff and marked as Annexes “A”,
INC. AND MAMERTO A. MARCELO, JR. (COURT- “B”, “C”, “D”, “E”, “E-1”, “F”, “G”, “G-1”, “H” and “H-1” in the plaintiff’s complaint.
APPOINTED REHABILITATION RECEIVER OF PACIFIC
PLANS, INC.), Respondents.
Defendants reserve the right to mark or adopt such other documentary evidence as may
G.R. No. 193100, December 10, 2014 - SAMAR-I be discovered or warranted to support its claim in the course of the trial. x x x.11
ELECTRIC COOPERATIVE, Petitioner, v.
COMMISSIONER OF INTERNAL REVENUE, Respondent.
The Court of Appeals found no merit in the Bank’s appeal. It observed that Cabrera, the Bank’s only
G.R. No. 209219, December 02, 2014 - BASES witness, prepared and properly identified Exhibits “F,” “G,” “N” and “N-1” to “N-4” only. The Bank’s
CONVERSION AND DEVELOPMENT AUTHORITY counsel even admitted in open court during Cabrera’s direct examination that Cabrera was incompetent
(BCDA), Petitioner, v. COMMISSION ON AUDIT to testify on the rest of the Exhibits. The trial court was therefore correct in not giving any evidentiary
CHAIRPERSON MA. GRACIA M. PULIDO-TAN, weight to those Exhibits not properly identified by Cabrera.12
COMMISSIONER HEIDI L. MENDOZA AND
COMMISSIONER ROWENA V. GUANZON, THE
For the Court of Appeals, the statement in the pre-trial brief that LCDC and the spouses Ley “shall adopt”
COMMISSIONERS, COMMISSION ON AUDIT,
Respondents. Annexes “A,” “B,” “C,” “D,” “E,” “E-1,” “F,” “G,” “G-1,” “H” and “H-1” of the Bank’s complaint did not
constitute an admission of the said documents by LCDC and the spouses Ley. However, the appellate
G.R. No. 211703, December 10, 2014 - EDELBERT C. court noted that LCDC and the spouses Ley admitted the existence and authenticity of the Bank’s Exhibits
UYBOCO, Petitioner, v. PEOPLE OF THE PHILIPPINES, “A,” “B,” “C,” “C-1,” and “G.”13
Respondent.
Nevertheless, the Court of Appeals ruled that the following Exhibits of the Bank were admitted in
A.C. No. 10579, December 10, 2014 - ERLINDA evidence:
FOSTER, Complainant, v. ATTY. JAIME V. AGTANG,
Respondent.

A.C. No. 10548, December 10, 2014 - CAROLINE Exhibit Document

CASTAÑEDA JIMENEZ, Complainant, v. ATTY. EDGAR
B. FRANCISCO, Respondent.
G.R. No. 207682, December 10, 2014 - CONRADO B.
NICART, JR., AS PROVINCIAL GOVERNOR OF LGU-
EASTERN SAMAR, Petitioner, v. MA. JOSEFINA C.
TITONG AND JOSELITO M. ABRUGAR, SR.,
Respondents.
G.R. No. 191694, December 03, 2014 - NARCISO
ZAPANTA, EDILBERTO CAPULONG AND CLARITA
CAPULONG, Petitioners, v. CO KING KI AS
REPRESENTED BY HIS ATTORNEY-IN-FACT WILLIAM
CO, Respondent.
G.R. No. 156577, December 03, 2014 - ALEJANDRO
C. RIVERA, Petitioner, v. PEOPLE OF THE
PHILIPPINES, Respondent.; G.R. NO. 156587 -
ALFREDO Y. PEREZ, JR., Petitioner, v. PEOPLE OF THE
PHILIPPINES, Respondent.; G.R. NO. 156749 - LUIS
D. MONTERO, Petitioner, v. PEOPLE OF THE
PHILIPPINES, Respondent.
G.R. No. 203022, December 03, 2014 - ANTONIO
MARTINEZ, Petitioner, v. HON. RONALDO B. MARTIN,
PRESIDING JUDGE AND ROLANDO PALMARES,
DEPUTY SHERIFF, BOTH OF THE REGIONAL TRIAL
COURT OF ANTIPOLO CITY, BRANCH 73, AND
NATALIA REALTY, INC., Respondent.
G.R. No. 204745, December 08, 2014 - MINDANAO
II GEOTHERMAL PARTNERSHIP, Petitioner, v.
COMMISSIONER OF INTERNAL REVENUE, Respondent.
G.R. No. 208261, December 08, 2014 - PHILIPPINE
AMUSEMENT AND GAMING CORPORATION, Petitioner,
v. LORENIA P. DE GUZMAN, Respondent.
G.R. No. 210148, December 08, 2014 - ANTONIO L.
DALURAYA, Petitioner, v. MARLA OLIVA, Respondent.
G.R. No. 194077, December 03, 2014 -
FLORENTINO W. LEONG AND ELENA LEONG, ET AL.,
Petitioners, v. EDNA C. SEE, Respondent.
G.R. No. 170046, December 10, 2014 - PEOPLE OF
THE PHILIPPINES, Petitioner, v. MAXIMO A. BORJE,
JR., BURT B. FAVORITO, FLORENDO B. ARIAS, ERDITO
Q. QUARTO, AGERICO C. PALAYPAY, NAPOLEON S.
ANAS, DANILO C. PLANTA, LUISITO S. DELA ROSA,
ROGELIO L. BERAY, NORMA A. VILLARMINO,
RICARDO M. JUAN, JR., NELSON UMALI, MARIA LUISA
T. CRUZ, MELISSA T. ESPINA, VIOLETA R. TADEO,
JESSICA J. CATIBAYAN, VIOLETA C. AMAR, RONALDO
“A” Continuing Surety Agreement dated July 25, 1989
“B” Application and Agreement for Commercial Letter of
Credit
“C” and “C-1” Letter of Credit No. DC 90-303-C
“F” Register Copy or Memorandum on the Letter of Credit
“G” Trust Receipt No. TRI432/90 dated August 16, 1990
“N” and “N-1” to “N-4” Statement of Outstanding Obligations
Even upon inclusion and consideration of the above-mentioned exhibits, the Court of Appeals held that
the Bank still failed to show that LCDC and the spouses Ley were directly responsible for the improper
negotiation of the letter of credit. Thus, the Court of Appeals, in its Decision dated September 4, 2008,
dismissed the appeal and affirmed the decision of the trial court.14 The dispositive portion of the
Decision of the Court of Appeals reads:
WHEREFORE, premises considered, the instant appeal is hereby DISMISSED and the
assailed decision of the RTC, National Capital Judicial Region, Branch 56, Makati City in
Civil Case No. 91-1878 is AFFIRMED.15
The Court of Appeals denied the Bank’s motion for reconsideration, prompting the Bank to file this
petition.
The Bank insists that it has been able to establish its cause of action not only through preponderance of
evidence but even by the admissions of LCDC and the spouses Ley. It maintains that its cause of action
is not predicated on the improper negotiation of the letter of credit but on the breach of the terms and
conditions of the trust receipt.16
The petition fails.
First, the Bank’s petition suffers from a fatal infirmity. In particular, it contravenes the elementary rule of
appellate procedure that an appeal to this Court by petition for review on certiorari under Rule 45 of the
Rules of Court “shall raise only questions of law.”17 The rule is based on the nature of this Court’s
appellate function – this Court is not a trier of facts18 – and on the evidentiary weight given to the
findings of fact of the trial court which have been affirmed on appeal by the Court of Appeals – they are
conclusive on this Court.19 While there are recognized exceptions to the rule,20 this Court sees no
reason to apply the exception and not the rule in this case.
The conceptual distinction between a question of law and a question of fact is well-settled in case law:
There is a “question of law” when the doubt or difference arises as to what the law is on a
certain state of facts, and which does not call for an examination of the probative value of
the evidence presented by the parties-litigants. On the other hand, there is a “question of
fact” when the doubt or controversy arises as to the truth or falsity of the alleged facts. x x
x.21

