MANUEL C. MOYCO, PLAINTIFF-APPELLEE, VS. UNITED COCONUT PLANTERS BANK, JESUS O. PAGOBAYAN, VIRGILIO T. SANCHEZ, FRIEDA T. JIMENEZ, EVA M. GULLERMO, ANGEL H. MOJICA AND ABELARDO …

Moyco versus United Coconut Planters Bank

The Case

This is a civil action for the recovery of a sum of money and damages, brought by Manuel Moyco, a former Vice President and Manager of the Legal Department of the United Coconut Planters Bank, against the bank and several of its officers and employees. Moyco sued after the bank refused to honor a certificate of time deposit that had been issued to him in the amount of twenty four thousand United States dollars. The case matters because it shows how the Supreme Court, on a motion for reconsideration, may correct its own judgment before it becomes final, and because it applies the equitable maxim that those who come to court seeking equity must come with clean hands. It is a study in how a litigant's own misconduct can strip him of an award of attorney's fees and costs even where he prevails on the principal claim.

Procedural History

The case began as a civil action in the Regional Trial Court, which rendered judgment in favor of Moyco. The bank and its officers appealed. The Court of Appeals affirmed the trial court's decision. The matter then reached the Supreme Court, which rendered a decision on July 17, 2013, again in favor of Moyco. The defendants filed a motion for reconsideration of that decision. On reconsideration, the Supreme Court took a second look at the record, redetermined the facts and issues, and modified its original decision.

Facts

On the afternoon of December 21, 1993, Moyco, then a bank officer of the bank's Legal Department, told Jesus Pagobayan, a bookkeeper, that he wanted to return what was left of the amount he had encashed from a previously terminated time deposit. Pagobayan asked how much, and Moyco answered twenty four. Pagobayan then got the cash from Moyco, without counting it, and handed it to Frieda Jimenez, a teller. Believing that Moyco meant twenty four thousand United States dollars, Pagobayan prepared a certificate of time deposit reflecting that amount.

When Jimenez counted the contents of the envelope, she discovered that it contained only two thousand four hundred United States dollars. Moyco, however, insisted on getting twenty four thousand dollars. The records clearly showed that Moyco had in fact deposited only two thousand four hundred dollars. Yet, because Moyco was the Vice President and Manager of the Legal Department and a long time depositor, the defendants tended to be lax and did not observe the bank's standard operating procedures relative to the deposit and issuance of a certificate of time deposit.

In its original decision, the Supreme Court had ordered the defendants to pay Moyco the total amount due, the stipulated interest, legal interest, attorney's fees of one hundred thousand pesos, and costs of suit of eleven thousand five hundred eighty nine pesos and seventy centavos. On reconsideration, the Court found that Moyco knew he had deposited only two thousand four hundred dollars but insisted on claiming twenty four thousand dollars.

Issues

• Whether or not the Supreme Court may reconsider and correct its own judgment before it becomes final.
• Whether or not Moyco, who knew he had deposited only two thousand four hundred dollars but claimed twenty four thousand dollars, came to court with clean hands.
• Whether or not the award of attorney's fees and costs of suit in favor of Moyco should be deleted.
• Whether or not the award of stipulated and legal interest in favor of Moyco remains proper despite the bank's own failure to observe its standard operating procedures.

Applicable Provisions

The decision does not quote any statutory provision. It rests on settled jurisprudence and on the equitable maxim that those who come to court seeking equity must come with clean hands, which the Court states as follows:

Those who comes to court seeking equity must come with clean hands.

This maxim bears on the case because it is the ground for denying Moyco the equitable awards of attorney's fees and costs.

Ruling

On the first issue, the Court held that the granting of a motion for reconsideration of a judgment is addressed to the sound discretion of the court. Any court discovering an error in its judgment before it becomes final may, upon its own motion or that of the parties, correct such error in order to do justice between or among the parties, for court litigations are primarily for the search of truth and justice, and one of the incidental powers of the court is to amend its judgment so as to make it conformable to justice.

On the second issue, the Court found that Moyco knew he had deposited only two thousand four hundred dollars but insisted on claiming twenty four thousand dollars. It stressed that Moyco was not an ordinary rank and file employee but was the Vice President and Manager of the bank's Legal Department. The Court concluded that Moyco did not come to court with clean hands and should not unduly benefit from the case.

On the third issue, the Court deleted the award of attorney's fees of one hundred thousand pesos and the costs of suit of eleven thousand five hundred eighty nine pesos and seventy centavos.

On the fourth issue, the Court held that the defendants, as bank officers and employees, are tasked to ensure that all policies and procedures are strictly followed since banking is imbued with public interest. Their error started the whole legal controversy. Hence, the award of the stipulated interest of three and six hundred twenty five thousandths percent and the twelve percent interest remained proper.

Doctrine

A court may, on its own motion or that of the parties, correct an error in its judgment before it becomes final, in order to do justice between the parties, because litigation is primarily a search for truth and justice. A litigant who comes to court seeking equity must come with clean hands; one who knowingly claims more than he deposited is not entitled to the equitable awards of attorney's fees and costs. Bank officers and employees are tasked to ensure that all policies and procedures are strictly followed, since banking is imbued with public interest, and their failure that starts the controversy does not excuse them from paying stipulated and legal interest.

Disposition

The Supreme Court granted the motion for reconsideration, modified its original decision by deleting the award of attorney's fees and costs of suit, and affirmed all other dispositions not so modified.

Remember This

Memorize the line that those who come to court seeking equity must come with clean hands, and that a court may correct its own judgment before finality to do justice. Examiners use this case to test the clean hands doctrine and the power of a court to reconsider its own decision.