Republic of the
Supreme Court
FIRST DIVISION
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PHILIPPINE NATIONAL
BANK, |
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G.R. No. 170865 |
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Petitioner, |
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- versus - |
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SPOUSES CHEAH CHEE
CHONG |
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and OFELIA CAMACHO
CHEAH, |
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Respondents. |
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SPOUSES CHEAH CHEE
CHONG |
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G.R. No. 170892 |
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and OFELIA CAMACHO
CHEAH, |
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Petitioners, |
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Present: |
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LEONARDO-DE CASTRO, |
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- versus - |
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BERSAMIN, |
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VILLARAMA, JR., JJ. |
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PHILIPPINE NATIONAL
BANK, |
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Promulgated: |
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Respondent. |
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April 25, 2012 |
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D E C I S I O N
Law favoreth diligence, and
therefore, hateth folly and negligence.Wingates Maxim.
In
doing a friend a favor to help the latters friend collect the proceeds of a
foreign check, a woman deposited the check in her and her husbands dollar
account. The local bank accepted the
check for collection and immediately credited the proceeds thereof to said
spouses account even before the lapse of the clearing period. And just when the money had been withdrawn
and distributed among different beneficiaries, it was discovered that all
along, to the horror of the woman whose intention to accommodate a friends friend backfired, she
and her
bank
had dealt with a rubber check.
These
consolidated[1]
Petitions for Review on Certiorari filed by the Philippine National Bank
(PNB)[2] and by the spouses Cheah
Chee Chong and Ofelia Camacho Cheah (spouses Cheah)[3] both assail the August 22,
2005 Decision[4]
and December 21, 2005 Resolution[5]of the Court of Appeals
(CA) in CA-G.R. CV No. 63948 which declared both parties equally negligent and,
hence, should equally suffer the resulting loss. For its part, PNB questions why it was
declared blameworthy together with its depositors, spouses Cheah, for the
amount wrongfully paid the latter, while the spouses Cheah plead that they be
declared entirely faultless.
Factual
Antecedents
On
November 4, 1992, Ofelia Cheah (Ofelia) and her friend Adelina Guarin (Adelina)
were having a conversation in the latters office when Adelinas friend,
Filipina Tuazon (Filipina), approached her to ask if she could have Filipinas
check cleared and encashed for a service fee of 2.5%. The check is Bank
of America Check No. 190[6] under the account of
Alejandria Pineda and Eduardo Rosales and drawn by Atty. Eduardo Rosales
against Bank of America Alhambra Branch in
Ofelia
agreed.
That same day, Ofelia and Adelina went to PNB Buendia
Branch. They met with Perfecto Mendiola of the Loans Department who
referred them to PNB Division Chief Alberto Garin (Garin). Garin discussed with them the process of
clearing the subject check and they were told that it normally takes 15 days.[7] Assured that the deposit and subsequent
clearance of the check is a normal transaction, Ofelia deposited Filipinas
check. PNB then sent it for clearing through its correspondent bank,
Philadelphia National Bank. Five days later, PNB received a credit advice[8] from Philadelphia National
Bank that the proceeds of the subject check had been temporarily credited to
PNBs account as of
In
the meantime, the Cable Division of PNB Head Office in Escolta, Manila received
on November 16, 1992 a SWIFT[13] message from Philadelphia
National Bank dated November 13, 1992 with Transaction Reference Number (TRN)
46506218, informing PNB of the return of the subject check for insufficient
funds.[14] However, the PNB Head Office could not
ascertain to which branch/office it should forward the same for proper
action. Eventually, PNB Head Office sent
Philadelphia National Bank a SWIFT message informing the latter that SWIFT
message with TRN 46506218 has been relayed to PNBs various
divisions/departments but was returned to PNB Head Office as it seemed
misrouted. PNB Head Office thus requested for Philadelphia National Banks
advice on said SWIFT messages proper disposition.[15] After a few days, PNB Head Office ascertained
that the SWIFT message was intended for PNB Buendia Branch.
PNB
Buendia Branch learned about the bounced check when it received on November 20,
1992 a debit advice,[16] followed by a letter[17] on November 24, 1992,
from Philadelphia National Bank to which the November 13, 1992 SWIFT message
was attached. Informed about the bounced
check and upon demand by PNB Buendia Branch to return the money withdrawn,
Ofelia immediately contacted Filipina to get the money back. But the latter told her that all the money
had already been given to several people who asked for the checks
encashment. In their effort to recover
the money, spouses Cheah then sought the help of the National Bureau of
Investigation. Said agencys Anti-Fraud
and Action Division was later able to apprehend some of the beneficiaries of
the proceeds of the check and recover from them $20,000.00. Criminal charges
were then filed against these suspect beneficiaries.[18]
Meanwhile,
the spouses Cheah have been constantly meeting with the bank officials to
discuss matters regarding the incident and the recovery of the value of the
check while the cases against the alleged perpetrators remain pending. Chee Chong in the end signed a PNB drafted[19] letter[20] which states that the
spouses Cheah are offering their condominium units as collaterals for the
amount withdrawn. Under this setup, the
amount withdrawn would be treated as a loan account with deferred interest
while the spouses try to recover the money from those who defrauded them. Apparently, Chee Chong signed the letter
after the Vice President and Manager of PNB Buendia Branch, Erwin Asperilla
(Asperilla), asked the spouses Cheah to help him and the other bank officers as
they were in danger of losing their jobs because of the incident. Asperilla likewise assured the spouses Cheah
that the letter was a mere formality and that the mortgage will be disregarded
once PNB receives its claim for indemnity from Philadelphia National Bank.
