Allied Banking Corporation v. Court of Appeals
REITERATIONFacts
The Antecedents: Private respondent Joselito Z. Yujuico obtained a loan of P500,000.00 from General Bank and Trust Company (GENBANK) on April 1, 1976, issuing a promissory note payable on April 1, 1977. At the time, Yujuico was a ranking officer and part of the controlling family of GENBANK. On March 25, 1977, the Monetary Board of the Central Bank (CB) forbade GENBANK from doing business, and on March 29, 1977, ordered its liquidation. Subsequently, Allied Banking Corporation (ALLIED) acquired GENBANK's assets and assumed its liabilities, including the receivable from Yujuico. Procedural History: ALLIED filed a collection suit against Yujuico on February 7, 1979. During the proceedings, Yujuico sought to file an amended/supplemental answer and a third-party complaint impleading the Central Bank and Arnulfo Aurellano (Liquidator of GENBANK). Yujuico alleged that tortious interference by the CB prevented him from fulfilling his loan obligation, thus absolving him of liability. The Regional Trial Court (RTC), through Judge Felix B. Mintu and later Judge Domingo D. Panis, denied the admission of the third-party complaint in orders dated August 13, 1987, February 29, 1988, and April 18, 1988, but admitted the amended/supplemental answer. Yujuico then filed a petition for certiorari with the Court of Appeals (CA). The Petition: The CA, in its decision dated September 5, 1988, declared the RTC orders denying the third-party complaint null and void due to grave abuse of discretion and ordered the admission of the third-party complaint. ALLIED's motion for reconsideration was denied. Hence, this petition for review on certiorari by ALLIED.
Issue(s)
Whether the Court of Appeals erred in holding that the RTC Judge committed grave abuse of discretion in denying the admission of the third-party complaint, considering the requirements for a valid third-party complaint. Whether the proposed third-party complaint states a cause of action. Whether the alleged cause of action in the third-party complaint has prescribed. Whether the 'Doctrine of Relations' applies to save the third-party complaint from prescription.
Ruling
The petition is GRANTED. The decision of the Court of Appeals is REVERSED and SET ASIDE. The orders of the trial court denying the admission of the third-party complaint are SUSTAINED.
Ratio Decidendi
On the admission of the third-party complaint: The Court reiterated that a third-party complaint is a procedural device to bring a party into a case who may be liable for contribution, indemnity, subrogation, or other relief in respect of the plaintiff's claim. It is independent but connected to the plaintiff's claim. The third-party complaint in this case was premised on the alleged tortious interference by the Central Bank with GENBANK's affairs, which allegedly prevented Yujuico from performing his obligation. This claim was further bolstered by a Court of Appeals decision (CA-G.R. CV No. 03642) that declared the liquidation of GENBANK null and void. The Court found that Yujuico's claim, if he were held liable on the promissory note, sought to transfer liability to the third-party defendants due to the illegal liquidation of GENBANK, which was the basis for the assignment of the promissory note to ALLIED. Therefore, the claim, arising from a different transaction, was connected with the plaintiff's claim and could be accommodated under the tests for admitting a third-party complaint, specifically by potentially holding the third-party defendants liable for part of the plaintiff's claim against the original defendant. The provided text does not contain specific reasoning or ratio decidendi directly addressing whether the proposed third-party complaint states a cause of action. Therefore, no corresponding ratio is available for this issue. On the issue of prescription: The Court unequivocally stated that an action for damages arising from quasi-delict or alleged tortious interference must be filed within four (4) years from the date the cause of action accrued. Citing Español vs. Chairman, Philippine Veterans Administration, the Court held that the cause of action arises from the date of the act or omission violative of a party's right. In this case, the alleged tortious interference and the order for GENBANK to desist from doing business occurred on March 25, 1977. Therefore, the prescriptive period began to run from that date. The third-party complaint was filed on June 17, 1987, which was significantly beyond the four-year prescriptive period. On the application of the 'Doctrine of Relations' and prescription: The Court rejected the application of the 'Doctrine of Relations' to circumvent this prescriptive period, as the cause of action for tortious interference accrued on March 25, 1977, not on the finality of the decision annulling the liquidation. Consequently, the action had prescribed and the third-party complaint should not have been admitted.
Main Doctrine
A third-party complaint, while a procedural device to bring a new party into an existing suit, must still meet the requirements of stating a cause of action and must not be barred by prescription. The 'doctrine of relations' cannot be invoked to circumvent the prescriptive period for actions based on quasi-delict, especially when the cause of action accrued from the date of the wrongful act or omission.