Mellon Bank Vs Magsino

Mellon Bank vs Magsino, et al.
(190 SCRA 633)
Keywords: Mistake in transfer of funds; misappropriation; election of remedies
Summary: Petitioner Mellon Bank made a mistake in transferring $1M to Private

respondent 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 CFI in the Philippines.
RTC dimissed the case. Mellon then filed the instant petition for certiorari.
Doctrine: Election of Remedies; The purpose of the doctrine of election of remedies is

not to prevent recourse to any remedy, but to prevent double-redress for a single
wrong.—In its broad sense, 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. As a technical rule of procedure, the
purpose of the doctrine of election of remedies is not to prevent recourse to any
remedy, but 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. However, when a certain state of facts under the law entitles a
party to alternative remedies, both founded upon the identical state of facts, these
remedies are not considered inconsistent remedies. In such case, the invocation of
one remedy is not an election which will bar the other, unless the suit upon the
remedy first invoked shall reach the stage of final adjudication or unless by the
invocation of the remedy first sought to be enforced, the plaintiff shall have gained
an advantage thereby or caused detriment or change of situation to the other. It must
be pointed out that ordinarily, election of remedies is not made until the judicial
proceedings has gone to judgment on the merits.
Facts: Dolores Ventosa requested the transfer of $1K from the First National Bank in
USA to private respondent Victoria 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$1M instead of US$1K. Hence, Manufacturers Hanover Bank transferred 1 million
to the Prudential Bank for the account of Javier. Javier then appropriated the amount
with the help of the other respondents. Javier opened new dollar accounts in the
Prudential Bank and deposited $999,943.70. Immediately, Victoria Javier and her
husband, Melchor Javier, Jr., made withdrawals from the account, deposited them in
several banks only to withdraw them later in an apparent plan to conceal, "launder"
and dissipate the erroneously sent amount.
Further, it appears that Melchor Javier, Jr. had requested Jose Marquez, a realtor, to
look for properties for sale in the United States. Marquez offered a 160-acre lot in the
Mojave desert in California City which was owned by Honorio Poblador, Jr. Javier,
without having seen the property, agreed to buy it for US$437,405 although it was
actually appraised at around $38,500. Consequently, as Poblador's agent, Marquez
executed in Makati a deed of absolute sale in favor of the Javiers and had the
document notarized in Manila before an associate of Poblador. Marquez executed
another deed of sale indicating receipt of the purchase price and sent the deed to the
Kern County Registrar in California for registration.
Mellon Bank filed a complaint in the Superior Court of California against Melchor
Javier et.al. Mellon Bank also filed in the CFI complaint against the Javier spouses,
Honorio Poblador, Jr., Domingo L. Jhocson, Jr., Jose Marquez, Roberto Garino, Elnor
Investment Co., Inc. F.C. Hagedom & Co, Inc. and Paramount Finance Corporation.
One of the aversions pf Mellon Bank is that because of defendants' knowledge of
Mellon Bank's mistake and inadvertence and their use of the funds to purchase the
property, they and "each of them are involuntary or constructive trustees of the real
property and of any profits therefrom, with a duty to convey the same to plaintiff
forthwith." It prayed that the defendants and each of them be declared as holders of
the property in trust for the plaintiff; that defendants be compelled to transfer legal
title and possession of the property to the plaintiff;
One of the defendants, Paramount Finance Corporation, which is not a party to the
California case, thereafter filed its memorandum raising the matter of "election of
remedies". It averred that inasmuch as the Mellon Bank had filed in California an action to
impose constructive trust on the California property and to recover the same, Mellon Bank
can no longer try to regain the purchase price of the same property through Civil Case No.
26899. The other defendants adopted Paramount's stand.
The RTC dismissed the case for lack of cause of action. Subsequently Mellon's 2
Motions for Reconsideration were denied by the RTC. The Court is of the view that
in cases where money held in trust was diverted by the trustee, under the "rule of
trust pursuit" the beneficiary "may elect whether to accept the trust estate in its new
form or hold the trustee responsible for it in its original condition," and that "an
election to pursue one remedy waives and bars pursuit of any inconsistent remedy."
The instant complaint among others is for the recovery of the purchase price of the
Kern property as held in trust for the plaintiff while in the California case the
plaintiff maintains that the Kern property is held in trust for the plaintiff, which
positions are inconsistent with each other. Neither can the plaintiff now abandon his
complaint for the recovery of the Kern property and pursue his complaint for the
recovery of the purchase price of said property for "if he has first sought to follow the
res, the plaintiff cannot thereafter hold the trustee personally responsible" and "when
once there has been an election to do one of two things, you cannot retract it and do
the other thing. The election once made is finally made."
Hence, Mellon Bank filed the instant petition for certiorari claiming that the RTC
resolution dismissing the case are void for being unlawful and oppressive exercises
of legal authority, subversive of the fair administration of justice,and in excess of
jurisdiction.
Issue: WON the principle of election of remedies bars recovery of Mellon Bank?
Ruling: 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.
Further, 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.

Mellon Bank Vs Magsino

Uploaded by

Copyright:

Available Formats

Mellon Bank Vs Magsino

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Mellon Bank Vs Magsino

Uploaded by

Copyright:

Available Formats

Mellon Bank vs Magsino, et al.

(190 SCRA 633)

Keywords: Mistake in transfer of funds; misappropriation; election of remedies

Summary: Petitioner Mellon Bank made a mistake in transferring $1M to Private

Doctrine: Election of Remedies; The purpose of the doctrine of election of remedies is

You might also like

Pfad - The Proxy pFad of © 2024 Garber Painting. All rights reserved.