Source: http://lawlibrary.chanrobles.com/index.php?option=com_content&view=article&id=81189:188363&catid=1567&Itemid=566
Timestamp: 2019-04-19 10:33:52+00:00

Document:
ALLIED BANKING CORPORATION, Petitioner, v. BANK OF THE PHILIPPINE ISLANDS, Respondents.
A collecting bank is guilty of contributory negligence when it accepted for deposit a post-dated check notwithstanding that said check had been cleared by the drawee bank which failed to return the check within the 24-hour reglementary period.
Petitioner Allied Banking Corporation appeals the Decision1 dated March 19, 2009 of the Court of Appeals (CA) in CA-G.R. SP No. 97604 which set aside the Decision2 dated December 13, 2005 of the Regional Trial Court (RTC) of Makati City, Branch 57 in Civil Case No. 05-418.
However, it was petitioner who filed a complaint6 before the Arbitration Committee, asserting that respondent should solely bear the entire face value of the check due to its negligence in failing to return the check to petitioner within the 24-hour reglementary period as provided in Section 20.17 of the Clearing House Rules and Regulations8 (CHRR) 2000. Petitioner prayed that respondent be ordered to reimburse the sum of P500,000.00 with 12% interest per annum, and to pay attorney’s fees and other arbitration expenses.
In its Answer with Counterclaims,9 respondent charged petitioner with gross negligence for accepting the post-dated check in the first place. It contended that petitioner’s admitted negligence was the sole and proximate cause of the loss.
On December 8, 2004, the Arbitration Committee rendered its Decision10 in favor of petitioner and against the respondent. First, it ruled that the situation of the parties does not involve a “Ping-Pong” controversy since the subject check was neither returned within the reglementary time or through the PCHC return window, nor coursed through the clearing facilities of the PCHC.
(c) The sum of P2,090.00 as and by way of reimbursement of filing fees, plus the cost of suit.
On May 13, 2005, respondent filed a petition for review18 in the RTC claiming that PCHC erred in constricting the return of a post-dated check to Section 20.1, overlooking the fact that Section 20.3 is also applicable which provision necessarily contemplates defects that are referred to in Section 20.1 as both sections are subsumed under the general provision (Section 20) on the return of regular items. Respondent also argued that assuming it to be liable, the PCHC erred in holding it solely responsible and should bear entirely the consequent loss considering that while respondent may have the “last” opportunity in proximity, it was petitioner which had the longest, fairest and clearest chance to discover the mistake and avoid the happening of the loss. Lastly, respondent assailed the award of attorney’s fees, arguing that PCHC’s perception of “malice” against it and misuse of the clearing machinery is clearly baseless and unfounded.
These contradict petitioner’s belated contention that it discovered the defect only after the lapse of the reglementary period. What the evidence on record discloses is that petitioner received the check on October 10, 2002, that it was promptly sent for clearing, that through inadvertence, it did not notice that the check was postdated. Petitioner did not even state when it discovered the defect in the subject check.
With the denial of its motion for partial reconsideration, respondent elevated the case to the CA by filing a petition for review under Rule 42 of the 1997 Rules of Civil Procedure, as amended.
WHEREFORE, the decision of the Regional Trial Court of Makati City (Branch 57) dated December 13, 2005 is ANNULLED and SET ASIDE and judgment is rendered ordering petitioner to pay respondent Allied Banking Corporation the sum of P100,000.00 plus interest thereon at the rate of 6% from July 10, 2003, which shall become 12% per annum from finality hereof, until fully paid, aside from costs.
Its motion for reconsideration having been denied by the CA, petitioner is now before the Court seeking a partial reversal of the CA’s decision and affirmance of the December 13, 2005 Decision of the RTC.
Essentially, the two issues for resolution are: (1) whether the doctrine of last clear chance applies in this case; and (2) whether the 60-40 apportionment of loss ordered by the CA was justified.
As well established by the records, both petitioner and respondent were admittedly negligent in the encashment of a check post-dated one year from its presentment.
Petitioner argues that the CA should have sustained PCHC’s finding that despite the antecedent negligence of petitioner in accepting the post-dated check for deposit, respondent, by exercising reasonable care and prudence, might have avoided injurious consequences had it not negligently cleared the check in question. It pointed out that in applying the doctrine of last clear chance, the PCHC cited the case of Philippine Bank of Commerce v. Court of Appeals21 which ruled that assuming the bank’s depositor, private respondent, was negligent in entrusting cash to a dishonest employee, thus providing the latter with the opportunity to defraud the company, it cannot be denied that petitioner bank had the last clear opportunity to avert the injury incurred by its client, simply by faithfully observing their self-imposed validation procedure.
