Republic Planters v. CA (G.R. No. 159206. August 5, 2015)


CASE DIGEST: G.R. No. 159206. REPUBLIC PLANTERS BANK, Petitioner v. COURT OF APPEALS, and PAZ L. MARTELINO, AND/OR HEIRS OF PAZ MARTELINO, represented by EDIEL M. MARTELINO, ETAL, and NESTOR D. RIVERA, Respondents. August 5, 2015.

The petitioner assails the decision promulgated on August 24, 2001,[1] whereby the Court of Appeals (CA) reversed and set aside the joint decision rendered in three consolidated cases (specifically: Civil Case No. V-4996; Civil Case No. V-5015; and Special Civil Action No. V-5186) by the Regional Trial Court, Branch 18, in Roxas City (RTC).[2] Respondent Paz L. Martelino died during the pendency of her appeal in the CA, and was substituted by her heirs.[3]

The CA summed up the antecedents as follows:

Appellee Republic Planters Bank (or "appellee"), is a banking entity organized and existing under Philippine laws, while appellee Anoel Yu (or "Yu") is the former manager of said bank at its Roxas City branch. Appellant Paz L. Martelino (or "appellant"), then a 79 year old widow, was a depositor of Republic Planters Bank Roxas City branch, having Savings Account No. 2360 and Savings Account No. 2743, the latter account she held jointly and severally with appellee Amelita D. Tutica (or "Tutica").

On various dates, during the period from January 1983 to July 1983, appellant endorsed for deposit in her savings accounts 950 United States Treasury Warrants (or "USTWs") of varying US dollar denominations with a total Philippine peso equivalent of P4,014,124.45. She was allowed by appellee to immediately withdraw the peso equivalent thereof without waiting until the USTWs had been cleared. A few months later, these USTWs were returned unpaid by the United States Treasury on account of the fact that these were stolen and the signatures of the payees therein were forged. As a consequence, appellee forced appellant to pay back the entire amount withdrawn by virtue of the transactions.

Appellant countered that she should not be held liable since she did not get a single centavo from appellee. According to her, the money all went to spouses Amelia and Bernabe Que (or "Que spouses") who were introduced to her by her personal nurse and confidante, Amelia D. Tutica in 1983. Tutica told her that the Que spouses were in possession of some USTWs belonging to back-pay beneficiaries and/or dependents from out of town. These beneficiaries allegedly could not negotiate or encash the USTWs because of their lack of credit standing with any bank in Roxas City. Tutica asked appellant to help her encash the USTWs as she was promised a commission of fifty-centavos (P0.50) for every dollar value of the same.

To accommodate her, appellant inquired from appellee, through Yu, whether she could encash these USTWs. The latter apparently told her it was possible provided she endorse the same and deposit them first in her existing savings account. She was then allowed to encash some 950 USTWs and in each transaction, the bank manager assured her that the treasury warrants were okay. Upon receiving the amounts, she immediately turned them over to Tutica who in turn delivered them to the Que spouses. In all, withdrawn from her account was the total amount of P3,914,400.51. On different dates thereafter, the USTWs amounting to P3,000,094.06 were returned dishonored.

Initially, the Que spouses reimbursed the amount of three of the 950 USTWs that were dishonored. Soon thereafter, the two disappeared and could no longer be found, leaving appellant alone to answer for the other dishonored USTWs.

The bank garnished appellant's time deposits in the total amount of P15,000.00. Later, the bank made her sign two promissory notes secured by real estate mortgages on two of her properties. One promissory note (No.8208514) was for a purported loan of P100,000.00 and secured by a real estate mortgage on her residential house with TCT No. T-12471 which, according to appellant, had a market value of P300,000.00. The other promissory note (No. 8208588) was for a purported loan of P345,000.00 and secured by a real estate mortgage on her commercial property with TCT No. T-16370 which appellant claimed had a market value of P1.5 Million. The two promissory notes were dated October 18, 1983 and November 10, 1983, respectively. Appellant, however, asserts that the titles to her lots were merely borrowed by Yu "for appraisal by bank inspectors" and that she was not aware that the papers the bank presented to her and which she signed without reading were the deeds of mortgage and promissory notes. Nevertheless, she said she signed them because Yu pleaded with her that he would lose his job if she will not sign the documents. More significantly, she claimed that the proceeds of the purported loans in the total amount of P445,000.00 were never released to her by appellee. On top of this, appellee allegedly withdrew the total amount of P129,092.23 from her savings account no. 2360 without her consent.

