Case Digest (A.M. No. RTJ-92-876) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
The case involves petitioner Cely Yang and respondents Philippine Commercial International Bank (PCIB), Far East Bank Trust Company (FEBTC), Equitable Banking Corporation (Equitable), Prem Chandiramani, and Fernando David. On or before December 22, 1987, Yang and Chandiramani entered into an agreement whereby Chandiramani would provide Yang a PCIB manager’s check worth ₱4.2 million in exchange for two manager’s checks valued at ₱2.087 million each, both payable to Fernando David. They also agreed on a profit split of ₱26,000 and further arranged for Yang to secure a US$200,000 dollar draft from FEBTC to be exchanged with a similar draft from Hang Seng Bank in Hong Kong by Chandiramani.
On December 22, 1987, Yang procured two cashier's checks from Equitable and FEBTC, and a FEBTC dollar draft, all dated the same day and payable as agreed. Yang’s associate Liong’s messenger, Ranigo, was tasked to meet Chandiramani at a designated place to exchange these instruments for a PCIB
Case Digest (A.M. No. RTJ-92-876) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties and Nature of the Case
- Petitioner Cely Yang entered into an agreement with private respondent Prem Chandiramani involving the exchange of negotiable instruments, specifically manager’s checks and cashier’s checks amounting to millions of pesos, as well as dollar drafts.
- The agreement entailed Chandiramani giving Yang a PCIB manager’s check worth P4.2 million in exchange for two cashier’s checks from Yang payable to Fernando David, with an agreed profit of P26,000 to be split between Yang and Chandiramani.
- Yang was also to secure from FEBTC a US$200,000 dollar draft payable to a PCIB FCDU account, which Chandiramani agreed to exchange for another dollar draft from Hang Seng Bank of the same amount.
- Delivery and Disappearance of Checks
- On December 22, 1987, Yang procured:
- Yang gave these instruments to Albert Liong, who handed them to his messenger, Danilo Ranigo, to deliver to Chandiramani at a specific rendezvous. Chandiramani was tasked to deliver a PCIB manager’s check and Hang Seng Bank dollar draft to Ranigo.
- Chandiramani did not appear for the meeting; Ranigo allegedly lost the checks and dollar draft, promptly reporting the loss to Liong, who then informed Yang. Yang reported the loss to the police.
- Subsequent Events and Delivery of Checks to Fernando David
- It was later revealed that Chandiramani did not lose the checks but acquired possession without giving the agreed exchange instruments.
- Chandiramani delivered the two cashier’s checks to Fernando David at China Banking Corporation, San Fernando City, Pampanga on the same day, receiving US$360,000 from David in exchange, which was deposited in accounts held by Chandiramani’s wife and mother.
- Chandiramani also deposited the FEBTC dollar draft for US$200,000 into the PCIB FCDU account.
- Yang requested FEBTC and Equitable banks to stop payment on the instruments, which both banks complied with, but FEBTC later lifted the stop payment on the dollar draft on PCIB’s representation.
- Legal Actions
- On December 28, 1987, Yang filed a Complaint for injunction and damages against Equitable, Chandiramani, and David (Civil Case No. 5479), later amending to include restitution with interest.
- On January 12, 1988, Yang filed a similar suit (Civil Case No. 5492) against FEBTC, PCIB, Chandiramani, and David for injunction, damages, and recovery of amounts related to the FEBTC dollar draft, also seeking a writ of preliminary injunction.
- Writs of preliminary injunction were granted in both cases following the filing of bonds.
- Respondent David moved for dismissal and reconsideration; motions were denied. He filed a special civil action for certiorari to the Court of Appeals, which was dismissed.
- The two cases were consolidated due to the common set of facts.
- Trial Court Findings and Decision
- After resumptions post-fire-induced suspension, the parties agreed money in dispute be invested in Treasury Bills awarded to the prevailing side.
- Trial was limited to two issues: rightful entitlement to proceeds of the two cashier’s checks and earnings thereon pendente lite, and liability of FEBTC and PCIB for encashment of dollar draft despite stop payment order.
- On July 4, 1995, the trial court ruled in favor of Fernando David, declaring him entitled to the cashier’s checks’ proceeds and earnings, awarding him moral damages of P100,000, attorney’s fees of P100,000, and costs.
- Complaint against FEBTC, PCIB, and Equitable was dismissed; petitioner was advised to pursue Chandiramani for reimbursement.
- Trial court found David a holder in due course, emphasizing he acquired the checks in good faith, gave value (US$360,000), had no notice of prior dishonor, and made bank inquiries verifying genuineness.
- Stop payment on FEBTC check was lifted upon inquiry by David’s bank, indicating knowledge that the checks had reached David.
- Appeal Court Decision
- Petitioner filed a motion for reconsideration, denied by the trial court.
- Petitioner appealed to the Court of Appeals, which affirmed the judgment with modifications, ordering Yang to pay PCIB P25,000 attorney’s fees.
- Appellate court agreed David took necessary precautions to verify genuineness, had no notice of infirmity, and was a holder in due course.
- Court rejected Yang’s theory of collusion between David and Chandiramani due to lack of proof.
- Award of attorney’s fees to PCIB was justified due to the baseless and unfounded nature of the claim against PCIB.
- Petition for Review to the Supreme Court
- Petitioner raised four issues:
- Supreme Court emphasized its limited jurisdiction to questions of law in Rule 45 review and formulated the proper issues as:
Issues:
- Whether Fernando David is a holder in due course of the two cashier’s checks.
- Whether the Court of Appeals erred in awarding moral damages and attorney’s fees to Fernando David and Philippine Commercial International Bank (PCIB).
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)