Petitioner underscores respondent’s failure to observe clearing house rules and its own standard operating procedure which, the PCHC said constitute further negligence so much so that respondent should be solely liable for the loss. Specifically, respondent failed to return the subject check within the 24-hour reglementary period under Section 20.1 and to institute any formal complaint within the contemplation of Section 20.3 of the CHRR 2000. The PCHC likewise faulted respondent for not making follow-up calls or taking any other action after it initially attempted, without success, to contact by telephone the drawer of the check, and clearing the check despite such lack of confirmation from its depositor in violation of its own standard procedure for checks involving large amounts.
In this case, the evidence clearly shows that the proximate cause of the unwarranted encashment of the subject check was the negligence of respondent who cleared a post-dated check sent to it thru the PCHC clearing facility without observing its own verification procedure. As correctly found by the PCHC and upheld by the RTC, if only respondent exercised ordinary care in the clearing process, it could have easily noticed the glaring defect upon seeing the date written on the face of the check “Oct. 9, 2003”. Respondent could have then promptly returned the check and with the check thus dishonored, petitioner would have not credited the amount thereof to the payee’s account. Thus, notwithstanding the antecedent negligence of the petitioner in accepting the post-dated check for deposit, it can seek reimbursement from respondent the amount credited to the payee’s account covering the check.
Apportionment of damages between parties who are both negligent was followed in subsequent cases involving banking transactions notwithstanding the court’s finding that one of them had the last clear opportunity to avoid the occurrence of the loss.
In the case at bar, petitioner cannot evade responsibility for the loss by attributing negligence on the part of respondent because, even if we concur that the latter was indeed negligent in pre-signing blank checks, the former had the last clear chance to avoid the loss. To reiterate, petitioner’s own operations manager admitted that they could have called up the client for verification or confirmation before honoring the dubious checks. Verily, petitioner had the final opportunity to avert the injury that befell the respondent. x x x Petitioner’s negligence has been undoubtedly established and, thus, pursuant to Art. 1170 of the NCC, it must suffer the consequence of said negligence.
It bears stressing that “the diligence required of banks is more than that of a Roman pater familias or a good father of a family. The highest degree of diligence is expected,”36 considering the nature of the banking business that is imbued with public interest. While it is true that respondent’s liability for its negligent clearing of the check is greater, petitioner cannot take lightly its own violation of the long-standing rule against encashment of post-dated checks and the injurious consequences of allowing such checks into the clearing system.
Petitioner repeatedly harps on respondent’s transgression of clearing house rules when the latter resorted to direct presentment way beyond the reglementary period but glosses over its own negligent act that clearly fell short of the conduct expected of it as a collecting bank. Petitioner must bear the consequences of its omission to exercise extraordinary diligence in scrutinizing checks presented by its depositors.
Assessing the facts and in the light of the cited precedents, the Court thus finds no error committed by the CA in allocating the resulting loss from the wrongful encashment of the subject check on a 60-40 ratio.
WHEREFORE, the petition for review on certiorari is DENIED. The Decision dated March 19, 2009 of the Court of Appeals in CA-G.R. SP No. 97604 is hereby AFFIRMED.
1Rollo, pp. 27-33-A. Penned by Associate Justice Edgardo P. Cruz with Associate Justices Vicente S.E. Veloso and Ricardo R. Rosario concurring.
2 Id. at 56-61. Penned by Judge Reinato G. Quilala.
3 Id. at 27, 270, 276-279, 314.
5 Id. at 28, 240-242, 360.
8 Effective October 2, 2000. (Board Resolution No. 10-2000).
20 Id. at 33 to 33-A.
21 336 Phil. 667, 681 (1997).
22Bustamante v. Court of Appeals, 271 Phil. 633, 641-642 (1991).
23 J. Cezar S. Sangco, PHILIPPINE LAW ON TORTS AND DAMAGES, 1993 Edition, Vol. I, p. 77.
24The Consolidated Bank & Trust Corporation v. Court of Appeals, 457 Phil. 688, 712 (2003), citing Philippine Bank of Commerce v. Court of Appeals, supra note 21, at 680.
25 Supra note 23, at 76.
28 Bank of the Philippine Islands v. Court of Appeals, G.R. No. 102383, November 26, 1992, 216 SCRA 51.
30 G.R. No. 150228, July 30, 2009, 594 SCRA 301.
32 G.R. No. 173259, July 25, 2011, 654 SCRA 333.
34Philippine National Bank v. Cheah Chee Chong, G.R. Nos. 170865 & 170892, April 25, 2012, 671 SCRA 49, 64, citing Valenzuela v. Court of Appeals, 323 Phil. 374, 388 (1996).
36Philippine National Bank v. Cheah Chee Chong, supra note 34, at 62, citing Philippine Savings Bank v. Chowking Food Corporation, G.R. No. 177526, July 4, 2008, 557 SCRA 318, 330; Bank of the Philippine Islands v. Court of Appeals, 383 Phil. 538, 554 (2000); Philippine Bank of Commerce v. Court of Appeals, supra note 21, at 681; and Philippine Commercial International Bank v. Court of Appeals, 403 Phil. 361, 388 (2001).

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