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    Banas Vs Asia Pacific (Digested)

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    paul
    Teodoro Bañas executed a promissory note to pay C. G. Dizon Construction P390,000 in installments. C. G. Dizon Construction endorsed the note to Asia Pacific Finance Corporation and secured it with a deed of chattel mortgage on bulldozers. C. G. Dizon Construction defaulted, so Asia Pacific filed a case. The court ruled in favor of Asia Pacific, finding the transaction was a purchase of receivables, not a loan, which was within Asia Pacific's authority as an investment company. The Court of Appeals affirmed the ruling.

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    Banas Vs Asia Pacific (Digested)

    Uploaded by

    paul
    43 views1 page
    Teodoro Bañas executed a promissory note to pay C. G. Dizon Construction P390,000 in installments. C. G. Dizon Construction endorsed the note to Asia Pacific Finance Corporation and secured it with a deed of chattel mortgage on bulldozers. C. G. Dizon Construction defaulted, so Asia Pacific filed a case. The court ruled in favor of Asia Pacific, finding the transaction was a purchase of receivables, not a loan, which was within Asia Pacific's authority as an investment company. The Court of Appeals affirmed the ruling.

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    Banking laws

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    Banas vs Asia Pacific (Digested)

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    Teodoro Bañas executed a promissory note to pay C. G. Dizon Construction P390,000 in installments. C. G. Dizon Construction endorsed the note to Asia Pacific Finance Corporation and secured it with a deed of chattel mortgage on bulldozers. C. G. Dizon Construction defaulted, so Asia Pacific filed a case. The court ruled in favor of Asia Pacific, finding the transaction was a purchase of receivables, not a loan, which was within Asia Pacific's authority as an investment company. The Court of Appeals affirmed the ruling.

    Copyright:

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

    Banas Vs Asia Pacific (Digested)

    Uploaded by

    paul
    Teodoro Bañas executed a promissory note to pay C. G. Dizon Construction P390,000 in installments. C. G. Dizon Construction endorsed the note to Asia Pacific Finance Corporation and secured it with a deed of chattel mortgage on bulldozers. C. G. Dizon Construction defaulted, so Asia Pacific filed a case. The court ruled in favor of Asia Pacific, finding the transaction was a purchase of receivables, not a loan, which was within Asia Pacific's authority as an investment company. The Court of Appeals affirmed the ruling.

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    Banas vs. Asia Pacific Finance Corporation G.R. No.

    128703, October 18, 2000

    Facts: Teodoro Baas executed a Promissory Note in favor of C. G. Dizon Construction whereby
    for value received he promised to pay to the order of C. G. Dizon Construction the sum
    of P390,000.00 in installments of P32,500.00 every 25th day of the month starting from
    September 25, 1980 up to August 25, 1981.Later, C. G. Dizon Construction endorsed with
    recourse the Promissory Note to ASIA PACIFIC, and to secure payment thereof, C. G. Dizon
    Construction, through its corporate officers, Cenen Dizon, President, and Juliette B. Dizon, Vice
    President and Treasurer, executed a Deed of Chattel Mortgage covering three heavy equipment
    units of Caterpillar Bulldozer Crawler Tractors Moreover, Cenen Dizon executed a Continuing
    Undertaking wherein he bound himself to pay the obligation jointly and severally with C. G. Dizon
    Construction.

    In compliance thereof, C. G. Dizon Construction made three installment payments to ASIA


    PACIFIC for a total of P130,000.00. Thereafter, however, C. G. Dizon Construction defaulted in
    the payment of the remaining installments, prompting ASIA PACIFIC to send a Statement of
    Account to Cenen Dizon for the unpaid balance of P267,737.50 inclusive of interests and charges,
    and P66,909.38 representing attorneys fees. As the demand was unheeded, ASIA PACIFIC filed
    a complaint for a sum of money with prayer for a writ of replevin against Teodoro Baas, C. G.
    Dizon Construction and Cenen Dizon. The trial court issued a writ of replevin against defendant
    C. G. Dizon Construction for the surrender of the bulldozer crawler tractors. Of the three bulldozer
    crawler tractors, only two were actually turned over by defendants which units were subsequently
    foreclosed by ASIA PACIFIC to satisfy the obligation. The two bulldozers were sold both to ASIA
    PACIFIC as the highest bidder.

    Petitioners insist that ASIA PACIFIC was organized as an investment house which could
    not engage in the lending of funds obtained from the public through receipt of deposits. The
    disputed Promissory Note, Deed of Chattel Mortgage and Continuing Undertaking were not
    intended to be valid and binding on the parties as they were merely devices to conceal their real
    intention which was to enter into a contract of loan in violation of banking laws. The Regional
    Trial Court ruled in favor of ASIA PACIFIC holding the defendants jointly and severally liable
    for the unpaid balance of the obligation under the Promissory Note. The Court of Appeals affirmed
    the decision of the trial court.

    Issues: Whether the disputed transaction between ASIA PACIFIC was engaged in banking
    activities.

    Held: An investment company refers to any issuer which is or holds itself out as being engaged
    or proposes to engage primarily in the business of investing, reinvesting or trading in securities.
    As defined in Revised Securities Act, securities shall include commercial papers evidencing
    indebtedness of any person, financial or non-financial entity, irrespective of maturity, issued,
    endorsed, sold, transferred or in any manner conveyed to another with or without recourse, such
    as promissory notes Clearly, the transaction between petitioners and respondent was one
    involving not a loan but purchase of receivables at a discount, well within the purview of
    investing, reinvesting or trading in securities which an investment company, like ASIA
    PACIFIC, is authorized to perform and does not constitute a violation of the General Banking Act.

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