JETZON LEEs DIGEST SALES

Gr 99433 Project Builders Vs CA

FACTS: PBI, the developer-builder of Jovan Condominium Building, via an agreement,
obtained a credit line of P5M from IFC and assigned twenty (20) contracts to sell with
accounts receivable (AR) from its condominium unit buyers to IFC with recourse to assignor
and on a non-collection basis. Total ARs assigned was P7,986,815.38, but only
P4,549,132.72 was released to PBI, with the difference of P3,437,682.66 representing the
discounting fee or finance fee. PBI also executed a Deed of Real Estate Mortgage in favor of
IFC.

When PBI defaulted in the payment of the subject account, IFC foreclosed the mortgage
and was the highest bidder in the amount of P3,500,000.00. But prior to redemption, IFC
has been collecting interest from the ARs/contracts to sell. The foreclosed property was
redeemed a year later, but after application of the redemption payment, IFC claims that
there is still a deficiency of P1,323,053.08, Hence, IFC filed a collection complaint.

PBI denies liability and in their answer they allege that plaintiff has no cause or right of
action because the obligation is already fully paid out of the proceeds of foreclosure sale of
PBI's property. PBI alleged that IFC is the one liable to PBI.

The terms and conditions of the Agreement dated June 15, 1976 material to the case:
b. This assignment/discounting of the Contracts to Sell shall be with recourse to Assignor
and on a non-collection basis. d. Should there be a default on the part of the Assignor to
pay Assignee or should Assignor fail to pay Assignee the amount or amounts due to
Assignee arising from the assignment of the accounts receivables or remit to Assignee a
lesser amount, the Assignor and/or PABLO MALASARTE, ROLANDO L. JUSTO, LEANDRO D.
ENRIQUEZ, TEODORO G. BANAS, GALICANO A. CALAPATIA, JR. shall jointly and severally in
their personal capacities upon demand by the Assignee, repurchase the Contracts to Sell or
installment papers assigned and/or discounted by Assignor in favor of Assignee and/or pay
Assignee the remaining balance of the amount of the receivables discounted and/or
assigned by Assignor to Assignee.

TC: Dismissed IFC's complaint and ruled on the counterclaim ordering IFC it to pay PBI the
amount of AR that have not been compensated, to return to PBI the interest it collected
from PBI from foreclosure to redemption of the real estate mortgage; and to return pre-paid
interest since PBI was not allowed to use the period of such prepaid interests.
CA reserved TC and ordered PBI to pay, jointly and severally, to IFC the deficiency of
P1,237,802.48 with interest minus the amount of the promissory note in the sum of
P238,052.53 with interest.
ISSUE: WON assignor is still liable to the assignee for interests under the contract to sell, in
case of default, after the mortgage used to guaranty the collection of the assigned credit,
had already been foreclosed.

HELD: YES. IFC, which is engaged in discounting of ARs, is a financing company as defined
by the Financing Company Act, and the assignment of the contracts to sell falls under the
term credit.

An assignment of credit is an act of transferring, either onerously or gratuitously, the right
of an assignor to an assignee who would then be capable of proceeding against the debtor
for enforcement or satisfaction of the credit. The transfer of rights takes place upon
perfection of the contract, and ownership of the right, including all appurtenant accessory
rights, is thereupon acquired by the assignee. Where the assignment is of pure liberality,
donation would apply; while where valuable consideration is involved, a contract of sale or
purchase will apply.

In an assignment of a contract to sell, the assignee is effectively subrogated in place of the
assignor and in a position to enforce the contract to sell to the same extent as the assignor
could. In an assignment of credit, the consent of the debtor is not essential for its
perfection. A creditor may assign his credit and its accessories without the debtor's consent.
The purpose of notice to the debtor is only to inform him that from date of assignment,
payment should be made to the assignee and not to the original creditor. Lack of notice to
debtor affects only the efficacy of payment debtor might make.

The assignment was "with recourse," and default in payment of installments had been
established when mortgaged parcels of land were foreclosed. However, the foreclosure did
not preclude private IFC from collecting interest from the assigned Contracts To Sell from
the time of foreclosure to the redemption of the foreclosed property. The imposition of
interest was a mere enforcement or exercise of the right to the ownership of the credit or
receivables which the parties stipulated in the 1976 financing agreement.

