Facts:

The case involves Allied Banking Corporation (petitioner) and Joselito Z. Yujuico (respondent). On April 1, 1976, Yujuico secured a loan of Five Hundred Thousand Pesos (₱500,000.00) from the General Bank and Trust Company (GENBANK), which he documented through a promissory note. At the time of the loan, Yujuico was a senior officer of GENBANK and part of the family that owned a controlling interest in the bank. However, on March 25, 1977, the Monetary Board of the Central Bank issued Resolution No. 675, prohibiting GENBANK from conducting business in the Philippines, followed by Resolution No. 677 on March 29, 1977, which mandated the bank's liquidation. Subsequently, on May 9, 1977, Allied Banking Corporation acquired GENBANK's assets and liabilities, including Yujuico's promissory note.

After Yujuico defaulted on the loan, Allied filed a collection suit against him on February 7, 1979, which was registered as Civil Case No. 121474 in the Court of First Instanc...

Facts:

Background of the Loan and Promissory Note

• On April 1, 1976, private respondent Joselito Z. Yujuico obtained a loan amounting to Five Hundred Thousand pesos (P500,000.00) from the General Bank and Trust Company (GENBANK).
• To evidence the loan, private respondent issued a promissory note in favor of GENBANK.
• At the time of incurring the debt, private respondent held a prominent position as a ranking officer of GENBANK and was a member of the family that controlled the bank.

Developments Leading to the Liquidation of GENBANK

• On March 25, 1977, the Monetary Board of the Central Bank issued Resolution No. 675, which forbade GENBANK from conducting business in the Philippines.
• Shortly thereafter, on March 29, 1977, Resolution No. 677 was issued by the Monetary Board, ordering the liquidation of GENBANK.
• On May 9, 1977, Allied Banking Corporation (ALLIED) acquired all assets and assumed the liabilities of GENBANK through a Memorandum of Agreement executed with Arnulfo Aurellano, the liquidator of GENBANK.

Initiation of the Collection Suit and Subsequent Pleadings

• After private respondent’s failure to perform his obligation under the promissory note, petitioner ALLIED filed a collection suit on February 7, 1979, which was docketed as Civil Case No. 121474 before the Regional Trial Court (RTC) of Manila.
• In the course of the proceedings, during 1987, private respondent filed a Motion to admit an Amended/Supplemental Answer and a Third-Party Complaint.
• The third-party complaint sought to implead the Central Bank and Arnulfo Aurellano on the ground that their alleged tortious interference with GENBANK’s affairs prevented him from fulfilling his obligation.
• The underlying assertion was that if found liable on the promissory note, private respondent could transfer that liability to the alleged third-party defendants.
• The RTC, under Hon. Judge Felix B. Mintu (order dated August 13, 1987) and later under Judge Domingo D. Panis (order dated February 29, 1988), denied the admission of the third-party complaint while admitting the amended/supplemental answer.
• Subsequent motions for partial reconsideration by both parties led Judge Panis, through an order dated April 18, 1988, to again deny the third-party complaint and the motions.

Appeal to the Court of Appeals and Subsequent Orders

• Private respondent filed a petition for certiorari with the Court of Appeals (CA) on June 1, 1988, challenging the RTC orders denying the admission of the third-party complaint and the motion for partial reconsideration.
• On September 5, 1988, the CA ruled in favor of private respondent by declaring the RTC orders as null and void and ordering the admission of the proposed third-party complaint.
• A motion for reconsideration of the CA decision was subsequently filed by petitioner, which was denied via a resolution dated November 9, 1988.
• Petitioner, ALLIED, raised several assignments of error regarding:
• The sufficiency of the third-party complaint in stating a cause of action in respect of petitioner’s claim.
• The allegation that the cause of action presented in the third-party complaint had already prescribed.
• The contention that admitting the third-party complaint would cause further unnecessary delay in the disposition of the collection suit.
• The argument that the rule barring defenses not raised in the lower court from being raised on appeal did not apply in special civil actions of certiorari.

Procedural and Substantive Assertions Raised

• The petition for review centered on whether the third-party complaint was a proper procedural device as allowed by the Rules of Court and whether it was timely filed given the statutory prescription.
• Private respondent defended his position by invoking the doctrine of “Relations” (or “Relations Back Doctrine”), claiming that the cause of action against the third-party defendants accrued only when the decision in CA-G.R. CV No. 03642 became final and executory.
• The complexity of the case stemmed from the intertwining of the simple maker’s liability on the promissory note with the allegations of tortious interference linked to the illegal liquidation of GENBANK.

Issue:

Whether there is a proper ground for the admission of the third-party complaint in the instant case.

• Consideration of whether the third-party complaint, although independent of the plaintiff’s complaint, is sufficiently connected to the main transaction to warrant its inclusion as a procedural device.
• Analysis of whether the alleged tortious interference and subsequent claim for indemnity by the third-party plaintiff satisfy the tests set forth in Capayas to be “in respect of plaintiff’s claim.”

Whether the cause of action underlying the third-party complaint has prescribed.

• Examination of petitioner’s contention that the cause of action, based on a quasi-delict and tortious interference, accrued on March 25, 1977 (or March 25, 1980 as later argued), thereby prescribing it by March 1981, given the four-year prescriptive period under the Civil Code.
• Consideration of private respondent’s reliance on the “Doctrine of Relations” (or "Relations Back Doctrine"), which purports that the cause of action accrued only on December 12, 1986 when the pertinent CA decision became final and executory, thus saving the claim from prescription.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)