THE Supreme Court (SC) has stood by its 2007 decision favoring Philippine National Bank (PNB), which had refused to issue a $4.4-million letter of credit to an alleged dummy of the late dictator Ferdinand E. Marcos.
In a 15-page resolution dated Sept. 25 and released to media yesterday, the high court’s First Division said no account with PNB was created from which funds may be drawn for the benefit of Marcos crony and businessman Vicente B. Chuidian.
The letter of credit provided that at least a week before the date of each drawdown, borrower Dynetics, Inc. must deposit to the bank the peso equivalent of the amount of the drawdown.
But the court said no account was created from which funds may be drawn and Dynetics did not surrender assets unconditionally to the custody of PNB.
“The letter of credit is for Chuidian’s benefit, but PNB relied upon Dynetics, Inc. primarily to meet the obligations of the letter of credit,” the tribunal said.
“The obligation of PNB to Chuidian was also far from being unequivocal and was, in fact, wholly contingent as the latter could not have collected from PNB unless he presented the documents required under the letter of credit,” it added.
The court also noted that the Presidential Commission on Good Governance (PCGG) had sequestered the letter of credit and had stopped any drawings against the credit letter.
“All the foregoing show that there can be no proceeds to speak of,” the court said.
The high court corrected decisions it issued in 2001 and 2006 ordering the bank to remit proceeds of the letter of credit. — Vann Marlo M. Villegas