As owner of the account receivables, IFC was entitled over the interest payments. This
interest is separate from the purchase discount which is not considered interest but more of
a "time price differential".

G.R. No. 42449. July 5, 1989.

FACTS: C & C Commercial Corporation (now Abestos Cements Products PhilsACPPI) opened
7 letter so credits with PNB to import machineries and equipmentsfor its plant. But ACCPI
failed to pay its obligations under the said letters of creditand so through a Voting
Trust Agreement, NIDC headed the new management ofACCPI to help pay of its debt
to PNB and NIDC.An accounting of SGV however, showed that the management and
operationsfor the first 3 years of the Voting Trust Agreement under PNB/NIDC was a
completeand disastrous failure. Leading to court action for receivership. Meanwhile,
DBPexecuted a deed of assignment in favor of PNB whereby DBP assigned to PNB itsrights
and interests under the promissory noted and deeds of real estate mortgagesexecuted by
ACCPI in favor of DBP. These credits together with the original lettersof credits executed by
ACCPI in favor of PNB was foreclosed by PNB through courtaction.ISSUE: Whether or not
the assignment of credit by DBP to PNB is proper.HELD: Yes. As to the DBP-assigned
credits, there is no doubt that foreclosure canproceed as these were secured by appropriate
mortgages. Morever, contrary to petitioners pretensions, the validity of the assignment of
the mortgage credit byDBP to PNB is beyond question. Article 1624 of the Civil Code
provides that an assignment of credits and other incorporeal rights shall be perfected in
accordancewith the provisions of Article 1475 which in turn states that the contract of sale is
perfected at the moment there is a meeting of the minds upon the thing which is theobject
of the contract and upon the price.The meeting of the minds contemplatedhere is that
between the assignor of the credit and his assignee, there being nonecessity for the consent
of the debtor, contrary to petitioners claim. It is sufficient that the assignment be brought
to his knowledge in order to be binding upon him.This may be inferred from Article 1626 of
the Civil Code which declares that the debtor who, before having knowledge of the
assignment, pays his creditor shall bereleased from the obligation.


GR 71694 Nyco Sales Vs BA Finance


Nyco Sales has discounting privileges with BA Finance. In 1978, brothers Renato Fernandez and
Santiago Renato (officers of Sanshell Corporation) approached Nyco Sales Corporation for a
credit accommodation in order for the brothers make use of Nycos discounting privileges. Nyco
Sales agreed and so on November 15, 1978, Sanshell issued a post-dated (November 17, 1978)
BPI check to Nyco Sales in the amount of P60,000.00. Following the discounting process agreed
upon, Nyco Sales, thru its president Rufino Yao, endorsed the check in favor of BA Finance.
Thereafter, BA Finance issued a check payable to Nyco Sales which endorsed it in favor of
Sanshell. Sanshell then made use of and/or negotiated the check. Accompanying the exchange
of checks was a Deed of Assignment executed by Nyco Sales (assignor) in favor of BA Finance
(assignee) with the conformity of Sanshell. Under the said Deed, the subject of the discounting
was P60k BPI check.
The check bounced. BA Finance notified Sanshell. Sanshell substituted the BPI check with a
Security Bank and Trust Company check for P60k. This check again bounced. BA Finance made
repeated demands to Nyco Sales and Sanshell but neither of the two settled the obligation.
Hence, BA Finance sued Nyco Sales. Nyco Sales averred that it received no notice of dishonor
when the second check was dishonored.

ISSUE: Whether or not Nyco Sales is liable to pay BA Finance.

HELD: Yes. The relationship between Nyco Sales and BA Finance is one of assignor-assignee.
The assignor-vendor warrants both the credit itself (its existence and legality) and the person of
the debtor (his solvency), if so stipulated, as in the case at bar. Consequently, if there be any
breach of the above warranties, the assignor-vendor should be held answerable therefor. There
is no question then that the assignor-vendor is indeed liable for the invalidity of whatever he
assigned to the assignee-vendee. Considering now the facts of the case at bar, it is beyond
dispute that Nyco executed a deed of assignment in favor of BA Finance with Sanshell
Corporation as the debtor-obligor. BA Finance is actually enforcing said deed and the check
covered thereby is merely an incidental or collateral matter. This particular check merely
evidenced the credit which was actually assigned to BA Finance. Thus, the designation is
immaterial as it could be any other check. It is only what is represented by the said checks that
Nyco is being asked to pay.

