G.R. No. 149040 July 4, 2007
Facts:
Edgar Ledonio obtained from Patrocinio S. Picache two loans with the amount of P60,000.00, and covered by promissory notes duly signed by him.
from Ledonio to Capitol Development Corporation .
However, Ledonio failed to pay any of the loans covered by the promissory notes when they became due. The corporation demanded payment from him but refused to do so. He denied that he made such promissory notes in favor of Picache and he further alleged that he only signed the promissory notes as a result of intimidation and fraud. He alleged that when he made the promissory notes, they were only used by Picache by taking advantage of his signature.
Prior to the case, Ledonio was engaged in a garment business where he leased a real property from Mission Realty and Management Corporation. An incident happened where a group of Meralco employees cut-off the power supply of the plant of Ledonio due to non- payment of electric bills. This made foreign investors to desist transacting with him. He blamed the MRMC for not notifying him with the unpaid bills but he failed to obtain any of his claims.
The RTC ruled in favor of the respondent corporation finding its version of the facts more credible. The Court of Appeals affirmed the same.
ISSUE: whether the assignment of debt by Picache, the creditor, to another party such as the CDC, requires his consent being the debtor.
RULING: Petition is denied for lack of merit. The transaction between Picache and CDC was an assignment of credit and does not require petitioner’s consent as debtor for its validity and enforceability.
An assignment of credit has been defined as an agreement by virtue of which the owner of a credit known as the assignor, by a legal cause - such as sale, dation in payment or exchange or donation – and without need of the debtor’s consent, transfers that credit and its accessory rights to another who is the assignee, who acquires the power to enforce it, to the same extent as the assignor could have enforced it against the debtor.
The law does not require any formal notice to bind the debtor to the assignee, all that the law requires is knowledge of the assignment. Even if the debtor had not been notified, but came to know of the assignment by whatever means, the debtor is bound by it.
G.R. No. 97753 August 10, 1992
CALTEX (PHILIPPINES), INC., petitioner, vs.
COURT OF APPEALS and SECURITY BANK AND TRUST COMPANY, respondents.
REGALADO, J.: Facts:
On various dates, defendant Security Bank and Trust Company issued 280 certificates of time deposit in favor of Angel dela Cruz who deposited of time deposit therein the aggregate
amount of P1,120,000.00. Angel dela Cruz delivered said certificate of time deposit to plaintiff-petitioner Caltex in connection with his purchase of fuel products from the latter. Thereafter, dela Cruz informed defendant Bank that he lost all the certificates of deposit and ask for the replacement of said last CTP where it was granted by the bank. Soon after said grants, dela Cruz negotiated and obtained a loan from defendant bank in the amount of Eight Hundred Seventy-Five Thousand Pesos (P875,000.00). On the same date, said depositor executed a notarized Deed of Assignment of Time Deposit which stated, among others, that he surrendered to defendant bank “full control of the indicated time deposits from and after date” of the assignment and further authorizes said bank to preterminate, set-off and “apply the said time deposit to the payment of whatever amounts may be due” on the loan upon it maturity. the loan of Angel dela Cruz with the defendant bank matured and fell due and on August 5, 1983, the latter set-off and applied the time deposits in question to the payment of the matured loan. Plaintiff filed the instant complaint, praying that defendant bank be ordered to pay it the aggregate value of the certificates of time deposit of P1,120,000.00 plus accrued interest and compounded interest therein at 16% per annum
Issue:
whether or not Caltex Philippines has a better right over the Certificate of time deposits?
Held:
Security Bank has a better right because the assignment of the CTDs made by Angel de la Cruz in favor of respondent bank was embodied in a public instrument. Art. 1625. An assignment of credit, right or action shall produce no effect as against third persons, unless it appears in a public instrument, or the instrument is recorded in the Registry of Property in case the assignment involves real property.
Respondent bank duly complied with this statutory requirement. Contrarily, petitioner, whether as purchaser, assignee or lien holder of the CTDs, neither proved the amount of its credit or the extent of its lien nor the execution of any public instrument which could affect or bind private respondent. Necessarily, therefore, as between petitioner and respondent bank, the latter has definitely the better right over the CTDs in question.
