Spouses Redor v. Union Bank of the Philippines

FIRST DIVISION

[G.R. No. 172552. September 2, 2015.]

SPOUSES BRENDA GURANGO-REDOR, AND MORENO O. REDOR, AND MA. VICTORIA SAMONTE, JOINTLY WITH HER HUSBAND LAWRENCE C. SAMONTE, petitioners, vs. UNION BANK OF THE PHILIPPINES, respondent.

NOTICE

Sirs/Mesdames :

Please take notice that the Court, First Division, issued a Resolution datedSeptember 2, 2015, which reads as follows:

"G.R. No. 172552 — SPOUSES BRENDA GURANGO-REDOR, AND MORENO O. REDOR, AND MA. VICTORIA SAMONTE, JOINTLY WITH HER HUSBAND LAWRENCE C. SAMONTE, Petitioners, v. UNION BANK OF THE PHILIPPINES, Respondent.

This is a Petition for Review onCertiorari filed under Rule 45 of the Rules of Court, as amended, assailing the Decision1 and Resolution2 dated August 26, 2005 and April 19, 2006, respectively, of the Court of Appeals in CA-G.R. SP No. 67931. 3 The assailed Court of Appeals Decision and Resolution annulled and set aside several Orders 4 of the Regional Trial Court (RTC)-Branch 64, Makati City in two consolidated civil cases docketed as Civil Case Nos. 99-2069 5 and 99-2070. 6

The salient facts of the case are:

On February 16, 1998, petitioners Brenda Gurango-Redor (Brenda) and Ma. Victoria Samonte (Victoria) jointly opened a Power Savings Account7 with respondent Union Bank of the Philippines (UBP), Cubao-Aurora Boulevard Branch, denominated as PSA No. 12-011-000189-7, 8 with an initial deposit of P7,202,713.24. The account had a maturity period of 35 days at an interest rate of 19.75% per annum. As of July 29, 1999, the balance of account was alleged to have reached P8,600,000.00. 9

On February 17, 1998, petitioners Brenda and Victoria jointly opened another Power Savings Account, this time with an initial deposit of P7,000,000.00. Said account was denominated as PSA No. 12-011-000190-3. 10 And as of July 29, 1999, the balance of the account supposedly totaled P12,400,000.00. 11

On March 15, 1999, petitioners Brenda and her husband, Moreno O. Redor (Moreno), also opened a Power Savings Account with respondent UBP, at the same branch, designated as PSA No. 12-011-000352-3, and was opened with an initial deposit of P2,500,000.00. It had a maturity of 35 days and an interest rate of 18% per annum. The balance of the account as of July 29, 1999 was said to have amounted to P3,600,000.00. 12

In sum, as of July 29, 1999, the outstanding balance of all three accounts was claimed to be at P24,600,000.00.

On July 29, 1999, petitioners Brenda, Moreno and Victoria served on respondent UBP notices of termination of all three accounts and demanded the release of the total amount of P24,600,000.00. Respondent UBP, however, refused such demand.

In an exchange of letters 13 petitioners reiterated their demand for the immediate return of their deposits plus interests; while respondent UBP turned down said claims and ultimatums, pointing out that the three accounts were under investigation by the Presidential Anti-Organized Crime Task Force in connection with the illegal activities of UBP Cubao-Aurora Branch Manager Raymund Recio Buñag (Buñag). Respondent UBP further pointed out that being related to Buñag, the petitioners were indispensable parties to the on-going investigation.

On December 8, 1999, petitioners Brenda, Moreno, and Victoria (jointly with her husband Lawrence C. Samonte) filed a complaint for breach of contract with damages, with a prayer for the issuance of a writ of preliminary mandatory injunction, on the ground that respondent UBP had "no valid or plausible reason . . . to withhold the funds [deposited in PSA Nos. 12-011-000283-0 and 12-011-000251-8] rightfully belonging to [them]." The complaint was docketed as Civil Case No. 99-206914 and was raffled to RTC-Branch 150, Makati City.

On the same day, petitioners Brenda and Moreno also filed a separate complaint for breach of contract with damages, with a prayer for the issuance of a writ of preliminary mandatory injunction, against herein respondent UBP. It was docked as Civil Case No. 99-207015 and also raffled to RTC-Branch 150, Makati City. The allegations thereof centered on PSA No. 12-011-000352-3 and basically repleaded all arguments contained in the aforementioned Complaint. 16

In its Consolidated Answer with Counterclaim, 17 respondent UBP made the following admissions and denials:

2. The Bank admits paragraph 4 18 insofar as it alleges that PSA No. 12-011-000189-7 started with an initial deposit of P7,202,713.34, but denies the rest of the allegations therein, for the reasons stated in paragraphs 16 to 32 hereof. CAIHTE

3. The Bank admits paragraph 8 19 insofar as it alleges that PSA 12-011-000190-3 started with [an] initial deposit of P7,000,000.00, but denies the rest of the allegations therein, for the reasons stated in paragraphs 16 to 32 hereof.

