Republic of the Philippines an aggregate value of PESOS: THREE MILLION FIVE HUNDRED THOUSAND

SUPREME COURT (P3,500,000.00);

Manila
4. The aforesaid Detached Assignment (Annex "A") contains an express
SECOND DIVISION authorization executed by the transferor intended to complete the
assignment through the registration of the transfer in the name of
PhilFinance, which authorization is specifically phrased as follows: '(Filriters)
hereby irrevocably authorized the said issuer (Central Bank) to transfer the
G.R. No. 93397 March 3, 1997 said bond/certificates on the books of its fiscal agent;

TRADERS ROYAL BANK, petitioner, 5. On February 4, 1981, petitioner entered into a Repurchase Agreement with
vs. PhilFinance . . ., whereby, for and in consideration of the sum of PESOS: FIVE
COURT OF APPEALS, FILRITERS GUARANTY ASSURANCE CORPORATION and CENTRAL BANK HUNDRED THOUSAND (P500,000.00), PhilFinance sold, transferred and
of the PHILIPPINES, respondents. delivered to petitioner CBCI 4-year, 8th series, Serial No. D891 with a face value
of P500,000.00 . . ., which CBCI was among those previously acquired by
PhilFinance from Filriters as averred in paragraph 3 of the Petition;

TORRES, JR., J.: 6. Pursuant to the aforesaid Repurchase Agreement (Annex "B"), Philfinance
agreed to repurchase CBCI Serial No. D891 (Annex "C"), at the stipulated price
Assailed in this Petition for Review on Certiorari is the Decision of the respondent Court of of PESOS: FIVE HUNDRED NINETEEN THOUSAND THREE HUNDRED SIXTY-
Appeals dated January 29, 1990,1 affirming the nullity of the transfer of Central Bank Certificate ONE & 11/100 (P519,361.11) on April 27, 1981;
of Indebtedness (CBCI) No. D891,2 with a face value of P500,000.00, from the Philippine
Underwriters Finance Corporation (Philfinance) to the petitioner Trader's Royal Bank (TRB), 7. PhilFinance failed to repurchase the CBCI on the agreed date of maturity,
under a Repurchase Agreement3 dated February 4, 1981, and a Detached Assignment4dated April 27, 1981, when the checks it issued in favor of petitioner were dishonored
April 27, 1981. for insufficient funds;

Docketed as Civil Case No. 83-17966 in the Regional Trial Court of Manila, Branch 32, the action 8. Owing to the default of PhilFinance, it executed a Detached Assignment in
was originally filed as a Petition for Mandamus5 under Rule 65 of the Rules of Court, to compel favor of the Petitioner to enable the latter to have its title completed and
the Central Bank of the Philippines to register the transfer of the subject CBCI to petitioner registered in the books of the respondent. And by means of said Detachment,
Traders Royal Bank (TRB). Philfinance transferred and assigned all, its rights and title in the said CBCI
(Annex "C") to petitioner and, furthermore, it did thereby "irrevocably
In the said petition, TRB stated that: authorize the said issuer (respondent herein) to transfer the said
bond/certificate on the books of its fiscal agent." . . .
3. On November 27, 1979, Filriters Guaranty Assurance Corporation (Filriters)
executed a "Detached Assignment" . . ., whereby Filriters, as registered owner, 9. Petitioner presented the CBCI (Annex "C"), together with the two (2)
sold, transferred, assigned and delivered unto Philippine Underwriters Finance aforementioned Detached Assignments (Annexes "B" and "D"), to the
Corporation (Philfinance) all its rights and title to Central Bank Certificates of Securities Servicing Department of the respondent, and requested the latter
Indebtedness of PESOS: FIVE HUNDRED THOUSAND (P500,000) and having to effect the transfer of the CBCI on its books and to issue a new certificate in
the name of petitioner as absolute owner thereof;
 10. Respondent failed and refused to register the transfer as requested, and 13. Without any consideration or benefit whatsoever to Filriters, in violation of
continues to do so notwithstanding petitioner's valid and just title over the law and the trust fund doctrine and to the prejudice of policyholders and to all
same and despite repeated demands in writing, the latest of which is hereto who have present or future claim against policies issued by Filriters, Alfredo
attached as Annex "E" and made an integral part hereof; Banaria, then Senior Vice-President-Treasury of Filriters, without any board
resolution, knowledge or consent of the board of directors of Filriters, and
11. The express provisions governing the transfer of the CBCI were without any clearance or authorization from the Insurance Commissioner,
substantially complied with the petitioner's request for registration, to wit: executed a detached assignment purportedly assigning CBCI No. 891 to
Philfinance;
"No transfer thereof shall be valid unless made at said office
(where the Certificate has been registered) by the registered xxx xxx xxx
owner hereof, in person or by his attorney duly authorized in
writing, and similarly noted hereon, and upon payment of a 14. Subsequently, Alberto Fabella, Senior Vice-President-Comptroller are Pilar
nominal transfer fee which may be required, a new Certificate Jacobe, Vice-President-Treasury of Filriters (both of whom were holding the
shall be issued to the transferee of the registered holder same positions in Philfinance), without any consideration or benefit
thereof." redounding to Filriters and to the grave prejudice of Filriters, its policy holders
and all who have present or future claims against its policies, executed similar
and, without a doubt, the Detached Assignments presented to respondent detached assignment forms transferring the CBCI to plaintiff;
were sufficient authorizations in writing executed by the registered owner,
Filriters, and its transferee, PhilFinance, as required by the above-quoted xxx xxx xxx
provision;
15. The detached assignment is patently void and inoperative because the
12. Upon such compliance with the aforesaid requirements, the ministerial assignment is without the knowledge and consent of directors of Filriters, and
duties of registering a transfer of ownership over the CBCI and issuing a new not duly authorized in writing by the Board, as requiring by Article V, Section 3
certificate to the transferee devolves upon the respondent; of CB Circular No. 769;

