Case Digest (G.R. No. 212024) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In the consolidated petitions of Banco de Oro Unibank, Inc. (hereinafter “BDO Unibank” or “the Bank”) versus Edgardo C. Ypil, Sr., Cebu Sureway Trading Corporation (“CSTC”) and Leopoldo Kho, the respondent Ypil invested ₱300,000.00 in a “Prudentialife Plan – Millionaires in Business” scheme offered by Kho for CSTC. When Ypil sought a refund in February 2003, his repeated demands and demand letters went unanswered, prompting him to file a Complaint for Specific Performance with Attachment, Damages, and Attorney’s Fees before the RTC of Cebu City (Civil Case No. CEB-29462). The RTC granted an ex parte Writ of Preliminary Attachment over CSTC’s and Kho’s bank accounts, and on February 4, 2004, issued a Notice of Garnishment against BDO Unibank’s North Mandaue Branch for ₱300,000.00. Although the Bank initially replied that there were no garnishable funds, it later unilaterally debited €301,838.27 from CSTC’s accounts to offset an alleged overdue loan obligation under a promissory n Case Digest (G.R. No. 212024) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Investment and Demand for Refund
- On August 20, 2002, respondent Cebu Sureway Trading Corporation (CSTC), through its EVP Leopoldo Kho, solicited ₱300,000 from Edgardo C. Ypil, Sr. to invest in the “Prudentialife Plan – Millionaires in Business.”
- Ypil sought refund by letter dated February 11, 2003 and follow‐up demand of May 19, 2003; CSTC and Kho did not respond.
- Attachment and Garnishment
- Ypil filed a Complaint for Specific Performance with Attachment, Damages and Attorney’s Fees (Civil Case No. CEB-29462) before the RTC of Cebu City; the RTC granted ex parte attachment on October 15, 2003 and issued a Writ of Preliminary Attachment on October 29, 2003.
- On February 4, 2004, Sheriff Guaren served a Notice of Garnishment on BDO Unibank’s North Mandaue Branch for ₱300,000. BDO replied on February 10, 2004 that no garnishable funds existed and simultaneously debited CSTC’s accounts to offset its outstanding loan.
- RTC Proceedings on Contempt and Garnished Funds
- The RTC issued subpoenas to BDO Branch Head Cyrus Polloso (Sept. 19 and Oct. 24, 2007); Polloso finally testified on February 1, 2008. The court found that BDO had debited funds in custodia legis and issued an order to show cause for indirect contempt (May 9, 2008).
- In its Order of August 11, 2008, the RTC absolved Polloso of contempt but commanded BDO to make the garnished ₱300,000 available to the court; it denied BDO’s motion for reconsideration on May 20, 2011.
- Compromise Agreement and Appellate History
- On November 23, 2012, Ypil and CSTC/Kho executed a Compromise Agreement settling the ₱300,000 claim; the RTC approved it and ordered BDO to tender the garnished amount. BDO’s motion to suspend execution was denied by the RTC (March 12, 2013) and by the CA (May 6, 2013).
- BDO filed a petition for certiorari before the CA challenging the garnishment orders; the CA dismissed it in a Decision dated January 15, 2014 and denied reconsideration on March 26, 2014. BDO elevated the case to the Supreme Court via Rule 45 Petition.
Issues:
- Whether legal compensation ipso jure between BDO and CSTC occurred prior to the February 4, 2004 garnishment notice, thereby preventing the funds from being placed in custodia legis.
- Whether respondents acted in bad faith by including the disputed deposit in their Compromise Agreement and inducing the RTC’s judgment based thereon.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)