10.

Banco de Oro vs JAPRL, 551 Scra 342

After evaluatin t!e financial state"ents of res#ondent JAPRL $evelo#"ent %or#oration &JAPRL' for fiscal (ears 1))*, 1))) and
2000, #etitioner Banco de Oro+,P%-, -nc. e.tended credit facilities to it a"ountin to P230,000,000 on /arc! 2*, 2003. Res#ondents
Ra#id 0or"in %or#oration &R0%' and Jose 1. Arollado acted as JAPRL2s sureties. $es#ite its see"inl( stron financial #osition, JAPRL
defaulted in t!e #a("ent of four trust recei#ts soon after t!e a##roval of its loan. Petitioner later learned fro" /R/ /anae"ent,
JAPRL2s financial adviser, t!at JAPRL !ad altered and falsified its financial state"ents. -t alleedl( 3loated its sales revenues to #ost a
3i inco"e fro" o#erations for t!e concerned fiscal (ears to #ro4ect itself as a via3le invest"ent. 5!e infor"ation alar"ed #etitioner.
%itin relevant #rovisions of t!e 5rust Recei#t Aree"ent, it de"anded i""ediate #a("ent of JAPRL2s outstandin o3liations
a"ountin to P1)4,4)3,3**.)*. On Auust 30, 2003, JAPRL &and its su3sidiar(, R0%' filed a #etition for re!a3ilitation in t!e Reional
5rial %ourt &R5%'. -t disclosed t!at it !ad 3en e.#eriencin a decline in sales for t!e t!ree #recedin (ears and a staerin loss in 2002.
Because t!e #etition 6as sufficient in for" and su3stance, a sta( order 6as issued on Se#te"3er 2*, 2003. 7o6ever, t!e #ro#osed
re!a3ilitation #lan for JAPRL and R0% 6as eventuall( re4ected 3( t!e 8ue9on %it( R5% in an order dated /a( ), 2005. Because JAPRL
inored its de"and for #a("ent, #etitioner filed a co"#laint for su" of "one( 6it! an a##lication for t!e issuance of a 6rit of
#reli"inar( attac!"ent. Res#ondents "oved to dis"iss t!e co"#laint due to an alleedl( invalid service of su""ons. Because t!e
officer2s return stated t!at an :ad"inistrative assistant;, 6!ic! is not included in t!e Rules of court as t!ose t!at are aut!ori9ed to
receive su""ons in 3e!alf of t!e cor#oration. On 0e3ruar( 20, 200<, JAPRL &and its su3sidiar(, R0%' filed a #etition for re!a3ilitation in
t!e R5% of %ala"3a, Launa, Branc! 34 &%ala"3a R5%'. t!e %ala"3a R5% issued a sta( order on /arc! 13, 200<. On Jul( =, 200<, t!e
/a>ati R5% ranted t!e "otion 6it! reard to JAPRL and R0% 3ut ordered Arollado to file an ans6er. -t ruled t!at, 3ecause !e 6as
4ointl( and solidaril( lia3le 6it! JAPRL and R0%, t!e #roceedins aainst !i" s!ould continue. Res#ondents "oved for reconsideration
3ut it 6as denied. %ourt of a##eals !eld t!at R5% never ac?uired 4urisdiction 3ecause t!e su""ons 6ere not #ro#erl( effectuated.
Petitioner asserts t!at res#ondents "aliciousl( evaded t!e service of su""onses to #revent t!e /a>ati R5% fro" ac?uirin 4urisdiction
over t!eir #ersons. 0urt!er"ore, t!e( e"#lo(ed 3ad fait! to dela( #roceedins 3( cunninl( e.#loitin #rocedural tec!nicalities to avoid
t!e #a("ent of t!eir o3liations.
-ssue@
Aon R5% !ad ac?uired 4urisdiction over t!e case.
7eld@
A!en res#ondents "oved for t!e sus#ension of #roceedins in %ivil %ase Bo. 03+))1 3efore t!e /a>ati R5% &on t!e 3asis of t!e /arc!
13, 200< order' t!e( 6aived 6!atever defect t!ere 6as in t!e service of su""ons and 6ere dee"ed to !ave su3"itted t!e"selves
voluntaril( to t!e 4urisdiction of t!e /a>ati R5%.
Ae 6it!!old 4ud"ent for t!e "o"ent on t!e Jul( =, 200< order of t!e /a>ati R5% sus#endin t!e #roceedins in %ivil %ase
Bo. 03+))1 insofar as JAPRL and R0% are concerned. 1nder t!e -nteri" Rules of Procedure on %or#orate Re!a3ilitation, a sta( order
defers all actions or clai"s aainst t!e cor#oration see>in re!a3ilitation fro" t!e date of its issuance until t!e dis"issal of t!e #etition
or ter"ination of t!e re!a3ilitation #roceedins. 5!e /a>ati R5% "a( #roceed to !ear %ivil %ase Bo. 03+))1 onl( aainst Arollado if
t!ere is no round to o after JAPRL and R0% &as 6ill later 3e discussed'. A creditor can de"and #a("ent fro" t!e suret( solidaril(
lia3le 6it! t!e cor#oration see>in re!a3ilitation.
Res#ondents a3used #rocedural tec!nicalities &al3eit unsuccessfull(' for t!e sole #ur#ose of #reventin, or at least dela(in, t!e
collection of t!eir leiti"ate o3liations. 5!eir re#re!ensi3le sc!e"e i"#eded t!e s#eed( dis#ensation of 4ustice. /ore i"#ortantl(,
!o6ever, considerin t!e a"ount involved, res#ondents utterl( disrearded t!e sinificance of a sta3le and efficient 3an>in s(ste" to
t!e national econo"(.
-n t!is case, #etitioner alleed t!at JAPRL fraudulentl( altered and falsified its financial state"ents in order to o3tain its credit
facilities. %onsiderin t!e a"ount of #etitioner2s e.#osure in JAPRL, 4ustice and fairness dictate t!at t!e /a>ati R5% !ear 6!et!er or not
res#ondents indeed co""itted fraud in securin t!e credit acco"odation.
-n t!is case, #etitioner alleed t!at JAPRL fraudulentl( altered and falsified its financial state"ents in order to o3tain its credit
facilities. %onsiderin t!e a"ount of #etitioner2s e.#osure in JAPRL, 4ustice and fairness dictate t!at t!e /a>ati R5% !ear 6!et!er or not
res#ondents indeed co""itted fraud in securin t!e credit acco"odation.

