G.R. No. 207747, March 11, 2015 - SPOUSES CHIN KONG WONG CHOI AND ANA O. CHUA, Petitioners, v.

UNITED COCONUT PLANTERS BANK, Respondent.

SECOND DIVISION
G.R. No. 207747, March 11, 2015
SPOUSES CHIN KONG WONG CHOI AND ANA O. CHUA, Petitioners, v. UNITED COCONUT PLANTERS
BANK, Respondent.
DECISION
CARPIO, J.:
The Case
This petition for review1 assails the Decision2 dated 29 January 2013 as well as the Resolution3 dated 27 May
2013 of the Court of Appeals (CA) in CA-G.R. SP No. 117831. The CA reversed the Decision4dated 1 June
2010 and Resolution5 dated 5 January 2011 of the Office of the President (OP), and ruled that its decisions
in the cases of UCPB v. OHalloran6 and UCPB v. Liam7 shall apply in the present case, following the doctrine
of stare decisis.
The Facts
The

facts,

as

culled

from

the

records,

are

as

follows:

Petitioner spouses Chin Kong Wong Choi and Ana O. Chua (Spouses Choi) entered into a Contract to
Sell8 with Primetown Property Group, Inc. (Primetown), a domestic corporation engaged in the business of
condominium construction and real estate development. The Contract to Sell provided that Spouses Choi
agreed to buy condominium unit no. A-322 in Kiener Hills Cebu (Kiener) from Primetown for a consideration
of P1,151,718.75, with a down payment of P100,000.00 and the remaining balance payable in 40 equal
monthly
installments
of
P26,292.97
from
16
January
1997
to
16
April
2000.9
c ralawre d

On 23 April 1998, respondent United Coconut Planters Bank (UCPB), a commercial bank duly organized and
existing under the laws of the Philippines, executed a Memorandum of Agreement10and Sale of Receivables
and Assignment of Rights and Interests (Agreement)11 with Primetown. The Agreement provided that
Primetown, in consideration of P748,000,000.00, assigned, transferred, conveyed and set over unto [UCPB]
all Accounts Receivables accruing from [Primetowns Kiener] x x x together with the assignment of all its
rights, titles, interests and participation over the units covered by or arising from the Contracts to Sell from
which the Accounts Receivables have arisen. Included in the assigned accounts receivable was the account
of Spouses Choi, who proved payment of one monthly amortization to UCPB on 3 February 1999.12
c ralaw red

On 11 April 2006, the Spouses Choi filed a complaint for refund of money with interest and damages against
Primetown and UCPB before the Housing and Land Use Regulatory Board (HLURB) Regional Field Office No.
VI (RFO VI). Spouses Choi alleged that despite their full payment of the purchase price, Primetown failed to
finish the construction of Kiener and to deliver the condominium unit to them.
chanrob lesvi rtual lawlib rary

The Ruling of the HLURB

In a Decision dated 29 November 2006,13 the HLURB RFO VI found that only the accounts receivable on the
condominium unit were transferred to UCPB. The HLURB RFO VI stated that it would be unfair to order UCPB

to refund all the payments made by Spouses Choi because UCPB only received part of the consideration
after the assignment of receivables. Considering that both UCPB and Primetown were liable to Spouses Choi,
and Primetown was under corporate rehabilitation, the HLURB RFO VI held that the proceedings should be
suspended, to wit:
chanRoble svi rtual Lawli bra ry

WHEREFORE, premises considered, decision is hereby rendered suspending the proceedings of the present
case. The complainants are therefore directed to file their claim before the Rehabilitation Receiver.
No

judgment

IT

as

to

IS

cralawlawl ibra ry

the

costs.
ORDERED.14

SO

cralawre d

In a Decision dated 18 October 2007,15 the HLURB Board of Commissioners (BOC) suspended the
proceedings against Primetown, but ordered UCPB to refund the full amount paid by Spouses Choi. The
HLURB BOC found that UCPB was the legal successor-in-interest of Primetown against whom the Spouses
Chois action for refund could be enforced. The dispositive portion of the decision reads:
chanRoblesv irt ual Lawlib rary