Finding her properties still inadequate, appellee instituted the case a quo for recovery of sum of money with damages and attachment against appellant and filed against her a separate criminal case for estafa through falsification of commercial documents, docketed as Criminal Case No. 2152, with the Regional Trial Court of Roxas City, Capiz, Branch 17. On the other hand, to prevent the foreclosure of her properties, appellant filed Civil Case No. V-5015 against appellee, Yu and Tutica, for damages and annulment of the promissory notes and real estate mortgages and a petition for prohibition, docketed as Special Civil Action No. V-5186, against appellee, Felixberto Guiao and the ex-officio provincial sheriff of Capiz.

Appellee denied the allegation of appellant as to the manner with which it obtained the promissory notes and the real estate mortgages. It also presented two bank employees who testified on the fact that appellant deposited and on the same day withdrew the peso equivalent of the USTWs and that these USTWs were all returned dishonored to the prejudice of appellee.[4]

As mentioned, the RTC ruled in favor of the petitioner, and ordered Paz Martelino to pay the petitioner P2,310,433.71, plus interest at the legal rate from 1983 until the principal was fully paid; dismissed the complaint of Martelino; and directed Martelino to pay the costs of suit.[5]

Martelino appealed, and the CA later promulgated its assailed judgment reversing the RTC on August 24, 2001.

Hence, the petitioner instituted this special civil action for certiorari[8] charging the C A with grave abuse of discretion for reversing the decision of the RTC despite Martelino's responsibility to make good her warranty as to the genuineness of the treasury warrants, and to return the proceeds of the warrants having been indubitably established by the evidence, documentary or otherwise.

The Supreme Court DISMISSED the petition for certiorari.

FIRST. The petitioner has pursued the wrong remedy in assailing the judgment of the CA. Its correct remedy was an appeal in due course by petition for review on certiorari because the assailed judgment was one rendered upon the merits of the case. Its resort to the extraordinary remedy of certiorari by alleging grave abuse of discretion on the part of the CA was improper considering that the errors it assailed concerned only the propriety and correctness of the disposition by the CA. Indeed, certiorari is a remedy that is available only when there is no appeal, nor any plain, speedy and adequate remedy in the ordinary course of law.[9] This means that certiorari is not a substitute for appeal.

SECOND. Even assuming that the remedy of certiorari is proper, the CA's ruling is not to be reversed by virtue of its being correct in law and in fact. In this regard, the following ratiocination given by the CA to justify its assailed decision indicates that the assailed judgment of the CA was in accord with law and jurisprudence, and thus is worth reiterating, to wit:

This case involves foreign non-negotiable instruments which necessitate stricter application of banking rules by appellee. The admitted fact of their encashment on the same day that they were deposited, without waiting until they had been cleared, indubitably demonstrates gross negligence on the part of appellee's bank officials, particularly its bank manager, Yu.Such negligence was admitted no less by Yu himself, who resigned after having been investigated by the bank, and also by the bank official who replaced him. In his testimony, Yu admitted that he allowed the immediate encashment of the treasury warrants not because they had been cleared or that they appeared okay but because appellant, who was a valued client of the bank, was the one who presented them to the bank.

On the other hand, Rolando Cordero, the bank's officer-in-charge, testified that the usual practice was for the bank not to allow withdrawal from the treasury warrants until after they had been cleared and that this clearing process usually took about a week. In this case, however, their branch manager disregarded the usual banking practice and allowed the encashment of the USTWs on the same day that they were deposited without waiting until they had been cleared, x x x

During the trial, appellees failed to present in evidence the original USTWs, but presented at least 29 debit advised which arrived one after another from July 1983 to May, 1986. Based on these debit advices, appellee insists that it be reimbursed by appellant on the ground that the encashments of the USTWs resulted in substantial losses to the bank. This argument, however, must fail since appellee brought such losses upon itself on account of its own gross negligence and the extraordinary carelessness of its own employees. 'Banks handle daily transactions involving millions of pesos. By the very nature of their work, the degree of responsibility, care and trustworthiness expected of their employees and officials is far greater than those of ordinary clerks and employees.'

