United Coconut Planters Bank v. Uy
REITERATIONFacts
The Antecedents: Spouses Walter and Lily Uy (respondents) entered into a Contract to Sell with Prime Town Property Group, Inc. (PPGI) for a condominium unit. PPGI later executed a Memorandum of Agreement (MOA) and Sale of Receivables and Assignment of Rights and Interests with United Coconut Planters Bank (UCPB), transferring the right to collect receivables from buyers, including respondents, as partial settlement of PPGI's loan. Respondents filed a complaint for sum of money and damages against PPGI and UCPB, alleging failure to complete their units despite full payment. Procedural History: The HLURB Regional Office directed respondents to file their claim before the Rehabilitation Receiver, suspending proceedings as to PPGI. The HLURB Board reversed this, finding UCPB solidarily liable with PPGI and ordering UCPB to refund the full purchase price with interest and damages. The Office of the President (OP) affirmed the HLURB Board's decision. The Court of Appeals (CA) modified the OP decision, holding UCPB not solidarily liable but liable only for the amount respondents paid upon UCPB's assumption as the party entitled to receive payments or on April 23, 1998. The CA limited UCPB's liability to ₱552,152.34, with Primetown liable for the remaining ₱599,566.41. The Petition: UCPB filed a petition for review on certiorari, questioning the CA's application of stare decisis based on CA decisions and its ruling that UCPB is liable for amounts not paid to the bank.
Issue(s)
Whether the Court of Appeals erred in applying the principle of stare decisis to decisions of the Court of Appeals. Whether UCPB is liable for amounts respondents did not pay to the bank and which UCPB did not receive. Whether the computation of UCPB's liability by the Court of Appeals was correct.
Ruling
The petition is meritorious. The Supreme Court modified the Court of Appeals' decision, holding UCPB liable to pay the amount of ₱157,757.82 to Spouses Walter and Lily Uy, with legal interest at six percent (6%) per annum, without prejudice to any action the parties may have against Prime Town Property Group, Inc.
Ratio Decidendi
On the applicability of stare decisis to Court of Appeals decisions: The Court clarified that the doctrine of stare decisis applies only to judicial precedents set by pronouncements of the Supreme Court, not by lower courts. Decisions of lower courts, including the Court of Appeals, only have persuasive effect. Therefore, respondents were correct in contesting the application of stare decisis when the CA relied on its own previous decisions. The appellate court, however, has the power to review the case in its entirety and make its own judgment, which may include modifying or reversing the lower court's decision. On UCPB's liability for amounts not received: The Court reiterated its ruling in Spouses Choi v. UCPB and Liam v. UCPB that the transaction between PPGI and UCPB was an assignment of credit, not a subrogation. This means UCPB acquired PPGI's right to collect receivables but not the obligation to complete the condominium project. The assignment explicitly excluded PPGI's liabilities. Therefore, UCPB is only liable to refund the amounts it had actually and unquestionably received from the unit buyers. The Court found that only ₱157,757.82 was sufficiently substantiated as having been received by UCPB, despite respondents' claim of full payment. On the computation of UCPB's liability: The Court found that the exception to the rule that only questions of law can be raised in a petition for review under Rule 45 applies, as the CA's conclusion was based on a misapprehension of facts. The CA's computation of UCPB's liability as ₱552,152.34 was based on an assumption that the balance was paid to UCPB, which was not supported by evidence. The only substantiated amount received by UCPB was ₱157,757.82, as indicated in its own demand letter. Therefore, UCPB's liability should be limited to this amount, as the burden of proving payment rests on the party pleading it.
Main Doctrine
An assignment of credit, as distinguished from subrogation, transfers only the right to collect receivables and does not automatically transfer the obligations of the assignor, unless explicitly assumed. The assignee is only liable for the amounts it has actually received.