WHEREFORE, premises considered, the decision of the Regional Office is SET ASIDE and a new one is
entered
as
follows:
1. Respondent UCPB is hereby ordered to refund to the complainant the amount of P1,151,718.80 with
interest at the legal rate of 6% per annum reckoned from the date of extrajudicial demand on May 24, 2005
until fully paid without prejudice to whatever claims UCPB may have against PPGI; and
2. Respondents UCPB and PPGI, jointly and severally, are declared liable to the complainant for payment of
exemplary damages in the amount of P30,000.00; and attorneys fees in the amount of P30,000.00.
SO ORDERED.16

cralawlawlib rary

In a Resolution dated 18 March 2008,17 the HLURB BOC denied the motion for reconsideration filed by UCPB.
Thus, UCPB appealed to the OP.
chanroble svirtuallaw lib rary

The Ruling of the OP

In a Decision dated 1 June 2010,18 the OP, through the Deputy Executive Secretary for Legal Affairs Agustin
S. Dizon, affirmed the decision of the HLURB BOC. The OP held that UCPB, being Primetowns successor-ininterest, was jointly and severally liable with Primetown for its failure to deliver the condominium unit.
In a Resolution dated 5 January 2011,19 the OP denied the motion for reconsideration filed by UCPB. Thus,
UCPB appealed to the CA.
chanroblesv irt uallawl ibrary

The CA Ruling
In a Decision dated 29 January 2013,20 the CA granted the petition of UCPB and adopted the ruling of the
CA Fourteenth Division dated 23 July 2009 in the case of UCPB v. OHalloran, and that of the CA First
Division dated 24 September 2010 in the case of UCPB v. Liam. According to the CA, the doctrine of stare
decisis applies because the facts and arguments in the present case are similar to those in the mentioned
cases. Thus, the dispositive portion of the CA decision states:
chanRoblesvi rt ual Lawlib rary

WHEREFORE, the petition is GRANTED. The Decision dated June 1, 2010 and Resolution dated January 5,
2011 of the Office of the President in O.P. Case No. 08-F-213, are REVERSED and SET ASIDE. The Decision
dated
November
29,
2006
of
the
HLURB-Regional
Field
Office
is
REINSTATED.
SO ORDERED.21

cralawlawlib rary

In a Resolution dated 27 May 2013,22 the CA denied the motion for reconsideration filed by Spouses Choi.
The Issues
Spouses Choi raised the following issues in this petition:

chanRoble svirtual Lawlib ra ry

chanroble svi rtual lawlib rary

I.
WITH ALL DUE RESPECT, THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED IN RULING THE
INSTANT CASE BY SOLELY RELYING ON THE DOCTRINE OF STARE DECISIS BY CITING THE CASES OF UCPB
V. JOHN P. OHALLORAN AND JOSEFINA L. OHALLORAN (CA-G.R. SP NO. 101699) (A Court of Appeals
Decided Case) AND UCPB V. FLORITA LIAM (CA-G.R. SP NO. 112195), (a Court of Appeals Decided Case)
DESPITE THE APPLICABILITY OF THE DOCTRINE OF ESTOPPEL IN THIS CASE, WHICH IS NOT PRESENT IN
THE OHALLORAN CASE AND LIAM CASE. THE HONORABLE COURT OF APPEALS A QUO ALSO ERRED WHEN
IT DECIDED THIS CASE BY ONLY GIVING DUE DEFERENCE TO THE DECISION OF ITS CO-DIVISION, BUT
SHOULD HAVE LOOKED UPON THE MERITS OF THE CASE BY APPLYING THE DECISION OF THE SUPREME
COURT IN THE CASE OF QUASHA ANCHETA PEA & NOLASCO LAW OFFICE and LEGEND INTERNATIONAL
RESORTS, LIMITED vs. THE SPECIAL SIXTH DIVISION of the COURT OF APPEALS, KHOO BOO BOON and the
Law Firm of PICAZO BUYCO TAN FIDER & SANTOS (G.R. No. 182013, December 4, 2009).
chanroblesv irt uallawl ibra ry