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3/20/2019 G.R. No. 185590, December 03, 2014 - METROPOLITAN BANK AND TRUST COMPANY, Petitioner, v. LEY CONSTRUCTION AND DE…
G. SIMBAHAN, FELIPE A. SAN JOSE, ROLANDO C.
CASTILLO, CONCHITA N. DELA CRUZ, JANETTE A.
BUGAYONG, JESUS D. CAPUZ, RODELIA R. UY, ROMEO
C. FULLIDO, NONETTE H. FULLIDO, VICTORIA M. GO,
CARMELITO V. EDEM, AUGUSTO C. CAPUZ,+ VICENTE
SANTOS, JR., JOHN DOES AND JANE DOES, AND THE
SANDIGANBAYAN (SECOND DIVISION), Respondents.
G.R. No. 193707, December 10, 2014 - NORMA A.
DEL SOCORRO, FOR AND IN BEHALF OF HER MINOR
CHILD RODERIGO NORJO VAN WILSEM, Petitioner, v.
ERNST JOHAN BRINKMAN VAN WILSEM, Respondent.
G.R. No. 206768, December 03, 2014 - PEOPLE OF
THE PHILIPPINES, Plaintiff-Appellee, v. LEONARDO
CASTRODES, Accused-Appellant.
G.R. No. 185590, December 03, 2014 -
METROPOLITAN BANK AND TRUST COMPANY,
Petitioner, v. LEY CONSTRUCTION AND DEVELOPMENT
CORPORATION AND SPOUSES MANUEL LEY AND
JANET LEY, Respondents.
G.R. No. 174996, December 03, 2014 - BRO.
BERNARD OCA, FSC, BRO. DENNIS MAGBANUA, FSC,
MRS. CIRILA MOJICA, MRS. JOSEFINA PASCUAL AND
ST. FRANCIS SCHOOL OF GENERAL TRIAS, CAVITE,
INC., Petitioner, v. LAURITA CUSTODIO, Respondent.
G.R. No. 180364, December 03, 2014 - TZE SUN
WONG, Petitioner, v. KENNY WONG, Respondent.
G.R. No. 187589, December 03, 2014 - certiorari under Rule 45 of the Rules of Court. It was incumbent upon the Bank to demonstrate that this
COMMISSIONER OF INTERNAL REVENUE, Petitioner,
v. THE STANLEY WORKS SALES (PHILS.),
INCORPORATED, Respondent.
G.R. No. 209386, December 08, 2014 - MEL
CARPIZO CANDELARIA, Petitioner, v. THE PEOPLE OF
THE PHILIPPINES, Respondent.
G.R. No. 206661, December 10, 2014 - HON.
ORLANDO C. CASIMIRO, IN HIS CAPACITY AS ACTING
OMBUDSMAN, OFFICE OF THE OMBUDSMAN; HON.
ROGELIO L. SINGSON, IN HIS CAPACITY AS
DEPARTMENT OF PUBLIC WORKS AND HIGHWAYS
SECRETARY, Petitioner, v. JOSEFINO N. RIGOR,
Respondent.
G.R. No. 201781, December 10, 2014 - ANNIE
GERONIMO, SUSAN GERONIMO AND SILVERLAND
ALLIANCE CHRISTIAN CHURCH*, Petitioners, v. SPS.
ESTELA C. CALDERON AND RODOLFO T. CALDERON,
Respondents.
G.R. No. 212388, December 10, 2014 - REPUBLIC
OF THE PHILIPPINES, Petitioner, v. HEIRS OF
SPOUSES DONATO SANCHEZ AND JUANA MENESES,
REPRESENTED BY RODOLFO S. AGUINALDO,
Respondents.
G.R. No. 195390, December 10, 2014 - GOV. LUIS
RAYMUND F. VILLAFUERTE, JR., AND THE PROVINCE
OF CAMARINES SUR, Petitioners, v. HON. JESSE M.
ROBREDO, IN HIS CAPACITY AS SECRETARY OF THE
DEPARTMENT OF THE INTERIOR AND LOCAL
GOVERNMENT, Respondent.
G.R. No. 208890, December 08, 2014 - JOEL N.
MONTALLANA, Petitioner, v. LA CONSOLACION
COLLEGE MANILA, SR. IMELDA A. MORA, AND ALBERT
D. MANALILI,* Respondents.
G.R. No. 151258, December 01, 2014 - ARTEMIO
VILLAREAL, Petitioner, v. PEOPLE OF THE
PHILIPPINES, Respondent.; G.R. No. 154954 -
PEOPLE OF THE PHILIPPINES, Petitioner, v. THE
HONORABLE COURT OF APPEALS, ANTONIO MARIANO
ALMEDA, DALMACIO LIM, JR., JUNEL ANTHONY AMA,
ERNESTO JOSE MONTECILLO, VINCENT TECSON,
ANTONIO GENERAL, SANTIAGO RANADA III, NELSON
VICTORINO, JAIME MARIA FLORES II, ZOSIMO
MENDOZA, MICHAEL MUSNGI, VICENTE VERDADERO,
ETIENNE GUERRERO, JUDE FERNANDEZ, AMANTE
PURISIMA II, EULOGIO SABBAN, PERCIVAL D.
BRIGOLA, PAUL ANGELO SANTOS, JONAS KARL B.
PEREZ, RENATO BANTUG, JR., ADEL ABAS, JOSEPH
LLEDO, AND RONAN DE GUZMAN, Respondents.; G.R.
No. 155101 - FIDELITO DIZON, Petitioner, v. PEOPLE
OF THE PHILIPPINES, Respondents.; G.R. Nos.
178057 & 178080 - GERARDA H. VILLA, Petitioner, v.
MANUEL LORENZO ESCALONA II, MARCUS JOEL
CAPELLAN RAMOS, CRISANTO CRUZ SARUCA, JR.,
AND ANSELMO ADRIANO, Respondents.
G.R. No. 198928, December 18, 2014 - CBK POWER
COMPANY LIMITED, Petitioner, v. COMMISSIONER OF
INTERNAL REVENUE, Respondent.
G.R. No. 203760, December 03, 2014 - HOMER C.
JAVIER, REPRESENTED BY HIS MOTHER AND
NATURAL GUARDIAN, SUSAN G. CANENCIA,
Petitioner, v. SUSAN LUMONTAD, Respondent.
A.C. No. 8085, December 01, 2014 - FELIPE LAYOS,
Complainant, v. ATTY. MARLITO I. VILLANUEVA,
Respondent.
G.R. No. 215427, December 10, 2014 - PHILIPPINE
AMUSEMENT AND GAMING CORPORATION (PAGCOR),
Petitioner, v. THE BUREAU OF INTERNAL REVENUE,
http://www.chanrobles.com/cralaw/2014decemberdecisions.php?id=1050
The issue of whether or not the Bank was able to establish its cause of action by preponderant evidence
is essentially a question of fact. Stated in another way, the issue which the Bank raises in this petition is
whether the evidence it presented during the trial was preponderant enough to hold LCDC and the
spouses Ley liable.
The required burden of proof, or that amount of evidence necessary and sufficient to establish one’s claim
or defense, in civil cases is preponderance of evidence.22 Preponderance of evidence is defined as
follows:
Preponderance of evidence is the weight, credit, and value of the aggregate evidence on
