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Mercado vs. Court of Appeals and San Miguel Corporation

LEONIDES MERCADO, represented by his heirs: Racquel D. Mercado, Jimmy D. Mercado, Henry D. Mercado, Louricar D. Mercado and Virgilio D. Mercado, Petitioners, versus COURT OF APPEALS and SAN MIGUEL CORPORATION, Respondents.

G.R. No. 169576 | 2008-10-17

R E S O L U T I O N


CORONA, J.:

Leonides Mercado had been distributing respondent San Miguel Corporation's (SMC's) beer products in Quiapo, Manila since 1967. In 1991, SMC extended to him a P7.5 million credit line allowing him to withdraw goods on credit. To secure his purchases, Mercado assigned three China Banking Corporation (CBC) certificates of deposit amounting to P5 million[1] to SMC and executed a continuing hold-out agreement stating:

Any demand made by [SMC] on [CBC], claiming default on my/our part shall be conclusive on [CBC] and shall serve as absolute authority for [CBC] to encash the [CBC certificates of deposit] in...