II.
WITH ALL DUE RESPECT, THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED WHEN IT
DISREGARDED THE APPLICABILITY OF THE SUPREME COURT DECIDED CASES OF LUZON DEVELOPMENT
BANK V. ANGELES CATHERINE ENRIQUEZ (G.R. NO. 168646, JANUARY 12, 2011) AND DELTA
DEVELOPMENT AND MANAGEMENT SERVICES INC. V. ANGELES CATHERINE ENRIQUEZ AND LUZON
DEVELOPMENT BANK (G.R. NO. 168666, JANUARY 12, 2011) TO THE INSTANT CASE. THE HONORABLE
COURT OF APPEALS ALSO ERRED WHEN IT FAILED TO APPLY THE MORE RECENT CASE OF PBCOMM VS.
PRIDISONS REALTY CORPORATION (G.R. NO. 155113, JANUARY 9, 2013) TO THE INSTANT CASE.
chanroblesvi rt uallawl ibra ry

III.
WITH ALL DUE RESPECT, THE HONORABLE COURT OF APPEALS GRIEVOUSLY ERRED BY NOT RESOLVING
THE ISSUE PERTAINING TO THE EFFECT OF THE CONTRACT DENOMINATED AS "SALE OF RECEIVABLES AND
ASSIGNMENT OF RIGHTS AND INTERESTS", WHEREIN PRIMETOWN TRANSFERRED TO RESPONDENT UCPB
THE FORMERS RECEIVABLES, MONIES, RIGHTS, TITLES, AND INTERESTS IN THE KIENER HILLS
CONDOMINIUM PROJECT.23
cralawlawl ibra ry

The Ruling of the Court

We

deny

the

petition.

The primordial issue to be resolved is whether, under the Agreement between Primetown and UCPB, UCPB
assumed the liabilities and obligations of Primetown under its contract to sell with Spouses Choi.
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 debtors consent, transfers that credit and its accessory rights to another, known as the
assignee, who acquires the power to enforce it to the same extent as the assignor could have enforced it
against the debtor.24 In every case, the obligations between assignor and assignee will depend upon the
judicial relation which is the basis of the assignment.25 An assignment will be construed in accordance with
the rules of construction governing contracts generally, the primary object being always to ascertain and
carry out the intention of the parties.26 This intention is to be derived from a consideration of the whole
instrument, all parts of which should be given effect, and is to be sought in the words and language
employed.27
c ralaw red

In the present case, the Agreement between Primetown and UCPB provided that Primetown, in consideration
of P748,000,000.00, assigned, transferred, conveyed and set over unto [UCPB] all
Accounts Receivables accruing from [Primetowns Kiener] x x x together with the assignment of all its
rights, titles, interests and participation over the units covered by or arising from the Contracts to Sell
from
which
the
Accounts
Receivables
have
arisen.28
cralawred

The Agreement further stipulated that x x x this sale/assignment is limited to the Receivables accruing
to [Primetown] from the [b]uyers of the condominium units in x x x [Kiener] and thecorresponding
Assignment of Rights and Interests arising from the pertinent Contract to Sell and does not include
except for the amount not exceeding 30,000,000.00, Philippine currency, either singly or
cumulatively any and all liabilities which [Primetown] may have assumed under the individual
Contract
to
Sell.29
cralaw red

The Agreement conveys the straightforward intention of Primetown to sell, assign, transfer, convey and set
over to UCPB the receivables, rights, titles, interests and participation over the units covered by the
contracts to sell. It explicitly excluded any and all liabilities and obligations, which Primetown assumed
under the contracts to sell. The intention to exclude Primetowns liabilities and obligations is further shown
by Primetowns subsequent letters to the buyers, which stated that this payment arrangement shall in no
way cause any amendment of the other terms and conditions, nor the cancellation of the Contract to Sell
you have executed with [Primetown].30 It is a basic rule that if the terms of a contract are clear and leave
no doubt upon the intention of the parties, the literal meaning shall control.31 The words should be
construed according to their ordinary meaning, unless something in the assignment indicates that they are
being used in a special sense.32 Furthermore, in order to judge the intention of the contracting parties, their
contemporaneous
and
subsequent
acts
shall
be
principally
considered.33
cra lawred

It was not clear whether the amount not exceeding 30,000,000.00, Philippine currency in the Agreement
referred to receivables or liabilities.34 Under the Rules of Court, when different constructions of a provision
are otherwise equally proper, that is to be taken which is the most favorable to the party in whose favor the
provision was made.35 The Memorandum of Agreements whereas clauses provided that Primetown desired
to settle its obligation with UCPB.36 Therefore, the tenor of the Agreement is clearly in favor of UCPB. Thus,
the
excluded
amount
referred
to
receivables.
The intention to merely assign the receivables and rights of Primetown to UCPB is even bolstered by the CA
decisions
in
the
cases
of UCPB
v.
OHalloran37 and UCPB
v.
Ho.38
cralawred

