GR 191458; (July, 2017) (Digest)
G.R. No. 191458 July 3, 2017
CHINATRUST (PHILS.) COMMERCIAL BANK, Petitioner, vs. PHILIP TURNER, Respondent.
FACTS
Respondent Philip Turner, a British national, instructed petitioner Chinatrust Bank to telegraphically transfer US$430 to a travel agency’s account in Egypt, paying a US$30 service fee. The funds were debited and remitted through correspondent banks to Citibank Cairo. Citibank Cairo later sent a discrepancy notice, stating the beneficiary name “Min Travel/Esmat Azmy” did not match its records. Chinatrust relayed this to Turner. Despite this, Citibank Cairo subsequently confirmed it had credited the funds to the account of “Min Travel” days earlier. Turner, having canceled his trip, demanded a refund from Chinatrust, which refused, stating the funds were already credited to the beneficiary. Turner filed a complaint for refund and damages.
The Metropolitan Trial Court dismissed the complaint, finding Chinatrust fulfilled its obligation by transmitting the funds, which were credited. The Regional Trial Court reversed, holding Chinatrust negligent for failing to present the discrepancy notice as evidence and for not mitigating Turner’s distress during the six-week period of uncertainty. It ordered Chinatrust to refund the amounts and pay damages. The Court of Appeals affirmed this decision.
ISSUE
Whether the Court of Appeals erred in affirming the Regional Trial Court’s finding that Chinatrust was negligent and liable for damages.
RULING
The Supreme Court granted the petition and reversed the Court of Appeals. The core legal principle applied is that issues not raised in the pleadings or during trial cannot be raised for the first time on appeal. The Regional Trial Court, acting as an appellate court, committed reversible error by basing its finding of negligence on Chinatrust’s alleged failure to present the “discrepancy notice” as evidence. This specific issue of evidentiary insufficiency regarding the notice was never raised by Turner in his pleadings or position papers before the Metropolitan Trial Court, which conducted the case under the Rule on Summary Procedure. His arguments were confined to Chinatrust’s alleged failure to secure a refund.
Since the issue of the missing discrepancy notice was not properly litigated, the Regional Trial Court had no authority to consider it. Its decision introduced a new factual issue on appeal, violating the fundamental rules of fair play and due process. The Supreme Court found the Metropolitan Trial Court’s factual conclusions—that Chinatrust performed its contractual duty and the funds reached the beneficiary—were supported by evidence, including Citibank Cairo’s confirmations. No negligence was established based on the issues properly presented. Consequently, Chinatrust incurred no liability for damages.