Case Digest (G.R. No. 151932)
Facts:
Henry Ching Tiu, Christopher Halin Go, and George Co v. Philippine Bank of Communications, G.R. No. 151932, August 19, 2009, Supreme Court Third Division, Peralta, J., writing for the Court.Petitioners were directors/officers of Asian Water Resources, Inc. (AWRI) who, together with AWRI, applied for loans from Philippine Bank of Communications (PBCOM). In June 1993 AWRI obtained a real estate‑backed loan from PBCOM supported by a Board Resolution and collateral over TCT No. T-13020. In August 1996 AWRI sought additional unsecured credit; PBCOM required the board members to execute a Surety Agreement dated August 16, 1996, copies of which were notarized and of which two notarial copies were retained by the notary public (one of which was sent to the Records Management and Archives Office).
In December 1998 AWRI offered to surrender properties in dacion en pago; PBCOM denied the proposal and subsequently demanded payment. When AWRI and the sureties did not pay, PBCOM filed a complaint for collection against petitioners (Civil Case No. 99‑352). Petitioners answered, alleging they signed in their corporate capacities and contending that the words “In his personal capacity” had been intercalated on the Surety Agreement without their knowledge — i.e., that the copy annexed to the complaint (Annexes “A”–“A‑2”) had been altered. Petitioners attached a certified photocopy from the Records Management Office (issued March 25, 1999) showing the words were absent; PBCOM’s notarial file copy likewise lacked the insertion.
PBCOM discovered the insertion had been typed by a loans clerk at the auditor’s direction to conform to bank practice, without notice to the notary; the clerk executed an affidavit explaining the circumstances. PBCOM moved to substitute the altered copy attached to the complaint with the duplicate original notarial copy retrieved from the notary’s file. On December 14, 1999, the Regional Trial Court (RTC) of Cagayan de Oro City, Branch 21 allowed the substitution. Petitioners’ motion for reconsideration was denied on January 11, 2000. Petitioners then filed a petition for certiorari under Rule 65 with the Court of Appeals (CA) (CA‑G.R. SP No. 57732), arguing the RTC acted without or in excess of jurisdiction and committed grave abuse in permitting substitution of what they characterized as a falsified document.
On September 28, 2001 the CA dismissed the petition for lack of merit and affirmed the RTC orders. Petitioners filed a petition for review on certiorari under Rule 45 in the Supreme...(Subscriber-Only)
Issues:
- Did the RTC act without or in excess of jurisdiction, or with grave abuse of discretion, in allowing the substitution of the altered Surety Agreement with the duplicate original notarial copy?
- Did the Court of Appeals exceed its proper scope in resolving the petition by deciding the parties’ substantive rights under the surety agreement (i.e., did it go beyond addressing jurisdictional grave abuse)?
- Was the substitution improper as a matter of procedure because it amounted to withdrawal/substitution of a falsified document and thus...(Subscriber-Only)
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)