Case Digest (G.R. No. 177921) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Metro Concast Steel Corporation et al. vs. Allied Bank Corporation, petitioners Metro Concast Steel Corporation, through its officers Spouses Jose S. Dychiao and Tiu Oh Yan, Spouses Guillermo and Mercedes Dychiao, and Spouses Vicente and Filomena Dychiao, obtained multiple loans from respondent Allied Bank between 1995 and 1997 under one promissory note (No. 96-21301 amounting to ₱2,000,000.00 at 15.25% p.a. plus 3% monthly penalty) and twelve trust receipts totaling approximately ₱47,064,094.28 at 14% p.a. plus 1% penalty. The individual petitioners provided continuing guaranty agreements as security. Upon failure to settle the indebtedness, Allied Bank sent demand letters on December 10, 1998, seeking ₱51,064,093.62. When petitioners did not pay, the bank filed Civil Case No. 00-1563 before the RTC of Makati, Branch 57. In their second amended answer, petitioners admitted the principal but denied liability for interest and penalties, asserting they paid ₱65,073,055.73 in in Case Digest (G.R. No. 177921) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Loan transactions and security
- Between July 1995 and March 1997, Metro Concast Steel Corporation (Metro Concast) obtained from Allied Bank:
- Promissory Note No. 96-21301 dated December 13, 1996 for ₱2,000,000 at 15.25% p.a. interest and 3% monthly penalty; and
- Twelve Trust Receipts totaling ₱49,064,094.28 at 14% p.a. interest and 1% monthly penalty.
- The individual petitioners (Spouses Dychiao and others) executed Continuing Guaranty/Comprehensive Surety Agreements in favor of Allied Bank as security.
- Default, demand and RTC proceedings
- Petitioners defaulted on their obligations. Allied Bank sent extrajudicial demand letters dated December 10, 1998, for ₱51,064,093.62; no payment was made.
- Allied Bank filed Civil Case No. 00-1563 for collection of sum of money before the RTC of Makati City, Branch 57.
- Settlement attempt, trial and appeals
- Petitioners offered to sell scrap metal to Peakstar Oil Corporation under a Memorandum of Agreement (MoA) dated November 8, 2002 for ₱34,000,000 (₱4 million earnest and ₱30 million in ten monthly installments secured by bank guarantees). Peakstar defaulted.
- RTC Decision (January 17, 2006) dismissed the complaint, holding that the MoA, negotiated and drafted by Atty. Peter Saw (alleged agent of Allied Bank), extinguished the loan obligations by novation.
- CA Decision (February 12, 2007) reversed the RTC, ruling no evidence of agency or novation and ordering petitioners to pay the bank obligations with interests, penalties, and attorney’s fees. The CA denied reconsideration in its May 10, 2007 Resolution. Petitioners filed this certiorari.
Issues:
- Whether petitioners’ loan obligations under the Promissory Note and Trust Receipts were extinguished by the MoA with Peakstar.
- Whether the MoA effected a novation binding Allied Bank or created a binding agency relationship through Atty. Saw.
- Whether Peakstar’s default constitutes force majeure that excused petitioners’ performance.
- Whether petitioners proved the affirmative defense of payment or extinguishment of debt.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)