Case Digest (G.R. No. 159622)
Facts:
Landl & Company (Phil.) Inc., Percival G. Llaban and Manuel P. Lucente, G.R. No. 159622, July 30, 2004, First Division, Ynares‑Santiago, J., writing for the Court. Respondent Metropolitan Bank & Trust Company (Metrobank) sued petitioner Landl & Company (Phil.) Inc. and its directors Percival G. Llaban and Manuel P. Lucente before the Regional Trial Court of Cebu City, Branch 19 (Civil Case No. CEB‑4895), for the unpaid balance of a trust‑receipt/letter‑of‑credit arrangement. Metrobank alleged that on June 17, 1983 it opened Commercial Letter of Credit No. 4998 for US$19,606.77 (equivalent to P218,733.92) to finance Landl’s importation of welding rods; Landl posted a marginal deposit of P50,414 and Llaban and Lucente executed a Continuing Suretyship for P400,000, while Lucente executed a Deed of Assignment for P35,000.As required, Landl executed a Trust Receipt covering the goods and took actual possession upon arrival. The trust receipt matured on November 23, 1983; Landl defaulted and failed to return the goods by that date. Metrobank demanded turnover on July 24, 1984; petitioners turned over the goods on September 24, 1984. Metrobank repossessed and, on July 31, 1985, sold the goods at public auction, becoming the highest bidder at P30,000; the sale proceeds proved insufficient to satisfy petitioners’ indebtedness despite application of Lucente’s time deposit.
After petitioners failed to pay the deficiency, Metrobank filed the complaint. On March 31, 1997 the trial court rendered judgment for Metrobank ordering petitioners to pay P292,172.23 (as of April 17, 1986) plus 19% interest, 2% service charge, 10% per annum attorneys’ fees, litigation expenses of P3,000, costs and 12% penalty. Petitioners appealed to the Court of Appeals (CA‑G.R. CV No. 58193), which on February 13, 2003 affirmed the trial court in toto. Petitioners then filed a petition for review on certiorari under Rule 45 to the Supreme Court, raising, inter alia, whether Metrobank could recover ...(Pro-only)
Issues:
- May an entruster who, upon the entrustee’s default, has taken actual and juridical possession of the goods covered by a trust receipt and sold them, still recover a deficiency from the entrustee?
- Were the trial court and Court of Appeals erroneous in the computation and awards made (principal balance, interest, penalty, service charges, and attorneys’ fees)?
- Is respondent Metrobank entitled to litigation expenses and costs as awarded?
- Are Llaban and Lucente solidarily liable with petitioner corpor...(Pro-only)
Ruling:
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Ratio:
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Doctrine:
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