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10. The Bank admits paragraph 4 20 insofar as it alleges that PSA No. 12-011-000352-3 was opened on 15th March 1999, but denies the rest of the allegations therein, for the reasons stated in paragraphs 16 to 32 hereof.

and presented the truth to be those explained in paragraphs 16 to 32 thereof, which state:

Common Affirmative Allegations

16. One of the products being offered by the Bank to its clients is a short-term but high-interest savings plan called "Power Savings Account." Under this investment plan, the client was required to keep a minimum amount in the account for a fixed period, e.g., thirty (30) days, after which he/she, may opt to withdraw the principal and/or a special interest thereon, or keep or roll over both the principal and the interest for another fixed period.

17. On 16th February 1998, the Bank received a Chinabank Manager's Check in the amount of P7,202,713.34 for deposit to the Bank under the Power Savings Account (PSA) program in the names of a "Brenda Redor and/or Ma. Victoria Samonte." The Bank thereupon opened PSA No. 12-011-000189-7 in the accountholders' names. In accordance with Bank practice, the Bank secured specimen signatures from the accountholders to support the account opening, and placed said signatures on file.

18. The following day (17th February 1998), the Bank received a Bank of Commerce Check No. 0098365 in the amount of P7,000,000.00 for deposit to the Bank under another PSA also in the names of a "Brenda Redor and/or Ma. Victoria Samonte." The Bank thereupon opened PSA No. 12-011-000190-3 in the accountholders' names, using the same specimen signature cards from the previous day to support the account opening.

19. On 16th March 1998, and upon their instructions, the accountholders pre-terminated PSA Nos. 12-011-000189-7 and 12-011-000190-3, i.e., liquidated before their purported due dates, with a total proceeds of P14,269,996.43. The accountholders used P7,986,683.17 to purchase a Manager's Check payable to a Cesar Sylianteng. The remaining P6,283,329.76 was used to open a new account, PSA No. 12-011-000201-4 in the name of "Brenda Redor and/or Ma. Victoria Samonte," using the same specimen signature cards previously mentioned to support the account opening.

20. On 1st April 1998, and upon the instructions of the accountholders, the accountholders pre-terminated PSA No. 12-011-000201-4 with a total proceeds of P6,289,882.89. The accountholders used P2,595,825.91 to purchase a Manager's Check payable to a Roberto and/or Lorraine Sylianteng. The remaining P3,694,056.98 was used to open another new account, PSA No. 12-011-000204-0 in the name of "Brenda Redor and/or Ma. Victoria Samonte," using the same specimen signature cards previously mentioned to support the account opening.

21. On 26th June 1998, the Bank received (insofar as Civil Case No. 99-2070 is concerned) a Prime Savings Bank Manager's Check in the amount of P3,684,648.33. The Bank's records show that P3,630,000.00 were deposited in Treasury Bills under the name of a "Brenda Redor and/or Ma. Victoria Samonte." The Bank has no record of the whereabouts of the balance of P54,648.33.

22. On 10th July 1998, and upon their instructions, the accountholders terminated PSA No. 12-011-000204-0 with a total proceeds of P3,799,027.67, and the Treasury Bills mentioned in the immediately preceding paragraph with a total proceeds of P3,636,933.19. The accountholders used P5,744,319.82 to purchase a Manager's Check payable to BPI Family Bank. The remaining P1,691,641.04 was used by the accountholders to open another new account, PSA No. 12-011-000363-8 in the name of a "Brenda Redor and/or Ma. Victoria Samonte," using the same specimen signature cards previously mentioned to support the account opening. At present, this account remains active.

23. On 15th March 1999, the Bank received a Bank of Commerce check in the amount of P2,500,000.00 for deposit to the Bank under the PSA program. Per the Bank's records, PSA No. 12-011-000352-3 was opened in the name of Elpidia Ria Leopando in the amount of P500,000.00. The balance of P2,000.000.00 n was used to open Checking Account No. 011-002028-5 also in the name of Elpidia Ria Leopando. DETACa

At present, PSA No. 12-011-000352-3 in the name of Elpidia Ria Leopando remains active. On the other hand, Bank records in respect of checking account no. 011-002028-5 also in the name of Elpidia Ria Leopando as of said date reflect an account balance of only P200,918.96, or withdrawals through check issuances of at least P1,800,000.00.

24. On 29th June 1999, the Bank received a Manilabank check in the amount of P900,921.57. This amount was deposited in a new PSA in the name of a "Moreno Redor" at the Bank's Cubao-Rustan's branch. At present, this account remains active.

25. Plaintiffs' claim that the Bank is liable for breach of contract is without legal or factual basis.

26.1. "Breach of Contract" is defined as a "(p)revention or hindrance by (a) party to (a) contract of any occurrence or performance requisite under the contract for the creation or continuance of a right in favor of the other party or the discharge of a duty by him" (Black's Law Dictionary, Sixth Ed. [1990], at 188).

26.2. Under normal banking practice, a contract is created when a depositor tenders money to the bank, and the bank accepts the same under certain conditions. The bank has the fiduciary obligation to keep the money in its care, pay interest for the privilege of investing said funds for its own purposes, and to release said funds and the interest thereon to the "depositor" as reflected in Bank records.

26.3.  As mentioned, the Bank received various amounts from and opened accounts in favor of "Brenda Redor and/or Ma. Victoria Samonte," "Elpidia Ria Leopando" and "Moreno Redor." In accordance with the instructions of [the] said clients as reflected in pertinent bank forms the signatures of which match those of the signatures of the accountholders as appearing in the Bank records, said amounts were used to either cause the issuance of Manager's Checks, open new PSA's and checking accounts, honor checks issued, and purchase Treasury Bills.