Lo vs. KJS Eco-Formwork System Phil., Inc. October 8, 2003
First Division
Justice Ynares-Santiago Facts:
Respondent KJS ECO_FORMWORK System Phil., Inc. is a corporation engaged in the sale of steel scaffoldings. Sonny Lo, on the other hand is a building contractor.
The petitioner ordered scaffolding equipments worth P540, 425.80 from respondent and paid a downpayment of P150,000. The balance was
made payable in ten monthly installments. The respondent delivered the equipments to petitioner but Sonny Lo was only able to pay the first two monthly installments because his business encountered financial difficulties. Despite the situation, the petitioner and respondent executed a Deed of Assignment whereby the petitioner assigned to respondent his receivables in the amount of P335, 462.80 from Jomero Realty Corporation.
When the respondent tried to collect the said credit from the corporation. Jomero Realty Corporation refused to honor the Deed of Assignment because it claimed that petitioner was also indebted to it.
The respondent filed an action for recovery of a sum of money before the RTC of Makati.The trial court dismissed the complaint on the ground that the assignment of credit extinguished the obligation when they executed the Deed of Assignment.
The respondent appealed the decision to the Court of Appeals and the said court reverses the appealed decision.
Issue:
Whether or not the Deed of Assignment that was executed extinguished the obligation of the petitioner.
Ruling:
The decision of the Court of Appeals ordering petitioner to pay the respondent the sum of P335, 462.14 is AFFIRMED with MODIFICATION.
Ratio: (Lo vs. KJS Eco-Formwork System Phil., Inc., pp 186-188)
An Assignment of Credit is an agreement by virtue of which the owner of a credit, known as the assignor, by a legal cause, such as sale, dacion en pago, exchange or donation, and without the consent of the debtor , transfers his credit and accessory rights to another, known as the assignee, who acquires the power to enforce it to the same extent as the assignor could enforce it against the debtor.
In dacion en Pago, as a special mode of
payment, the debtor offers another thing to the creditor who accepts it as equivalent of payment of an outstanding debt.
Hence, it may be well settled that the assignment of credit, which is in the nature of a sale of personal property, produced the effects of a dation in payment which may extinguish the obligation. However, as in any other contract of sale, the vendor is bound by certain warranties.
From the provision of the civil code(Article 1628), petitioner, as vendor or assignor, is bound to warrant the existence and legality of the credit at the time of the sale or assignment. When Jomero claimed that it was no longer indebted to petitioner since the latter also had an unpaid obligation to it, it essentially meant that its obligation to petitioner has been extinguished by compensation. In other words, respondent alleged the non-existence of the credit and asserted its claim to petitioner’s warranty under assignment. Therefore, it behooved on petitioner to make good its warranty and paid the obligation.
Indeed by warranting the existence of the credit, petitioner should be deemed to have ensured the performance thereof in case the same is later found to be inexistent. He should be held liable to pay to respondent the amount of his indebtedness(Lo vs. KJS Eco-Formwork System Phil., Inc., pp 186-188).
ATOK FINANCE CORPORATION,
petitioner vs. COURT OF APPEALS, SANYU CHEMICAL CORPORATION, DANILO E. ARRIETA, NENITA B. ARRIETA, PABLITO BERMUNDO and LEOPOLDO HALILI, respondents.
G.R. No. 80078 May 18, 1993 FELICIANO, J.:
FACTS: Private respondents Sanyu Chemical corporation ("Sanyu Chemical") as principal and
Sanyu Trading Corporation ("Sanyu Trading") along with individual private stockholders of Sanyu Chemical, namely, private respondent spouses Danilo E. Halili and Pablico Bermundo as sureties, executed in the continuing Suretyship Agreement in favor of Atok Finance as creditor. Under this Agreement, Sanyu Trading and the individual private respondents who were officers and stockholders of Sanyu Chemical did jointly and severally unconditionally guarantee to ATOK FINANCE CORPORATION the full, faithful and prompt payment and discharge of any and all indebtedness of private respondent to the Creditor Atok. The word "indebtedness" is used herein in its most comprehensive sense and includes any and all advances, debts, obligations and liabilities of Principal or any one or more of them.