Upon these assertions, TRB prayed for the registration by the Central Bank of the subject CBCI 16. The assignment of the CBCI to Philfinance is a personal act of Alfredo
in its name. Banaria and not the corporate act of Filriters and such null and void;

On December 4, 1984, the Regional Trial Court the case took cognizance of the defendant a) The assignment was executed without consideration and for that reason,
Central Bank of the Philippines' Motion for Admission of Amended Answer with Counter Claim the assignment is void from the beginning (Article 1409, Civil Code);
for Interpleader6 thereby calling to fore the respondent Filriters Guaranty Assurance
Corporation (Filriters), the registered owner of the subject CBCI as respondent. b) The assignment was executed without any knowledge and consent of the
board of directors of Filriters;
For its part, Filriters interjected as Special Defenses the following:
c) The CBCI constitutes reserve investment of Filriters against liabilities, which
11. Respondent is the registered owner of CBCI No. 891; is a requirement under the Insurance Code for its existence as an insurance
company and the pursuit of its business operations. The assignment of the
12. The CBCI constitutes part of the reserve investment against liabilities CBCI is illegal act in the sense of malum in se or malum prohibitum, for anyone
required of respondent as an insurance company under the Insurance Code; to make, either as corporate or personal act;
d) The transfer of dimunition of reserve investments of Filriters is expressly c) The CBCI involved substantial amount and its assignment clearly constitutes
prohibited by law, is immoral and against public policy; disposition of "all or substantially all" of the assets of Filriters, which requires
the affirmative action of the stockholders (Section 40, Corporation [sic] Code.7
e) The assignment of the CBCI has resulted in the capital impairment and in the
solvency deficiency of Filriters (and has in fact helped in placing Filriters under In its Decision8 dated April 29, 1988, the Regional Trial Court of Manila, Branch XXXIII found the
conservatorship), an inevitable result known to the officer who executed assignment of CBCI No. D891 in favor of Philfinance, and the subsequent assignment of the
assignment. same CBCI by Philfinance in favor of Traders Royal Bank null and void and of no force and effect.
The dispositive portion of the decision reads:
17. Plaintiff had acted in bad faith and with knowledge of the illegality and
invalidity of the assignment. ACCORDINGLY, judgment is hereby rendered in favor of the respondent
Filriters Guaranty Assurance Corporation and against the plaintiff Traders
a) The CBCI No. 891 is not a negotiable instrument and as a certificate of Royal Bank:
indebtedness is not payable to bearer but is a registered in the name of
Filriters; (a) Declaring the assignment of CBCI No. 891 in favor of PhilFinance, and the
subsequent assignment of CBCI by PhilFinance in favor of the plaintiff Traders
b) The provision on transfer of the CBCIs provides that the Central Bank shall Royal Bank as null and void and of no force and effect;
treat the registered owner as the absolute owner and that the value of the
registered certificates shall be payable only to the registered owner; a (b) Ordering the respondent Central Bank of the Philippines to disregard the
sufficient notice to plaintiff that the assignments do not give them the said assignment and to pay the value of the proceeds of the CBCI No. D891 to
registered owner's right as absolute owner of the CBCI's; the Filriters Guaranty Assurance Corporation;

