Choi v. United Coconut Planters Bank
REITERATIONFacts
The Antecedents: Petitioner spouses Chin Kong Wong Choi and Ana O. Chua (Spouses Choi) entered into a Contract to Sell with Primetown Property Group, Inc. (Primetown) for a condominium unit. Subsequently, Primetown executed a Memorandum of Agreement and Sale of Receivables and Assignment of Rights and Interests with respondent United Coconut Planters Bank (UCPB), assigning its accounts receivable from Primetown's projects, including Spouses Choi's account, to UCPB for P748,000,000.00. Spouses Choi made payments towards their unit. Procedural History: Spouses Choi filed a complaint for refund against Primetown and UCPB before the Housing and Land Use Regulatory Board (HLURB) Regional Field Office VI (RFO VI), alleging Primetown's failure to complete construction and deliver the unit despite full payment. The HLURB RFO VI suspended proceedings and directed claims to the Rehabilitation Receiver. The HLURB Board of Commissioners (BOC) later ordered UCPB to refund the full amount paid by Spouses Choi, jointly and severally with Primetown for damages and attorney's fees. The Office of the President (OP) affirmed the HLURB BOC's decision. The Court of Appeals (CA) reversed the OP's decision, reinstating the HLURB RFO VI's decision based on the doctrine of stare decisis, citing previous CA rulings in similar cases involving UCPB and Primetown. The Petition: Spouses Choi filed a petition for review assailing the CA's decision, arguing that the CA erred in solely relying on stare decisis and in disregarding other applicable doctrines and Supreme Court decisions.
Issue(s)
Whether the Court of Appeals erred in applying the doctrine of stare decisis. Whether UCPB, as an assignee of Primetown's receivables, assumed the obligations and liabilities of Primetown under the Contract to Sell. Whether UCPB is estopped from denying liability. Whether UCPB is solidarily liable with Primetown.
Ruling
The Court denied the petition and affirmed with modification the decision of the Court of Appeals. It ordered UCPB to return to Spouses Choi the amount of P26,292.97 with legal interest.
Ratio Decidendi
On the application of stare decisis: The Court noted that the CA correctly applied the doctrine of stare decisis, as the facts and arguments in the present case were similar to those in previous CA cases involving UCPB and Primetown, specifically UCPB v. O’Halloran and UCPB v. Liam. The CA's reliance on these prior rulings, which had become final and executory, was deemed proper. The Court also considered the Supreme Court's denial of UCPB v. Ho's petition for review, further solidifying the precedent. On UCPB's assumption of liabilities: The Court held that the Agreement between Primetown and UCPB was an assignment of credit, not a transfer of all obligations. The Agreement explicitly stated that the assignment was limited to receivables and did not include "any and all liabilities which [Primetown] may have assumed under the individual Contract to Sell." The Court emphasized that the intention of the parties, as derived from the whole instrument and their subsequent acts, was to assign only the receivables. The principle that an assignment of credit makes the assignor responsible for the existence and legality of the credit at the time of sale, as per Article 1628 of the Civil Code, was applied. On estoppel: The Court found no merit in the argument that UCPB was estopped from denying liability. UCPB's letters to the buyers merely assured them of the completion of their units by the developer, Primetown. UCPB did not represent itself as the new owner of the project or that it would undertake the completion itself. Therefore, no misrepresentation that would give rise to estoppel was established. On solidary liability: The Court rejected the claim of solidary liability, distinguishing the present case from those involving violations of Presidential Decree No. 957, which made banks solidarily liable. The Court reiterated that a solidary obligation cannot be inferred lightly and must be expressly stated or required by the nature of the obligation. Since the Agreement did not establish solidary liability and the nature of the assignment was limited to receivables, UCPB could not be held solidarily liable with Primetown for the full amount paid by Spouses Choi. The Court concluded that UCPB was only liable for the amount it indisputably received, which was P26,292.97.
Main Doctrine
An assignment of receivables, by its nature, does not automatically transfer the liabilities of the assignor to the assignee unless expressly stipulated or the law requires it. The assignee is generally only liable for the existence and legality of the credit assigned.