73 SPOUSES SERFINO v.

FAR EAST BANK AND TRUST COMPANY (now BPI) thing (in this case, the credit due from a third person) by the debtor to the
Assignment of Credits, NCC 1624-1635|Brion
● By way of settlement approved by the RTC, the Spouses Serfino and Spouses
Cortez executed a compromise agreement where spouses Cortez,
acknowledged their debt 108K eventually reduced to P155K with the promise
that they would pay in full the judgment debt.
● To satisfy their debt, Magdalena Cortez bound herself to pay the debt in full out
of her retirement benefits from the GSIS.
● In case of default, the debt maybe executed against any of their properties.
● No payment was made on agreed date, and Godfrey Serfino discovered that
Magdalena deposited her retirement benefits in the FEBTC savings account of
her daughter in law, Grace Cortez.
● That same day, spouses Serfino’s counsel sent 2 letters to FEBTC informing
them that the deposit in Grace’s name was owned by the spouses by virtue of
an assignment made in their favor by the spouses Cortez.
● They asked that the bank to prevent the delivery of the said amount to either
Grace or the spouses Cortez until its actual ownership has been resolved in
court.
● An action to recover the money on deposit and payment for damages was filed
by Serfino, with a prayer for preliminary attachment, but the next day, Grace
withdrew P150K from her account.
● RTC ruled that the spouses Cortez and Grace liable for fraudulently diverting
the amount due, but absolved FEBTC from any liability, declaring that the bank
was not party to the compromise judgement.
● The spouses Serfino, on the grounds of the virtue of the assignment of credit,
claim ownership of the deposit, and that FEBTC was duty bound to protect their
right by preventing the withdrawal of the deposit since the bank had been
notified of the assignment and of their claim.
creditor is accepted as the equivalent of the performance of the obligation.
4. The terms of the compromise judgment between them did not convey an
intent to equate the assignment of Magdalena’s retirement benefits (the
credit) as the equivalent of the payment of the debt due the spouses Serfino
(the obligation).
5. There was no assignment of credit as the compromise judgment merely
identified the fund from which payment for the judgment debt would be
sourced.
6. That the compromise agreement authorizes recourse in case of default on
other executable properties of the spouses Cortez, to satisfy the judgment
debt, shows that there was no assignment of Magdalena’s credit with the GSIS
that would have extinguished the obligation.
7. The Bank is also not liable for damages as there is no law or legal right abused
by it. Absent a law or a legal ruling of the Court, it has no option but to uphold
the existing policy that recognizes the fiduciary nature of banking.
8. It likewise rejects the adoption of a judicially-imposed rule giving third parties
with unverified claims against the deposit of another a better right over the
deposit.
9. As current laws provide, the bank’s contractual relations are with its depositor,
not with the third party. In the absence of any positive duty of the bank to an
adverse claimant, there could be no breach that entitles the latter to moral
damages.

ISSUE: WON there is assignment of credit? NONE.

1. An assignment of credit is an agreement by virtue of which the owner of a

credit, known as the assignor, by a legal cause, such as sale, dation in payment,
exchange or donation, and without the consent of the debtor, transfers his
credit and accessory rights to another, known as the assignee, who acquires the
power to enforce it to the same extent as the assignor could enforce it against
the debtor.
2. It may be in the form of sale, but at times it may constitute a dation in
payment, such as when a debtor, in order to obtain a release from his debt,
assigns to his creditor a credit he has against a third person.
3. As a dation in payment, the assignment of credit operates as a mode of
extinguishing the obligation; the delivery and transmission of ownership of a