Nyco Sales pretension that it had not been notified of the fact of dishonor is belied not only by
the formal demand letter issued by BA Finance but also by the fact that Nyco Sales and Sanshell
had frequent contacts before, during and after the dishonor. More importantly, as long as the
credit remains outstanding, Nyco Sales shall continue to be liable to BA Finance as its assignor.
The dishonor of an assigned check simply stresses its liability and the failure to give a notice of
dishonor will not discharge it from such liability. This is because the cause of action stems from
the breach of the warranties embodied in the Deed of Assignment, and not from the dishonoring
of the check alone.
GR 142838 Licaros vs Gatmaitan

Facts:

After having invested in Anglo-Asean Bank and Trust Limited (Anglo-Asean),petitioner
Abelardo B. Licaros, encountered tremendous difficulties inretrieving his investments and its
corresponding interests in the said bank.Thereafter, petitioner decided to seek the financial
consultancy services of herein respondent Antonio P. Gatmaitan, a reputable banker and
investment manager. Respondent voluntarily offered to assume the payment of Anglo-
Asean's indebtedness to Licaros subject to certain terms and conditions.

In order to effectuate and formalize the parties' respective commitments, thetwo executed a
notarized memorandum of agreement. Thereafter,respondent presented to Anglo-Asean the
said memorandum of agreement for the purpose of collecting Licaros' placement thereat. No
formal responsewas ever made by said bank to either petitioner or respondent.
Evidently,because of his inability to collect from Anglo-Asean, respondent did not bother
anymore to make good his promise to pay Licaros the amount statedin his promissory note.
Petitioner, however, felt that he had a right to collect on the basis of the promissory note
regardless of the outcome of respondents recovery efforts. Thus, petitioner demanded
payment of respondents obligations under the promissory note. When respondent didnot
accede to these demands, petitioner filed an action for recovery.
Issue:Whether or not the memorandum of agreement between petitioner andrespondent
was one of assignment of credit or one of conventional subrogation .

Held:

The Memorandum of Agreement was in the nature of a conventionalsubrogation which
requires the consent of the debtor, Anglo-Asean Bank, forits validity. The Memorandum of
Agreement never came into effect due to the failure of the parties to get the consent of
Anglo-Asean Bank and, as such,respondent never became liable for the amount stipulated
therein. The absence of such conformity by Anglo-Asean Bank prevented the Memorandum
of Agreement from becoming valid and effective. Hence, theMemorandum of Agreement
was never perfected.


GR L-48336 People vs Mapoy


Defendants were charged with violation of the Bulk Sales Law in that
theymortgaged all of their stock of goods, etc., without any notice to Daido Boeki
Kaisha,Ltd., one of the offended parties, to which they were indebted. They pleaded
guiltyand its sentenced by the Court of First Instance of Manila to pay a fine, and the
costs,and to indemnify Daido Boeki Kaisha, Ltd., jointly and severally, with subsi
diaryimprisonment in case of insolvency.

ISSUE:

WON in violation of bulk sales law,payment of indemnity will lie.

RULING:
That it was error for the trial court to consider said indebtedness as a liabilityarising from
the crime charged, and to order defendants to indemnify Daido BoekiKaisha, Ltd., with
subsidiary imprisonment in case of insolvency.Inasmuch as under section 4 of the Bulk Sales
Law, the mortgaged in questionwas fraudulent and void, and there being no proof that the
mortgaged goods havedisappeared, the same are still subject to attachment for the
satisfaction of creditors'lawful claims agai nst the defendants. Dai do Boeki Kai sha,
Ltd., may still bring aseparate civil action against defendants herein for the collection of
any indebtednessthat may be due from defendants, and if the latter will not pay the
judgment in suchcivil case, the goods involved in the instant case may be seized and sold.
Therefore,the obligations of defendants to pay Daido Boeki Kaisha , Ltd., which was
alreadyexisting when the mortgage was signed, was not the result of the violation of the
BulkSales Law, nor was it affected by said violation.