United Coconut Planters Bank (UCPB) vs.

Uy

Facts:

- In 1997, Walter and Lily Uy entered into a Contract to Sell with Prime Town
Property Group (the property’s co-developer) for a unit in Kiener Hills, amounting
to P1,151,718.75 payable according to the following terms:
o (a) P100,000.00 as down payment; and
o (b) the balance paid in 40 monthly installments at P26,297.97 from 16
January 1997 to 16 April 2000.

- In 1998, PPGI and UCPB executed a MOA and Sale of Receivables and Assignment of
Rights and Interests which gave PPGI the authority to collect the receivables of the
buyers. The parties entered into the said agreement as PPGI’s partial settlement of
its P1,814,500,000.00 loan with UCPB.

- In April 2006, Walter and Lily Uy filed a complaint to the Housing and Land Use
Regulatory Board Regional Office (HLURB Regional Office) against PPGI and UCPB.
They claimed that in spite of full payment, the developer failed to complete the
construction of their units.

- HLURB Regional Office’s Decision: Respondents were entitled to a full refund but
UCPB cannot be solidarily reliable because they were only in charge of the amounts
receivable and not the entire condominium project. HLRUB Regional office,
however, suspended the proceedings on account of PPGI being in corporate
rehabilitation.

- HLURB Board’s Decision upon receiving respondents’ appealed: UCPB is

solidarily liable with PPGI insofar as Kiener Hills is concerned pursuant to the MOA
they signed. The Board ruled:

o UCPB should refund Walter and Lily Uy P1,151,718.75 with interest at the
legal rate of 6% per annum reckoned from the date of extrajudicial demand
on May 24, 2005 until fully paid without prejudice to whatever claims UCPB
may have against PPGI; and
o UCPB and PPGI to pay Walter and Lily Uy P30,000 in exemplary damages and
P30,000 in attorney’s fees.

- OP’s decision upon receiving UCPB’s appeal: The MOA between PPGI and UCPB
transferred all rights, titles, interests, and participants over Kiener Hills to the latter.
UCPB has the obligation to reimburse Walter and Lily Uy. OP thereby affirmed the
decision of HLURB Board.

- CA’s decision upon receiving UCPB’s appeal: UCPB is only liable for the amount
the respondents have paid upon the bank’s assumption as party entitled to receive
 payments. The signed MOA did not make UCPB the developer of Kiener Hills but
merely the assignee of receivables to sell.

o UCPB was ordered to pay Walter and Lily Uy P552,152.34, with legal interest
at 6% per annum from the filing of the complaint until fully paid without
prejudice to whatever claims UCPB may have against Primetown; and
o Walter and Lily Uy may file against PPGI. PPGI is liable to the spouses the
amount of P599,566.41 with legal interest at 6% per annum from the filing of
the complaint until fully paid.

ISSUE:

Is UCPB liable to pay the respondents for the amount they have not paid the bank
and which UCPB did not receive?

DECISION:
No. UCPB is only liable to pay the respondents the amount it indubitably received.

The CA, however, miscomputed based on the assumption that the P552,152.34 was actually
paid by the respondents and received by the UCPB. A closer scrutiny of the records showed
that UCPB only the owes the spouses P157,757.82 based on the demand letter as seen in
the respondents’ complaint. While the respondents’ alleged that they have paid in full,
evidence shows that only P157,757.82 was sufficiently substantiated to have been actually
received by UCPB.

WHEREFORE: Petitioner United Coconut Planters Bank shall pay the amount of
P157,757.82 to Spouses Walter and Lily Uy, with legal interest at six percent (6%)
per annum, without prejudice to any action which the parties may have against
Prime Town Property Group, Inc.