Metrobank v.

Absolute Management (2013) Karl Salvador

Law 125 – Redemial Law 2 (Civil Procedure) A2025

Case Name Metrobank v. Absolute Management (2013)

Topic Kinds of Pleadings > Third (fourth, etc.)-party complaints

Case No. | Date G.R. No. 170498 | January 9, 2013

Petitioner/s Metropolitan Bank & Trust Company

Respondent/s Absolute Management Corporation

Ponente Brion, J.

Case Summary

Chua, AMC’s General Manager, died and a special proceeding for the settlement of his estate
was commenced. SHCI filed a complaint for a sum of money against AMC alleging that it
made advance payments covered by Metrobank checks, and it paid these amounts to Chua.
AMC filed an Answer with counterclaims against SHCI and a third-party complaint against
Metrobank. Metrobank filed several motions, which includes a Motion for leave to admit
fourth-party complaint against Chua’s estate alleging that it should reimburse Metrobank
in case it would be held liable in the third-party complaint filed against it by AMC. The RTC
denied the motion and ruled that the claim should be filed in the Special Proceedings of
Chua’s estate, not before the RTC as a fourth-party complaint. The CA affirmed the RTC.

W/N Metrobank’s claim should be filed in the Special Proceedings settling Chua’s estate:
Yes

The SC ruled that Metrobank's claim in its fourth-party complaint against Chua's estate is
based on quasi-contract, specifically solutio indebiti. Also, Metrobank's fourth-party
complaint is a contingent claim because it depends on the possibility that Metrobank would
be adjudged liable to AMC, which is a future event that may or may not happen. Both belong
to the category of claims against a deceased person that should be filed under Sec. 5, Rule
86, and not under Sec. 11, Rule 6 (see doctrine). Hence, it should be filed in the Special
Proceedings settling Chua's estate, and not through a fourth-party complaint.

Decision

The SC denied the petition. It affirmed the CA and RTC in denying the motion for leave to
admit fourth-party complaint.

Doctrine

• Under the statutory construction principle of lex specialis derogat generali, specific
provisions of Section 5, Rule 86 of the Rules of Court prevail over the general provisions
of Section 11, Rule 6 of the Rules of Court for claims against a deceased person. Sec. 11,
Rule 6 only applies suppletorily to Sec. 5, Rule 86.
• Sec. 5, Rule 86 applies to money claims against the estate/settlement of the estate of the
deceased persons.
• Sec. 11, Rule 6 applies to ordinary civil actions.

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Metrobank v. Absolute Management (2013) Karl Salvador
Law 125 – Redemial Law 2 (Civil Procedure) A2025

Relevant Facts
• Chua died in 1999, and a special proceeding for the settlement of his estate was
commenced before the RTC of Pasay City.
• Sherwood Holdings Corporation, Inc. (SHCI) made demands for a sum of money
against Absolute Management Corporation (AMC) after Chua’s death.
o SHCI alleged that it made advance payments to AMC covered by Metrobank
Checks. The checks were all crossed and made payable to AMC.
o They were given to Chua, AMC’s General Manager, in 1998.
• AMC claimed that these transactions could not be found in its records.
• SHCI later filed a complaint for a sum of money against AMC.
• AMC filed its Answer with counterclaims against SHCI and a third-party complaint
against Metrobank.
o Upon investigation, AMC discovered that Chua received from SHCI 18
Metrobank checks all payable to AMC. These checks were all crossed or “for
payee’s account only.”
o AMC averred that it had no knowledge of Chua’s transactions with SHCI and it
did not receive any money from the latter. It also asked the RTC to hold
Metrobank liable for the subject checks in case it is adjudged liable to SHCI.
• Metrobank filed: (1) Motion for bill of particulars, (2) Motion to dismiss against AMC
because it engaged in forum shopping, (3) Answer alleging (see below), and (4) Motion
for leave to admit fourth-party complaint against Chua’s estate alleging that it should
reimburse Metrobank in case it would be held liable in the third-party complaint filed
against it by AMC.
o Metrobank admitted that it deposited the checks in question to the account of
Ayala Lumber and Hardware (ALH), a sole proprietorship Chua owned.
o The deposit was allegedly done with the knowledge and consent of AMC.
▪ Chua assured that the arrangement for the handling of the checks was
with AMC’s consent.
▪ Chua submitted documents showing his position and interest in AMC.
▪ Chua’s records show that the proceeds of the checks were remitted to
AMC.
o AMC is estopped from questioning Chua’s authority to deposit the checks in
ALH’s account.
o AMC was grossly negligent by giving Chua unbridled control in managing AMC.
• RTC: The RTC denied Metrobank’s Motion for leave to admit fourth-party complaint
against Chua’s estate. Metrobank’s claim should have been filed in the Special
Proceedings of Chua’s estate, not before the RTC as a fourth-party complaint.
o Metrobank’s allegation in the fourth-party complaint is a quasi-contract.
o Quasi-contracts are implied contracts that must be included in claims required
to be filed with the judicial settlement of the deceased’s estate under Sec. 5,
Rule 86.
o The RTC, acting in the exercise of its general jurisdiction and hearing an
ordinary action, does not have the authority to resolve matters pertaining to
special proceedings.
• CA: The CA affirmed the RTC’s ruling.

