G.R. No. 151218 - NATIONAL SUGAR TRADING AND/OR THE SUGAR REGULATORY ADMINISTRATION, VS. PHILIPPINE NATIONAL BANK.DECISION - Supreme Court E-Library

Ruling

Accordingly, PHILEXCHANGE sold and turned over all sugar quedans to NASUTRA. However, no physical inventory of the sugar covered by the quedans was made. [8] Neither NASUTRA nor PHILSUCOM was required to immediately pay PHILEXCHANGE. Notwithstanding this concession, NASUTRA and PHILSUCOM still failed to pay the sugar stocks covered by quedans to PHILEXCHANGE which, as of June 30, 1984, amounted to P498,828,845.03. As a consequence, PHILEXCHANGE was not able to pay its obligations to PNB. To finance its sugar trading operations, NASUTRA applied for and was granted [9] a P408 Million Revolving Credit Line by PNB in 1981. Every time NASUTRA availed of the credit line, [10] its Executive Vice-President, Jose Unson, executed a promissory note in favor of PNB. In order to stabilize sugar liquidation prices at a minimum of P300.00 per picul , PHILSUCOM issued on March 15, 1985 Circular Letter No. EC-4-85, considering all sugar produced during crop year 1984-1985 as domestic sugar. Furthermore, PHILSUCOMs Chairman of Executive Committee, Armando C. Gustillo proposed on May 14, 1985 the following liquidation scheme of the sugar quedans [11] assigned to PNB by the sugar planters: Upon notice from NASUTRA, PNB shall credit the individual producer and millers loan accounts for their sugar proceeds and shall treat the same as loans of NASUTRA. Such loans shall be charged interest at the prevailing rates and it shall commence five (5) days after receipt by PNB of quedan s from NASUTRA. [12] PNB, for its part, issued Resolution No. 353 dated May 20, 1985 approving [13] the PHILSUCOM/NASUTRA proposal for the payment of the sugar quedans assigned to it. Pursuant to said resolution, NASUTRA would assume the interest on the planter/mill loan accounts. The pertinent portion of the Resolution states: Five (5) days after receipt of the quedans , NASUTRA shall absorb the accruing interest on that portion of the planter/mill loan with PNB commensurate to the net liquidation value of the sugar delivered, or in other words, NASUTRA proposes to assume interest that will run on the planter/mill loan equivalent to the net proceeds of the sugar quedans , reckoned five (5) days after quedan delivery to PNB. [14] Despite such liquidation scheme, NASUTRA/PHILSUCOM still failed to remit the interest payments to PNB and its branches, which interests amounted to P65,412,245.84 in 1986. [15] As a result thereof, then President Marcos issued PD 2005 dissolving NASUTRA effective January 31, 1986. NASUTRAs records of its sugar trading operations, however, were destroyed during the Edsa Revolution in February 1986. On May 28, 1986, then President Corazon C. Aquino issued Executive Order (EO) No. 18 creating the Sugar Regulatory Administration (SRA) and abolishing PHILSUCOM. All the assets and records of PHILSUCOM [16] including its beneficial interests over the assets of NASUTRA were transferred to SRA. [17] On January 24, 1989, before the completion of the three-year winding up perio