G.R. No. 194664 . June 15, 2016
FLORITA LIAM, PETITIONER, VS. UNITED COCONUT PLANTERS BANK, RESPONDENT.

FACTS

Petitioner Florita Liam entered into a Contract to Sell with developer Primetown Property Group, Inc. (PPGI) for a condominium unit. To finance the project, PPGI obtained a loan from respondent United Coconut Planters Bank (UCPB). PPGI partially settled this loan by assigning its right to collect receivables from buyers, including Liam, to UCPB via a Deed of Sale/Assignment. Liam was notified and subsequently remitted her payments directly to UCPB. However, due to PPGI’s failure to deliver the unit on the stipulated date, Liam demanded a refund of her payments after her requests for payment deferment and other concessions went unheeded.
Liam later filed a complaint for specific performance before the HLURB against both PPGI and UCPB. She alleged that UCPB promised delivery within six months and prayed for the privilege to choose a new unit from a different tower at a lower advertised price, with her prior payments credited. UCPB argued it was wrongly impleaded, contending it was merely an assignee of receivables with no obligation to deliver the unit, as that duty remained solely with PPGI, the developer.

ISSUE

Whether UCPB was correctly impleaded as a party-defendant in Liam’s complaint for specific performance before the HLURB.

RULING

No. The Supreme Court affirmed the Court of Appeals’ ruling that UCPB was improperly impleaded. The legal logic rests on the nature of the assignment and the distinct roles of the parties. The Deed of Sale/Assignment between PPGI and UCPB was a simple assignment of credit under Article 1624 of the Civil Code. This assignment transferred only PPGI’s right to collect payments from Liam; it did not constitute a novation that would substitute UCPB into the Contract to Sell or transfer PPGI’s primary obligations as the developer-vendor. The notice to Liam explicitly stated that the payment arrangement caused no amendment or cancellation of her original contract with PPGI.
Consequently, UCPB stepped into the shoes of PPGI only as an assignee of the monetary credit, not as the vendor obligated to perform under the Contract to Sell. The duty to deliver the condominium unit remained exclusively with PPGI as the developer. UCPB’s actions, such as accepting payments and proposing a financing package, were consistent with its role as a mere assignee-creditor. Therefore, Liam’s cause of action for specific performance concerning unit delivery lay solely against PPGI. The HLURB’s jurisdiction over UCPB was improper as the complaint did not allege a cause of action against the bank in its capacity as a developer, seller, or broker, which are the entities subject to HLURB authority under P.D. No. 957.