either side and is usually considered to be synonymous with the term “greater weight of
evidence” or “greater weight of the credible evidence.” Preponderance of evidence is a
phrase which, in the last analysis, means probability to truth. It is evidence which is
more convincing to the court as worthier of belief than that which is offered in opposition
thereto.23 (Emphasis supplied, citation omitted.)
As preponderance of evidence refers to the probability to truth of the matters intended to be proven as
facts, it concerns a determination of the truth or falsity of the alleged facts based on the evidence
presented. Thus, a review of the respective findings of the trial and the appellate courts as to the
preponderance of a party’s evidence requires that the reviewing court address a question of fact.
Moreover, a demurrer to evidence is a motion to dismiss on the ground of insufficiency of evidence.
Evidence is the means, sanctioned by the Rules of Court, of ascertaining in a judicial proceeding the truth
respecting a matter of fact.24 As such, the question of sufficiency or insufficiency of evidence, the basic
issue presented by the Bank, pertains to the question of whether the factual matters alleged by the Bank
are true. Plainly, it is a question of fact and, as such, not proper subject of a petition for review on
case fell under any of the exceptions to this rule but it failed to do so.
Second, the Bank attempts to avoid the “only questions of law” rule for appeals filed under Rule 45 by
invoking the misapprehension of facts exception.25 According to the Bank, the trial and the appellate
courts misapprehended the facts with respect to the determination of the basis of the Bank’s cause of
action.26 In particular, the Bank contends that both the trial and the appellate courts erred in the
consideration of the proper actionable document upon which the Bank based its cause of action. The
Bank asserts that its cause of action is not grounded on the Letter of Credit but on the Trust Receipt.
The Bank’s reference to the Trust Receipt as its “primary actionable document”27 is mistaken and
misleading.
The nature of the cause of action is determined by the facts alleged in the complaint.28 A party’s cause
of action is not what the party says it is, nor is it what the designation of the complaint states, but what
the allegations in the body define and describe.29
In this case, the Bank’s allegations as to the basis of its cause of action against LCDC and the spouses
Ley, however, belie the Bank’s claim. In particular, the relevant portion of the Bank’s Complaint30 reads:
1.2 The defendants: chanroblesvirtuallawlibrary
a. Ley Construction and Development Corporation (LCDC) is a general
contracting firm engaged in the construction of buildings, infrastructures,
and other civil works with principal office at Mapulang Lupa St., Malinta,
Valenzuela, Metro Manila where it [may be] served with summons and other
processes of this Court.
b. Sps. Manuel and Janet C. Ley, the major stockholders of defendant
(LCDC) with business address at 23rd Floor Pacific Star Bldg., Makati
Avenue, Makati, Metro Manila where the processes of this Honorable Court
[may be] served upon them are impleaded herein in their capacity as Surety
for the obligation incurred by defendant LCDC with the herein plaintiff by
virtue of a Continuing Surety Agreement they executed in favor of the
plaintiff, a copy of which is hereto attached as Annex “A”;
2. STATEMENT OF CAUSE OF ACTION AGAINST DEFENDANT LCDC AND SPOUSES MANUEL
AND JANET LEY
2.1 In conjunction with its business, defendant LCDC sought to import “Iraqi Cement” from
Iraq thru its supplier “Global Enterprises, Limited” with address at 15 A. Tuckeys Lane,
Gibraltar.
2.2 To finance this importation, defendant LCDC applied with the plaintiff for the opening of
Letter of Credit as evidenced by the Application and Agreement for Commercial Letter of
Credit, copy of which is marked as Annex “B” and made integral part hereof.
2.3 Acting on defendant[’]s oral representation and those stated in its application (Annex
“B”), plaintiff issued on April 26, 1990 its Letter of Credit No. DC 90[-]303-C in favor of the
supplier Global Enterprises Limited, as beneficiary in the amount of U.S. Dollars: EIGHT
HUNDRED TWO THOUSAND FIVE HUNDRED (US $802,500) for the account of defendant,
covering the importation of 15,000 metric tons of Iraqi Cement from Iraq, copy of the
Letter of Credit is marked as Annex “C” and made integral part hereof;
2.4 On May 3, 1990, defendant applied for and filed with plaintiff an Application for
Amendment of Letter of Credit, copy of which is attached as Annex “D” hereof, and another
application for amendment was filed on May 11, 1990 copy of which is marked as Annexes
“E” and “E-1” hereof;
2.5 After these amendments were communicated to the negotiating bank, Credit Suisse of
