International Exchange Bank Now Union Bank of the Philippines vs. Sps.

Jerome and
Quennie Briones, and John Doe
G.R. No. 205657 March 29, 2017
Leonen, J.

TOPIC: Chattel Mortgage

FACTS:

Sometime in 2003, spouses Jerome and Quinnie Briones (Spouses Briones) took out a loan of
P3,789,216.00 from iBank to purchase a BMW Z4 Roadster.

The Spouses Briones executed a promissory note with chattel mortgage that required them to
take out an insurance policy on the vehicle. This gave iBank an authority to file an insurance
claim in case of loss or damage to the vehicle.

The mortgaged BMW Z4 Roadster was carnapped by three armed men in front of Metrobank in
Quezon City. Jerome Briones (Jerome) immediately reported the incident to the PNP Traffic
Management Group. The Spouses Briones declared the loss to iBank, which instructed them to
continue paying the next three monthly installments "as a sign of good faith," in which they
complied with.

After the Spouses Briones finished paying the three-month installment, iBank sent them a letter
demanding for the full payment. Thereafter, Spouses Briones submitted a notice of claim with
their insurance company, which was denied due to the delayed reporting of the lost vehicle.

iBank filed a complaint for replevin and/or sum of money against the Spouses Briones and a
person named John Doe. The Complaint alleged that the Spouses Briones defaulted in paying
the monthly amortizations of the mortgaged vehicle.

The Regional Trial Court dismissed iBank's complaint. It ruled that as the duly constituted
attorney-in-fact of the Spouses Briones, iBank had the obligation to facilitate the filing of the
notice of claim and then to pursue the release of the insurance proceeds. The Court of Appeals
also dismissed the case on appeal.

iBank claims that it is entitled to recover the mortgaged vehicle or, in the alternative, to collect a
sum of money from respondents because of the clear wording of the promissory note with
chattel mortgage executed by respondents.

ISSUE:

Whether or not iBank is entitled to the return of the mortgaged vehicle or, in the alternative,
payment of the outstanding balance of the loan taken out for the mortgaged vehicle.

HELD:

NO.
As the agent, iBank was mandated to look after the interests of the Spouses Briones. However,
instead of going after the insurance proceeds, as expected of it as the agent, petitioner opted to
claim the full amount from the Spouses Briones, disregard the established principal-agency
relationship, and put its own interests before those of its principal.

The facts show that the insurance policy was valid when the vehicle was lost, and that the
insurance claim was only denied because of the belated filing. Having been negligent in its
duties as the duly constituted agent, iBank must be held liable for the damages suffered by the
Spouses Briones because of non-performance of its obligation as the agent, and because it
prioritized its interests over that of its principal.

Furthermore, petitioner's bad faith was evident when it advised the Spouses Briones to continue
paying three (3) monthly installments after the loss, purportedly to show their good faith. A
principal and an agent enjoy a fiduciary relationship marked with trust and confidence, therefore,
the agent has the duty "to act in good faith [to advance] the interests of [its] principal."

If petitioner was indeed acting in good faith, it could have informed the Spouses Briones that it
was terminating the agency and its right to file an insurance claim, and could have advised them
to facilitate the insurance proceeds themselves. Petitioner's failure to do so only compounds its
negligence and underscores its bad faith. Thus, it will be inequitable now to compel the Spouses
Briones to pay the full amount of the lost property.
 PHILIPPINE TRUST COMPANY vs. REDENTOR R. GABINETE, SHANGRILA REALTY
CORPORATION and ELISA T. TAN
G.R. No. 216120 March 29, 2017
Peralta, J.

TOPIC: Surety

FACTS:

Petitioner Philtrust filed a complaint against Shangrila Realty Corporation, together with Elisa
Tan and respondent Redentor Gabinete alleging that petitioner granted Shangrila's application
for a renewal of its bills discounting line in the amount of Twenty Million Pesos as shown by a
letter-advice dated May 28, 1997 bearing the conformity of Shangrila's duly-authorized
representatives, Tan and respondent Gabinete. The said loan was conditioned on the execution
of a Continuing Suretyship Agreement dated August 20, 1997, with Shangrila as borrower and
respondent Gabinete and Tan as sureties, primarily to guaranty, jointly and severally, the
payment of the loan.

It is provided in the Continuing Suretyship Agreement that the sureties shall jointly and severally
guarantee with the borrower the punctual payment at maturity of any and all instruments, loans,
advances, credits and/or other obligations, and any and all indebtedness of every kind, due, or
owing to Philtrust, and such interest as may accrue and such expenses as may be incurred by
Philtrust.

Upon the maturity of the loan, Shangrila failed to pay Philtrust, rendering the entire principal
loan, together with accrued interest and other charges, due and demandable. Philtrust
repeatedly demanded for payment, but none of the respondents heeded the said demands.

Thus, Philtrust filed a Petition for Extra judicial Foreclosure of the real estate mortgage wherein
Philtrust was the highest bidder at the public auction with a bid of Six Million Pesos.

Due to the insufficiency of the proceeds of the foreclosure sale to fully satisfy the obligation of
Shangrila, the Six Million Pesos proceeds of the foreclosure sale was applied but still leaving a
deficiency. Despite repeated demands, respondents failed to fully settle the deficiency .

As of 2006, respondent's total outstanding obligation to Philtrust is at Php 50,425,059.20,

inclusive of interest. Therefore, Philtrust filed the instant case and engaged the services of a
counsel incurring the equivalent of 10% of the total amount due as attorney's fees per
stipulation in the promissory notes.

Thereafter, Philtrust filed a Motion to Declare Shangrila, Tan and respondent Gabinete in
default. However, Gabinete claimed that when he received a demand for payment from
Philtrust, he immediately replied and denied any participation in the transaction and informed
Philtrust that his signature in the Continuing Surety Agreement had been forged, expressing his
willingness and readiness to cooperate with any investigation and he did not receive further
notices of demand from Philtrust and has no knowledge of the demands made on his co-
respondents. Finally, he argued that his refusal to pay as demanded is justified because he had
no participation in the loan transactions.

The RTC rendered its Decision in favor of the petitioner. However, the CA found merit in the
appeal and ruled in favor of respondent Gabinete.

ISSUE:

1. WHETHER OR NOT THE SIGNATURE OF RESPONDENT GABINETE ON THE

CONTINUING SURETYSHIP AGREEMENT IS FORGED.
2. WHETHER OR NOT RESPONDENT GABINETE AGREED TO BE SOLIDARIL Y
LIABLE WITH SHANGRILA AND MS. TAN WHEN HE SIGNED THE LETTER-ADVICE
DATED MAY 28, 1997

HELD:

1. NO. As a rule, forgery cannot be presumed and must be proved by clear, positive and
convincing evidence, the burden of proof lies on the party alleging forgery. One who
alleges forgery has the burden to establish his case by a preponderance of evidence, or
evidence which is of greater weight or more convincing than that which is offered in
opposition to it. In this case, the respondent was not able to prove the fact that his
signature was forged. More so, the document being contested has been notarized and
thus, is considered a public document. It has the presumption of regularity in its favor
and to contradict all these, evidence must be clear, convincing, and more than merely
preponderant. As also borne in the records, the notary public who notarized the
Continuing Suretyship Agreement testified in court and confirmed that respondent
signed the said document in her presence. Thus, the NBI handwriting expert's opinion
may not overturn the categorical declaration of the notaries public. The positive
testimony of the attesting witnesses ought to prevail over expert opinions which cannot
be
2. YES. Since the signature was not forged, the act of signing the letter-advice constituted
a binding force between the parties. Thus, Gabinete is solidarily liable.