Manila Banking Corp vs Teodoro

8/18/2019 Manila Banking Corp vs Teodoro

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Manila Banking Corp. v AnastacioTeodoro, Jr. and Grace Teodoro

Bidin, J. | 1989

1. April 1966, Spouses Teodorotogether with Teodoro Sr executeda P in !a"our o! #anila Ban$ing

%orp B%'(

) Pa*a+le within 1- da*s &untilAug', with 1 interestperannu/(

) The* !ailed to pa* and le!t+alance o! 10$ as o! Septe/+er1969(

. #a* and June 1966, executed twoPs(

) 8$ and 1$ respecti"el* pa*a+lewithin 1- da*s and 1 perannu/(

) The* /ade partial pa*/ent +ut stillle!t 8.9$ +alance as o! Septe/+er1969(

. 2t appears than in 1963, Teodoro Jrexecuted a 4eed o! Assign/ent o! 5ecei"a+les in !a"our o! #B% !ro/

/ergenc* /plo*/entAd/inistration(

) A/ounted to 33$() The deed pro"ided it was !or

consideration o! certain credits,loans, o"erdra!ts and other creditacco//odations extended to thespouses and Teodoro Sr as securit*!or the pa*/ent o! said su/ andinterest thereon( and that the*

release and 7uitclai/ all its rights,title and interest in the recei"a+les(

3. 2n the stipulations o! !act, it wasad/itted +* the parties

) That #B% extended loans to thespouses and Teodoro Jr +ecause o! certain contracts entered into +*latter with A !or !a+rication o!

shing +oats and that thePhilippine :isheries %o//issionsucceeded A a!ter itsa+olition(

) That non)pa*/ent o! the Ps wasdue to !ailure o! the %o//ission topa* spouses() That the Ban$ too$steps to collect !ro/ the

%o//ission +ut no collection wase;ected(

0. :or !ailure o! the spouses and Teodor Sr to pa*, #B% institutedagainst the/(

) Teodoro Sr su+se7uentl* died sosuit onl* against the spouses(

6. T% !a"oured #B%( #:5 denied(

) Spouses appealed to %A +ut sinceissue pure 7uestion o the assign/ent o! recei"a+leshas the e;ect o! pa*/ent o! all theloans contracted +* the spouses( o.

=> #B% /ust exhaust all legare/edies against P:% +e!ore it canproceed against the spouses. o

Ratio:Assign/ent o! credit

) An agree/ent +* "irtue o! which theowner o! a credit&assignor' +* a legacause &e.g. sale, dation in pa*/entexchange or donation' and withoutthe need o! the consent o! the de+tortrans!ers his credit and its accessor*rights to another&assignee' whoac7uires the power to en!orce it to thesa/e extent as the assignor couldha"e en!orced it against the de+tor() #a* +e in !or/ o!

• Sale

• 4ation in pa*/ent ) when a de+torin order to o+tain a release !ro/ his


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de+t, assigns to his creditor acredit he has against a thirdperson(

• 4onation ? when it is +* gratuitoustitle(

• @uarant* ? creditor gi"es as a

collateral, to secure his own de+t in!a"our o! the assignee, withouttrans/itting ownership(

) +ligations +etween the partieswill depend upon the uridicalrelation which is the +asis o! theassign/ent(

=hat is the legal e;ect o! theAssign/ent &since its "alidit* is not in7uestion'

1. Assignment o receiva!les in 1"#$did not transer t%e o&ners%ip o t%e receiva!les to MBC and releaset%e spouses rom t%eir loans'

) %onsideration was !or certain credits,loans, o"erdra!ts and creditacco//odations worth 1-$ extended +*#B% to spouses and as securit* !or thepa*/ent o! said su/ and interest

thereon( also 7uitclai/ o! rights to #B%o! their interest in the recei"a+les(

) Stipulated also that it was a continuingguarant* !or !uture loans andcorrespondingl*, the assign/ent shallextend to all accounts recei"a+le(

Contention o spouses: not mereguarant( since it &as stipulated:

) That the assignor release and

7uitclai/ to assignee all its rights, titleand interest in the accountsrecei"a+le(

) That title and right o! possession toaccount recei"a+le is to re/ain inassignee and it shall ha"e right tocollect directl* !ro/ the de+tor( thatwhate"er the assignor does inconnection with collection o! such, it

does so as agent and representati"eand in trust o! assignee(

) S% character o! transaction is notdeter/ined +* the language indocu/ent +ut +* intention o! theparties(

) 2! it was intended to secure thepa*/ent o! /one*, it /ust +econstrued as a pledge.