c) CB Circular 769, Series of 1980 (Rules and Regulations Governing CBCIs) (c) Ordering the plaintiff Traders Royal Bank to pay respondent Filriters
provides that the registered certificates are payable only to the registered Guaranty Assurance Corp. The sum of P10,000 as attorney's fees; and
owner (Article II, Section 1).
(d) to pay the costs.
18. Plaintiff knew full well that the assignment by Philfinance of CBCI No. 891
by Filriters is not a regular transaction made in the usual of ordinary course of SO ORDERED.9
business;
The petitioner assailed the decision of the trial court in the Court of Appeals 10, but their appeals
a) The CBCI constitutes part of the reserve investments of Filriters against likewise failed. The findings of the fact of the said court are hereby reproduced:
liabilities requires by the Insurance Code and its assignment or transfer is
expressly prohibited by law. There was no attempt to get any clearance or The records reveal that defendant Filriters is the registered owner of CBCI No.
authorization from the Insurance Commissioner; D891. Under a deed of assignment dated November 27, 1971, Filriters
transferred CBCI No. D891 to Philippine Underwriters Finance Corporation
b) The assignment by Filriters of the CBCI is clearly not a transaction in the (Philfinance). Subsequently, Philfinance transferred CBCI No. D891, which was
usual or regular course of its business; still registered in the name of Filriters, to appellant Traders Royal Bank (TRB).
The transfer was made under a repurchase agreement dated February 4, 1981,
granting Philfinance the right to repurchase the instrument on or before April
27, 1981. When Philfinance failed to buy back the note on maturity date, it
 executed a deed of assignment, dated April 27, 1981, conveying to appellant Said the Court:
TRB all its right and the title to CBCI No. D891.
In the case at bar, Alfredo O. Banaria, who signed the deed of assignment
Armed with the deed of assignment, TRB then sought the transfer and purportedly for and on behalf of Filriters, did not have the necessary written
registration of CBCI No. D891 in its name before the Security and Servicing authorization from the Board of Directors of Filriters to act for the latter. For
Department of the Central Bank (CB). Central Bank, however, refused to effect lack of such authority, the assignment did not therefore bind Filriters and
the transfer and registration in view of an adverse claim filed by defendant violated as the same time Central Bank Circular No. 769 which has the force
Filriters. and effect of a law, resulting in the nullity of the transfer (People v. Que Po
Lay, 94 Phil. 640; 3M Philippines, Inc. vs. Commissioner of Internal Revenue,
Left with no other recourse, TRB filed a special civil action 165 SCRA 778).
for mandamus against the Central Bank in the Regional Trial Court of Manila.
The suit, however, was subsequently treated by the lower court as a case of In sum, Philfinance acquired no title or rights under CBCI No. D891 which it
interpleader when CB prayed in its amended answer that Filriters be could assign or transfer to Traders Royal Bank and which the latter can register
impleaded as a respondent and the court adjudge which of them is entitled to with the Central Bank.
the ownership of CBCI No. D891. Failing to get a favorable judgment. TRB now
comes to this Court on appeal. 11 WHEREFORE, the judgment appealed from is AFFIRMED, with costs against
plaintiff-appellant.
In the appellate court, petitioner argued that the subject CBCI was a negotiable instrument,
and having acquired the said certificate from Philfinance as a holder in due course, its SO ORDERED. 13
possession of the same is thus free fro any defect of title of prior parties and from any defense
available to prior parties among themselves, and it may thus, enforce payment of the Petitioner's present position rests solely on the argument that Philfinance owns 90% of Filriters
instrument for the full amount thereof against all parties liable thereon. 12 equity and the two corporations have identical corporate officers, thus demanding the
application of the doctrine or piercing the veil of corporate fiction, as to give validity to the
In ignoring said argument, the appellate court that the CBCI is not a negotiable instrument, transfer of the CBCI from registered owner to petitioner TRB. 14 This renders the payment by
since the instrument clearly stated that it was payable to Filriters, the registered owner, whose TRB to Philfinance of CBCI, as actual payment to Filriters. Thus, there is no merit to the lower
name was inscribed thereon, and that the certificate lacked the words of negotiability which court's ruling that the transfer of the CBCI from Filriters to Philfinance was null and void for
serve as an expression of consent that the instrument may be transferred by negotiation. lack of consideration.

