FIRST DIVISION

January 19, 2018

G.R. No. 206841

ARMANDO GO, Petitioner
vs.
EAST OCEANIC LEASING and FINANCE CORPORATION, Respondent

DECISION

DEL CASTILLO, J.:

We resolve the Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the
July 16, 2012 Decision  and the April 8, 2013 Order  of the Regional Trial Court (RTC), Branch 23,
1 2

Cebu City in Civil Case Nos. CEB-18366 and CEB-21918.

The Antecedent Facts

On March 22, 1995, petitioner Armando Go (Go) obtained a loan from respondent East Oceanic
Leasing and Finance Corporation (East Oceanic) in the amount of ₱4,062,888.00,  payable in
3

monthly installments of ₱169,287.00 until fully paid, as evidenced by a Promissory Note  that Go
4

executed on the same day.

Notably, Go's loan application was approved on the basis of the report and recommendation of
Theodore Sy (Sy), then East Oceanic's Managing Director, which specified that the purpose of the
loan was for the upgrading of the bus fleet and replacement of old units of Oriental Bus Lines, a bus
company owned by Go. 5

Go subsequently issued six post-dated checks in favor of East Oceanic, all drawn from his account
at the Development Bank of the Philippines - Ormoc Branch (DBP): 6

Check No. Date Amount

1273408 7
06/22/95 ₱169,287.00

1273409 8
07/22/95 ₱169,287.00

1273410 9
08/22/95 ₱169,287.00

1273412 10
10/22/95 ₱169,287.00
 005794 11
10/02/95 ₱ 922,614.15

1273413 12
11/22/95 ₱ 169,287.00

Unfortunately, the checks were all dishonored by the DBP upon presentment for payment with the
reason "Account Under Garnished" stamped at the back of the checks and as shown by the check
return slips.  East Oceanic duly informed Go of the dishonor of said checks and demanded that he
13

make good or pay the same, but the latter failed to do so. 14

By reason of the dishonored checks, Go's loan became due and ~ I , ' demandable with an
outstanding balance of ₱2,814,054.84, excluding interest and other charges, based on a Statement
of Account  dated January 24, 1996.
15 16

Thus, on February 7, 1996, East Oceanic filed a Complaint  against Go before the RTC for collection
17

of a sum of money with prayer for preliminary attachment. The case was docketed as Civil Case No.
CEB- 18366 (collection case).

In his Answer with Counterclaim,  Go argued that the Promissory Note is void, given that it had
18

"failed to comply with the mandatory requirements set up by the Bangko Sentral ng Pilipinas and the
decisions of the Supreme Court applying and interpreting the same. Hence, the interests and
charges contained therein are null and void."  He thus requested for a proper accounting of his loan
19

in order to determine the amount that he actually owed from East Oceanic. 20

While the collection case was pending, East Oceanic filed a Complaint for Damages  dated April 14,
21

1998 with the RTC against Sy, alleging that the corporation suffered a loss in the amount of
₱3,000,000.00 due to the latter's false report and recommendation pertaining to the real purpose of
Go's loan application, i.e., to pay off an existing loan to Sto. Nifio de Cebu Finance Corporation, as
well as his financial status.  The case was docketed as Civil Case No. CEB-21918 (damages case).
22 23

Upon East Oceanic's motion,  and finding the evidence adduced in the collection case to be likewise
24

pertinent to the damages case, the RTC ordered the cases to be consolidated. 25

The Regional Trial Court Ruling

In its Decision dated July 16, 2012, the RTC rendered judgment as follows:

1) Ordering defendant Theodore Sy to pay plaintiff the following:

a) ₱3,000,000.00 as actual damages with 6% interest computed from the time of the
filing of the case;

b) ₱300,000.00 as attorney's fees; and,

c) ₱30,000.00 as x x x litigation expenses.

2) Ordering defendant Armando Go to pay plaintiff the sum of ₱2,814,054.84 plus 6% interest to be
computed from the time of the filing of the complaint.

So Ordered. 26
Go moved for reconsideration,  arguing that the RTC Decision is contrary to law because it failed to
27

cite any factual and/or legal basis as to his civil liability to East Oceanic.  The RTC, however, denied
28

the motion in its Order dated April 8, 20l3.

As a consequence, Go filed the present Petition for Review on Certiorari before the Court, assailing
the RTC's July 16. 2012 Decision and April 8, 2013 Order.

