ALLIED BANKING CORPORATION, PETITIONER, VS. COURT OF APPEALS AND JOSELITO Z. YUJUICO, RESPONDENTS.

What started as a simple collection suit and which developed into
an intricate question of procedure is the focus of this petition for review on certiorari.

The present petition seeks the reversal of the decision of the
Court of Appeals in CA-G.R. SP No. 14759 dated September 5, 1988 entitled
“Joselito Z. Yujuico vs. Hon. Domingo D. Panis, RTC Judge of Manila Branch
LXI and Allied Banking Corp.,”^[1]
and the resolution dated November 9, 1988 denying petitioner’s motion for
reconsideration of the said decision.^[2]

The antecedent facts of the case are as follows:

On April 1, 1976, private respondent Joselito Z. Yujuico obtained
a loan from the General Bank and Trust Company (GENBANK) in the amount of Five
Hundred Thousand pesos (P500,000.00), payable on or before April 1, 1977. As evidence thereof, private respondent
issued a corresponding promissory note in favor of GENBANK. At the time private respondent incurred the
obligation, he was then a ranking officer of GENBANK and a member of the family
owning the controlling interest in the said bank.

On March 25, 1977, the Monetary Board of the Central Bank issued
Resolution No. 675 forbidding GENBANK from doing business in the
Philippines. This was followed by
Resolution No. 677 issued by the Monetary Board on March 29, 1977 ordering the
liquidation of GENBANK.

It appears that in a Memorandum of Agreement dated May 9, 1977
executed by and between Allied Banking Corporation (ALLIED) and Arnulfo
Aurellano as Liquidator of GENBANK, ALLIED acquired all the assets and assumed
the liabilities of GENBANK, which includes the receivable due from private
respondent under the promissory note.

Upon failing to comply with the obligation under the promissory
note, petitioner ALLIED, on February 7, 1979, filed a complaint against private
respondent for the collection of a sum of money. This case was docketed as Civil Case No. 121474 before the then
Court of First Instance of Manila (now Regional Trial Court).

Sometime in 1987 and in the course of the proceedings in the
court below, private respondent, then defendant in the court below, filed a
Motion to admit Amended/Supplemental Answer and Third-Party Complaint. Private respondent sought to implead the
Central Bank and Arnulfo Aurellano as third-party defendants. It was alleged in the third-party complaint
that by reason of the tortious interference by the Central Bank with the
affairs of GENBANK, private respondent was prevented from performing his
obligation under the loan such that he should not now be held liable thereon.

Acting on the motion and on the opposition filed thereto, the
Regional Trial Court through the Hon. Judge Felix B. Mintu issued an order
dated August 13, 1987 denying the admission of the third-party complaint but
admitting private respondent’s amended/supplemental answer.

When the case was re-raffled to Branch 61 of the Regional Trial
Court of Manila, presiding Judge Domingo D. Panis, on February 29, 1988,
reiterated the order denying the admission of private respondent’s third-party
complaint and admitting the amended/supplemental answer. When both parties filed their respective
motions for partial reconsideration, the Hon. Judge Panis issued an order dated
April 18, 1988 denying both motions.

Thereupon, private respondent filed with the Court of Appeals a
petition for certiorari^[3]
on June 1, 1988 questioning the orders of Hon. Judge Panis dated February 29,
1988 denying private respondent’s motion to admit third-party complaint, and
April 18, 1988 denying private respondent’s motion for partial reconsideration
of the February 29, 1988 order.

On September 5, 1988, the Court of Appeals rendered the assailed
decision, the dispositive portion of which reads:

“WHEREFORE, finding grave abuse of discretion on the part of
the respondent Judge, the Order of February 29, 1988 as well as that of April
18, 1988 insofar as it denies petitioner’s motion to admit his third party
complaint, is hereby declared null and void. Respondent judge is hereby ordered to admit the proposed third-party
complaint. Cost de oficio.

SO ORDERED.”^[4]

A motion for reconsideration thereof filed by petitioner was
denied in a resolution dated November 9, 1988.

Petitioner assigns the following errors:

I

RESPONDENT COURT OF APPEALS SERIOUSLY ERRED
IN HOLDING THAT HON. JUDGE PANIS COMMITTED GRAVE ABUSE OF DISCRETION IN DENYING
ADMISSION TO PRIVATE RESPONDENT’S THIRD-PARTY COMPLAINT, CONSIDERING THAT:

A.   PRIVATE RESPONDENT’S PROPOSED THIRD-PARTY
COMPLAINT DOES NOT STATE A CAUSE OF ACTION IN RESPECT OF PETITIONER’S CLAIM.