In UCPB v. OHalloran,39 docketed as CA-G.R. SP No. 101699, respondent OHallorans accounts with
Primetown were also assigned by Primetown to UCPB, under the same Agreement as in this case. Since
Primetown failed to deliver the condominium units upon full payment of the purchase price, OHalloran
likewise sued both Primetown and UCPB for cancellation of the contracts to sell, and the case eventually
reached the CA. The CA held UCPB liable to refund the amount it actually received from OHalloran. The CA
held that there is no legal, statutory or contractual basis to hold UCPB solidarily liable with Primetown for the
full reimbursement of the payments made by OHalloran. The CA found that based on the Agreement, UCPB
is merely the assignee of the receivables under the contracts to sell to the extent that the
assignment is a manner adopted by which Primetown can pay its loan to the bank. The CA held
that the assignment of receivables did not make UCPB the owner or developer of the unfinished project to
make it solidarily liable with Primetown. The CA decision dated 23 July 2009 in CA-G.R. SP No. 101699
became final and executory upon Entry of Judgment on 17 August 2009 for OHalloran and 18 August 2009
for
UCPB.40
cralawred

In UCPB v. Ho,41 docketed as CA-G.R. SP No. 113446, respondent Ho was similarly situated with OHalloran
and Spouses Choi. Upon reaching the CA, the CA considered the Agreement between UCPB and Primetown
as an assignment of credit, because: 1) the parties entered into the Agreement without the consent of the
debtor; 2) UCPBs obligation to deliver to the buyer the title over the condominium unit upon their full
payment signifies that the title to the condominium unit remained with Primetown; 3) UCPBs prerogative
to rescind the contract to sell and transfer the title of condominium unit to its name upon failure of the
buyer to pay the full purchase price indicates that UCPB was merely given the right to transfer title in its
name to apply the property as partial payment of Primetowns obligation; and 4) the Agreement clearly
states that the assignment is limited to the receivables and does not include any and all liabilities which
[Primetown] may have assumed under the individual contract to sell. Thus, the CA ruled that UCPB was a
mere assignee of the right of Primetown to collect on its contract to sell with Ho. The CA, then,
applied the ruling in UCPB v. OHalloran in finding UCPB jointly liable with Primetown only for the payments
UCPB
had
actually
received
from
Ho.
On 4 December 2013, this Court issued a Resolution42 denying Hos petition for review for failure to show
any reversible error on the part of the CA. On 2 April 2014, this Court likewise denied the motion for
reconsideration with finality.43 Thus, the 9 May 2013 Decision of the Special Fifteenth Division of the CA in
CA-G.R.
SP
No.
113446
became
final
and
executory.
Considering that UCPB is a mere assignee of the rights and receivables under the Agreement, UCPB did not
assume the obligations and liabilities of Primetown under its contract to sell with Spouses Choi.
In an assignment of credit, the vendor in good faith shall be responsible for the existence and legality of the
credit at the time of the sale.44 In Filinvest Credit Corporation v. Philippine Acetylene Co., Inc.,45 the Court
ruled that the assignee did not acquire the burden of unpaid taxes over the assigned property, since what

was

transferred

only

were

the

rights,

title

and

interest

over

the

property.

Contrary to Spouses Chois argument that UCPB was estopped, we find that estoppel would not lie since
UCPBs letters to the buyers only assured them of the completion of their units by the developer.46 UCPB
did not represent to be the new owner of Kiener or that UCPB itself would complete Kiener.
As for UCPBs alleged solidary liability, we do not find any merit in the claim of Spouses Choi that Luzon
Development Bank v. Enriquez47 and Philippine Bank of Communications v. Pridisons Realty
Corporation48 apply to the present case. Both cases involved the failure to comply with Sections 17, 18 and
25 of Presidential Decree No. 957, which made the banks in those cases solidarily liable. A solidary
obligation cannot be inferred lightly, but exists only when expressly stated, or the law or nature of the
obligation
requires
it.49
cra lawred