26.4. Considering that the Bank's actions were all in accordance with standard Bank practice, i.e., honoring the requested transactions upon the verification of their signatures with those on file with the Bank, the plaintiffs' claim that the Bank had breached its obligations to its clients is without legal or factual basis.

27. The Bank denies the authenticity of the entries in plaintiffs' passbooks, attached as Annexes to the complaints. As it were, the same cannot give rise and, thus, be the basis of any cause of action against the Bank. HEITAD

27.1. Paragraph 2 of the Savings Account Rules and Regulations printed on the passbooks themselves will undeniably show that "(b)alances shown in such book are not to be taken as correct except upon written verification by the Bank."

27.2. The Bank admit[s] the opening of PSA Nos. 12-011-000189-7, 12-011-000190-3, and 12-011-000352-3. HOWEVER, THE TRANSACTIONS IN RESPECT OF SAID ACCOUNTS AS REFLECTED IN BANK RECORDS ARE DIFFERENT FROM THOSE REFLECTED ON THE PLAINTIFFS' PASSBOOKS. Suffice it to state that said passbooks cannot be presented as evidence of the truth insofar as these accounts are concerned unless said entries tally with those of the Bank's.

27.3.  It may not be amiss to note that the entries on plaintiffs' passbooks are merely typewritten and not machine-validated. Neither do said passbooks reflect the interest earned and the corresponding final tax withheld by reason thereof. Such circumstances militate against the veracity and authenticity of the entries found in said passbooks.

27.4. It must also be emphasized that the succession of entries purported to be amounts representing roll-overs of the principal amount and the interest thereon are highly questionable, since the purported interest are in excess of the interest pegged by the Bank for similar accounts during the same period.

27.5. Further, plaintiffs in their Complaints allege that the deposits they made were "successively rolled-over for periods ranging from 30 to 36 days . . . ." However, a simple computation of the principal amounts and the accrued interests thereon for the stipulated periods were erroneous. Plaintiffs' monetary claims are clearly without factual basis.

28. The Bank is currently investigating the involvement and activities of a former business manager of the Bank (Raymond Recio Bunag) in respect of the funds subject matter of these cases. However, despite the Bank's efforts, Mr. Bunag could not be located to shed light on the truth and status of said funds, specifically, to explain the discrepancy between the entries in plaintiffs' passbooks and the transactions in respect thereof as reflected in Bank records. Suffice it to state that the Bank cannot act in respect of plaintiffs' claims as such are inconsistent with the records in its possession.

29. If a fraud was, in fact, committed by Raymond Bunag, plaintiffs contributed to the same. The Bank cannot, therefore be held solely accountable for any funds lost.

29.1. Plaintiffs claim that they gave checks to Raymond Buñag on various dates. However, it is obvious that plaintiffs' acts of entrusting these checks to Bunag was not out of any trust for the Bank itself but only because of their personal relationship with Buñag. It is obvious that plaintiffs believed (albeit erroneously) that Buñag, being a relative, would take care of their monies as if they were his own. For, it cannot be denied that plaintiffs gave these checks only when Raymond Buñag became Business Manager of the Bank's Cubao-Aurora West Branch.

29.2. If the records were to be believed, Buñag took his relatives literally — he treated plaintiffs' funds as his own!

29.3. Indeed, if it were not for their mistaken trust for their relative (Buñag), plaintiffs would have exerted the normal precautions which any depositor would have taken in the regular course of banking business, to wit:

29.3.1. They would have had their passbooks machine-validated;

29.3.2. They would have had each transaction (including the interest and withholding tax thereon) reflected on the passbook; and

29.3.3. They would have transacted over-the-counter, where the receipt, verification of signatures and validation of the transaction would have been done by at least two different bank employees.

29.4. There being contributory negligence on their part in putting too much trust on their relative and, thus, facilitating the fraud which may later be determined to have been committed by Buñag against the Bank and his own kin, plaintiffs cannot wash their hands from any responsibility for any losses which they sustained as a result of Buñag's fraudulent actions.

30. The Bank had acted to the best interests of all concerned; thus, claims for moral and exemplary damages, and for expenses of litigation are without basis.

30.1. Upon learning of the fraud allegedly committed by Buñag, the Bank wasted no time in conducting an investigation. Only as a service and by way of assistance to plaintiffs based solely on their claims, the Bank filed cases of estafa and qualified theft against Buñag. ATICcS

30.2. Plaintiffs were verbally apprised of all actions taken against Buñag. The Bank made immediate written responses to the demands of their counsel. Suffice it to state that the Bank had treated this matter with utmost urgency and attention, and had dealt with plaintiffs with candor and honesty.

30.3. The Bank has acted with good faith in informing plaintiffs of the status of the accounts subject matter of these cases. As it were, their claims that the Bank had acted in bad faith or in an unreasoned or oppressive manner is without factual basis. Their claims for moral and exemplary are, therefore, without basis.

31. The Bank reiterates, repleads and reproduces its arguments in opposition to plaintiffs' application for a writ of preliminary mandatory injunction.