Obviously, the assignment of the certificate from Filriters to Philfinance was fictitious, having Admittedly, the subject CBCI is not a negotiable instrument in the absence of words of
made without consideration, and did not conform to Central Bank Circular No. 769, series of negotiability within the meaning of the negotiable instruments law (Act 2031).
1980, better known as the "Rules and Regulations Governing Central Bank Certificates of
Indebtedness", which provided that any "assignment of registered certificates shall not be The pertinent portions of the subject CBCI read:
valid unless made . . . by the registered owner thereof in person or by his representative duly
authorized in writing." xxx xxx xxx

Petitioner's claimed interest has no basis, since it was derived from Philfinance whose interest The Central Bank of the Philippines (the Bank) for value received, hereby
was inexistent, having acquired the certificate through simulation. What happened was promises to pay bearer, of if this Certificate of indebtedness be registered, to
Philfinance merely borrowed CBCI No. D891 from Filriters, a sister corporation, to guarantee its FILRITERS GUARANTY ASSURANCE CORPORATION, the registered owner
financing operations. hereof, the principal sum of FIVE HUNDRED THOUSAND PESOS.
 xxx xxx xxx the meaning of the words they have used. What the parties meant must be
determined by what they said.
Properly understood, a certificate of indebtedness pertains to certificates for the creation and
maintenance of a permanent improvement revolving fund, is similar to a "bond," (82 Minn. Thus, the transfer of the instrument from Philfinance to TRB was merely an assignment, and is
202). Being equivalent to a bond, it is properly understood as acknowledgment of an obligation not governed by the negotiable instruments law. The pertinent question then is, was the
to pay a fixed sum of money. It is usually used for the purpose of long term loans. transfer of the CBCI from Filriters to Philfinance and subsequently from Philfinance to TRB, in
accord with existing law, so as to entitle TRB to have the CBCI registered in its name with the
The appellate court ruled that the subject CBCI is not a negotiable instrument, stating that: Central Bank?

As worded, the instrument provides a promise "to pay Filriters Guaranty The following are the appellate court's pronouncements on the matter:
Assurance Corporation, the registered owner hereof." Very clearly, the
instrument is payable only to Filriters, the registered owner, whose name is Clearly shown in the record is the fact that Philfinance's title over CBCI No.
inscribed thereon. It lacks the words of negotiability which should have served D891 is defective since it acquired the instrument from Filriters fictitiously.
as an expression of consent that the instrument may be transferred by Although the deed of assignment stated that the transfer was for "value
negotiation.15 received", there was really no consideration involved. What happened was
Philfinance merely borrowed CBCI No. D891 from Filriters, a sister corporation.
A reading of the subject CBCI indicates that the same is payable to FILRITERS GUARANTY Thus, for lack of any consideration, the assignment made is a complete nullity.
ASSURANCE CORPORATION, and to no one else, thus, discounting the petitioner's submission
that the same is a negotiable instrument, and that it is a holder in due course of the certificate. What is more, We find that the transfer made by Filriters to Philfinance did not
conform to Central Bank Circular No. 769, series of 1980, otherwise known as
The language of negotiability which characterize a negotiable paper as a credit instrument is the "Rules and Regulations Governing Central Bank Certificates of
its freedom to circulate as a substitute for money. Hence, freedom of negotiability is the Indebtedness", under which the note was issued. Published in the Official
touchtone relating to the protection of holders in due course, and the freedom of negotiability Gazette on November 19, 1980, Section 3 thereof provides that any
is the foundation for the protection which the law throws around a holder in due course (11 assignment of registered certificates shall not be valid unless made . . . by the
Am. Jur. 2d, 32). This freedom in negotiability is totally absent in a certificate indebtedness as registered owner thereof in person or by his representative duly authorized in
it merely to pay a sum of money to a specified person or entity for a period of time. writing.

