Consolidated Bank vs CA, GR No.

114286, 19 April 2001, 356

SCRA 671

FACTS
Continental Cement Corp obtained from Consolidated Bank letter of credit
used to purchased 500,000 liters of bunker fuel oil. Respondent
Corporation made a marginal deposit to petitioner. A trust receipt was
executed by respondent corporation, with respondent Gregory Lim as
signatory. Claiming that respondents failed to turn over the goods or
proceeds, petitioner filed a complaint for sum of money before the RTC of
Manila. In their answer, respondents aver that the transaction was a simple
loan and not a trust receipt one, and tht the amount claimed by petitioner
did not take into account payments already made by them. The court
dismissed the complaint, CA affirmed the same.
ISSUE
Whether or not the marginal deposit should not be deducted outright from
the amount of the letter of credit.
HELD
No. petitioner argues that the marginal deposit should be considered only
after computing the principal plus accrued interest and other charges. It
could be onerous to compute interest and other charges on the face value
of the letter of credit which a bank issued, without first crediting or setting
off the marginal deposit which the borrower paid to it-compensation is
proper and should take effect by operation of law because the requisited in
Art. 1279 are present and should extinguish both debts to the concurrent
amount. Unjust enrichment.