32. Plaintiffs' claims for interest of 12.75% on the amounts reflected in their passbooks are without factual basis. In addition to the factual arguments contesting the truth thereof, and as admitted by plaintiffs themselves, they had formally informed the Bank as of 29th July 1999 that they were terminating and withdrawing the funds they had with the Bank. Thus, from that date, they could not invoke the right to an interest on deposits founded on an alleged previously existing agreement with the Bank. 21 (Emphases supplied.)

Thereafter, or on March 14, 2000, herein petitioners filed a Consolidated Motion for Release of Undisputed Balance of Plaintiffs' Funds with Earned Interest anchored on the following arguments:

In its Consolidated Answer with Counterclaim, [respondent UBP] admits that [petitioners] made the following deposits with defendant bank:

Case No. 99-2069
Deposit	Date	Complaint	Admission
P7,202,713.34	2/16/98	Par. 3; Exh. A-1	Answer, Par[s]. 2 & 17
P7,000,000.00	2/17/98	Par. 7; Exh. C-1	Answer, Par. 18
P3,684,648.33	6/26/98	Par. 9; Exh. C-1	Answer, Par. 21
–––––––––––––
P17,887,361.57
===========
Case No. 99-2070
Deposit	Date	Complaint	Admission
P2,500,000.00	3/15/99	Par. 3; Exh. A-1	Answer, Par. 23
P900,921.57	6/29/99	Par. 5; Exh. A-1	Answer, Par. 24
––––––––––––
P3,400,921.57
===========

 

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According to [respondent UBP] what remains of the deposits are the following[:]

UNDISPUTED BALANCE

still held by [respondent UBP] from the sums deposited by [petitioners]:

Case No. 99-2069
Balance	Account	Source
P1,691,641.04	B&V Acct[.] #12-011-000363-8	Answer, Par. 22
Case No. 99-2070
Balance	Account	Source
P200,918.96	Ria's Acct[.] #011-002028-5	Answer, Par. 23
P500,000.00	Ria's Acct[.] #12-011-000352-3	Answer, Par. 23
P900,921.57	MOR Acct. at Rustan	Answer, Par. 24

 

Elpidia Ria Leopando has executed an affidavit declaring that:

"I had no knowledge nor participation in the opening of Power SA No. 12-011-000352-3 for P500,000.00 and CA No. 011-002028-5 for P2,000,000.00 at UBP and neither do I own the funds deposited in both accounts. . . . The source of these funds being a check for P2,500,000.00 issued by Moreno O. Redor on March 15, 1999 payable to CASH for deposit under the name of Moreno Redor and/or Brenda Redor, I hereby waive and assign to Moreno Redor and/or Brenda Redor whatever rights I may have in UBP Power SA No. 12-011-000352-3 and UBP CA No. 011-002028-5 arising from the situation that these accounts were opened in my name." ETHIDa

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[Respondent UBP] has an obligation to return to [petitioners] whatever is remaining of their deposits. 22

In a Consolidated Opposition dated March 15, 2000, respondent UBP stated that "the Bank [made] NO ADMISSION that the [PETITIONERS] were the ones who made the deposits." It countered that the petitioners must first prove that they were the same Brenda Redor, Moreno O. Redor and Ma. Victoria Samonte who opened the subject accounts given that their supposed specimen signatures in the bank's possession appeared to be different from those presented by the petitioners. Particularly, respondent UBP argued that:

5. During the investigation conducted by the Bank upon [the] receipt of [petitioners'] letter dated 23rd August 1999, it was determined, among others, that the signatures of [petitioners] Brenda Redor and Moreno Redor are different from the specimen signatures of the "Brenda Redor/Ma. Victoria Samonte" and "Moreno Redor" accounts mentioned above. Based on Bank records, [petitioners] have failed to show that they were the ones who made the deposits and caused the opening of the aforementioned accounts.

6. Suffice it to state that just because the Bank admits that accounts in the names of "Brenda Redor/Ma. Victoria Samonte" and "Moreno Redor" are active, that the funds therein belong to [petitioners]. . . . [Petitioners] must prove that they are the (sic) "Brenda Redor" and "Moreno Redor" who have opened accounts in the Bank, as may be confirmed by the specimen signatures provided by the "accountholders" when said accounts were opened.

7. . . . [T]he affidavit of an "Elpidia Ria Leopando" . . . is of dubious origin, since the signature found on said affidavit is different from the signature of the accountholder as reflected in the specimen signature cards on file with the Bank. 23

In a Consolidated Reply dated March 22, 2000, petitioners insisted that the funds used to open the subject accounts were transfers from their accounts from other banks; 24 and that the "ownership of these funds need not be verified with the 'specimen signatures provided when the accounts were opened' as suggested by [respondent UBP] because . . . '[petitioners'] signatures' on file with the bank are spurious. The signature cards submitted by [petitioners] for [respondent UBP's] file which contained [petitioners'] authentic signatures were replaced at the bank with phony signature cards bearing spurious signatures of the [petitioners]." 25

In a Consolidated Rejoinder dated March 30, 2000, respondent UBP reiterated that it neither admitted that petitioners are the very same persons who opened the subject accounts given the discrepancies in the specimen signatures in its possession; nor did it admit that the funds used to open the subject accounts came from petitioners' accounts with other banks. 26