Zurich, Switzerland, the beneficiary negotiated its Letter of Credit therewith. Thereafter,
Credit Suisse sent a reimbursement claim by telex to American Express Bank Ltd., New
York on July 25, 1990 for the amount of US$766,708.00 with a Certification that all terms
and conditions of the credit were complied with;
2.6 Accordingly, on July 30, 1990, American Express Bank debited plaintiff’s account
US$770,691.30 and credited Credit Suisse Zurich Account with American Express Bank
Ltd., New York for the negotiation of Letter of Credit;
2.7 On August 6, 1990, plaintiff received from Credit Suisse the necessary shipping
documents pertaining to Letter of Credit DC 90-303-C all of which were in turn delivered
and received by the defendant on August 16, 1990 as evidenced by their acknowledgment
4/8
3/20/2019 G.R. No. 185590, December 03, 2014 - METROPOLITAN BANK AND TRUST COMPANY, Petitioner, v. LEY CONSTRUCTION AND DE…
REPRESENTED BY JOSE MARIO BUÑAG, IN HIS
CAPACITY AS COMMISSIONER OF THE BUREAU OF
INTERNAL REVENUE, AND JOHN DOE AND JANE DOE,
WHO ARE PERSONS ACTING FOR, IN BEHALF OR
UNDER THE AUTHORITY OF RESPONDENT,
Respondent.
G.R. No. 149638, December 10, 2014 - MONCAYO
INTEGRATED SMALL-SCALE MINERS ASSOCIATION,
INC. [MISSMA], Petitioner, v. SOUTHEAST MINDANAO
GOLD MINING CORP., JB. MGT. MINING CORP., PICOP
RESOURCES, INC., MT. DIWATA UPPER ULIP
MANDAYA TRIBAL COUNCIL, INC. AND BALITE
INTEGRATED SMALL-SCALE MINING CORP.,
(BISSMICO), Respondents.; G.R. NO. 149916 - HON.
ANTONIO H. CERILLES, IN HIS CAPACITY AS
SECRETARY OF DEPARTMENT OF ENVIRONMENT AND
NATURAL RESOURCES, Petitioner, v. SOUTHEAST
MINDANAO GOLD MINING CORPORATION (SMGMC)
AND BALITE INTEGRATED SMALL-SCALE MINING
CORP., (BISSMICO), Respondents.
G.R. No. 120051, December 10, 2014 - CITY OF
MANILA, HON. ALFREDO S. LIM, AS MAYOR OF THE
CITY OF MANILA, AND ANTHONY Y. ACEVEDO, CITY
TREASURER, Petitioners, v. HON. ANGEL VALERA
COLET, AS PRESIDING JUDGE, REGIONAL TRIAL
COURT OF MANILA (BR. 43), AND MALAYSIAN
AIRLINE SYSTEM, Respondents.; G.R. NO. 121613 -
MAERSK-FILIPINAS, INC., AMERICAN PRESIDENT
LINES, LTD., FLAGSHIP TANKERS CORP., CORE INDO
MARITIME CORP., AND CORE MARITIME CORP.,
Petitioners, v. CITY OF MANILA, MAYOR ALFREDO
LIM, VICE MAYOR LITO ATIENZA,1] SANGGUNIANG
PANLUNGSOD AND CITY TREASURER ANTHONY
ACEVEDO, Respondents.; G.R. NO. 121675 - EASTERN
SHIPPING LINES, INC., Petitioner, v. CITY COUNCIL
OF MANILA, THE MAYOR OF MANILA AND THE CITY
OF MANILA, Respondents.; G.R. NO. 121704 -
WILLIAM LINES, INC., NEGROS NAVIGATION CO.,
INC., LORENZO SHIPPING CORPORATION, CARLOS A.
GOTHONG LINES, INC., ABOITIZ SHIPPING
CORPORATION, ABOITIZ AIR TRANSPORT
CORPORATION, ABOITIZ HAULERS, INC., AND SOLID
SHIPPING LINES CORPORATION, Petitioners, v.
REGIONAL TRIAL COURT OF MANILA, BRANCH 32,
CITY OF MANILA, MAYOR ALFREDO LIM, VICE MAYOR
LITO ATIENZA, SANGGUNIANG PANLUNGSOD, AND
CITY TREASURER ANTHONY ACEVEDO, Respondents.;
G.R. NOS. 121720-28 - PNOC SHIPPING AND
TRANSPORT CORPORATION, Petitioner, v. HON. JUAN
T. NABONG, JR., PRESIDING JUDGE, REGIONAL TRIAL
COURT OF MANILA, BRANCH 32; THE CITY OF
MANILA; MAYOR ALFREDO LIM; VICE MAYOR LITO
ATIENZA; SANGGUNIANG PANLUNGSOD, AND CITY
TREASURER ANTHONY ACEVEDO, Respondents.; G.R.
NOS. 121847-55 - MAERSK-FILIPINAS,
AMERICAN PRESIDENT LINES, SEA-LAND SERVICES,
INC., OVERSEAS FREIGHTERS SHIPPING, INC.,
DONGNAMA SHIPPING CO., LTD., FLAGSHIP
TANKERS, CORE INDO MARITIME CORP., CORE
MARITIME CORP., AND EASTERN SHIPPING LINES,
INC., Petitioners, v. CITY OF MANILA, HON. MAYOR
ALFREDO S. LIM, HON. VICE MAYOR LITO ATIENZA,
JR., SANGGUNIANG PANLUNGSOD NG MAYNILA, AND
CITY TREASURER ANTHONY Y. ACEBEDO AND THEIR
AGENTS OR REPRESENTATIVES, AND HON. JUDGE
JUAN C. NABONG, JR., BRANCH 32, REGIONAL TRIAL
COURT OF MANILA, RESPONDENTS, WILLIAM LINES,
INC., NEGROS NAVIGATION CO., INC., LORENZO
SHIPPING CORPORATION, CARLOS A. GOTHONG
LINES, INC., ABOITIZ SHIPPING CORPORATION,
ABOITIZ AIR TRANSPORT CORPORATION, ABOITIZ
HAULERS, INC., SOLID SHIPPING
CORPORATION AND PNOC SHIPPING & TRANSPORT
CORPORATION, Intervenors.; G.R. NO. 122333 -
COSCO CONTAINER LINES AND HEUNG-A SHIPPING
CO., LTD., BOTH REPRESENTED BY THEIR RESIDENT
AGENT, WALLEM PHILIPPINES SHIPPING, INC.; DSR
SENATOR LINES, COMPANIA SUD AMERICANA DE
VAPORES S.A., AND ARIMURA SANGYO COMPANY,
LTD., ALL REPRESENTED BY THEIR RESIDENT AGENT,
C.F. SHARP SHIPPING AGENCIES, INCORPORATED;
PACIFIC INTERNATIONAL LINES (PTE) LTD. AND
PACIFIC EAGLE LINES (PTE) LTD.,
REPRESENTED BY THEIR RESIDENT AGENT, TMS SHIP
AGENCIES, INC.; COMPAGNIE MARITIME
AFFRETEMENT (CMA), REPRESENTED BY
RESIDENT AGENT, INCHCAPE SHIPPING SERVICES;
EVERETT ORIENT LINES, INC., REPRESENTED BY ITS
RESIDENT AGENT, EVERETT STEAMSHIP
CORPORATION; YANGMING MARINE TRANSPORT
CORP., REPRESENTED BY ITS RESIDENT AGENT, SKY
INTERNATIONAL, INC.; NIPON YUSEN KAISHA,
REPRESENTED BY ITS RESIDENT AGENT, FIL-JAPAN