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 Metrobank v. Absolute Management (2013) Karl Salvador
Law 125 – Redemial Law 2 (Civil Procedure) A2025

Issue/s, Held and Ratio

1. W/N Metrobank’s claim should be filed in the Special Yes

Proceedings settling Chua’s estate, and not through a fourth-
party complaint:

Quasi-contracts are included in claims that should be filed under Sec. 5, Rule 86
• Quasi-contract: involves a juridical relation that the law creates on the basis of certain
voluntary, unilateral and lawful acts of a person, to avoid unjust enrichment.
• Leung Ben v. O’Brien: the term quasi-contract is included in the concept of “implied
contracts” as used in the ROC.
• Under Sec. 5, Rule 86, liabilities of the deceased arising from quasi-contracts should
be filed as claims in the settlement of his estate.

Metrobank’s fourth-party complaint is based on a quasi-contract

• Both the RTC and CA ruled that Metrobank’s claim against Chua’s estate is based on a
quasi-contract
• ITC, Metrobank’s fourth-party complaint is a quasi-contract called Solutio Indebiti.
o Solutio indebiti: arises when something is delivered through mistake to a
person who has no right to demand it. It obligates the latter to return what has
been received through mistake.
o Requisites: (1) something has been unduly delivered through mistake, (2)
something was received when there was no right to demand it.
• It fulfilled the first requisite when Metrobank acted in a manner akin to a mistake when
it deposited the AMC checks to ALH’s account.
o Because of Chua’s control over AMC’s operations, Metrobank assumed that the
checks payable to AMC could be deposited to ALH’s account.
• It fulfilled the second requisite since ALH had no right to demand and receive the
checks that were deposited to its account.
o Despite Chua's control over AMC and Ayala Lumber and Hardware, the two
entities are distinct, and checks exclusively and expressly payable to one cannot
be deposited in the account of the other.
• ALH, through its sole proprietor Chua, has to return the amount of these checks to
Metrobank.
• Note: The SC’s description of Metrobank's fourth-party complaint as a claim closely
analogous to solutio indebiti is only to determine the validity of the lower courts' orders
denying it. It is not an adjudication determining the liability of Chua's estate against
Metrobank. The appropriate trial court should still determine whether Metrobank has
a lawful claim against Chua's estate based on quasi-contract.

Also, Metrobank’s fourth-party complaint is a contingent claim, which falls

within the claims that should be filed under Sec. 5, Rule 86
• Metrobank’s fourth-party complaint is a contingent claim because it depends on the
possibility that Metrobank would be adjudged liable to AMC, which is a future event
that may or may not happen.
• The complaint is included in the claims falling under Sec. 5, Rule 86.

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 Metrobank v. Absolute Management (2013) Karl Salvador
Law 125 – Redemial Law 2 (Civil Procedure) A2025

o Sec. 5, Rule 86: Claims which must be filed under the notice. If not filed, barred;
exceptions. — All claims for money against the decedent, arising from contract,
express or implied, whether the same be due, not due, or contingent, all claims
for funeral expenses and expenses for the last sickness of the decedent, and
judgment for money against the decedent, must be filed within the time limited
in the notice.

Specific provisions of Section 5, Rule 86 of the Rules of Court prevail over

general provisions of Section 11, Rule 6 of the Rules of Court
• Under the statutory construction principle of lex specialis derogat generali, Section 5,
Rule 86 should prevail over the general provisions of Section 11, Rule 6.
o Sec. 5, Rule 86 applies to money claims against the estate/settlement of the
estate of the deceased persons.
o Sec. 11, Rule 6 applies to ordinary civil actions.
• Since the claims is against a deceased person, Sec. 5, Rule 86 should primarily govern.
Sec. 11, Rule 6 merely applies suppletorily to Sec. 5, Rule 86.
• Hence, the claim should have been filed in the Special Proceedings settling Chua’s
estate.

Ruling

WHEREFORE, premises considered, we hereby DENY the petition for lack of merit. The
decision of the Court of Appeals dated August 25, 2005, holding that the Regional Trial Court
of Quezon City, Branch 80, did not commit grave abuse of discretion in denying Metropolitan
Bank & Trust Company's motion for leave to admit fourth-party complaint is AFFIRMED.
Costs against Metropolitan Bank & Trust Company.

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