The Regional Trial Court Orders

In anOrder dated May 4, 2000, the RTC granted the petitioners' Consolidated Motion for Release of Undisputed Balance of Plaintiffs' Funds with Earned Interest, to wit:

In view thereof, it is only proper to grant [petitioners'] motion. Accordingly, the Court orders [respondent UBP] to immediately release to [petitioners] Brenda Gurango-Redor and Ma. Victoria Samonte the sum of P1,691,641.04 and to [petitioners] Brenda Gurango-Redor and Moreno O. Redor the sums of P200,918.96, P500,000.00 and P900,921.57, all at the legal rate of interest from August 23, 1999 when [petitioners] thru counsel served notice on [respondent UBP] of the termination of their accounts and demanded immediate payment of their accounts. The actual interests [petitioners] are entitled to will be decided with the main case. 27

The RTC reasoned that respondent UBP's acknowledgment in its Consolidated Answer of its receipt of funds deposited in the subject accounts contradict its claim that it did not receive any funds from the petitioners. As such, "there could be no persons other than the [petitioners] who could have made the deposits/money placements with confirmed balances since the receipt of several sums on different dates in the names of [petitioners] Brenda Redor/Ma. Victoria Samonte/Moreno Redor was acknowledged by [respondent UBP]." 28

Respondent UBP's subsequent motion for reconsideration to the foregoing Order was denied in an Order dated June 10, 2000.

Respondent UBP filed a Notice of Appeal.

In an Order dated December 22, 2000, the RTC denied due course to respondent UBP's Notice of Appeal on the ground that its May 4, 2000 and June 10, 2000 Orders were not interlocutory orders of the court; hence not appealable to the next level court.

Respondent UBP moved for the reconsideration of the abovementioned Order but it was likewise denied by the RTC in an Order29 dated November 8, 2001.

Undaunted, respondent UBP went to the Court of Appeals via a Petition for Certiorari.

But during the pendency of the aforementioned petition, upon motion of the petitioners, the RTC issued a writ of execution commanding its Sheriff 30 to cause the implementation of its Order dated May 4, 2000. cSEDTC

In a Sheriff's Report dated October 25, 2002, the Sheriff informed the RTC of the full satisfaction of the total amount of P3,293,481.57 or the sum of the amounts indicated in the latter's Order dated May 4, 2000. 31

The Court of Appeals

In a Decision dated August 26, 2005, the Court of Appeals granted the Petition for Certiorari filed by respondent UBP. The fallo thereof reads:

WHEREFORE, premises considered, the petition is GRANTED. The assailed orders of public respondents are hereby ANNULLED AND SET ASIDE. The court a quo is DIRECTED to conduct a full trial of the consolidated cases and resolve all the issues raised therein. 32

In annulling and setting aside the four assailed orders, the CA held that "at every turn, [respondent UBP] questioned the ownership by [petitioners Brenda, Victoria, and Moreno] of PSA No. 12-011-000189-7 . . ., PSA No. 12-011-000190-3 . . . and, most especially PSA No. 12-011-000352-3. It raised an issue of genuine importance: whether or not private respondents and the accountholders are one and the same persons based on the identification documents on file with it. Certainly, such issue necessitated a full-blown trial for its resolution hinges the determination of the existence of any contractual relationship between the parties and the validity of the claims of private respondents." 33

Petitioners Brenda, Victoria, and Moreno moved for the reconsideration of the foregoing Decision. But in a Resolution dated April 19, 2006, the Court of Appeals denied said motion for reconsideration.

Hence, this Petition for Review on Certiorari anchored on the following assigned errors:

Issues

I.

The (Former) Second Division of the Court of Appeals committed gross error in law when it granted UBP's Petition for Certiorari, in spite of the fact that the same is fatally flawed and dismissible under the August 18, 2004 Decision of the Special Tenth Division which dealt and resolved on practically the same legal issues, and between the same parties, has already assumed a final and executory character.

II.

The (Former) Second Division of the Court of Appeals committed a serious and reversible error in the application of law when it failed to dismiss [the] UBP's Petition for Certiorari despite the legal preclusion dictated by the working principle of res judicata.

III.

The (Former) Second Division of the Court of Appeals committed a serious error in law when it omitted to brush aside UBP's Petition for Certiorari, notwithstanding the fact that the same was instituted way beyond the 60-day reglementary period as provided under Rule 65 of the 1997 Rules of Civil Procedure.

IV.

The (Former) Second Division committed a serious and fatal procedural error when it treated UBP's Petition for Certiorari as a regular appeal to review the rulings of the RTC of Makati City.

V.

The (Former) Second Division of the Court of Appeals acted with gross and reversible indiscretion when it failed to uphold the partial summary judgment of the RTC regarding the undisputed balance of petitioner's deposit notwithstanding UBP's admission in its Consolidated Answer of the basic allegations in the Complaints. 34

The foregoing assignment of errors notwithstanding, the essential issue for the Court's resolution boils down to whether or not the ownership of the three Power Savings Account was raised by respondent UBP as a genuine issue in its Consolidated Answer to preclude summary judgment by the RTC.