B.   THE ALLEGED CAUSE OF ACTION SET FORTH IN
PRIVATE RESPONDENT’S PROPOSED THIRD-PARTY COMPLAINT HAS ALREADY PRESCRIBED.

C.  THE ADMISSION OF PRIVATE RESPONDENT’S PROPOSED
THIRD-PARTY COMPLAINT WILL ONLY CAUSE FURTHER UNNECESSARY DELAY IN THE
DISPOSITION OF THE CASE OF PETITIONER AGAINST PRIVATE RESPONDENT.

II

CONTRARY TO THE RULING OF RESPONDENT COURT
OF APPEALS, THE RULE PRESCRIBING THAT DEFENSES NOT RAISED IN THE COURT BELOW
CANNOT BE RAISED FOR THE FIRST TIME ON APPEAL IS NOT APPLICABLE TO SPECIAL
CIVIL ACTIONS OF CERTIORARI.^[5]

From the foregoing assignment of errors, petitioner would like Us
to resolve the following issues: (a) Is
there a proper ground to admit the third-party complaint?; and (b) assuming
that there is, has the cause of action under the third-party complaint
prescribed?

A third-party complaint is a procedural device whereby a
“third-party” who is neither a party nor privy to the act or deed
complained of by the plaintiff, may be brought into the case with leave of
court, by the defendant, who acts as third-party plaintiff to enforce against
such third-party defendant a right for contribution, indemnity, subrogation or
any other relief, in respect of the plaintiff’s claim.^[6]
The third party complaint is actually independent of, separate and distinct
from the plaintiff’s complaint. Such
that, were it not for this provision of the Rules of Court, it would have to be
filed separately from the original complaint by the defendant against the
third-party.^[7]

After going through the records of this case, this Court finds
that the third-party plaintiff’s claim is premised not only on what was alleged
as the tortious interference by the third-party defendants with the affairs of
GENBANK. More importantly, attention
should have been focused on the fact that this allegation is wedded to a decision
rendered by the Court of Appeals in CA-G.R. CV No. 03642 which affirmed the
decision of the Regional Trial Court in Special Proceedings No. 107812.^[8]
We quote the pertinent portion of the affirmed decision, to wit:

“Based on the foregoing facts, the Court finds the
liquidation of GBTC as embodied in Annex “A” and Annex
“B” of the petition, which merely adopted the bid of the Lucio Tan
group as the liquidation plan of GBTC, as plainly arbitrary and made in bad
faith and therefore the same must be annulled and set aside. xxx.”^[9]
(Emphasis supplied).

This decision, which declared as null and
void the liquidation of GENBANK, prompted private respondent herein to file a
third-party complaint against the Central Bank and Arnulfo Aurellano on the
theory that he has a right to proceed against them in respect of ALLIED’s
claim. In the words of private
respondent, he “[s]eeks to transfer liability for the default imputed
against him by the petitioner to the proposed third-party defendants because of
their tortious acts which prevented him from performing his abligations.^[10]
Thus, if at the outset the issue appeared to be a simple maker’s liability on a
promissory note, it became complex by the rendition of the aforestated
decision.

As early as Capayas vs. Court of First Instance of Albay,^[11]
this Court had already outlined the tests to determine whether the claim for
indemnity in a third-party claim is “in respect of plaintiff’s
claim.” They are: (a) whether it
arises out of the same transaction on which the plaintiff’s claim is based, or
whether the third-party’s claim, although arising out of another or different
contract or transaction, is connected with the plaintiff’s claim; (b) whether
the third-party defendant would be liable to the plaintiff or to the defendant for
all or part of the plaintiff’s claim against the original defendant, although
the third-party defendant’s liability arises out of another transaction; or (c)
whether the third-party defendant may assert any defense which the third-party
plaintiff has, or may have against plaintiff’s claim.^[12]

While the claim of third-party plaintiff, private respondent
herein, does not fall under test (c), there is no doubt that such claim can be
accommodated under tests (a) and (b) abovementioned. Whether or not this Court agrees with the petitioner’s assertion
that the claim does not “arise out of the same transaction on which the
plaintiff’s claim is based,” it cannot be denied that the third-party’s
claim (although arising out of another or different contract or transaction) is
connected with plaintiff’s claim. The judgment of the Court of Appeals in CA-G.R. CV No. 03642 is the
substantive basis of private respondent’s proposed third-party complaint. Put differently, there is merit in private
respondent’s position that if held liable on the promissory note, they are
seeking, by means of the third-party complaint, to transfer unto the
third-party defendants liability on the note by reason of the illegal
liquidation of GENBANK which, in the first place, was the basis for the
assignment of the promissory note. If
there was any confusion at all on the ground/s alleged in the third-party
complaint, it was the claim of third-party plaintiff for other damages in
addition to any amount which he may be called upon to pay under the original
complaint.^[13]
While these allegations in the proposed third-party complaint may cause delay
in the disposition of the main suit, it cannot, however, be outrightly asserted
that it would not serve any purpose.

