Other Collaterals - Deposit As Security
Other Collaterals - Deposit As Security
Other Collaterals - Deposit As Security
Santos, President of IRC, made two time deposits with OBM for a total of 700k. IRC applied for a loan with PNB and executed a deed of
assignment of the two time deposits as security in favor of PNB. OBM failed to pay PNB upon the maturity of the time deposits. PNB filed a
complaint against IRC and Santos for the amount of the loan but IRC alleged that there obligation to PNB has been extinguished upon the
irrevocable assignment of the time deposit certificates. SC held that the liability of IRC to PNB cannot be deemed to have been paid upon the
execution of the deed of assignment with PNB.
FACTS
1. Pet. Raul L. Santos made two time deposits with defendant Overseas Bank of Manila (OBM) in the amount of P 500,000.00 and P200,000
for which he was issued certificates of Time Deposit.
2. Pet. IRC through its President Raul Santos, applied for a loan and/or credit line in the amount of P 700,000.00 with PNB. To secure the said
loan, Santos executed on August 11, 1967 a Deed of Assignment of the two time deposits in favor of PNB.
3. Defendant OBM gave its conformity to the assignment and IRC through Santos, also executed a Deed of Conformity to Loan Conditions.
4. OBM after the due dates of the time deposit certificates, did not pay PNB. PNB demanded payment from defendants IRC Santos and from
OBM. IRC and Santos replied that the obligation of IRC was deemed paid with the irrevocable assignment of the time deposit certificates.
5. PNB filed a complaint to collect from IRC and Santos the loan of P 700,000.00 with interest and attorney's fees. It impleaded OBM as a
defendant to compel it to redeem and pay to it Santos' time deposit certificates with interest, and damages.
6. In their answer to the complaint, IRC and Santos alleged that PNB has no cause of action against them because their obligation to
PNB was fully paid or extinguished upon the' irrevocable' assignment of the time deposit certificates, and that they are not
answerable for the insolvency of OBM.
7. They filed a counterclaim for damages against PNB and a cross-claim against OBM alleging that OBM acted fraudulently in refusing to pay
the time deposit certificates to PNB resulting in the filing of the suit against them by PNB, and therefore, OBM should pay them whatever
amount they may be ordered by the court to pay PNB with interest plus damages.
8. OBM’s filed its Answer acknowledging the certificates of time deposits but alleged that by reason of its state of insolvency, its oper ations
have been suspended by the Central Bank since August 1, 1968; that the time deposits ceased to earn interest from that date; that it may
not give preference to any depositor or creditor; and that payment of the plaintiffs claim is prohibited.
9. RTC: Ordered IRC to pay PNB P700,000 with interest from the maturity of the promissory notes, and for OBM to pay IRC and Santos
whatever the latter pays to PNB.
10. CA: Deleted the portion ordering OBM to pay IRC and Santos. Hence this petition.
DISPOSITIVE PORTION
WHEREFORE, judgment is hereby rendered, ordering:
1
1. Integrated Realty Corporation and Raul L. Santos to pay Philippine National Bank, jointly and severally, the total amount of seven hundred
thousand pesos (P 700,000.00), with interest thereon at the rate of nine percent (9%) per annum from the maturity dates of the two promissory
notes on January 11 and February 6, 1968, respectively, plus one and one-half percent (1-1/2%) additional interest per annum effective February
28, 1968 and additional penalty interest of one percent (1%) per annum of the said amount of seven hundred thousand pesos (P 700,000.00)
from the time of maturity of said loan up to the time the said amount of seven hundred thousand pesos (P 700,000.00) is fully paid to Philippine
National Bank
OTHER NOTES
Deed of Assignment
KNOW ALL MEN BY THESE PRESENTS;
I, RAUL L. SANTOS, of legal age, Filipino, with residence and postal address at 661 Richmond St.,
Mandaluyong, Rizal for and in consideration of certain loans, overdrafts and other credit accommodations granted or those that may hereafter be
granted to me/us by the PHILIPPINE NATIONAL BANK, have assigned, transferred and conveyed and by these presents, do hereby assign,
transfer and convey by way of security unto said PHILIPPINE NATIONAL BANK its successors and assigns the following Certificates of Time
Deposit issued by the OVERSEAS BANK OF MANILA, its CONFORMITY issued on August 11, 1967, hereto enclosed as Annex ' A', in favor of
RAUL L. SANTOS and/or NORA S. SANTOS, in the aggregate sum of SEVEN HUNDRED THOUSAND PESOS
ONLY (P 700,000.00), Philippine Currency, ....
xxx xxx xxx
It is also understood that the herein Assignor/s shall remain hable for any outstanding balance of his/their obligation if the Bank is unable to
actually receive or collect the above assigned sums , monies or properties resulting from any agreements, orders or decisions of the court or for
any other cause whatsoever.