The petitioners insist that "nowhere in the Consolidated Answer did UBP specifically deny the identities of petitioners as the individual depositors of the subject PSA bank placements, such that if there was any denial relative to the ownership of the three bank accounts, it is certain that the same was never made in UBP's Consolidated Answer, but perhaps in subsequent pleadings which may not prevail over what UBP has already judicially admitted." 35 They conclude, therefore, that "there is no longer any genuine issue as to any material fact anent the said remainder, and this necessarily entitled [them] to the release and withdrawal of the subject balance of the PSA deposits as a matter of law by way of a partial summary judgment . . . ." 36

On the other hand, respondent UBP argues that "what is clear [from specific paragraphs of the Consolidated Answer] is, the respondent Bank opened accounts in the name of the respective payees subject checks and it does not follow that the payees of the checks are the petitioners in this case and the funds deposited therein belongs to them. The fact that the respondents admitted that the accounts are in the names of 'Brenda Redor and/or Ma. Victoria Samonte['] does not necessarily mean that respondent [UBP] admitted that the funds therein belong to petitioners." 37 Thus, it maintains that "the issue whether or not the 'accountholders' and private respondents are one and the same persons has still to be determined during the trial." 38 SDAaTC

The Court's Ruling

The petition has no merit. Summary judgment was not warranted. The petitioners should have adduced evidence to substantiate their allegations against respondent UBP.

Firstly, as to the procedural matter raised by the petitioners against respondent UBP's petition for certiorari filed in the Court of Appeals, suffice it to state that the partial summary judgment rendered by the RTC being merely interlocutory in character, it is a trivial matter to discuss whether or not the May 4, 2000 Order granting the Consolidated Motion for Release of Undisputed Balance of Plaintiffs' Funds with Earned Interest became final and executory for respondent UBP's failure to file its petition within the reglementary period within which to do so. The interlocutory nature of a partial summary judgment is provided for under Section 4, Rule 35 of the Rules of Court, as amended, to wit:

Section 4.  Case not fully adjudicated on motion. — If on motion under this Rule, judgment is not rendered upon the whole case or for all the reliefs sought and a trial is necessary, the court at the hearing of the motion, by examining the pleadings and the evidence before it and by interrogating counsel shall ascertain what material facts exist without substantial controversy and what are actually and in good faith controverted. It shall thereupon make an order specifying the facts that appear without substantial controversy, including the extent to which the amount of damages or other relief is not in controversy, and directing such further proceedings in the action as are just. The facts so specified shall be deemed established, and the trial shall be conducted on the controverted facts accordingly.

In Guevarra v. Court of Appeals, 39 the Court, in interpreting the abovequoted provision instructed that:

A partial summary judgment "is not a final or appealable judgment." (Moran, Vol. 2, 1970 Edition, p. 189, citing several cases.) "It is merely a pre-trial adjudication that said issues in the case shall be deemed established for the trial of the case." (Francisco, Rules of Court, Vol. II, p. 429.)

And explained further that:

What the rules contemplate is that the appeal from the partial summary judgment shall be taken together with the judgment that may be rendered in the entire case after a trial is conducted on the material facts on which a substantial controversy exists. This is on the assumption that the partial summary judgment was validly rendered which, as shown above, is not true in the case at bar. 40 AaCTcI

In the case at bar, the May 4, 2000 Order of the RTC is a partial summary judgment, having been rendered only with respect to the supposed undisputed remaining balance of the three accounts with respondent UBP. It was not intended to cover the entire amounts sought by the petitioners in their Complaints. This is confirmed by the pronouncement of the RTC in the said Order that "the funds plaintiffs seek to be released so far are merely part of their principal placements"; 41 and that "[t]he actual interests plaintiffs are entitled to will be decided with the main case." 42

Secondly, the petitioners raise the question of res judicata and/or mootness of the present petition brought about by the Court of Appeals Decision in an entirely separate case, i.e., CA-G.R. CV No. 76188, 43 relating to a May 29, 2002 Order of the RTC denying respondent UBP's Motion to Quash Writ of Execution and Notice to Pay, whereby the appellate court affirmed the same paving the way for the implementation of the May 4, 2000 and June 10, 2000 Orders of the RTC. But the Court of Appeals' Resolution dated April 19, 2006 fully explained why the petitioners' position is patently erroneous, viz.:

Indeed, CA-GR CV No. 76188 is limited to the propriety of the execution of the partial summary judgment while CA-GR SP No. 67931 involves the validity of the partial summary judgment itself. Execution of the questioned judgment will not preclude determination of the merits of such judgment . . . . In fact, the Rules of Court provides for restitution in case an executed judgment is reversed on appeal. . . . Section 5 of Rule 39 reads:

Sec. 5.  Effect of reversal of executed judgment. — Where the judgment executed is reversed totally or partially on appeal, the trial court, on motion, after the case is remanded to it, may issue such orders of restitution as equity and justice may warrant under the circumstances.

Thus, the complete release of a portion of the disputed account is no obstacle to our August 26, 2005 Decision. Restitution of said amount is in order, the partial summary judgment which authorized its release having been nullified. 44

Finally, to the main issue in this case. The Court finds that the RTC misapplied the rules on summary judgment.