SHIPPING CORPORATION; HYUNDAI MERCHANT
MARINE CO. LTD., REPRESENTED BY ITS RESIDENT
AGENT, CITADEL LINES; MALAYSIAN INTERNATIONAL
SHIPPING CORPORATION BERHAD, REPRESENTED BY
ITS RESIDENT AGENT, ROYAL CARGO AGENCIES,
INC.; BOLT ORIENT LINE, REPRESENTED BY ITS
RESIDENT AGENT, FILSOV SHIPPING COMPANY, INC.;
MITSUI-O.S.K. LINES, LTD., REPRESENTED BY ITS
RESIDENT AGENT, MAGSAYSAY AGENCIES, INC.;
PHILS., MICRONESIA & ORIENT NAVIGATION CO.
(PMSO LINE), REPRESENTED BY ITS RESIDENT
AGENT, VAN TRANSPORT COMPANY, INC.; LLOYD
TRIESTINO DI NAVIGAZIONE S.P.A.N.
COMPAGNIE GENERALE MARITIME,
REPRESENTED BY THEIR RESIDENT AGENT, F.E.
ZUELLIG (M), INC.; AND MADRIGAL-WAN HAI LINES,
http://www.chanrobles.com/cralaw/2014decemberdecisions.php?id=1050
appearing on the plaintiff’s register copy, a copy of which is hereto attached as Annex “F”;
2.8 Upon defendant’s receipt of the shipping documents and other documents of title to
the imported goods, defendant signed a trust receipt manifesting its
acceptance/conformity that the negotiation of the LC is in order. A copy of the TR and the
draft issued by the defendant as a means of paying its LC obligation to the plaintiff are
hereto attached and marked as Annexes “G” and “G-1” hereof;
2.9 Sometime during the 3rd week of August, defendant LCDC informed the plaintiff that
the expected shipment of cement subject matter of the LC was allegedly held up in Iraq
purportedly on account of the trade embargo imposed against it by the United Nation[s]
and sought assistance from the plaintiff to secure no-dollar import permit from the Central
Bank as defendant was negotiating with its supplier Global Enterprises Limited, Inc. for an
alternate shipment of Syrian Cement.
2.10 Plaintiff acceded to the request of the defendant and conformably secured the
requested approval from Central Bank to allow the defendant to import cement on a no-
dollar basis, a copy of the defendant’s request as well as the Central Bank approval are
hereto attached as Annexes “H” and “H-1”.
2.11 About two months after the plaintiff has obtained the requested Central Bank
approval (Annex “H-1”)[,] plaintiff was again advised by the defendant that the alternate
shipment of Syrian Cement is no longer forthcoming and that defendant LCDC after a
series of negotiation with its supplier has agreed with the latter for a reimbursement of the
value of the negotiated Letter of Credit.
2.12 While defendant was negotiating with its supplier for that replacement of Syrian
cement, defendant advised plaintiff not to initiate any move as it might jeopardize
defendant’s negotiation with its supplier.
2.13 In December 1990, four (4) months from defendant’s receipt of the shipping and
export documents from plaintiff, as it became perceptible that defendant’s negotiation with
its supplier for reimbursement or replacement would fail[,] defendant for the first time
asked for copies of the beneficiary’s draft, the Charter Party Agreement even as it
contested the validity of defendant’s obligation to plaintiff.
2.14 For the first time, defendant also began to assail the validity of the payment made by
the plaintiff to the supplier (Global Enterprises Ltd.) through Credit Suisse, with the
intention of avoiding the payment of its lawful obligation to reimburse the plaintiff the
amount of US $802,500 which obligation is now long overdue and unpaid notwithstanding
repeated demands.
2.15 The obligation covered by the aforesaid Letter of Credit bears interest and
charges at the rate of 30% per annum which rate [may be] increased or decreased within
the limits allowed by the law.
2.16 The prompt payment of the obligations contracted by defendant LCDC from the
plaintiff inclusive of the subject Letter of Credit is guaranteed by defendant Sps.
Manuel and Janet Ley by making themselves jointly and severally liable with the defendant
LCDC in accordance with the terms of a Continuing Surety Agreement which they executed
in favor of the plaintiff (Annex “A”).31 (Emphases supplied.)
INC.,
That the Bank’s cause of action was hinged on the Letter of Credit is unmistakable. Taken as a whole,
the Bank’s allegations make a cause of action based on the Letter of Credit. The Trust Receipt was
mentioned incidentally and appears only in paragraph 2.8 of the Complaint.32 In stark contrast, the
Letter of Credit figures prominently in the Complaint as it is mentioned in almost all of the paragraphs of
Part 2 (Statement of Cause of Action Against Defendant LCDC and Spouses Manuel and Janet Ley). More
tellingly, in paragraph 2.15, the Bank speaks of “the obligation covered by the aforesaid Letter of Credit.”
33
Moreover, under paragraphs 1.2(b) and 2.16 of the Complaint, the spouses Ley have been impleaded as
co-defendants of LCDC on account of their execution of a Continuing Surety Agreement in the Bank’s
favor to guarantee the “prompt payment of the obligations contracted by defendant LCDC from the