) A trans!er o! propert* +* the de+torto a creditor, e"en i! suCcient on its!ar/ to /a$e an a+solutecon"e*ance, should +e treated as apledge i! the de+t continues inexistence and is not discharged +* thetrans!er(

Assign/ent o! recei"a+les did notresult !ro/ sale or +* "irtue o! adation in pa*/ent(

) At ti/e the deed was executed, theloans were non)existent *et(

) At /ost, it was a dation !or 1-$, thea/ount o! credit with #B% indicated inthe deed( at the ti/e o! executionthere was no o+ligation to +e

extinguished except !or the 1-$() 19 in order that an o+ligation /a*+e extinguished +* another whichsu+stitutes the sa/e, it is i/perati"ethat it +e so declared in une7ui"ocater/s, or that the old and the newo+ligations +e on e"er* pointinco/pati+le with each other(

4eed o! assign/ent intended ascollateral securit* !or the loans, as a

continuing guarant* !or whate"er su/sthat would +e owing +* spouses(

) 2n case o! dou+t as to whether atransaction is a pledge or a dation inpa*/ent, the presu/ption is in !a"or o!pledge, the latter +eing the lessetrans/ission o! rights and interests&DopeE " %A'(


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). MBC need not e*%aust all legalremedies against +C:

) Spouses, not +eing released +* theassign/ent, re/ain as the principalde+tors o! #B%,rather than /ereguarantors(

) The deed /erel* guarantees saido+ligations(

) -08 &creditor /ust ha"e exhaustedpropert* o! de+tor and resorted to alllegal re/edies +e!ore it can proceed toguarantor' does not appl* to the/(

) Appellants are +oth the principalde+tors and the pledgors or /ortgagors(

) #B% did tr* to collect +ut at P, it was

disappro"ed( so the loan was +asicall*unsecured(

42S#2SS4.

:eliciano, J. concurring

Justice BidinFs, Gthe character o! thetransactions +etween the parties is not,howe"er, deter/ined +* the languageused in the docu/ent +ut +* theirintentionH ? not without exception(

) 4eed here contains language whichsuggest that the parties intendedco/plete alienation o! title to and rightso"er the recei"a+les() =ords Ire/iseF,IreleaseF and I7uitclai/F and clauses Ititle the title and right o! possession tosaid accounts recei"a+le is to re/ain insaid assigneeG who Gshall ha"e the rightto collect directl* !ro/ the de+torF(

) =ords IagentF also con"e* the ideas() But such /ust +e ta$en in conunctionwith and 7ualied +* other languageshowing intent o! the parties that title tothe recei"a+les shall pass to the assignee!or the li/ited purpose o! securinganother, principal o+ligation owed +* theassignor to the assignee(

Title /o"es !ro/ assignor to assignee+ut that title is de!easi+le +eing designedto collateraliEe the principal o+ligation

) perationall* /eans assignee is+urdened to collateraliEe theprincipal o+ligation( ta$ing theproceeds o! the recei"a+les

assigned and appl*ing suchproceeds to the satis!action o! theprincipal o+ligation and returningan* +alance re/aining therea!teto the assignor(

The parties ga"e the deed o! assign/entthe !or/ o! an a+solute con"e*ance o!title o"er the recei"a+les assignedessentiall* !or the con"enience o! theassignee

) =ithout such nature o! a+solutecon"e*ance, the assignee would ha"e to!oreclose the properties( he would ha"eto co/pl* with docu/entation andregistration re7uire/ents o! a pledge orchattel /ortgage'(

) A deed o! assign/ent +* wa* osecurit* a"oids the necessit* o! apu+lic sale i/pose +* the rule onpactu/ co//isoriu/, +* in e;ect

placing the sale o! the collateral up!ront(

) The !oregoing is applica+le wherethe deed o! assign/ent o!recei"a+les co/+ines ele/ents o!+oth a co/plete alienation o! thecredits and a securit* arrange/entto assure pa*/ent o! a principao+ligation(

) =here the nd ele/ent is a+sentthe assign/ent would constituteessentiall* a /ode o! pa*/ent ordacion en pago(

) 2n order that a deed o! assign/ento! recei"a+les which is in !or/ ana+solute con"e*ance o! title to thecredits +eing assigned, /a* +e7ualied and treated as a securit*


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arrange/ent, language to suche;ect /ust +e !ound in thedocu/ent itsel! and that language,precisel*,is e/+odied in the deedo! assign/ent in the instant case.

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Manila Banking Corp vs Teodoro