Section 3, Rule 35 of the Rules of Court, as amended, provides that after hearing on the motion, summary judgment may be rendered by the court upon application of a party when there is "no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law." The provision reads:

Section 3.  Motion and proceedings thereon. — The motion shall be served at least ten (10) days before the time specified for the hearing. The adverse party may serve opposing affidavits, depositions, or admissions at least three (3) days before the hearing. After the hearing, the judgment sought shall be rendered forthwith if the pleadings, supporting affidavits, depositions, and admissions on file, show that, except as to the amount of damages, there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.

By genuine issue is meant an issue of fact which calls for the presentation of evidence as distinguished from an issue which is sham, fictitious, contrived, set up in bad faith and patently unsubstantial so as not to constitute a genuine issue for trial. 45 The court can determine this on the basis of the pleadings, admissions, documents, affidavits and/or counter-affidavits submitted by the parties to the Court.

Conversely, the rendition of summary judgment is not justified when the defending party tenders vital issues which call for the presentation of evidence. 46 That is, where the facts pleaded by the parties are disputed or contested, proceedings for a summary judgment cannot take the place of a trial. 47

Relief by summary judgment is intended to expedite or promptly dispose of cases where the facts appear undisputed and certain from the pleadings, depositions, admissions and affidavits. 48 But such should not be resorted to —

[I]f there be a doubt as to such facts and there be an issue or issues of fact joined by the parties, neither one of them can pray for a summary judgment. Where the facts pleaded by the parties are disputed or contested, proceedings for a summary judgment cannot take the place of a trial. acEHCD

An examination of the Rules will readily show that a summary judgment is by no means a hasty one. It assumes a scrutiny of facts in a summary hearing after the filing of a motion for summary judgment by one party supported by affidavits, depositions, admissions, or other documents, with notice upon the adverse party who may file an opposition to the motion supported also by affidavits, depositions, or other documents (Section 3, Rule 34). In spite of its expediting character, relief by summary judgment can only be allowed after compliance with the minimum requirement of vigilance by the court in a summary hearing considering that this remedy is in derogation of a party's right to a plenary trial of his case. At any rate, a party who moves for summary judgment has the burden of demonstrating clearly the absence of any genuine issue of fact, or that the issue posed in the complaint is so patently unsubstantial as not to constitute a genuine issue for trial, and any doubt as to the existence of such an issue is resolved against the movant. 49

In the present case, the invalidity of the summary judgment rendered by the RTC stems from the fact that such judgment was not proper under the allegations of the pleadings filed. Even by the most liberal interpretation of the Rules, this case cannot be considered as one not involving genuine issues which need the presentation of evidence to determine which of the two conflicting assertions of fact is correct.

From the two Complaints, the petitioners alleged that they are the owners of the three Power Savings Account and that they seek the recovery of their alleged deposits therein with interests and damages for breach of contract. On the other hand, an examination of the Consolidated Answer shows that respondent UBP denied the same and raised material issues questioning (1) the veracity of the entries in the passbooks pertaining to the said accounts; (2) the identities of the depositors or owners of the account i.e., whether or not the petitioners and the "accountholders" by the names of "Brenda Gurango-Redor and/or Ma. Victoria Samonte" and "Brenda Gurango-Redor and Moreno Redor" are one and the same persons based on the signature cards on file with the bank; and pointing out that (3) the particular account claimed by petitioners spouses Brenda and Moreno is actually in the name of one Elpidia Ria Leopando. The issues thus raised may not be categorized as not genuine so as to dispense with a formal trial and to authorize the rendition of summary judgment.

Moreso with the presentation by the petitioners of an affidavit by one claiming to be Elpidia Ria Leopando that PSA No. 12-011-000352-3 was said to be the owner of, a trial on the merits was a necessity in order to accord respondent UBP the chance to cross-examine the supposed affiant.

From the foregoing, the Court agrees in the findings of the Court of Appeals and restates the same, viz.:

While [respondent UBP] may have made admissions in its pleadings, the same were expressly qualified and limited to the existences (sic) of the accounts and the flow of funds therein, even as it was always careful to emphasize that, based on its records, [petitioners] were not the owners of the accounts. Grave misgivings over the true ownership of the accounts was therefore engendered, warranting the conduct of a full-blown trial. With unseemly haste, however, public respondent Judge Zeus Abrogar leaped to the conclusion that [petitioners] were the accountholders merely because ". . . the amounts (of deposits admitted to by defendant) exactly correspond(ed) to the principal placements [petitioners] made . . ." . . . The more prudent course of action would have been for public respondent Judge Zeus Abrogar to conduct a trial on the matter. To reiterate, any doubt as to the existence of a genuine issue shall be resolved against the party seeking summary judgment . . . . The May 4, 2000 and June 10, 2000 Orders granting summary judgment notwithstanding the existence of genuine issues of fact were therefore null and void. 50

Respondent UBP's allegation of the identities of the owners of the accounts is a factual and legal issue resolvable only in a trial on the merits. Stated otherwise, the genuine issue presented did not justify dispensation of a trial on the merits. From the Consolidated Answer previously quoted above it was plain, indeed, that respondent UBP had tendered a genuine issue and did not admit that the ownership by the petitioners of the questioned accounts. As a result, it was essential that the petitioners establish their allegations with preponderant, relevant and competent evidence.

