The International Corporate Bank v. The Honorable Court of Appeals

Summary

This consolidated case involved multiple creditor banks organized as a consortium that took over management of the financially distressed Visayan Integrated Steel Corporation (VISCO). Emerito B. Ramos, Jr., who had managed VISCO and made cash advances, entered into agreements with the consortium for reimbursement through promissory notes. While the consortium discounted three notes totaling P350,000, they refused to pay the remaining balance when their planned rehabilitation with a Japanese group failed to materialize. Instead, they foreclosed on VISCO's assets and sold them to National Steel Corporation. The Supreme Court affirmed lower courts' decisions holding the consortium banks jointly and severally liable for the remaining P1,151,071.97 plus interest and attorney's fees. The Court applied the principle of constructive fulfillment of conditions under Article 1186 of the Civil Code, ruling that the banks voluntarily prevented fulfillment of the condition by foreclosing and selling assets instead of pursuing rehabilitation. The decision established important precedents regarding assumption of liability by creditor consortiums and the application of promissory estoppel in commercial transactions.