Case Digest (G.R. No. 209370)
Facts:
Fort Bonifacio Development Corporation v. Valentin L. Fong, G.R. No. 209370, March 25, 2015, the Supreme Court First Division, Perlas‑Bernabe, J., writing for the Court.Petitioner Fort Bonifacio Development Corporation (FBDC) is a domestic real estate developer; respondent Valentin L. Fong (Fong) sued in his trade name VF Industrial Sales. The dispute arises from a Trade Contract dated June 5, 2000 between FBDC and MS Maxco Company, Inc. (then L&M Maxco) for structural and partial architectural works on the Bonifacio Ridge Condominium Project. The Trade Contract reserved a five percent retention from the contract price and contained Clause 19.1 prohibiting assignment or transfer of rights, obligations or liabilities under the contract without FBDC’s written consent.
MS Maxco allegedly delayed and performed defective work; FBDC engaged other contractors to complete and rectify works and deducted corrective costs (P11,567,779.12) from MS Maxco’s retention money. By a notarized Deed of Assignment dated February 28, 2005, MS Maxco purportedly assigned to Fong the amount of P1,577,115.90, to be taken from its retention money. FBDC received notice of the assignment by counsel’s letter dated April 18, 2005 but declined to pay, asserting (a) the retention was not then due and demandable, (b) corrective costs had been properly deducted pursuant to the Trade Contract, and (c) the retention had been garnished by MS Maxco’s other creditors.
After repeated demands, and a January 31, 2006 letter from FBDC stating none of the retention remained after rectification and garnishments, Fong filed a complaint for sum of money on February 13, 2006 in the Regional Trial Court (RTC), Mandaluyong City, Branch 214, naming MS Maxco or FBDC and praying for P1,577,115.90 plus interest, costs and litigation expenses.
The RTC, in a Decision dated January 28, 2009, found FBDC liable for P1,577,115.90 with legal interest from filing (Feb. 13, 2006). The RTC reasoned that the Deed of Assignment is an assignment of credit under Article 1624 of the Civil Code and, because FBDC had notice (April 18, 2005), the assignment was effective against FBDC; the retention could no longer be considered MS Maxco’s property and the subsequent garnishments could not prejudice Fong. The RTC also acknowledged FBDC’s recourse against MS Maxco for breach.
FBDC appealed to the Court of Appeals (CA). In a Decision dated May 17, 2013 (and a September 2, 2013 denial of reconsideration), the CA affirmed the RTC: finding the assignment effective upon notice, that the Deed of Assignment being a public instrument bound FBDC and third persons, and tha...(Pro-only)
Issues:
- Did the Court of Appeals err in ruling that FBDC was bound by the Deed of Assignment between MS Maxco and Fong?
- If FBDC was bound by the Deed of Assignment, is FBDC liable to pay Fong the amount of P1,577,115.90 representing a portion of MS Ma...(Pro-only)
Ruling:
- (Pro-only)
Ratio:
- (Pro-only)
Doctrine:
- (Pro-only)