The rendition of a summary judgment, albeit partial, substantially prejudiced respondent UBP to the point that it was deprived of due process of law; thus, the caution pronounced by this Court in Paz v. Court of Appeals 51 is worth repeating, viz.:

Courts should not render summary judgment hastily but rather, carefully assuming a scrutiny of facts in a summary hearing, considering that this remedy is in disparagement of a party's right to due process. A party who moves for summary judgment has the burden of demonstrating clearly the absence of any genuine issue of fact, and any doubt as to the existence of such an issue is resolved against the movant . . . .

WHEREFORE, the petition is DENIED. The Decision and Resolution dated August 26, 2005 and April 19, 2006, respectively, of the Court of Appeals in CA-G.R. SP No. 67931 are AFFIRMED. Let the records of Civil Case Nos. 99-2069 and 99-2070 be remanded to the RTC for pre-trial and trial on the merits without delay. No cost.

SO ORDERED."

Very truly yours,

(SGD.) EDGAR O. ARICHETADivision Clerk of Court

 

Footnotes

1. Rollo, pp. 54-75; penned by Associate Justice Godardo A. Jacinto with Associate Justices Bienvenido L. Reyes (now a member of this Court) and Rosalinda Asuncion-Vicente, concurring.

2. Id. at 76-80.

3. Entitled "Union Bank of the Philippines v. Hon. Judges Delia H. Panganiban and Zeus C. Abrogar, Jr., in their capacities as Presiding Judges of RTC of Makati City, Branch 64 and 150, respectively, and Brenda Gurango-Redor, Moreno O. Redor and Ma. Victoria Samonte."

4. Dated May 4, 2000, June 10, 2000, December 22, 2000 and November 8, 2001.

5. Entitled "Brenda Gurango-Redor, jointly with her husband Moreno O. Redor and Ma. Victoria Samonte, jointly with her husband Lawrence C. Samonte v. Union Bank of the Philippines."

6. Entitled "Brenda Gurango-Redor and Moreno O. Redor v. Union Bank of the Philippines."

7. It is a type of savings account that featured high interest rates at short renewable monthly periods.

8. Eventually changed to PSA No. 12-011-000251-8.

9. According to the petitioners, "[t]he principal and interests earned were successively rolled-over for periods ranging from 30 to 36 days and varying interest rates for each period from a low of 12.75% per annum to a high of 19.75% per annum." Complaint docketed as Civil Case No. 99-2069. (Rollo, p. 82.)

10. Eventually changed to PSA No. 12-011-000283-0.

11. Again, according to the petitioners, "[t]he principal and interests earned were successively rolled-over for periods ranging from 30 to 36 days and varying interests rates for each period from a low of 12.75% per annum to a high of 19.75% per annum." (Rollo, p. 84.)

12. Also according to the petitioners, "[t]he principal and interests earned were successively rolled-over for periods ranging from 30 to 36 days and varying interest rates for each period from a low of 12.75% per annum to a high of 18% per annum." (Id. at 94.)

13. CA rollo, pp. 63-68.

14. Entitled "Brenda Gurango-Redor, jointly with her husband, Moreno O. Redor, and Ma. Victoria Samonte, jointly with her husband, Laurence C. Samonte v. Union Bank of the Philippines."

15. Entitled "Spouses Brenda Gurango-Redor and Moreno O. Redor v. Union Bank of the Philippines."

16. Rollo, p. 94.

17. Id. at 103-112.

18. Id. at 103.

19. Id.

20. Id. at 104.

21. Consolidated Answer with Counterclaim. Id. at 105-109.

22. Id. at 113-115.

23. Id. at 120.

24. Id. at 124.

25. Id.

26. Id. at 128.

27. Id. at 132-133.

28. Order dated May 4, 2000; id. at 132.

29. The Order was issued by Presiding Judge Delia M. Panganiban, RTC-Branch 64, Makati City, in view of the inhibition of Judge Zeus C. Abrogar.

30. Sheriff Reynaldo A. Pascual, RTC-Branch 64, Makati City.

31. But in another Sheriff's Report, this time dated November 27, 2002, the Sheriff further informed the RTC of his receipt of the amounts of P164,552.40 and P13,039.20, over and above the total amount stated in court's Order dated May 4, 2000.

32. Rollo, p. 74.

33. Id. at 69.

34. Id. at 25-27.

35. Id. at 39-40.

36. Id. at 40.

37. Id. at 359.

38. Id.

39. 209 Phil. 241, 258 (1983).

40. Id.

41. RTC Order dated May 4, 2000, p. 2; rollo, pp. 131-133.

42. Id. at 133.

43. Entitled "Brenda G. Redor, Moreno O. Redor and Ma. Victoria Samonte v. Union Bank of the Philippines;" CA rollo, pp. 180-197.

44. Rollo, pp. 79-80.

45. Paz v. Court of Appeals, 260 Phil. 31, 36 (1990).

46. Villanueva v. National Marketing Corporation, 138 Phil. 771, 776 (1969).

47. Id. at 777.

48. Viajar v. Judge Estenzo, 178 Phil. 561, 572 (1979).

49. Id. at 572-573.

50. Rollo, pp. 69-70.

51. Supra note 45 at 36-37.  

n   Note from the Publisher: Copied verbatim from the official copy.