As held in Caltex (Philippines), Inc. v. Court of Appeals, 16: In the case at bar, Alfredo O. Banaria, who signed the deed of assignment
purportedly for and on behalf of Filriters, did not have the necessary written
The accepted rule is that the negotiability or non-negotiability of an authorization from the Board of Directors of Filriters to act for the latter. For
instrument is determined from the writing, that is, from the face of the lack of such authority, the assignment did not therefore bind Filriters and
instrument itself. In the construction of a bill or note, the intention of the violated at the same time Central Bank Circular No. 769 which has the force
parties is to control, if it can be legally ascertained. While the writing may be and effect of a law, resulting in the nullity of the transfer (People vs. Que Po
read in the light of surrounding circumstance in order to more perfectly Lay, 94 Phil. 640; 3M Philippines, Inc. vs. Commissioner of Internal Revenue,
understand the intent and meaning of the parties, yet as they have constituted 165 SCRA 778).
the writing to be the only outward and visible expression of their meaning, no
other words are to be added to it or substituted in its stead. The duty of the In sum, Philfinance acquired no title or rights under CBCI No. D891 which it
court in such case is to ascertain, not what the parties may have secretly could assign or transfer to Traders Royal Bank and which the latter can register
intended as contradistinguished from what their words express, but what is with the Central Bank
Petitioner now argues that the transfer of the subject CBCI to TRB must upheld, as the The corporate separateness between Filriters and Philfinance remains, despite the petitioners
respondent Filriters and Philfinance, though separate corporate entities on paper, have used insistence on the contrary. For one, other than the allegation that Filriters is 90% owned by
their corporate fiction to defraud TRB into purchasing the subject CBCI, which purchase now Philfinance, and the identity of one shall be maintained as to the other, there is nothing else
is refused registration by the Central Bank. which could lead the court under circumstance to disregard their corporate personalities.

Says the petitioner; Though it is true that when valid reasons exist, the legal fiction that a corporation is an entity
with a juridical personality separate from its stockholders and from other corporations may be
Since Philfinance own about 90% of Filriters and the two companies have the disregarded, 19 in the absence of such grounds, the general rule must upheld. The fact that
same corporate officers, if the principle of piercing the veil of corporate entity Filfinance owns majority shares in Filriters is not by itself a ground to disregard the independent
were to be applied in this case, then TRB's payment to Philfinance for the CBCI corporate status of Filriters. In Liddel & Co., Inc. vs. Collector of Internal Revenue, 20 the mere
purchased by it could just as well be considered a payment to Filriters, the ownership by a single stockholder or by another corporation of all or nearly all of the capital
registered owner of the CBCI as to bar the latter from claiming, as it has, that stock of a corporation is not of itself a sufficient reason for disregarding the fiction of separate
it never received any payment for that CBCI sold and that said CBCI was sold corporate personalities.
without its authority.
In the case at bar, there is sufficient showing that the petitioner was not defrauded at all when
xxx xxx xxx it acquired the subject certificate of indebtedness from Philfinance.

We respectfully submit that, considering that the Court of Appeals has held On its face the subject certificates states that it is registered in the name of Filriters. This should
that the CBCI was merely borrowed by Philfinance from Filriters, a sister have put the petitioner on notice, and prompted it to inquire from Filriters as to Philfinance's
corporation, to guarantee its (Philfinance's) financing operations, if it were to title over the same or its authority to assign the certificate. As it is, there is no showing to the
be consistent therewith, on the issued raised by TRB that there was a piercing effect that petitioner had any dealings whatsoever with Filriters, nor did it make inquiries as to
a veil of corporate entity, the Court of Appeals should have ruled that such veil the ownership of the certificate.
of corporate entity was, in fact, pierced, and the payment by TRB to
Philfinance should be construed as payment to Filriters. 17 The terms of the CBCI No. D891 contain a provision on its TRANSFER. Thus:

