Case Digest (G.R. No. 202004) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Gil G. Chua v. China Banking Corporation (G.R. No. 202004, November 4, 2020), China Banking Corporation (China Bank) sought to recover P189,831,288.17 it advanced under twelve domestic Letters of Credit and corresponding Trust Receipts issued in favor of Interbrand Logistics & Distribution, Inc. (formerly Publicis Interbrand, Inc.). Interbrand’s duly authorized officer, Almer L. Caras, procured goods from Nestle Philippines, Inc. which were delivered to warehouses in Libis, Quezon City; Tarlac City; and Meycauayan, Bulacan. Pursuant to two Surety Agreements dated April 24, 2008 and May 22, 2008, Interbrand and its officers—Chua, Carlos Francisco S. Mijares, and Caras—along with Edgar S. San Luis, bound themselves jointly and severally to pay all Trust Receipt obligations. When Interbrand defaulted, China Bank demanded payment from the sureties, including Gil G. Chua, who refused to comply. On March 1, 2010, China Bank filed before the Regional Trial Court of Makati (Branch 59 Case Digest (G.R. No. 202004) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Background of the Transactions
- Interbrand Logistics & Distribution, Inc. (Interbrand), through its officer Almer L. Caras, applied for and obtained twelve (12) Domestic Letters of Credit (L/Cs) from China Banking Corporation (China Bank) to purchase goods from Nestlé Philippines.
- China Bank advanced a total of ₱189,831,288.17 in full payment of the invoice value. The goods were delivered to Interbrand’s warehouses in Libis, Quezon City; Tarlac City; and Meycauayan, Bulacan.
- Security Instruments Executed
- Interbrand executed Trust Receipt Agreements whereby it agreed to hold the goods in trust for China Bank and to remit the proceeds of sale or return the goods upon maturity.
- Two Surety Agreements were jointly signed:
- First agreement naming Interbrand and its officers—Gil G. Chua, Carlos Francisco Mijares, and Almer L. Caras—as sureties.
- Second agreement naming Edgar San Luis as individual surety.
- Defaults and Trial Court Proceedings
- Upon maturity, Interbrand failed to pay. China Bank demanded payment from the sureties, including Chua, who refused to pay.
- On March 1, 2010, China Bank filed a Complaint for Sum of Money and Damages with an application for a Writ of Preliminary Attachment before the Makati RTC (Branch 59), alleging fraud in contracting the obligation.
- RTC issued the writ on March 3, 2010, attaching all properties of the defendants up to the bond amount of ₱189,831,288.17.
- Chua moved to lift the attachment, arguing he was not a debtor, officer, director, or stockholder of Interbrand when the obligation was incurred. The RTC granted the motion on May 21, 2010.
- China Bank’s motion for reconsideration was denied; the RTC held that presented corporate documents did not prove Chua’s status during the material period (September–December 2009).
- Court of Appeals Proceedings
- China Bank petitioned the CA for certiorari and mandamus with an application for TRO and/or preliminary injunction, contesting the lifting of the attachment.
- On November 10, 2011, the CA granted the petition, reinstating the March 3, 2010 Order and directing attachment of Chua’s properties.
- The CA denied Chua’s motion for reconsideration on May 16, 2012.
- Supreme Court Petition and Comments
- Chua filed a Petition for Review on Certiorari, claiming due process violations, erroneous disregard of his evidence, misapplication of surety liability, and improper remedy via certiorari.
- China Bank’s Comment emphasized that under the Surety Agreements, Chua’s obligation was direct, primary, and absolute; alleged fraud through misappropriation of proceeds; and argued that failure to remit sale proceeds under a trust receipt is also a crime.
Issues:
- Whether the writ of preliminary attachment against Gil G. Chua’s properties was properly issued and maintained.
- Whether the attachment remedy contested by Chua should have been corrected by appeal rather than by certiorari.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)