CASE DIGEST: Marques vs Far East Bank

G.R. No. 171379: January 10, 2011

Jose Marques and Maxilite Technologies, Inc. Petitioners vs. Far East Bank and Trust Company, Far East Bank Insurance Brokers, Inc., and Makati Insurance Company Respondents

G.R. No. 171419 : January 10, 2011

Far East Bank and Trust Company, and Makati Insurance Company Petitioners vs. Jose Marques and MaxiliteTechnologies, Inc. Respondents

Carpio, J.:


Jose Marques and Maxilite technologies entered into a Trust Receipt transaction with Far East Bank and Trust Company (FEBTC). FEBTC also referred the incoming goods to Far East Bank Insurance Company (FEBIC) to insure said goods from fire. Marques et al. were unable to comply with the trust agreement, and restructured the debt with FEBTC by availing of a straight loan to pay for the initial obligation. At the same time, Marques et al. were unable to pay the premium for the fire insurance. FEBIC notified FEBTC of the unpaid premium, and asked that Marquesaccount be debited the amount. FEBTC was unable to do so. Subsequently, the warehouse where the goods in question were stored burned down. Marques et al. sought to collect the insurance proceeds from Makati Insurance and FEBIC. Both refused compliance as the insurance premium was unpaid. Marques et al. sued FEBTC, FEBIC, and Makati Insurance companyfor actual, moral, and exemplary damages. The RTC found for Marques, and ruled that all respondents were solidarilyliable to Marques for actual damages, with 12% interest per annum, as well as moral and exemplary damages. On appeal, the CA affirmed the finding of the RTC but modified the interest to 6% per annum. Both parties appealed.Marques contends that since the obligation is to render a sum of money, the proper interest is 12%. FEBTC, and Makati Insurance Company raised the non-payment of premiums, as well as its separate juridical entity as defense.

ISSUES: Whether or not the reduction of interest is proper (G.R. No. 171379) and Whether or not FEBTC and Makati Insurance Company can be held solidarily liable with FEBIC. (G.R. No. 171419)

HELD: Petition is without merit (G.R. 171379) Petition is partly meritorious (G.R. 171419)

Credit Transactions: 12% interest is granted from day of default for breaches of obligation of a sum of money. On the other hand, 6% interest for unliquidated damages. In this case, the appellate court found that it was negligence of FEBTC that lead to damages suffered by Marques et al. Hence, the interest on the award is properly 6%

Torts and damages: The appellate court has found that FEBTC is the cause of the damage suffered by Marques. It was the one who referred the goods to the insurance company. It was also the entity approached by FEBIC for the debit of the unpaid insurance premium. The loan that it extended to Marques was to cover all expenses related to the trust receipt, including the insurance cost. Hence, FEBTC is clearly the one responsible to take care of the matters of the insurance premium. Since it failed in its duty due to negligence, it is clearly liable for damages it caused to Marques, as Marques was unable to get insurance proceeds for his loss.

Corporation Law: The appellate court only found FEBTC liable as it was through its negligence, i.e. failure to debit the insurance premium from the account of Marques, which lead to the prejudice of Marques. FEBIC and Makati Insurance Company, though subsidiaries, cannot be held solidarily liable by virtue of that fact alone. There are no sufficient grounds to merit the application of the piercing the veil doctrine.