plaintiff inclusive of the subject Letter of Credit.”34 In short, the Bank seeks to hold liable (1) LCDC for
its obligations under the Letter of Credit, and (2) the spouses Ley for their obligations under the
Continuing Surety Agreement which stands as security for the Letter of Credit and not for the Trust
LINES Receipt.
Another significant factor that contradicts the Bank’s assertion that its “primary actionable document” is
the Trust Receipt is the manner it pleaded the Letter of Credit and the Trust Receipt, respectively.
The relevant rule on actionable documents is Section 7, Rule 8 of the Rules of Court which provides:
Section 7. Action or defense based on document. – Whenever an action or defense is
based upon a written instrument or document, the substance of such instrument or
BOTH document shall be set forth in the pleading, and the original or a copy thereof shall be
attached to the pleading as an exhibit, which shall be deemed to be a part of the pleading,
D’ or said copy may with like effect be set forth in the pleading.
ITS
An “actionable document” is a written instrument or document on which an action or defense is founded.
It may be pleaded in either of two ways:
(1) by setting forth the substance of such document in the pleading and attaching the
document thereto as an annex, or
(2) by setting forth said document verbatim in the pleading.35
A look at the allegations in the Complaint quoted above will show that the Bank did not set forth the
contents of the Trust Receipt verbatim in the pleading. The Bank did not also set forth the substance of
the Trust Receipt in the Complaint but simply attached a copy thereof as an annex. Rather than setting
forth the substance of the Trust Receipt, paragraph 2.8 of the Complaint shows that the Bank simply
described the Trust Receipt as LCDC’s manifestation of “its acceptance/conformity that the negotiation of
the [Letter of Credit] is in order.”36
AND
In contrast, while the Bank did not set forth the contents of the Letter of Credit verbatim in the
BOTH
Complaint, the Bank set forth the substance of the Letter of Credit in paragraph 2.3 of the Complaint and
attached a copy thereof as Annex “C” of the Complaint. The Bank stated that it “issued on April 26, 1990
its Letter of Credit No. DC 90[-]303-C in favor of the supplier Global Enterprises Limited, as beneficiary[,]
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3/20/2019 G.R. No. 185590, December 03, 2014 - METROPOLITAN BANK AND TRUST COMPANY, Petitioner, v. LEY CONSTRUCTION AND DE…
Petitioners, v. CITY OF MANILA, MAYOR ALFREDO
LIM, VICE MAYOR LITO ATIENZA, SANGGUNIANG
PANLUNGSOD AND CITY TREASURER ANTHONY Y.
ACEBEDO, Respondents.; G.R. NO. 122335 - SULPICIO
LINES, INC., Petitioner, v. REGIONAL TRIAL COURT
OF MANILA, BRANCH 32, CITY OF MANILA MAYOR
ALFREDO LIM, VICE MAYOR LITO ATIENZA,
SANGGUNIANG PANLUNGSOD AND CITY TREASURER
ANTHONY ACEVEDO, Respondents.; G.R. NO. 122349 -
ASSOCIATION OF INTERNATIONAL SHIPPING LINES,
INC., IN ITS OWN BEHALF AND IN REPRESENTATION
OF ITS MEMBERS, Petitioner, v. CITY OF MANILA,
MAYOR ALFREDO LIM, VICE MAYOR LITO ATIENZA,
SANGGUNIANG PANLUNGSOD AND CITY TREASURER
ANTHONY ACEVEDO, Respondents.; G.R. NO. 124855 -
DONGNAMA SHIPPING CO., LTD. AND KYOWA
SHIPPING LTD. HEREIN REPRESENTED BY SKY
INTERNATIONAL, INC., Petitioners, v. COURT OF
APPEALS, CITY OF MANILA MAYOR ALFREDO LIM,
VICE MAYOR LITO ATIENZA, CITY COUNCIL OF
MANILA, AND CITY TREASURER ANTHONY ACEVEDO,
Respondents.
G.R. No. 204944-45, December 03, 2014 - FUJI
TELEVISION NETWORK, INC., Petitioner, v. ARLENE S.
ESPIRITU, Respondent.
G.R. No. 168612, December 10, 2014 - PHILIPPINE
ELECTRIC CORPORATION (PHILEC), Petitioner, v.
COURT OF APPEALS, NATIONAL CONCILIATION AND
MEDIATION BOARD (NCMB), DEPARTMENT OF LABOR
AND EMPLOYMENT, RAMON T. JIMENEZ, IN HIS
CAPACITY AS VOLUNTARY ARBITRATOR, PHILEC
WORKERS’ UNION (PWU), ELEODORO V. LIPIO, AND
EMERLITO C. IGNACIO, Respondents.
G.R. No. 204926, December 03, 2014 - ANACLETO
C. MANGASER, REPRESENTED BY HIS ATTORNEY-IN-
FACT EUSTAQUIO DUGENIA, Petitioner, v. DIONISIO
UGAY, Respondent.
http://www.chanrobles.com/cralaw/2014decemberdecisions.php?id=1050
in the amount of U.S. Dollars: EIGHT HUNDRED TWO THOUSAND FIVE HUNDRED (US$802,500.00) for
the account of defendant [LCDC], covering the importation of 15,000 metric tons of Iraqi Cement from
Iraq.”37
Thus, the Bank’s attempt to cling to the Trust Receipt as its so-called “primary actionable document” is
negated by the manner of its allegations in the Complaint. Thus, too, the trial and the appellate courts
did not misapprehend the facts when they considered the Letter of Credit as the basis of the Bank’s
cause of action.
Third, a look at the Letter of Credit, the actionable document on which the Bank relied in its case against