On 27 November 1981, Sanyu Chemical assigned its trade receivables outstanding as of 27 November 1981 with a total face value of P125, 871.00, to Atok Finance in consideration of receipt from Atok Finance of the amount of P105, 000.00. The assigned receivables carried a standard term of thirty (30) days; it appeared, however, that the standard commercial practice was to grant an extension up to one hundred twenty (120) days without penalties. Later, additional trade receivables were assigned by Sanyu Chemical to Atok Finance with a total face value of P100, 378.45.
On 13 January 1984, Atok Finance commenced action against Sanyu Chemical, the Arrieta spouses, Pablito Bermundo and Leopoldo Halili before the Regional Trial Court of Manila to collect the sum of P120, 240.00 plus penalty charges amounting to P0.03 for every peso due and payable for each month starting from 1 September 1983. Atok Finance alleged that Sanyu Chemical had failed to collect and remit the amount due under the trade receivables. The private respondents on the other hand seek for the dismissal of the complaint for lack of cause of action and contended that the Continuing Suretyship Agreement, being an accessory contract, was null and void since, at the time of its execution, Sanyu Chemical had no pre-existing obligation due to Atok Finance. The trial court rendered a decision in favor of Atok Finance.Upon appeal; Court of Appeals
reversed the decision of the trial court, ruling in favor of the private respondents.Hence, this petition.
ISSUES: Whether the individual private respondents may be held solidarily liable with Sanyu Chemical under the provisions of the Continuing Suretyship Agreement? Whether or not the continuing suretyship agreement must be held null and void as having been executed without consideration and without a pre-existing principal obligation to sustain it.
RULING: The Supreme Court granted the petition of Petitioner Atok Finance and sustains the decision of trial court finding in favor of petitioner Atok Finance.
The contention of private appellants that the suretyship agreement is null and void because it is not in consonance with the laws on guaranty and security on the ground that the agreement was entered into by the parties two years before the Deed of Assignment was executed. Thus, contesting that it ran counter to the provision that guaranty cannot exist independently because by nature it is merely an accessory contract. The SC held that Court of Appeals here was in serious error. It is true that a serious guaranty or a suretyship agreement is an accessory contract in the sense that it is entered into for the purpose of securing the performance of another obligation which is denominated as the principal obligation. It is also true that Article 2052 of the Civil Code states that "a guarantee cannot exist without a valid obligation." However, the SC ruled that such legal proposition is not, like most legal principles, to be read in an absolute and literal manner and carried to the limit of its logic. This is clear from Article 2052 of the Civil Code itself. A surety is not bound under any particular principal obligation until that principal obligation is born. But there is no theoretical or doctrinal difficulty inherent in saying that the suretyship agreement itself is valid and binding even before the principal obligation intended to be secured thereby is born, any more that there would be in saying that obligations which are subject to a condition precedent are valid and binding before the occurrence of the condition precedent. By executing such an agreement, the principal places itself in a position to enter into the projected series of transactions with its creditor; with such surety agreement, there would be no need to execute a separate surety contract or
bond for each financing or credit accommodation extended to the principal debtor.
With respect to the second issue, that is, whether private respondents are liable under the Deed of Assignment which they, along with the principal debtor Sanyu Chemical, executed in favor of petitioner, on the receivables thereby assigned, SC held that private respondents are liable with respect to the deed they executed in favor of creditor Atok Finance. The Deed of Assignment was valid and binding upon Sanyu Chemical. It is an activity or operation that permits the assignee to monetize or realize the value of the receivables before the maturity thereof. In other words, Sanyu Chemical received from Atok Finance the value of its trade receivables it had assigned; Sanyu Chemical obviously benefitted from the assignment. The liability of Sanyu Chemical to Atok Finance rest on the breach of ex contractu (contractual obligation). Under the Deed of Assignment, the effect of non-payment by the original trade debtors was breach of warranty of solvency by Sanyu Chemical, resulting in turn in the assumption of solidary liability by the assignor under the receivables assigned. In other words, the assignor Sanyu Chemical becomes a solidary debtor under the terms of the receivables covered and transferred by virtue of the Deed of Assignment. And because assignor Sanyu Chemical became, under the terms of the Deed of Assignment, solidary obligor under each of the assigned receivables, the other private respondents (the Arrieta spouses, Pablito Bermundo and Leopoldo Halili), became solidarily liable for that obligation of Sanyu Chemical, by virtue of the operation of the Continuing Suretyship Agreement.