Case Digest (G.R. No. 108052)
Facts:
Philippine National Bank v. Court of Appeals and Ramon Lapez, G.R. No. 108052, July 24, 1996, Supreme Court Third Division, Panganiban, J., writing for the Court.Petitioner Philippine National Bank (PNB) (hereinafter petitioner) challenged the Court of Appeals' decision affirming the Regional Trial Court of Quezon City, Branch 107, which ordered PNB to pay private respondent Ramon Lapez (doing business as Sapphire Shipping) the sum of US$2,627.11 (or its peso equivalent) and dismissed other claims and counterclaims. Teresita V. Lapez was later substituted for the deceased Ramon Lapez.
The dispute arose after two remittances to benefit Lapez were coursed through PNB as the local correspondent bank of the National Commercial Bank (NCB) of Jeddah: one telegraphic transfer of US$2,627.11 meant to be credited to Lapez’s account at Citibank, Greenhills, and another remittance from Libya (later resulting in a P34,340.38 deduction) intended for credit to Lapez’s account at PNB (Acct. No. 830‑2410). PNB admitted it applied/appropriated US$2,627.11 and P34,340.38 from those remittances, but defended the deductions as compensatory set‑offs to recover double credits previously and erroneously made to Lapez’s PNB account in November 1980 and January 1981 (aggregating about P87,380.44).
Lapez made a written demand (Dec. 4, 1986) for the remittance; PNB replied and later made its own demand (Oct. 23, 1986) for refund of the duplicate credits. At trial the parties adduced documents showing the double credits and subsequent communications; PNB produced a receipt dated Feb. 18, 1987 acknowledging the P34,340.38 deduction.
The trial court found that solutio indebiti (quasi‑contract under Art. 2154, Civil Code) gave rise to an obligation by Lapez to return the erroneously received double payments, but held that the requisites for legal compensation under Art. 1279, Civil Code were not present with respect to the US$2,627.11 transfer because PNB acted as an implied trustee/correspondent compelled to transmit the funds to Citibank (a stipulation pour autrui), and therefore PNB’s interception was improper; the court awarded Lapez US$2,627.11. The trial court did find, however, that compensation could validly be applied to the P34,340.38 deduction and effected a partial set‑off against the plaintiff’s indebtedness. The trial court also treated the quasi‑contract action as governed by the six‑year prescriptive period of Art. 1145, Civil Code.
On appeal the Court of Appeals affirmed in toto, emphasizing that a telegraphic money transfer purchased from a foreign bank and coursed through a local correspondent bank creates an obligation on the correspondent to transmit and remit the transfer to the beneficiary bank (akin to duties reflected in Section 7 of the Rules and Regulations Implementing E.O. 857, as amended by E.O. 925), and that PNB’s responsibility as correspondent continued until complete performance — it could not unilaterally intercept a transfer destined for cre...(Subscriber-Only)
Issues:
- Was PNB legally justified in intercepting and applying the US$2,627.11 telegraphic transfer coursed through it to satisfy obligations owed by private respondent (i.e., did legal compensation or set‑off apply)?
- If both parties stood as mutual obligors (PNB to return and private respondent to refund under solutio indebiti), did legal compensation operate as a matter of law so as to extinguish PNB’s duty to...(Subscriber-Only)
Ruling:
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Ratio:
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Doctrine:
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