Philippine National Bank v. Honorable Court of Appeals
REITERATIONFacts
The Antecedents: Petitioner Philippine National Bank (PNB) filed a collection case against respondent Atty. Mordeno Cua. PNB alleged that on December 18, 1985, it received a tested message from Manufacturer’s Hanover Trust Co., New York (Mantrust) to remit US$14,056.25 to PNB Cagayan de Oro Branch under Account No. 16087. PNB implemented this on December 20, 1985, converting it to P262,793.04. Subsequently, PNB discovered that Account No. 16087 was not maintained by PNB Cagayan de Oro but by PCI Bank Cagayan de Oro, under the name CENTER FOR ECONOMIC AND SOCIAL STUDIES (CESS), with respondent Atty. Mordeno Cua as the sole signatory. PNB Cagayan de Oro then transferred the funds to the PCI Bank account, and the funds were withdrawn by Cua. Later, Mantrust rectified its message, recalling the fund as it was 'not intended' for PNB. PNB complied with the recall on January 21, 1986. Upon request, PCI Bank informed PNB that the entire amount was already withdrawn by Cua. Despite demands, Cua refused to restitute the amount. Procedural History: The Regional Trial Court (RTC) ruled in favor of PNB, ordering Cua to pay the peso equivalent of the amount and docketing fees. On appeal, the Court of Appeals (CA) reversed the RTC decision, holding that PNB failed to prove that Cua withdrew the money. The Petition: PNB filed a petition for review on certiorari, arguing that the CA erred in reversing the RTC decision. PNB contended that Cua's failure to specifically deny the allegation in paragraph 6 of the complaint constituted a judicial admission that he withdrew the funds. PNB also argued that even without a judicial admission, other evidence established that the funds were credited to CESS's account.
Issue(s)
Whether the respondent's denial in his Answer constituted a specific denial of the material allegations in the complaint, and whether certain denials were ineffective, thus constituting admissions. Whether the petitioner sufficiently proved that the respondent withdrew the remitted amount.
Ruling
The petition is DENIED. The Court of Appeals did not err in reversing the decision of the trial court.
Ratio Decidendi
On the issue of specific denial and admission: The Court reiterated that under Rule 8, Section 10 of the Rules of Court, a defendant must specify each material allegation of fact that they do not admit and, when practicable, set forth the substance of the matters relied upon to support the denial. A general denial, even if qualified, is insufficient. Matters plainly and necessarily within the defendant's knowledge, if denied with an allegation of lack of knowledge or information, will be treated as an admission. However, in this case, while the respondent's denial of paragraph 6 of the complaint was not as specific as PNB desired, his denial in paragraph C of his Answer, stating he never withdrew money from the 'fund transfer of the petitioner-Bank' and was not notified of the fund transfer, must be considered in its entirety with his other averments. The Court found that the respondent's denial, when read in context with his other statements, was sufficient to raise the issue of whether he actually withdrew the funds, thereby placing the burden of proof on the petitioner. The Court noted that the respondent's denial of paragraph 3 of the complaint, regarding the account being maintained with PCIB, was ineffective as it was within his knowledge as the signatory, thus constituting an admission of that fact. Similarly, his failure to specifically deny paragraph 4 of the complaint regarding the transfer of funds to Account No. 16087 was deemed an admission of the transfer itself. On the issue of proof of withdrawal: The Court agreed with the respondent that the petitioner bore the burden of proving not only that the amount was remitted to Account No. 16087 but also that the respondent, as the sole signatory, actually withdrew the said amount. The Court found that while PNB successfully proved the remittance of US$14,056.25 to PCIB Account No. 16087 under the name of CESS, with the respondent as the sole signatory, it failed to present sufficient evidence to prove that the respondent withdrew the amount from the said account. The Court also found PNB's reliance on certain letters to be misplaced, as these letters did not explicitly claim that the respondent had withdrawn the amount nor did they demand restitution of the withdrawn sum. Furthermore, PNB failed to adduce evidence that the respondent actually received these letters.
Main Doctrine
While a failure to specifically deny an allegation in the complaint may be deemed an admission, this rule is not absolute, especially when the denial, though imperfect, is accompanied by an affirmative statement that negates the allegation, and when the matters alleged are not exclusively within the defendant's knowledge.