Bond Agreement

As for the land titles surrendered by respondents, the Court determines that Swift has no basis for retaining the same as “collateral for feeds warehousing.” While the warehousing agreement stipulated that the respondents shall post a bond (which may be in the form of a property bond), this was merely a future undertaking that did not actually materialize. Although the respondents delivered their land titles to Swift, they did not actually execute any bond agreement or security instrument (such as real estate mortgage). In the absence of such bond agreement or security instrument, it cannot be said that a bond has actually been posted or constituted. Besides, even assuming arguendo that the real properties served as collateral, petitioner cannot just appropriate them in view of the prohibition against pactum commissorium (Swift Foods, Inc. Vs. Spouses Jose Mateo, Jr. and Irene Mateo, G.R. No. 170486. September 12, 2011).