Asian Construction And Development Corporation v. Philippine Commercial International Bank

GARCIA, J.:

In this petition for review under Rule 45 of the Rules of Court, petitioner Asian Construction and Development Corporation or "ASIAKONSTRUKT," seeks the reversal and setting aside of the decision1dated March 15, 2002 and the Resolution2 dated June 3, 2002 of the Court of Appeals (CA) in CA-G.R. CV No. 68189. The assailed decision affirm with modification the Summary Judgment rendered by the Regional Trial Court (RTC) of Makati City in an action for a sum of money thereat commenced by the herein respondent, Philippine Commercial International Bank (PCIBANK) against the petitioner, while the challenged resolution denied petitioner's motion for reconsideration.

The facts: On February 24, 1999, in the RTC of Makati City, respondent PCIBANK filed a complaint3 for a sum of money with prayer for a writ of preliminary attachment against petitioner ASIAKONSTRUKT. Docketed as Civil Case No. 99-432, the complaint alleged, inter alia, as follows: FIRST CAUSE OF ACTION 2.01 On various occasions, ASIAKONSTRUKT obtained U.S. dollar denominated credit accommodations from PCIBANK in the amount of Four Million Four Hundred Eighty Seven Thousand U.S. dollars (US$4,487,000.00), exclusive of interests, charges and fees thereon and the cost of collecting the same. These credit accommodations are covered by the following promissory notes: xxx xxx xxx 2.02 Prompt and faithful payment of all the foregoing promissory notes was secured by the following deeds of assignment executed by ASIAKONSTRUKT in favor of PCIBANK: (a) Deed of Assignment of Receivables/Contract Proceeds dated 20 July 1994… where ASIAKONSTRUKT assigned its receivables from its Contract … with the National Power Corporation (NPC) in the amount of ….~~P~~ 54,500,000; (b) Deed of Assignment of Receivables … dated 28 June 1995 … where ASIAKONSTRUKT assigned its receivables from its Contract … with the NPC in the amount of …~~P~~ 26,281,000.00; (c) Deed of Assignment of Receivables dated 28 August 1995 … where ASIAKONSTRUKT assigned its receivables from its Sub-Contract with ABB Power, Inc., in the amount of ~~P~~ 43,000,000.00; (d) Deed of Assignment of Contract Proceeds dated 27 March 1996 … where ASIAKONSTRUKT assigned its receivables from its contracts with PNOC … in the aggregate amount of ~~P~~ 46,000,000.00; and (e) Deed of Assignment of Contract Proceeds … dated 20 February 1997 … where ASIAKONSTRUKT assigned its receivables from the Ormat Philippines, Inc., in the aggregate amount of US$3,350,000.00; 2.03 All the foregoing deeds of assignments stipulate, among others, the following terms and conditions: a) The assignment is for the purpose of securing payment of the principal amount and the interests and bank charges accruing thereon, the costs of collecting the same and all other expenses which PCIBANK may be put in connection with or as an incident of the assignment; b) That the assignment secures also any extension or renewal of the credit which is the subject thereof as any and all other obligations of ASIAKONSTRUKT of whatever kind and nature as appear in the records of PCIBANK, which ASIAKONSTRUKT accepts as the final and conclusive evidence of such obligations to PCIBANK, "whether contracted before, during or after the constitution of [the assignment agreement]"; c) That PCIBANK authorizes ASIAKONSTRUKT, at the latter's expense, to "collect and receive for [PCIBANK] all the Receivables"; and d) That ASIAKONSTRUKT "shall have no right, and agrees not to use any of the proceeds of any collections, it being agreed by the parties that [ASIAKONSTRUKT] divests itself of all the rights, title and interest in said Receivables and the proceeds of the collection received thereon."1avvphil.net 2.04 The promissory notes have remained not fully paid despite their having become due and demandable.

Repeated verbal and written demands were made upon ASIAKONSTRUKT, but to no avail. It has failed and refused, and continues to fail and refuse, to pay its outstanding obligations to PCIBANK…; 2.05 As a result of ASIAKONSTRUKT's refusal to pay its outstanding obligations, PCIBANK was constrained to refer the matter … to counsel and thus incur attorney's fees and legal costs. 2.06 The aggregate unpaid obligation of ASIAKONSTRUKT to PCIBANK, as of 31 December 1998, amounts to… US$4,553,446.06, broken down as follows: Principal US$ 4,067,867.23 Interest US$ 291,263.27 Penalties US$ 194,315.56 TOTAL