LCDC and the spouses Ley, confirms the identical findings of the Regional Trial Court and the Court of
Appeals.
In Keng Hua Paper Products Co., Inc. v. Court of Appeals, we held38:
In a letter of credit, there are three distinct and independent contracts: (1) the contract of
sale between the buyer and the seller, (2) the contract of the buyer with the issuing bank,
and (3) the letter of credit proper in which the bank promises to pay the seller pursuant to
the terms and conditions stated therein. x x x.
Here, what is involved is the second contract – the contract of LCDC, as the buyer of Iraqi cement, with
the Bank, as the issuer of the Letter of Credit. The Bank refers to that contract in the Petition for Review
on Certiorari and the Memorandum filed by the Bank in this case when the Bank argues that, as LCDC
and the spouses Ley have admitted the issuance of the Letter of Credit in their favor, they are “deemed
to have likewise admitted the terms and conditions thereof, as evidenced by the stipulation therein
appearing above the signature of respondent Janet Ley,”39 viz:
“In consideration of your arranging, at my/o[u]r request[,] for the establishment of this
commercial letter of credit (thereinafter referred to as the [“]Credit[”]) substantially in
accordance with the foregoing, I/we hereby covenant and agree to each and all of [the]
provisions and conditions stipulated on the reverse side hereof.”40
The above stipulation actually appears on the Application and Agreement for Commercial Letter of Credit,
the Bank’s Exhibit “B.” It is the contract which contains the provisions and conditions governing the legal
relationship of the Bank and LCDC, particularly their respective rights and obligations, in connection with
the Bank’s issuance of Letter of Credit No. DC 90-303-C. The importance of the provisions and
conditions supposed to be stipulated on the reverse side of the Application and Agreement for
Commercial Letter of Credit is underscored by the following note appearing below the space for the
signature of Janet Ley:
IMPORTANT: PLEASE READ PROVISIONS AND CONDITIONS ON REVERSE SIDE HEREOF
BEFORE SIGNING ABOVE.41
However, the Bank’s Exhibit “B” has nothing on its reverse side. In other words, the reverse side of the
Application and Agreement for Commercial Letter of Credit is a blank page.42 Even the copy of the
Application and Agreement for Commercial Letter of Credit attached to the Bank’s Complaint also has
nothing on its back page.43
A cause of action – the act or omission by which a party violates the right of another44 – has three
essential elements:
(1) the existence of a legal right in favor of the plaintiff;
(2) a correlative legal duty of the defendant to respect such right; and
(3) an act or omission by such defendant in violation of the right of the plaintiff with a
resulting injury or damage to the plaintiff for which the latter may maintain an action
for the recovery of relief from the defendant.45
Although the first two elements may exist, a cause of action arises only upon the occurrence of the last
element, giving the plaintiff the right to maintain an action in court for recovery of damages or other
appropriate relief.46 In this case, however, even the legal rights of the Bank and the correlative legal
duty of LCDC have not been sufficiently established by the Bank in view of the failure of the Bank’s
evidence to show the provisions and conditions that govern its legal relationship with LCDC, particularly
the absence of the provisions and conditions supposedly printed at the back of the Application and
Agreement for Commercial Letter of Credit. Even assuming arguendo that there was no impropriety in
the negotiation of the Letter of Credit and the Bank’s cause of action was simply for the collection of what
it paid under said Letter of Credit, the Bank did not discharge its burden to prove every element of its
cause of action against LCDC.
This failure of the Bank to present preponderant evidence that will establish the liability of LCDC under
the Letter of Credit necessarily benefits the spouses Ley whose liability is supposed to be based on a
Continuing Surety Agreement guaranteeing the liability of LCDC under the Letter of Credit.
The Court therefore finds no reason to disturb the rulings of the courts a quo as the petition put forward
insufficient basis to warrant their reversal.
WHEREFORE, the petition is hereby DENIED.
SO ORDERED.
Sereno, C.J., (Chairperson), Bersamin, Perez, and Perlas-Bernabe, JJ., concur.
Endnotes:
1Rollo, pp. 27-42; penned by Associate Justice Marlene Gonzales-Sison with Associate
Justices Juan Q. Enriquez, Jr. and Isaias P. Dicdican, concurring.
2 Id. at 43-44.
3 Id. at 121-124.
4 Id. at 4. The Philippine Banking Corporation is now the Metropolitan Bank and Trust
Corporation, petitioner in this case.
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5 Id. at 121-123.

