In a letter12dated November 21, 1996 to Allied Bank, thru Mercado, Atty. Lao requested for the immediate payment of the balance of the purchase price amounting to P8,360,000.00 considering that the guaranty executed by the bank in favor of GGDI was irrevocable and the TCT for the subject property was already transferred in Bienvenida's name. There being no action on his previous letter, Atty. Lao wrote another letter13dated December 11, 1996 to AlliedBank, thru Mercado, to follow-up on the request for payment.Bienvenida, in a letter14dated January 6, 1997, offered to pay GGDI P1,000,000.00 on or beforeJanuary 24, 1997 and the balance of P7,360,000.00 plus interest on March 28, 1997. GGDI received the P1,000,000.00 partial payment from Bienvenida via two checks dated January 17, 1997 and January 24, 1997 for the amount of P500,000.00 each.15Bienvenida then issued two
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Allied Bank postdated checks for March 28, 1997 for the amounts of P7,360,000.00 and P442,340.00, to cover the balance of the purchase price for the subject property and interest, respectively.16Mercado executed another letter dated January 27, 1997 addressed to Atty. Lao, similarly worded as his letter dated August 22, 1996, except for the penultimate paragraph which statesthat "we guarantee to pay directly to you the amount of PESOS: SEVEN MILLION EIGHT HUNDRED TWO THOUSAND THREE HUNDRED FORTY (P7,802,340.00) sixty days from January 27, 1997 or on or before March 28, 1997."17When GGDI deposited the two Allied Bank checks dated March 28, 1997 issued by Bienvenida, said.checks were dishonored for being "Drawn Against Insufficient Funds."18Atty. Lao sent a letter dated August 15, 1997 to the Head Office of Allied Bank in Makati City, copy furnished Mercado, referring to Mercado's letter of guaranty dated January 27, 1997 and making a final request for payment of the sum of P7,802,340.00 within seven days from receipt of the current letter.19Hemandas, President of GGDI, sent a fax letter dated October 7, 1997 to Aida T. Yu, Vice President of Allied Bank, also requesting payment based on Mercado's letter of guaranty dated January 27, 1997. In a letter dated October 13, 1997, Reynaldo A. Maclang, Senior Vice-President of Allied Bank, replied to Hemandas's letter in this wise:We asked Mr. Mercado about this and he said that this letter [dated January 27, 1997] was not really intended as a [guaranty] for anything but was an accommodation to a request of Atty. Cesar Lao, the Vice President of Games and Garments Developers, Inc. He even emphasized toAtty. Lao that he was not authorized to issue such [guaranty] inasmuch as banks are not allowed to do so under the General Banking Act.We noted that the letter dated 27 January, 1997 makes reference to a lot covered by TCT# 205965 which was supposed to be purchased, but our records show that this title was already superseded by TCT# 206877 issued to Bienvenida S. Pantaleon since 23 August, 1996 yet.20In a letter dated December 19, 1997 to Maclang, Hemandas inquired as to the status of the demand for payment of GGDI and sought an opportunity to discuss the matter.21Without any favorable action from Allied Bank, Atty. Lao, this time for Lacas, Lao & Associates,
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