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    UP Law F2021: Yau Chu v. CA

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    Juno Geronimo
    Victoria Yau Chu had assigned time deposits totaling P320,000 to CAMS Trading as a guarantee for cement purchases on credit. When Yau Chu defaulted on payments, CAMS Trading encashed the deposits, obtaining P283,737.75 due to a signature issue. Yau Chu sued to recover the deposits but her complaint was dismissed by the trial court and appellate court. The Supreme Court upheld the appellate court's ruling, finding that the assignment of time deposits as collateral was not an impermissible pacto commissorio, as CAMS Trading was simply converting the deposit certificates into cash after Yau Chu's default.

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    UP Law F2021: Yau Chu v. CA

    Uploaded by

    Juno Geronimo
    26 views1 page
    Victoria Yau Chu had assigned time deposits totaling P320,000 to CAMS Trading as a guarantee for cement purchases on credit. When Yau Chu defaulted on payments, CAMS Trading encashed the deposits, obtaining P283,737.75 due to a signature issue. Yau Chu sued to recover the deposits but her complaint was dismissed by the trial court and appellate court. The Supreme Court upheld the appellate court's ruling, finding that the assignment of time deposits as collateral was not an impermissible pacto commissorio, as CAMS Trading was simply converting the deposit certificates into cash after Yau Chu's default.

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    Original Title

    Yau Chu v. CA

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    Victoria Yau Chu had assigned time deposits totaling P320,000 to CAMS Trading as a guarantee for cement purchases on credit. When Yau Chu defaulted on payments, CAMS Trading encashed the deposits, obtaining P283,737.75 due to a signature issue. Yau Chu sued to recover the deposits but her complaint was dismissed by the trial court and appellate court. The Supreme Court upheld the appellate court's ruling, finding that the assignment of time deposits as collateral was not an impermissible pacto commissorio, as CAMS Trading was simply converting the deposit certificates into cash after Yau Chu's default.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
    Download as pdf or txt
    26 views1 page

    UP Law F2021: Yau Chu v. CA

    Uploaded by

    Juno Geronimo
    Victoria Yau Chu had assigned time deposits totaling P320,000 to CAMS Trading as a guarantee for cement purchases on credit. When Yau Chu defaulted on payments, CAMS Trading encashed the deposits, obtaining P283,737.75 due to a signature issue. Yau Chu sued to recover the deposits but her complaint was dismissed by the trial court and appellate court. The Supreme Court upheld the appellate court's ruling, finding that the assignment of time deposits as collateral was not an impermissible pacto commissorio, as CAMS Trading was simply converting the deposit certificates into cash after Yau Chu's default.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    UP Law F2021 Yau Chu v.

    CA
    Credit Transactions Art. 2101 1989 Griño-Aquino

    SUMMARY

    Victoria Yau Chu had assigned her time deposits (P320,000.00) to CAMS Trading as a guaranty for her
    purchase of cement on credit. When she defaulted, and after her verbal conformity was obtained, CAMS
    Trading encashed the time deposits (only up to P283,737.75; one TD lacks proper signature). Yau Chu
    demanded that her TD be restored and filed an action at RTC; the complaint was dismissed at RTC and CA.
    SC Upheld the CA decision.

    FACTS

     Since 1980, the petitioner, Victoria Yau Chu, had been purchasing cement on credit from CAMS
    Trading Enterprises, Inc (CAMS Trading);
     To guaranty payment for her cement withdrawals, she executed in favor of Cams Trading deeds of
    assignment of her time deposits in the total sum of P320,000 in the Family Savings Bank (Bank);
     After Yau Chu defaulted in her payments, and after obtaining her verbal conformity to do the same,
    CAMS Trading requested the Bank to deliver to it the total amount in the time deposit of Yau Chu;
     The Bank complied but only to the amount of P283,737.75 because one of the time deposits lacked
    proper signatures;
     Upon being informed of the encashment, Mrs. Chu demanded from the Bank and Cams Trading that
    her time deposit be restored. When neither complied, she filed a complaint to recover;
     The RTC of Makati dismissed the complaint for lack of merit;
     CA affirmed the RTC decision, dismissing the complaint.

    RATIO

    W/N the encashment should be annulled for being a pacto commissorio


    No. The deeds of assignment were contracts of pledge, but, as the collateral was also money or an exchange
    of "peso for peso”. All that had to be done to convert the pledgor's time deposit certificates into cash was to
    present them to the bank for encashment after due notice to the debtor.

    The encashment of the deposit certificates was not a pacto commissorio which is prohibited under Art. 2088
    of the Civil Code.

    FALLO

    WHEREFORE, the petition for review is denied. Costs against the appellant. SO ORDERED.

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