We disagree with Petitioner. TRANSFER. This Certificate shall pass by delivery unless it is registered in the
owner's name at any office of the Bank or any agency duly authorized by the
Petitioner cannot put up the excuse of piercing the veil of corporate entity, as this merely an Bank, and such registration is noted hereon. After such registration no transfer
equitable remedy, and may be awarded only in cases when the corporate fiction is used to thereof shall be valid unless made at said office (where the Certificates has
defeat public convenience, justify wrong, protect fraud or defend crime or where a corporation been registered) by the registered owner hereof, in person, or by his attorney,
is a mere alter ego or business conduit of a person. 18 duly authorized in writing and similarly noted hereon and upon payment of a
nominal transfer fee which may be required, a new Certificate shall be issued
Peiercing the veil of corporate entity requires the court to see through the protective shroud to the transferee of the registered owner thereof. The bank or any agency duly
which exempts its stockholders from liabilities that ordinarily, they could be subject to, or authorized by the Bank may deem and treat the bearer of this Certificate, or if
distinguished one corporation from a seemingly separate one, were it not for the existing this Certificate is registered as herein authorized, the person in whose name
corporate fiction. But to do this, the court must be sure that the corporate fiction was misused, the same is registered as the absolute owner of this Certificate, for the
to such an extent that injustice, fraud, or crime was committed upon another, disregarding, purpose of receiving payment hereof, or on account hereof, and for all other
thus, his, her, or its rights. It is the protection of the interests of innocent third persons dealing purpose whether or not this Certificate shall be overdue.
with the corporate entity which the law aims to protect by this doctrine.
This is notice to petitioner to secure from Filriters a written authorization for the transfer or to Q Do you know this Central Bank Certificate of Indebtedness,
require Philfinance to submit such an authorization from Filriters. in short, CBCI No. D891 in the face value of P5000,000.00
subject of this case?
Petitioner knew that Philfinance is not registered owner of the CBCI No. D891. The fact that a
non-owner was disposing of the registered CBCI owned by another entity was a good reason A Yes, sir.
for petitioner to verify of inquire as to the title Philfinance to dispose to the CBCI.
Q Why do you know this?
Moreover, CBCI No. D891 is governed by CB Circular No. 769, series of 1990 21, known as the
Rules and Regulations Governing Central Bank Certificates of Indebtedness, Section 3, Article A Well, this was CBCI of the company sought to be examined
V of which provides that: by the Insurance Commission sometime in early 1981 and this
CBCI No. 891 was among the CBCI's that were found to be
Sec. 3. Assignment of Registered Certificates. — Assignment of registered missing.
certificates shall not be valid unless made at the office where the same have
been issued and registered or at the Securities Servicing Department, Central Q Let me take you back further before 1981. Did you have the
Bank of the Philippines, and by the registered owner thereof, in person or by knowledge of this CBCI No. 891 before 1981?
his representative, duly authorized in writing. For this purpose, the transferee
may be designated as the representative of the registered owner. A Yes, sir. This CBCI is an investment of Filriters required by
the Insurance Commission as legal reserve of the company.
Petitioner, being a commercial bank, cannot feign ignorance of Central Bank Circular 769, and
its requirements. An entity which deals with corporate agents within circumstances showing Q Legal reserve for the purpose of what?
that the agents are acting in excess of corporate authority, may not hold the corporation
liable. 22 This is only fair, as everyone must, in the exercise of his rights and in the performance A Well, you see, the Insurance companies are required to put
of his duties, act with justice, give everyone his due, and observe honesty and good faith. 23 up legal reserves under Section 213 of the Insurance Code
equivalent to 40 percent of the premiums receipt and further,
The transfer made by Filriters to Philfinance did not conform to the said. Central Bank Circular, the Insurance Commission requires this reserve to be invested
which for all intents, is considered part of the law. As found by the courts a quo, Alfredo O. preferably in government securities or government binds.
Banaria, who had signed the deed of assignment from Filriters to Philfinance, purportedly for This is how this CBCI came to be purchased by the company.
and in favor of Filriters, did not have the necessary written authorization from the Board of
Directors of Filriters to act for the latter. As it is, the sale from Filriters to Philfinance was It cannot, therefore, be taken out of the said funds, without violating the requirements of the
fictitious, and therefore void and inexistent, as there was no consideration for the same. This law. Thus, the anauthorized use or distribution of the same by a corporate officer of Filriters
is fatal to the petitioner's cause, for then, Philfinance had no title over the subject certificate cannot bind the said corporation, not without the approval of its Board of Directors, and the
to convey the Traders Royal Bank. Nemo potest nisi quod de jure potest — no man can do maintenance of the required reserve fund.
anything except what he can do lawfully.
Consequently, the title of Filriters over the subject certificate of indebtedness must be upheld
Concededly, the subject CBCI was acquired by Filriters to form part of its legal and capital over the claimed interest of Traders Royal Bank.
reserves, which are required by law 24 to be maintained at a mandated level. This was pointed
out by Elias Garcia, Manager-in-Charge of respondent Filriters, in his testimony given before ACCORDINGLY, the petition is DISMISSED and the decision appealed from dated January 29,
the court on May 30, 1986. 1990 is hereby AFFIRMED.
SO ORDERED.