GR 153827; (April, 2006) (Digest)
G.R. No. 153827 ; April 25, 2006
ASIAN CONSTRUCTION AND DEVELOPMENT CORPORATION, Petitioner, vs. PHILIPPINE COMMERCIAL INTERNATIONAL BANK, Respondent.
FACTS
Respondent Philippine Commercial International Bank (PCIBANK) filed a complaint for a sum of money with a prayer for a writ of preliminary attachment against petitioner Asian Construction and Development Corporation (ASIAKONSTRUKT). PCIBANK alleged that ASIAKONSTRUKT obtained dollar-denominated credit accommodations covered by promissory notes, secured by several Deeds of Assignment of receivables from various entities like the National Power Corporation. The deeds stipulated that ASIAKONSTRUKT, authorized to collect the receivables for the bank, divested itself of all rights to the proceeds and was obligated to turn them over to PCIBANK.
PCIBANK further alleged that ASIAKONSTRUKT committed fraud by collecting the assigned contract proceeds from the obligor entities but failing to remit them to the bank, instead using the funds for its own purposes. This act allegedly deprived PCIBANK of its security. ASIAKONSTRUKT, in its Answer, admitted the execution of the promissory notes and deeds but denied the allegations of fraud and non-payment, claiming the case involved factual issues requiring a trial.
ISSUE
Whether the Court of Appeals erred in affirming the trial court’s grant of summary judgment in favor of PCIBANK.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals’ decision. Summary judgment is proper when, upon the pleadings and supporting affidavits, no genuine issue as to any material fact exists, leaving the case involving purely questions of law. Here, the material facts were established by the admissions in ASIAKONSTRUKT’s own Answer. It admitted the execution of the promissory notes and the Deeds of Assignment. The terms of the deeds were clear: ASIAKONSTRUKT assigned the receivables as security, was merely an authorized collecting agent, and had absolutely no right to use the collected proceeds.
By admitting the deeds and not disputing PCIBANK’s specific allegation—supported by an affidavit—that it collected the proceeds but failed to remit them, ASIAKONSTRUKT failed to tender a genuine issue. Its general denial of fraud and invocation of “poor financial condition” were insufficient to overturn the clear terms of the contracts and the specific evidence of collection without remittance. Since the obligor admitted the principal facts constitutive of the plaintiff’s cause of action, no trial was necessary. The reduction of attorney’s fees by the appellate court was also sustained.