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Prelims - Case Digest 1

The document discusses a court case between International Corporate Bank and spouses Francis and Maria Gueco. The spouses took out a loan from the bank to purchase a car but defaulted on payments. They later paid what was owed but the bank refused to return the car unless they signed a 'Joint Motion to Dismiss'. The court had to determine if signing this was actually part of the agreement and if the bank committed fraud. It was determined signing the motion was not required and the bank's actions did not constitute fraud.

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Alexandra Sarmiento
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40 views1 page

Prelims - Case Digest 1

The document discusses a court case between International Corporate Bank and spouses Francis and Maria Gueco. The spouses took out a loan from the bank to purchase a car but defaulted on payments. They later paid what was owed but the bank refused to return the car unless they signed a 'Joint Motion to Dismiss'. The court had to determine if signing this was actually part of the agreement and if the bank committed fraud. It was determined signing the motion was not required and the bank's actions did not constitute fraud.

Uploaded by

Alexandra Sarmiento
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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THE INTERNATIONAL CORPORATE BANK v. SPS. FRANCIS S. GUECO and MA.

LUZ
E. GUECO
GR No. 141968
February 12, 2001
FACTS: Gueco spouses acquired a loan from International Corporate Bank to purchase a car. All
things considered, the respondents executed promissory notes, and a chattel mortgage. However,
the spouses defaulted in payment of their obligations despite the lowering of the remaining unpaid
balance. In return, respondent delivered a manager’s check, but petitioner insisted on the signing
of “Joint Motion to Dismiss”, detaining the car until payment thereof. The bank declared that the
joint motion to dismiss is part of standard office procedure to prevent the filing of other claims.
Because of this, the spouses filed an action for damages against the bank. And by the time the case
was instituted, the check had become stale in the hands of the bank.
ISSUE: (1) Whether or not the signing of the joint motion to dismiss a part of the compromise
agreement between the spouses and the bank. (2) Whether or not there was fraud in the part of
herein petitioner.
RULING: (1) No. It is not a part of the compromise agreement entered by the parties. And thus,
the signing is dispensable in releasing the car to the spouses. Petitioner’s act of requiring
respondents to sign the Joint Motion to Dismiss cannot be said to be a conscious attempt on the
part of petitioner to retract on the compromise agreement of the parties. Significantly, even the
Metropolitan Trial Court, while ruling in favor of the petitioner and thereby dismissing the
complaint, did not make a factual finding that the compromise agreement included the condition
of the signing of a joint motion to dismiss.
(2) No. The Court failed to see how the act of the petitioner bank in requiring the respondent to
sign the Joint Motion to Dismiss could add as fraud. Fraud has been defined wrongful or criminal
deception intended to result in financial or personal gain. Petitioner may have been remiss in
informing Dr. Gueco that the signing of a Joint Motion to Dismiss is a standard operating
procedure of petitioner bank. The main point of the parties engaging into the compromise
agreement was for Dr. Gueco to pay his outstanding account and in return petitioner would return
the car and drop the case for money and replevin before the Metropolitan Trial Court. The Joint
Motion to Dismiss was but a repercussion of the compromise agreement and simply declared that
Dr. Gueco had fully settled his obligation, hence, the dismissal of the case. In consequence,
petitioner's act of requiring Dr. Gueco to sign the Joint Motion to Dismiss cannot be said to be a
deliberate attempt on the part of petitioner to breach on the compromise agreement of the parties.
REASONING: The lower court's finding of fraud which became the basis of the award of
damages was likewise sufficiently proven. Fraud under Article 1170 of the Civil Code of the
Philippines as amended is the 'deliberate and intentional evasion of the normal fulfillment of
obligation'. When petitioner refused to release the car despite respondent's tender of payment in
the form of a manager's check, the former intentionally evaded its obligation and thereby became
liable for moral and exemplary damages, as well as attorney's fees.

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