Facts:

The case involves H. R. Andreas as the plaintiff and the Bank of the Philippine Islands as the defendant. The events leading to the case began on May 31, 1920, when the American Trading Company of Australia drew a bill of exchange upon H. R. Andreas for the sum of 5,050 pounds, payable to the order of the Bank of New South Wales thirty days after sight. The draft was duly endorsed to the Bank of the Philippine Islands and accepted by Andreas on June 21, 1920. On July 13, 1920, Andreas paid the full amount of the bill of exchange to the defendant, along with an erroneous interest payment of P1,136.96. Andreas later demanded a refund of this interest on February 9, 1921, but the defendant did not return any part of the payment. Andreas filed a complaint seeking a total of P8,260.33, which included interest on various amounts from different dates. The defendant denied the allegations and sought dismissal of the complaint. The lower court ruled in favor of Andreas, leading the de...

Facts:

1. Parties Involved:

   • Plaintiff: H.R. Andreas, a resident businessman in Manila.
   • Defendant: Bank of the Philippine Islands (BPI), a banking corporation based in Manila.

2. Transaction Details:

   • On May 31, 1920, the American Trading Company of Australia drew a bill of exchange for £5,050:0:0 payable to the Bank of New South Wales, endorsed to BPI, and accepted by the plaintiff on June 21, 1920.
   • The plaintiff paid the full amount of the bill of exchange on July 13, 1920, including an erroneous payment of P1,136.96 as interest.
   • Similar transactions occurred in three other instances, with the plaintiff paying additional interest charges totaling P8,260.33.

3. Plaintiff’s Claim:

   • The plaintiff sought a refund of the erroneously paid interest, claiming that the defendant had no right to charge such interest.

4. Defendant’s Defense:

   • The defendant denied the allegations and argued that the interest charges were legal and agreed upon by the plaintiff.

5. Trial Court Decision:

   • The lower court ruled in favor of the plaintiff, ordering the defendant to refund the erroneously paid interest.

6. Defendant’s Appeal:

   • The defendant appealed, raising nine errors, including the trial court’s refusal to admit evidence of banking customs and its determination that the interest charges were improper.

Issue:

1. Whether the defendant bank had the legal right to charge interest on the drafts after the plaintiff had already paid the full amount, including interest charges from the Australian bank.
2. Whether the plaintiff’s payment of the interest charges constituted ratification, estopping him from recovering the erroneously paid amounts.
3. Whether the trial court erred in excluding evidence of banking customs and practices regarding interest charges.

Ruling:

The Supreme Court affirmed the lower court’s decision, ruling in favor of the plaintiff. The defendant bank was not entitled to charge additional interest on the drafts, as the plaintiff had already paid the full amount, including interest charges from the Australian bank. The Court held that there was no contract, express or implied, authorizing the defendant to collect such interest.

Ratio:

1. No Legal Basis for Interest Charges:

   • The defendant bank had no legal right to charge interest on the drafts after the plaintiff had already paid the full amount, including interest charges from the Australian bank. The interest charges made by the defendant were not authorized by the Australian bank and were not part of the original agreement.

2. No Ratification or Estoppel:

   • The plaintiff’s payment of the interest charges did not constitute ratification, as he was unaware of the nature of the charges at the time of payment. Upon discovering the error, he promptly protested and sought a refund.

3. Exclusion of Evidence on Banking Customs:

   • The trial court correctly excluded evidence of banking customs, as the defendant failed to plead such customs in its answer. Without proper pleading, such evidence could not be admitted to explain or modify the terms of the written contract.

4. Written Contract Governs:

   • The written contract between the plaintiff and the defendant did not provide for the payment of additional interest to the defendant. Any such charges would require an express or implied agreement, which was absent in this case.