- Petitioner
- In the Matter of the Involuntary Insolvency of Umberto de Poli. the Asia Banking Corporation
- Respondent
- J. R. Herridge
- Citation
- G.R. No. 20993
- Court
- Supreme Court
- Division
- Second Division
- Ponente
- Johns, J.
- Decided
- December 22, 1923
Summary
Asia Banking Corporation claimed preferential rights over merchandise held by assignee J.R. Herridge in Umberto de Poli's insolvency proceedings based on letter-warehouse receipts. The Supreme Court affirmed the trial court's denial of the bank's claim, ruling that the letters were not valid warehouse receipts under law and did not comply with Civil Code Article 1865's requirement for public instruments. The court established that assignees represent general creditors and can challenge preferences. The bank's taking possession sixteen days before insolvency, with knowledge of De Poli's financial distress, constituted a voidable preference under Section 70 of the Insolvency Law. The transaction secured preexisting debt rather than a present loan made in good faith.