- Petitioner
- Spouses Tirzo Vintola
- Respondent
- Insular Bank of Asia
- Citation
- G.R. No. 78671
- Court
- Supreme Court
- Division
- Third Division
- Ponente
- Cortes, J.
- Decided
- March 25, 1988
Summary
Spouses Vintola obtained a P35,000 commercial letter of credit from IBAA secured by trust receipt for purchasing seashells. When unable to sell the goods, they offered to return them but the bank refused. After criminal acquittal for estafa, IBAA sued civilly to recover the loan. The Supreme Court affirmed the trial court's judgment ordering payment of P62,704.23 plus interest and attorney's fees. The Court ruled that in letter of credit-trust receipt arrangements, the bank remains a lender with security interest, not the actual owner of goods. The borrowers' inability to sell goods and their deposit in court did not extinguish their loan obligation, as the transaction's loan feature remains separate from the security aspect. The decision reinforced that trust receipts secure indebtedness and depositing collateral goods does not constitute recovery by the creditor bank.