Mellon Bank vs. Magsino Case Digest G.R. No. 61011 October 18, 1990

Mellon Bank vs. Magsino Case Digest 

G.R. No. 61011 ; October 18, 1990

DOCTRINE/S:

Remedial Law

a) Interlocutory Order

Does not dispose of the case completely but leaves something more to be done upon its merits.

b) Meaning of "election of remedies"

Election of remedies refers to the choice by a party to an action of one of two or more coexisting remedial rights, where several such rights arise out of the same facts, but the term has been generally limited to a choice by a party between inconsistent remedial rights, the assertion of one being necessarily repugnant to, or a repudiation of, the other. In its technical and more restricted sense, election of remedies is the adoption of one of two or more coexisting remedies, with the effect of precluding a resort to the others. 

c) Purpose of "election of remedies"

Purpose of the doctrine of election of remedies to prevent double redress for a single wrong. It is regarded as an application of the law of estoppel, upon the theory that a party cannot, in the assertion of his right occupy inconsistent positions which form the basis of his respective remedies.

c) When "election of remedies" is binding

No binding election occurs before a decision on the merits is had or a detriment to the other party supervenes. This is because the principle of election of remedies is discordant with the modern procedural concepts embodied in the Code of Civil Procedure which Permits a party to seek inconsistent remedies in his claim for relief without being required to elect between them at the pleading stage of the litigation.

Banking Law

a) Section 2 of Republic Act No. 1405 on the secrecy of bank deposits

- Section 2 of said law allows the disclosure of bank deposits in cases where the money deposited is the subject matter of the litigation

FACTS:

Short version: Mellon Bank made a mistake in transferring $1M to Javier’s account instead of just $1K. Javier with the help of the other respondents appropriated the amount for himself. Mellon then filed a complaint against Javier et al. before Superior Court of California and Court of First Instance in the Philippines.  The RTC at first conditionally allowed the testimonies of Baylosis and Red about the transactiom. But their testimonies were later stricken off the record. RTC dimissed the case. Mellon then filed the instant petition for certiorari.

Long version: Ventosa requested the transfer of $1,000 from the First National Bank Javier in Manila through the Prudential Bank. Accordingly, the First National Bank requested the petitioner, Mellon Bank, to effect the transfer. Unfortunately the wire sent by Mellon Bank to Manufacturers Hanover Bank, a correspondent of Prudential Bank, indicated the amount transferred as “US$1,000,000.00” instead of US$1,000.00. Hence Manufacturers Hanover Bank transferred one million to the Prudential Bank for the account of Javier. Javier then appropriated the amount with the help of the other respondents.

Mellon Bank filed a complaint in the Superior Court of California against Melchor Javier, Jane Doe Javier, Honorio Poblador, Jrn, and Does I through V. Mellon Bank also filed in the Court of First Instance complaint against the Javier spouses, Honorio Poblador, Jr., Domingo L. Jhocson, Jr., Jose Marquez, Roberto Gariño, Elnor Investment Co., Inc., F.C. Hagedorn & Co., Inc. and Paramount Finance Corporation. After its amendment, Rafael Caballero and Tri-Arc Investment & Management Company, Inc. were also named defendants.

The RTC at first conditionally allowed the testimonies of Baylosis and Red about the bank transaction. But their testimonies were later stricken off the record on the grounds of res inter alios acta, immateriality, irrelevancy and confidentiality due to RA 1405. 

The RTC dimissed the case for lack of cause of action. Subsequently, Mellon’s 2 Motions for Reconsideration were denied by the RTC. Hence, Mellon Bank filed the instant petition for certiorari claiming that the resolution of September 10, 1982 and the orders of October 28, 1983 and July 9, 1985 are void for being unlawful and oppressive exercises of legal authority, subversive of the fair administration of justice, and in excess of jurisdiction.

ISSUE/S:

1) WON CFI gravely abused its discretion in ruling that the resolution of September 10, 1982 is a "final and definitive disposition" of petitioner's claim for the purchase price of the Kern property?

2) WON Republic Act No. 1405 on the secrecy of bank deposits prohibits the disclosure of an account deposit which is relevant and material to the resolution of the case?

3) WON the principle of election of remedies bars recovery of Mellon Bank?

HELD:

1)YES. An interlocutory order is one which does not dispose of the case completely but leaves something more to be done upon its merits. In this case, the resolution is interlocutory because the issue resolved therein is merely the admissibility of the plaintiff's evidence.  It only orders that the testimonies of Baylosis and Red and the documents they testified on should be stricken from the record. As such, there are things left undone in Civil Case No. 26899 after the issuance of the September 10, 1982 resolution not only because of its explicit dispositive portion but also due to the fact that even until now, the case is still pending and being heard.

2) NO. Section 2 of said law allows the disclosure of bank deposits in cases where the money deposited is the subject matter of the litigation. In the instant case, Civil Case No. 26899 is aimed at recovering the amount converted by the Javiers for their own benefit. Necessarily, an inquiry into the whereabouts of the illegally acquired amount extends to whatever is concealed by being held or recorded in the name of persons other than the one responsible for the illegal acquisition. 

3) NO. Respondents, with the exception of the Javiers, failed to raise “election of remedies” as a defense in their answers and therefore, by virtue of Section 2, Rule 9 of the Rules of Court, such defense is deemed waived.  Having been waived as a defense, it cannot be treated as if it has been raised in a motion to dismiss based on the nonexistence of a cause of action.

Moreover, granting that the defense was properly raised, it is inapplicable in this case. Election of remedies refers to the choice by a party to an action of one of two or more coexisting remedial rights, where several such rights arise out of the same facts, but the term has been generally limited to a choice by a party between inconsistent remedial rights, the assertion of one being necessarily repugnant to, or a repudiation of, the other. In its technical and more restricted sense, election of remedies is the adoption of one of two or more coexisting remedies, with the effect of precluding a resort to the others. 

It should be noted that the remedies pursued in the California case and in Civil Case No. 26899 are not exactly repugnant or inconsistent with each other. If ever, they are merely alternative in view of the inclusion of parties in the latter case who are not named defendants in the former. The causes of action, although they all stem from the erroneous transmittal of dollars, are distinct as shown by the complaints lengthily set out above. The bar of an election of remedies does not apply to the assertion of distinct causes of action against different persons arising out of independent transactions.