Issue

Go raises the sole issue of whether the assailed RTC Decision is void for having no basis in fact and
in law as regards his civil liability to East Oceanic.

The Court's Ruling

Tbe Petition is impressed with merit.

FIRST DIVISION

January 19, 2018

G.R. No. 206841

ARMANDO GO, Petitioner
vs.
EAST OCEANIC LEASING and FINANCE CORPORATION, Respondent

DECISION

DEL CASTILLO, J.:

We resolve the Petition for Review on Certiorari under Rule 45 of the Rules of Court, assailing the
July 16, 2012 Decision  and the April 8, 2013 Order  of the Regional Trial Court (RTC), Branch 23,
1 2

Cebu City in Civil Case Nos. CEB-18366 and CEB-21918.

The Antecedent Facts

On March 22, 1995, petitioner Armando Go (Go) obtained a loan from respondent East Oceanic
Leasing and Finance Corporation (East Oceanic) in the amount of ₱4,062,888.00,  payable in
3

monthly installments of ₱169,287.00 until fully paid, as evidenced by a Promissory Note  that Go
4

executed on the same day.

Go subsequently issued six post-dated checks in favor of East Oceanic, all drawn from his account
at the Development Bank of the Philippines - Ormoc Branch (DBP): 6

Check No. Date Amount

1273408 7
06/22/95 ₱169,287.00

1273409 8
07/22/95 ₱169,287.00

1273410 9
08/22/95 ₱169,287.00

1273412 10
10/22/95 ₱169,287.00

005794 11
10/02/95 ₱ 922,614.15

1273413 12
11/22/95 ₱ 169,287.00

Unfortunately, the checks were all dishonored by the DBP upon presentment for payment with the
reason "Account Under Garnished" stamped at the back of the checks and as shown by the check
return slips.  East Oceanic duly informed Go of the dishonor of said checks and demanded that he
13

make good or pay the same, but the latter failed to do so. 14

By reason of the dishonored checks, Go's loan became due and ~ I , ' demandable with an
outstanding balance of ₱2,814,054.84, excluding interest and other charges, based on a Statement
of Account  dated January 24, 1996.
15 16

Thus, on February 7, 1996, East Oceanic filed a Complaint  against Go before the RTC for collection
17

of a sum of money with prayer for preliminary attachment. The case was docketed as Civil Case No.
CEB- 18366 (collection case).

In his Answer with Counterclaim,  Go argued that the Promissory Note is void, given that it had
18

"failed to comply with the mandatory requirements set up by the Bangko Sentral ng Pilipinas and the
decisions of the Supreme Court applying and interpreting the same. Hence, the interests and
charges contained therein are null and void."  He thus requested for a proper accounting of his loan
19

in order to determine the amount that he actually owed from East Oceanic. 20

While the collection case was pending, East Oceanic filed a Complaint for Damages  dated April 14,
21

1998 with the RTC against Sy, alleging that the corporation suffered a loss in the amount of
₱3,000,000.00 due to the latter's false report and recommendation pertaining to the real purpose of
Go's loan application, i.e., to pay off an existing loan to Sto. Nifio de Cebu Finance Corporation, as
well as his financial status.  The case was docketed as Civil Case No. CEB-21918 (damages case).
22 23

Upon East Oceanic's motion,  and finding the evidence adduced in the collection case to be likewise
24

pertinent to the damages case, the RTC ordered the cases to be consolidated. 25

The Regional Trial Court Ruling

1) Ordering defendant Theodore Sy to pay plaintiff the following:

a) ₱3,000,000.00 as actual damages with 6% interest computed from the time of the
filing of the case;

b) ₱300,000.00 as attorney's fees; and,

c) ₱30,000.00 as x x x litigation expenses.

2) Ordering defendant Armando Go to pay plaintiff the sum of ₱2,814,054.84 plus 6% interest to be
computed from the time of the filing of the complaint.

So Ordered. 26

Go moved for reconsideration,  arguing that the RTC Decision is contrary to law because it failed to
27

cite any factual and/or legal basis as to his civil liability to East Oceanic.  The RTC, however, denied
28

the motion in its Order dated April 8, 20l3.

As a consequence, Go filed the present Petition for Review on Certiorari before the Court, assailing
the RTC's July 16. 2012 Decision and April 8, 2013 Order.

Issue

Go raises the sole issue of whether the assailed RTC Decision is void for having no basis in fact and
in law as regards his civil liability to East Oceanic.

The Court's Ruling

Tbe Petition is impressed with merit.