Bank Of The Philippine Islands v. De Reny Fabric Industries

CASTRO, J.:

. This is an appeal from the decision of the Court of First Instance of Manila ordering the defendants-appellants to pay to the Bank of the Philippine Islands (hereinafter referred to as the Bank), jointly and severally, the value of the credit it extended to them in several letters of credit which the Bank opened at the behest of the defendants appellants to finance their importation of dyestuffs from the United States, which however turned out to be mere colored chalk upon arrival and inspection thereof at the port of Manila. The record shows that on four (4) different occasions in 1961, the De Reny Fabric Industries, Inc., a Philippine corporation through its co-defendants-appellants, Aurora Carcereny alias Aurora C. Gonzales, and Aurora T. Tuyo, president and secretary, respectively of the corporation, applied to the Bank for four (4) irrevocable commercial letters of credit to cover the purchase by the corporation of goods described in the covering L/C applications as "dyestuffs of various colors"

from its American supplier, the J.B. Distributing Company. All the applications of the corporation were approved, and the corresponding Commercial L/C Agreements were executed pursuant to banking procedures. Under these agreements, the aforementioned officers of the corporation bound themselves personally as joint and solidary debtors with the corporation.

Pursuant to banking regulations then in force, the corporation delivered to the Bank peso marginal deposits as each letter of credit was opened. The dates and amounts of the L/Cs applied for and approved as well as the peso marginal deposits made were, respectively, as follows:. Date Application & L/C No. Amount Marginal Deposit Oct.

10, 1961 61/1413 $57,658.38 P43,407.33 Oct. 23, 1961 61/1483 $25,867.34 19,473.64 Oct. 30, 1961 61/1495 $19,408.39 14,610.88 Nov.

10, 1961 61/1564 $26,687.64