GR 175466; (December, 2009) (Digest)
G.R. No. 175466; December 23, 2009
BANK OF THE PHILIPPINE ISLANDS as successor-in-interest of FAR EAST BANK AND TRUST COMPANY, Petitioner, vs. SMP, INC., Respondent.
FACTS
SMP, Inc. delivered 4,000 bags of polystyrene products to Clothespak Manufacturing Phils. (Clothespak). As payment, Clothespak issued postdated checks to SMP’s sales executive, Maria Teresa Michaela Ong, who issued a Provisional Receipt (No. 4476) containing the handwritten notation: “Materials belong to SMP Inc. until your checks clear.” The checks were later dishonored. Meanwhile, Far East Bank and Trust Company (FEBTC, now BPI) obtained a writ of preliminary attachment against Clothespak’s properties in a separate collection case, which was levied on the said goods. SMP filed a third-party claim, asserting ownership. The trial court directed SMP to file a separate vindicatory action. SMP filed the instant case against the bank to recover the value of the attached goods, claiming wrongful attachment as ownership had not passed to Clothespak due to the non-payment. The bank argued ownership had passed upon delivery, as indicated by “F.O.B.” terms in sales invoices, and assailed the admissibility of the provisional receipt under the best evidence rule, claiming it was a mere triplicate copy. The Regional Trial Court ruled in favor of SMP. The Court of Appeals affirmed the decision.
ISSUE
Whether the Court of Appeals erred in ruling that there was a wrongful attachment by affirming that the goods attached were still owned by SMP, Inc., and not by Clothespak, at the time of the attachment.
RULING
The Supreme Court denied the petition and affirmed the Court of Appeals. The agreement between SMP and Clothespak was a contract to sell, not a contract of sale. Ownership was reserved by SMP until full payment, as evidenced by the provisional receipt stating “Materials belong to SMP Inc. until your checks clear.” The non-payment of the checks (which were dishonored) prevented the transfer of ownership to Clothespak. The “F.O.B.” stipulation, placing the risk of loss on the buyer during transit, is compatible with and does not alter the nature of a contract to sell. Regarding admissibility, the triplicate copy of the provisional receipt was deemed an original under the Rules of Court (Section 4, Rule 130), as it was executed simultaneously with identical copies. Thus, at the time of the attachment, SMP retained ownership, making the attachment wrongful.