Case Summary (G.R. No. 180069)
Plaintiff’s Claims
After his son’s leukemia treatment depleted his resources, respondent sought to liquidate the TICs in 1997. The bank repeatedly delayed production of records and, on June 22, 2000, through counsel, declared the TICs null and void due to their conversion into Common Trust Funds. Respondent demanded payment of principal and accrued interest, moral and exemplary damages, attorney’s fees, and reimbursement of filing costs.
Defendants’ Position
Petitioner admitted issuance of the TICs but denied that they carried an automatic roll‐over feature and asserted that respondent’s cause of action had prescribed. No documentary evidence of payment, cancellation, or termination of the TICs was presented.
Trial Court Decision
The RTC found respondent credible and held that the express trust relationship subsisted beyond maturity because the TICs were never replaced or cancelled. It recognized an automatic roll‐over practice, awarded respondent principal and stipulated interest for each certificate, legal interest of 6% per annum from maturity until full payment, P50,000 moral damages, P200,000 exemplary damages, P50,000 attorney’s fees plus P3,000 per hearing, and P22,117.80 filing‐fee reimbursement. The claim against Equitable Banking Corporation was dismissed.
Issues on Appeal
- Whether respondent is entitled to the relief sought.
- Whether the cause of action had prescribed.
Court of Appeals Ruling
The CA affirmed the RTC, finding no evidence that respondent had withdrawn or the bank had paid or cancelled the TICs. It upheld the presumption that an unpaid debt evidenced by possession of the certificates remains outstanding, rejected prescription, and agreed that maturity did not terminate the trust.
Supreme Court Ruling
The Supreme Court denied the petition for certiorari. It held that petitioner, as the party pleading payment, bore the burden of proving discharge of the obligation. Respondent’s possession of the original TICs constituted prima facie proof of non‐payment. Petitioner’s failure to present contrary documentary evidence or credible witness testimony led to the conclusion that no payment occurred.
Rationale on Proof of Payment
Pursuant to establish
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Facts of the Case
- On September 5, 2000, Arturo P. Franco (plaintiff) sued Philippine Commercial International Bank (PCIB, now Equitable-PCIBank) and Equitable Banking Corp. for refusal to return trust investments.
- Plaintiff purchased four Trust Indenture Certificates (TICs) with fixed terms, principal amounts ranging from ₱100,000.00 to ₱850,594.54, and stipulated interest rates between 7.75% and 9.25% per annum.
- PCIB’s “Trust Services Group” represented that investments would be commingled, pooled, and automatically rolled-over for better returns, ensuring plaintiff’s retirement security without further action.
- In 1995, plaintiff’s child was diagnosed with leukemia, depleting family resources and prompting inquiries to liquidate TICs; bank officers repeatedly requested time to retrieve records.
- On June 22, 2000, plaintiff received a counsel’s letter stating that all PCIB trust indenture certificates had become null and void due to conversion into Common Trust Funds.
- Plaintiff claimed nonpayment of principal and interest, plus moral and exemplary damages, attorney’s fees, and filing expenses totaling ₱272,117.80.
Procedural History
- RTC, Makati City, Branch 61 (Oct. 21, 2003): rendered judgment for plaintiff, awarding principal, stipulated and legal interest, damages, attorney’s fees, and costs; dismissed Equitable Banking Corp. for insufficiency of evidence.
- Court of Appeals (CA) in CA-G.R. CV No. 82340 (July 31, 2007 Decision; Oct. 4, 2007 Resolution): affirmed RTC decision and denied petitioner’s motion for reconsideration.
- Supreme Court (G.R. No. 180069, March 5, 2014): petition for review on certiorari under Rule 45 filed by PCIB.
Issues Presented
- Whether plaintiff is entitled to the relief he seeks (return of principal pl