Since there is no other ground to hold UCPB solidarily liable with Primetown and there is no reason to depart
from the ratio decidendi in UCPB v. Ho,50 UCPB is only liable to refund Spouses Choi the amount it
indisputably received, which is P26,292.97 based on the evidence presented by Spouses Choi.51

cralawred

WHEREFORE, we DENY the petition and AFFIRM with MODIFICATION the Decision dated 29 January
2013 and the Resolution dated 27 May 2013 of the Court of Appeals in CA-G.R. SP No. 117831.
We ORDER respondent United Coconut Planters Bank to RETURN to petitioner spouses Chin Kong Wong
Choi and Ana O. Chua the amount of P26,292.97, with 12% interest per annum from the time of its receipt
on 3 February 1999 until 30 June 2013, then 6% interest per annum from 1 July 2013 until fully paid.
SO

ORDERED.

cralawlawlibra ry

Brion, Del Castillo, Mendoza, and Leonen, JJ., concur.

Endnotes:

Under

Rule

45

of

the

1997

Rules

of

Civil

Procedure. Rollo,

pp.

4-70.

Penned by Associate Justice Agnes Reyes-Carpio, with Associate Justices Rosalinda Asuncion- Vicente and
Priscilla
J.
Baltazar-Padilla
concurring.
Id.
at
72-81.
3

Id.

Id.

at

360-363.

Id.

at

455-456.

at

83-87.

Penned by Associate Justice Rosmari D. Carandang, with Associate Justices Mariflor P. Punzalan
Castillo
and
Ramon
M.
Bato,
Jr.
concurring.
Id.
at
917-931.
7

Penned by Associate Justice Andres B. Reyes, Jr., with Associate Justices Japar B. Dimaampao and Jane
Aurora
C.
Lantion
concurring.
Id.
at
932-944.
8

Id.

Id.

at

156-157.
at

183.

10

Id.

at

901-911.

11

Id.

at

145-149.

12

Id.

13

Id.

14

Id.

15

Id.

at
at

182-191.
at

at

493.

190.
262-266.

16

Id.

17

Id.

at

284-286.

18

Id.

at

360-363.

19

Id.

at

424-425.

20

Id.

21

Id.

22

Id.

at

83-87.

23

Id.

at

13-14.

at

266.

at

72-81.

at

80.

24

Ledonio v. Capitol Development Corporation, 553 Phil. 344 (2007); Aquintey v. Sps. Tibong, 540 Phil. 422
(2006); South City Homes, Inc. v. BA Finance Corporation, 423 Phil. 84 (2001); Project Builders, Inc. v.
Court of Appeals, 411 Phil. 264 (2001); Nyco Sales v. BA Finance, Corporation, G.R. No. 71694, 16 August
1991,
200
SCRA
637;Manila
Banking
Corp.
v.
Teodoro,
Jr., 251
Phil.
98
(1989).
25

Manila Banking Corp. v. Teodoro,

and
Jurisprudence
on
the
Civil
26

Aquintey

27

v.

Jr., 251
Code

Sps.

Phil. 98
of
the

(1989) citing Tolentino, Commentaries

Philippines,
Vol.
5,
pp.
165-166.

Tibong, 540

Phil.

422

(2006).

Id.

28

Rollo, p.

146.

29

Id.

at

148.

30

Id.

at

235.

31

CIVIL

CODE,

32

Aquintey

33

UCPB

35

Rules

36

Rollo,

37

v.

Civil

34

Article
Sps.

Code,
v.

OHalloran,
of

CA-G.R.
Court,

1370.
Tibong, supra.

Article
SP.

No.

101699,
Rule
p.

Supra

note

23

July

130,

1371.
2009.

Rollo,

Section

p.

928.
17.
460.
6.

38

Penned by Associate Justice Melchor Q.C. Sadang, with Associate Justices Ricardo R. Rosario and
Franchito
N.
Diamante
concurring.
Rollo,
pp.
965-976.
39

Supra

note

40

Rollo, p.

41

758.

Supra.

42

Rollo, p.

43

6.

Id.

1241.
at

1209.

44

Civil

Code,

Article

45

197

Phil.

394

1628.
(1982).

46

Rollo, p.

47

654

48

G.R.

49

Civil

50

Supra

51

240.
Phil.
No.

Rollo, p. 493.

155113,

315
9

January

Code,

2013,
Article

note

(2011).
688

SCRA

200.
1207.
38.