A findin of fraud 6ill c!ane t!e 6!ole #icture. -n t!is event, #etitioner can use t!e findin of fraud to "ove for t!e
dis"issal of t!e re!a3ilitation case in t!e %ala"3a R5%.

5!e #rotective re"ed( of re!a3ilitation 6as never intended to 3e a refue of a de3tor uilt( of fraud.

/ean6!ile, t!e /a>ati R5% s!ould #roceed to !ear %ivil %ase Bo. 03+))1 aainst t!e t!ree res#ondents uided 3( Section 40 of
t!e Ceneral Ban>in La6 6!ic! states@

Section 40. Requirement for Grant of Loans or Other Credit Accommodations. Before rantin a loan or ot!er
credit acco""odation, a 3an> "ust ascertain t!at t!e de3tor is ca#a3le of fulfillin !is co""it"ents to t!e 3an>.

5o6ards t!is end, a 3an> "a( de"and fro" its credit a##licants a state"ent of t!eir assets and lia3ilities and of t!eir inco"e
and e.#enditures and suc! infor"ation as "a( 3e #rescri3ed 3( la6 or 3( rules and reulations of t!e /onetar( Board to ena3le t!e
3an> to #ro#erl( evaluate t!e credit a##lication 6!ic! includes t!e corres#ondin financial state"ents su3"itted for ta.ation #ur#oses
to t!e Bureau of -nternal Revenue. Should such statements prove to be false or incorrect in any material detail, the bank may
terminate any loan or credit accommodation granted on the basis of said statements and shall have the right to demand
immediate repayment or liquidation of the obligation.