GR 29041; (March, 1981) (Digest)
G.R. No. L-29041 March 24, 1981
BACOLOD-MURCIA MILLING CO., INC., plaintiff-appellant, vs. FIRST FARMERS MILLING CO., INC., ETC.; RAMON NOLAN in his capacity as Administrator of the Sugar Quota Administration, ET AL., defendants; PHILIPPINE NATIONAL BANK and NATIONAL INVESTMENT AND DEVELOPMENT CORPORATION, defendants-appellees.
FACTS
Bacolod-Murcia Milling Co., Inc. (BMMC) filed an action for Injunction and Prohibition with Damages against First Farmers Milling Co., Inc. (FFMC), certain planters, and the Sugar Quota Administrator. BMMC alleged that the planters illegally transferred their sugar quota allotments to FFMC for milling, which was approved by the Sugar Quota Administration over BMMC’s protest. After FFMC asserted in its Answer that the Philippine National Bank (PNB) and the National Investment and Development Corporation (NIDC) were necessary parties as prior creditors, BMMC filed an Amended and Supplemental Complaint adding them as defendants.
The amended complaint alleged that PNB and NIDC extended substantial loans to FFMC to assist in the “illegal creation and operation” of its sugar central, making them joint tortfeasors in trespassing upon BMMC’s rights. It was claimed these loans exceeded legal limits given FFMC’s small paid-up capital. PNB and NIDC moved to dismiss, contending they extended loans in the ordinary course of business as authorized by their charters, with no participation in the alleged illegal quota transfers, and thus BMMC had no cause of action against them.
ISSUE
Whether the Amended and Supplemental Complaint states a sufficient cause of action against defendants PNB and NIDC.
RULING
No, the complaint fails to state a cause of action against PNB and NIDC. In a motion to dismiss based on lack of cause of action, the court examines only the factual allegations in the complaint, accepting them as true, without considering defenses or external facts. The test is whether, based solely on those allegations, a valid judgment can be rendered for the plaintiff. The complaint against PNB and NIDC contains mere conclusions of law unsupported by well-pleaded ultimate facts.
Crucially, there is no allegation that PNB and NIDC had any notice, information, or knowledge of any illegality in FFMC’s operations or the planters’ quota transfers when they extended the loans. The claim that they acted to “assist in the illegal creation and operation” and were “joint tortfeasors” is a bare conclusion. The absence of factual averments showing bad faith or tortious conduct is fatal. The act of extending loans in the ordinary course of banking business, lawful in itself, does not create liability simply because it may have enabled another party to allegedly commit a wrong. The trial court correctly dismissed the complaint against PNB and NIDC.