6 Id. at 30-31.

7 Id. at 31.

8 Id. at 124.

9 Id. at 137-139.

10 Id. at 139.

11 Id. at 144.

12 Id. at 35-37.

13 Id. at 38-40.

14 Id. at 40.

15 Id. at 41.

16 Id. at 241-255.

17 See RULES OF COURT, Rule 45, Section 1.

18EtertonMulti-Resources Corporation v. Filipino Pipe and Foundry Corporation, G.R. No.

179812, July 6, 2010, 624 SCRA 148, 152.

In particular, the Court said: chanroblesvirtuallawlibrary

An inquiry into the veracity of the CA’s factual findings and conclusions is not
the function of the Supreme Court, for this Court is not a trier of facts.
Neither is it our function to reexamine and weigh anew the respective
evidence of the parties. (Citation omitted.)
19Development Bank of the Philippines v. Traders Royal Bank, G.R. No. 171982, August
18, 2010, 628 SCRA 404, 413.

In particular, the Court stated: chanroblesvirtuallawlibrary

Factual findings of the trial court which are adopted and confirmed by the
Court of Appeals are final and conclusive on the Court unless the findings
are not supported by the evidence on record x x x. (Citation omitted.)
20 The exceptions are: (1) when the findings are grounded entirely on speculation,
surmises, or conjectures; (2) when the inference made is manifestly mistaken, absurd, or
impossible; (3) when there is grave abuse of discretion; (4) when the judgment is based
on a misapprehension of facts; (5) when the findings of facts are conflicting; (6) when in
making its findings, the CA went beyond the issues of the case, or its findings are contrary
to the admissions of both the appellant and the appellee; (7) when the findings are
contrary to the trial court; (8) when the findings are conclusions without citation of specific
evidence on which they are based; (9) when the facts set forth in the petition as well as in
the petitioner’s main and reply briefs are not disputed by the respondent; (10) when the
findings of fact are premised on the supposed absence of evidence and contradicted by the
evidence on record; and (11) when the CA manifestly overlooked certain relevant facts not
disputed by the parties, which, if properly considered, will justify a different conclusion.
(Development Bank of the Philippines v. Licuanan, 545 Phil. 544, 553 [2007]).

21Republic v. Medida, G.R. No. 195097, August 13, 2012, 678 SCRA 317, 324.

22 Section 1, Rule 131 of the Rules of Court defines “burden of proof” as follows:

Section 1. Burden of proof. – Burden of proof is the duty of a party to present evidence on
the facts in issue necessary to establish his claim or defense by the amount of evidence
required by law.

On the other hand, Section 1, Rule 133 describes preponderance of evidence as follows:

Section 1. Preponderance of evidence, how determined. – In civil cases, the party having
the burden of proof must establish his case by a preponderance of evidence. In
determining where the preponderance or superior weight of evidence on the issues
involved lies, the court may consider all the facts and circumstances of the case, the
witnesses’ manner of testifying, their intelligence, their means and opportunity of knowing
the facts to which they are testifying, the nature of the facts to which they testify, the
probability or improbability of their testimony, their interest or want of interest, and also
their personal credibility so far as the same may legitimately appear upon the trial. The
court may also consider the number of witnesses, though the preponderance is not
necessarily with the greater number.

23 Magdiwang Realty Corporation v. Manila Banking Corporation, G.R. No. 195592,

September 5, 2012, 680 SCRA 251, 265.

24 RULES OF COURT, Rule 128, Section 1.

25Development Bank of the Philippines v. Licuanan, supra note 20. See exception No. 4.

26Rollo, pp. 20-21.

27 Id. at 245.

28Heirs of Abadilla v. Galarosa, 527 Phil. 264, 277 (2006).

29 De la Cruz v. Court of Appeals, 539 Phil. 158, 172 (2006).

30 Records, pp. 1-23.

31 Id. at 1-6.

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3/20/2019 G.R. No. 185590, December 03, 2014 - METROPOLITAN BANK AND TRUST COMPANY, Petitioner, v. LEY CONSTRUCTION AND DE…

32 Id. at 4.

33 Id. at 5.

34 Id. at 1 and 6.

35 Regalado, Florenz, Remedial Law Compendium (10th Edition), Vol. I, p. 177.

36 Records, p. 4.

37 Id. at 2.

38 349 Phil. 925, 939 (1998).

39Rollo, pp. 14 and 243, respectively.

40 Id.

41 Records, p. 533.

42 Id.

43 Id. at 12.

44 RULES OF COURT, Rule 2, Section 2.

45Turner v. Lorenzo Shipping Corporation, G.R. No. 157479, November 24, 2010, 636
SCRA 13, 30.

46 Id.

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