Facts:

The case revolves around the Bank of Commerce (petitioner) and the heirs of Rodolfo Dela Cruz (respondents). The events leading to the case began when Rodolfo Dela Cruz, the sole proprietor of Mamertha General Merchandising, filed a complaint against Panasia Banking, Inc. (Panasia) for the unauthorized withdrawals made by his son, Allan Dela Cruz, from his bank account without his consent. The complaint was filed in the Regional Trial Court (RTC) of Caloocan City, which was later amended to include the Bank of Commerce as an additional defendant after it acquired Panasia's assets and liabilities through a Purchase and Sale Agreement dated July 27, 2000. Despite Dela Cruz's explicit instructions to Panasia to prevent his son from making withdrawals, the bank allowed these transactions, leading to a total unauthorized withdrawal of P56,223,066.07. Dela Cruz demanded the restoration of the amount, but Panasia failed to comply. Subsequently, Dela Cruz filed a suit for col...

Facts:

Background of the Case

• The case originated from a complaint filed by Rodolfo Dela Cruz against Panasia Banking, Inc. (Panasia) for unauthorized withdrawals from his bank account. The complaint was later amended to include Bank of Commerce as a defendant.
• Dela Cruz discovered that his son, Allan Dela Cruz, had withdrawn P56,223,066.07 from his account without his consent. Despite Dela Cruz's instructions to Panasia to prevent such withdrawals, the bank continued to allow them.

Merger and Liability Issues

• Dela Cruz later discovered that Panasia had been acquired by Bank of Commerce through a Purchase and Sale Agreement. He demanded that Bank of Commerce pay Panasia's liability to him and sought to set off his loan obligation with Panasia against the unauthorized withdrawals.
• Bank of Commerce argued that it only acquired selected assets and liabilities from Panasia and that Dela Cruz's loan was among the liabilities it assumed. It denied liability for Panasia's negligence.

Trial Court Decision

• The Regional Trial Court (RTC) ruled that Bank of Commerce and Panasia were jointly and severally liable to Dela Cruz for the unauthorized withdrawals, less the amount of his loan obligation. The court found Panasia negligent and held that Bank of Commerce, by taking over Panasia, had assumed its liabilities.

Court of Appeals Decision

• The Court of Appeals (CA) affirmed the RTC's decision, holding that Bank of Commerce's failure to formally offer the Purchase and Sale Agreement and Deed of Assignment as evidence was fatal to its defense. The CA also upheld the finding of Panasia's negligence.

Issue:

1. Whether the Court of Appeals erred in ruling that Bank of Commerce's failure to formally offer the Purchase and Sale Agreement as evidence was fatal to its defense.
2. Whether the Court of Appeals erred in holding Bank of Commerce liable for Panasia's negligence.
3. Whether the Court of Appeals erred in disregarding Dela Cruz's alleged admission that he authorized his son to withdraw from the account.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Conclusion:

The Supreme Court granted Bank of Commerce's petition, dismissing the case against it for lack of cause of action. The Court emphasized that the terms of a merger must be proven and cannot be assumed, and that the burden of proof lies with the party alleging the assumption of liabilities.