Apropos is the ruling in Metropolitan Bank and Trust Company vs. Court of Appeals, where the bank, which had allowed withdrawals from the uncleared treasury warrants in the total amount of P968,000.00, was held not entitled to reimbursement because the losses were due to its own negligence.

By contrast, Metrobank exhibited extraordinary carelessness. The amount involved was not trifling - more than one and a half million pesos (and this was 1979). There was no reason why it should not have waited until the treasury warrants had been cleared; it would not have lost a single centavo by waiting. Yet, despite the lack of such clearance -and notwithstanding that it had not received a single centavo from the proceeds of the treasury warrants, as it now repeatedly stresses - it allowed Golden Savings to withdraw - not once, not twice, but thrice -from the uncleared treasury warrants in the total amount of P968,000.00.

Furthermore, there is no cogent basis for the application of the doctrine of unjust enrichment which simply means that 'a person shall not be allowed to benefit or enrich himself inequitably at another's expense.' The requirements to warrant the application of the said doctrine are absent in the case before Us. Appellant denies having profited or benefited, in any manner or amount, from the series of transactions involving the USTWs. She insists that, upon receiving the peso equivalent of the USTWs, she immediately turned them over to Tutica who in turn delivered them to the Que spouses. This was confirmed by Tutica when, in her deposition submitted to the court a quo, she declared that appellant never received anything. In fact she refused to get her share in the commissions on the transactions involving the USTWs.

This being the case, it would be the height of injustice and inequity if appellant, who never benefited by even a single centavo from the transactions involving the USTWs, would still be required to reimburse appellee for the losses which it brought upon itself through its own gross negligence.

Finally, the treasury warrants are non-negotiable instruments, it being indicated therein that they are payable from a particular fund, in this case, the US Treasury. Accordingly, the order or promise to pay is 'not unconditional' with the result that appellee cannot hold appellant liable on her indorsements of said USTWs, said indorsements having been made solely for the purpose of complying with the requirement of the bank and not to serve as a warranty that the treasury warrants were 'genuine and in all respects what they purport to be' in accordance with Sec. 66 of the Negotiable Instruments Law.

Anent the prayer for the cancellation of the promissory notes and real estate mortgages, there is sufficient factual and legal justification therefor, it having been duly proved that they were constituted as a consequence of the wrongful assumption that the appellant was the one liable for the dishonored treasury warrants. Since it is already established otherwise and that it is appellee who should instead bear the losses, the contracts pertaining to the loans and real estate mortgages should be nullified and declared of no force and effect, x x x[10]

THIRD AND FINALLY. The petitioner takes issue with the CA's calibration of the facts, particularly the date of the first debit advice,[11] and the petitioner's alleged purchase of the treasury warrants, which allowed the CA to apply the principle of caveat emptor.[12] However, the Court is not a trier of facts, and cannot re-examine the evidence or review the findings of fact on such issues. Moreover, the petitioner should not forget that the special civil action for certiorari is not designed to determine and settle factual disputes, but only questions of jurisdiction. Accordingly, the petitioner's present recourse is unwarranted.

[1] Rollo, pp. 37-49; penned by Associate Justice Rebecca De Guia-Salvador (retired), with Associate Justice Conchita Carpio-Morales (later a Member of this Court/retired) and Associate Justice Bienvenido L. Reyes (now a Member of the Court).
[2] Id. at 19-36.
[3] Id. at 48.
[4] Id. at 38-40.
[5] Supra note 2.
[6] Supra note 1.
[7] Id. at 49.
[8] Id. at 3-15.
[9] Rule 65 of the Rules of Court provides:

Section 1. Petition for certiorari. — When any tribunal, board or officer exercising judicial or quasi-judicial functions has acted without or in excess of its or his jurisdiction, or with grave abuse of discretion amounting to lack or excess of jurisdiction, and there is no appeal, or any plain, speedy, and adequate remedy in the ordinary course of law, a person aggrieved thereby may file a verified petition in the proper court, alleging the facts with certainty and praying that judgment be rendered annulling or modifying the proceedings of such tribunal, board or officer, and granting such incidental reliefs as law and justice may require.

The petition shall be accompanied by a certified true copy of the judgment, order or resolution subject thereof, copies of all pleadings and documents relevant and pertinent thereto, and a sworn certification of non-forum shopping as provided in the third paragraph of section 3, Rule 46. (la)

[10] Id. at 42-48.
[11] Id. at 13.
[12] Id. at 11.

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