Affirming a ruling of the Manila Regional Trial Court (RTC), the Court of Appeals (CA) said the basketball star and his wife were no longer bound by the obligations of the shipping firm, Supreme Marine Co. Inc. (SMCI), after he "divorced" himself from his business partners, Doroteo Gaerlan and his wife Marilen, in August 1998.
"A close perusal of the records of the case, especially PNB’s own records, would readily show that they (Jaworskis) were unconditionally released from their joint and several undertaking," read the CA decision.
The CA said the PNB had freed Jaworski and his wife from their obligations by virtue of a board resolution dated May 13, 1999, as attested by PNB board secretary Roderick Salazar III.
"Precisely, PNB’s own records indicate that the obligors were indeed released from their loan obligations and the defenses of the alleged breach and conditional release are not genuine issues, but more of an afterthought," read the CA decision.
Salazar’s statements were corroborated by PNB Vice President Arsenia Banaag, who stated that the Jaworskis had been released in their personal capacities and as officers of SMCI from any liabilities with the bank.
The CA gave weight to the testimonies of the two PNB executives.
Court records showed Jaworski signed a memorandum of agreement with Gaerlan in August 1998 to formally dissolve their "joint and solidary" agreement two years after entering into a shipping venture and organizing SMCI in March 1995.
SMCI acquired the P400 million loan in 1997 when it constructed a twin-hulled vessel called the Arabian Horse II.
Gaerlan, who has vast experience in freightage of oil and petroleum, borrowed the amount of $4 million from the PNB using his own corporation, the MGG Marine Service, Inc.
On Feb. 25, 1997, Jaworski and Gaerlan signed a joint agreement prepared by the PNB.
For more than two years, the management, control and operations of SMCI fell exclusively on Gaerlan because of his experience in the shipping business.
In August 1998, Jaworski and Gaerlan agreed to a "business divorce," and Jaworski agreed to give up his share in Arabian Horse II to Gaerlan who assumed all the loans related to the vessel.
Jaworski and Gaerlan related to the PNB their execution of a memorandum of agreement with the information that the $4 million loan should be shouldered exclusively by Gaerlan.
PNB officials met with Jaworski and he was informed that they would endorse to the board his request for a release and likewise agreed to restructure the loan for Gaerlan.
The bank proceeded to transact business with the Gaerlans under the restructured loan terms, but the MGG and the SMCI failed to make payments to the PNB, prompting the bank to foreclose on the collaterals.
The Gaerlans ran short by several millions of pesos and asked the Jaworskis to help shoulder part of the obligation, which led the Jaworskis to file a case for declaratory relief before the Manila RTC to protect their rights and interests.
In July 2002, Jaworski’s loan obligation with the PNB was raised as a reason for his defection to the administration, which eventually established the majority bloc in the Senate and caused Franklin Drilon to be elected Senate president.
The nine-page CA decision was written by Associate Justice Delila Magtolis.