It is one thing to say that a third-party defendant may be held
liable to indemnify or reimburse the third-party plaintiff “in respect of
plaintiff’s claim,” but it is quite another to state that a third-party
defendant may be held liable to a third-party plaintiff. The second instance may not carry with it
the necessary connection to the main cause of action and, therefore, is not
allowed by the Rules for it introduces a controversy that is entirely foreign
to and distinct from the main cause. The first instance is allowable and should be allowed if it will help in
clarifying in a single proceeding the multifarious issues involved arising from
a single transaction.

It is this Court’s pronouncement that the first instance is
applicable in the present situation.

As to the issue of prescription, it is the position of petitioner
that the cause of action alleged in the third-party complaint has already
prescribed.^[14]
Being founded on what was termed as “tortious interference,”
petitioner asserts that under the applicable provisions of the Civil Code on
quasi-delict^[15]
the action against third-party defendants should have been filed within four
(4) years from the date the cause of action accrued. On the theory that the cause of action accrued on March 25, 1977,
the date when the Monetary Board ordered GENBANK to desist from doing business
in the Philippines, petitioner maintains that the claim should have been filed
at the latest on March 25, 1981.^[16]
On the other hand, private respondent relies on the “Doctrine of
Relations” or “Relations Back Doctrine”^[17]
to support his claim that the cause of action as against the proposed
third-party defendant accrued only on December 12, 1986 when the decision in
CA-G.R. CV No. 03642 became final and executory. Thus, it is contended that while the third party complaint was
filed only on June 17, 1987, it must be deemed to have been instituted on
February 7, 1979 when the complaint in the case was filed.

There can be no question in this case that the action for damages
instituted by private respondent arising from the quasi-delict or alleged
“tortious interference” should be filed within four (4) years from
the day the cause of action accrued.^[18]

In the case of Español vs. Chairman, Philippine Veterans
Administration,^[19]
this Court ruled that it is from the date of the act or omission violative of
the right of a party when the cause of action arises and it is from this date
that the prescriptive period must be reckoned.

Thus, while technically the third party complaint in this case
may be admitted as above discussed, however, since the cause of action accrued
on March 25, 1980 when the Monetary Board ordered the General Bank to desist
from doing business in the Philippines while the third party complaint was
filed only on June 17, 1987, consequently, the action has prescribed. The third party complaint should not be
admitted.

WHEREFORE, the petition is GRANTED. The decision of the respondent Court of
Appeals dated September 5, 1988 and its resolution dated November 9, 1988
denying the motion for reconsideration filed by petitioner are hereby reversed
and set aside and declared null and void, and another judgment is hereby
rendered sustaining the orders of the trial court of February 29, 1988 and
April 18, 1988, denying the admission of the third party complaint. No pronouncement as to costs.

SO ORDERED.

Narvasa, (Chairman), Cruz, Griño-Aquino, and Medialdea, JJ., concur.

^[1]
Pages 42-49, Rollo; Justice Rodolfo A. Nocon was ponente, and
Justices Alfredo Marigomen and Fernando A. Santiago, concurring.

^[2]
Pages 51-57, Rollo.

^[3]
Docketed as CA-G.R. SP No. 14759.

^[4]
Page 48, Rollo.

^[5]
Page 18, Rollo.

^[6]
Section 12, Rule 6, Rules of Court; see also Annotations, 25 SCRA 651 (1968).

^[7]
Moran, Comments on the Rules of Court, 1979 ed., page 278.

^[8]
Page 43, Rollo.

^[9]
Page 55, Rollo.

^[10]
Page 66, Rollo.

^[11]
77 Phil 181 (1946).

^[12]
Ibid, page 183.

^[13]
Page 48. Records in CA-G.R. SP No.
14759.

^[14]
Pages 23-29, Rollo.

^[15]
Articles 1146 and 2176, Civil Code.

^[16]
Page 23, Rollo.

^[17]
That principle of law by which an act done at one time is considered by a
fiction of law to have been done at some antecedent period. It is a doctrine which, although of
equitable origin, has a well recognized application to proceedings at law; a
legal fiction invented to promote the ends of justice or to prevent injustice
and the occurrence of injuries where otherwise there would be no remedy.

The doctrine,
when invoked, must have connection with actual fact, must be based on some
antecedent lawful rights. It has also
been referred to as “the doctrine of relation back.” (2 CJS 1310)

^[18]
Article 1146, Civil Code; PauLan, et al. vs. Sarabia, et al., G.R.
L-10542, July 31, 1952.

^[19]
137 SCRA 314 (1985).