Commerce Bank v. Dela Cruz
REITERATIONFacts
The Antecedents: Rodolfo Dela Cruz (Dela Cruz), proprietor of Mamertha General Merchandising, maintained a savings account with Panasia Banking, Inc. (Panasia). Dela Cruz discovered that Panasia allowed his son, Allan Dela Cruz, to withdraw P56,223,066.07 from the account without his authority, despite his written instructions to Panasia to prevent such withdrawals. Panasia failed to restore the amount. Subsequently, Dela Cruz learned that Bank of Commerce (Petitioner) had acquired Panasia through a Purchase and Sale Agreement and Deed of Assignment, and that his loan from Panasia amounting to P27,150,000.00 was among the liabilities assumed by Bank of Commerce. Dela Cruz offered to set off his loan obligation against his claim for unauthorized withdrawals. Procedural History: Dela Cruz filed a collection suit against Panasia, later amended to include Bank of Commerce. Panasia was declared in default. Dela Cruz died and was substituted by his heirs. The Regional Trial Court (RTC) declared Panasia and Bank of Commerce jointly and severally liable to pay Dela Cruz's heirs the amount of P56,223,066.00, less P27,150,000.00, plus attorney's fees. The Court of Appeals (CA) affirmed the RTC's decision, holding that Bank of Commerce's failure to formally offer the merger documents was fatal to its defense and that the RTC's findings on Panasia's negligence were correct. The CA denied Bank of Commerce's motion for reconsideration. The Petition: Bank of Commerce appealed to the Supreme Court, arguing that its failure to formally offer the merger documents was not fatal due to Dela Cruz's alleged admission of their genuineness and due execution, that there was no basis for its solidary liability for Panasia's negligence, and that Panasia was not negligent as the withdrawals were authorized.
Issue(s)
Whether the Court of Appeals erred on a question of law when it ruled that the failure of the petitioner to offer the Purchase and Sale Agreement with Panasia as evidence was fatal to its defense. Whether the Court of Appeals erred on a question of law when it held the petitioner liable for the acts committed by Panasia. Whether the Court of Appeals erred on a question of fact in disregarding the admission of Rodolfo that he authorized his son to withdraw from the subject savings account.
Ruling
The Supreme Court granted the petition for review on certiorari, affirming the CA decision but modifying it to dismiss Civil Case No. C-19332 insofar as petitioner Bank of Commerce is concerned for lack of cause of action. The Court ordered the respondents to pay the costs of suit.
Ratio Decidendi
On the issue of whether the Court of Appeals erred on a question of law when it ruled that the failure of the petitioner to offer the Purchase and Sale Agreement with Panasia as evidence was fatal to its defense: The Supreme Court upheld the CA and RTC's ruling that the failure to formally offer the Purchase and Sale Agreement and Deed of Assignment was fatal to Bank of Commerce's defense. Section 34, Rule 132 of the Rules of Court mandates that courts shall consider no evidence which has not been formally offered, as the judge must base findings of fact and judgment strictly upon evidence offered. While evidence not formally offered may be considered if duly identified by testimony and incorporated in the records, the Purchase and Sale Agreement and Deed of Assignment were not marked as exhibits, their contents were not revealed, and the Purchase and Sale Agreement was not competently identified during trial. Therefore, the general rule applied, excluding these documents from consideration. On the issue of whether the Court of Appeals erred on a question of law when it held the petitioner liable for the acts committed by Panasia: The Supreme Court found merit in the petition, ruling that Bank of Commerce could not be held solidarily liable with Panasia. The exclusion of the merger documents meant there was a void in the link between Bank of Commerce and Panasia, lacking factual basis to implicate Bank of Commerce in Panasia's negligence. Dela Cruz's allegations in his amended complaint, being averments of ultimate facts, did not constitute proof of his cause of action against Bank of Commerce. Since Bank of Commerce specifically denied merging with Panasia and averred it purchased only selected assets and liabilities, the burden was on Dela Cruz to prove the merger and Bank of Commerce's assumption of liabilities, which he failed to do. The RTC's assumption that Bank of Commerce absorbed all liabilities based on 'common sense' was unfounded and lacked legal support. On the issue of whether the Court of Appeals erred on a question of fact in disregarding the admission of Rodolfo that he authorized his son to withdraw from the subject savings account: The Court noted that this issue posed a question of fact, and the petitioner had not shown that its case fell under any of the recognized exceptions for the Supreme Court to delve into factual disputes. Furthermore, the findings regarding Panasia's negligence and liability had already attained finality due to Panasia's non-appeal. Therefore, this specific issue, while raised, did not form the basis for the Court's reversal of the CA's decision regarding Bank of Commerce's liability.
Main Doctrine
The terms of a merger, when determinative of joint or respective liabilities towards third parties, cannot be assumed; the party alleging joint liabilities must establish the allegation. Otherwise, liabilities remain separate. Failure to formally offer evidence, such as a merger agreement, in court is fatal to a claim of assumed liabilities, and courts cannot take judicial notice of such merger without factual basis.