Although
some of the officers of PNB were amenable to the proposal,[21] the same did not
materialize. Subsequently, PNB sent a
demand letter to spouses Cheah for the return of the amount of the check,[22] froze their peso and
dollar deposits in the amounts of P275,166.80 and $893.46,[23] and filed a complaint[24] against them for Sum of
Money with Branch 50 of the Regional Trial Court (RTC) of P8,202,220.44, plus interests[25] and attorneys fees, from
the spouses Cheah.
As
their main defense, the spouses Cheah claimed that the proximate cause of PNBs
injury was its own negligence of paying a US dollar denominated check
without
waiting for the 15-day clearing period, in violation of its bank practice as
mandated by its own bank circular, i.e.,
PNB General Circular No. 52-101/88.[26] Because of this, spouses Cheah averred that
PNB is barred from claiming what it had lost.
They further averred that it is unjust for them to pay back the amount
disbursed as they never really benefited therefrom. As counterclaim, they prayed for the return
of their frozen deposits, the recoupment of P400,000.00 representing the
amount they had so far spent in recovering the value of the check, and payment
of moral and exemplary damages, as well as attorneys fees.
Ruling
of the Regional Trial Court
The
RTC ruled in PNBs favor. The
dispositive portion of its Decision[27] dated
WHEREFORE,
premises considered, judgment is hereby rendered in favor of the plaintiff
Philippine National Bank [and] against defendants Mr. Cheah Chee Chong and Ms.
Ofelia Camacho Cheah, ordering the latter to pay jointly and severally the
herein plaintiffs bank the amount:
1.
of
US$298,950.25 or its peso equivalent based on Central Bank Exchange Rate
prevailing at the time the proceeds of the BA Check No. 190 were withdrawn or
the prevailing Central Bank Rate at the time the amount is to be reimbursed by
the defendants to plaintiff or whatever is lower. This is without prejudice however, to the
rights of the defendants (accommodating parties) to go against the group of
Adelina Guarin, Atty. Eduardo Rosales, Filipina Tuazon, etc., (Beneficiaries-
accommodated parties) who are privy to the defendants.
No pronouncement as to costs.
No
other award of damages for non[e] has been proven.
SO
ORDERED.[28]
The
RTC held that spouses Cheah were
guilty of contributory negligence.
Because
Ofelia trusted a friends friend whom she did not know and considering the
amount of the check made payable to cash, the RTC opined that Ofelia showed
lack of vigilance in her dealings. She
should have exercised due care by investigating the negotiability of the check
and the identity of the drawer. While
the court found that the proximate cause of the wrongful payment of the check
was PNBs negligence in not observing the 15-day guarantee period rule, it
ruled that spouses Cheah still cannot escape liability to reimburse PNB the
value of the check as an accommodation party pursuant to Section 29 of the
Negotiable Instruments Law.[29] It likewise applied the principle of solutio indebiti under the Civil
Code. With regard to the award of other
forms of damages, the RTC held that each party must suffer the consequences of
their own acts and thus left both parties as they are.
Unwilling
to accept the judgment, the spouses Cheah appealed to the CA.
Ruling
of the Court of Appeals
While
the CA recognized the spouses Cheah as victims of a scam who nevertheless have
to suffer the consequences of Ofelias lack of care and prudence in immediately
trusting a stranger, the appellate court did not hold PNB scot-free. It ruled in its
As both parties were equally negligent,
it is but right and just that both parties should equally suffer and shoulder
the loss. The scam would not have been possible without the negligence of both
parties. As earlier stated, the complaint of PNB cannot be dismissed because
the Cheah spouses were negligent and Ms. Cheah took an active part in the
deposit of the check and the withdrawal of the subject amounts. On the other hand, the Cheah spouses cannot
entirely bear the loss because PNB allowed her to withdraw without waiting for the
clearance of the check. The remedy of the parties is to go after those who
perpetrated, and benefited from, the scam.
WHEREFORE, the May 20, 1999 Decision of
the Regional Trial Court, Branch 5,
Accordingly,
PNB is hereby ordered to credit to the peso and dollar accounts of the Cheah
spouses the amount due to them.
SO
ORDERED.[31]
In so
ruling, the CA ratiocinated that PNB Buendia Branchs non-receipt of the SWIFT
message from Philadelphia National Bank within the 15-day clearing period is
not an acceptable excuse. Applying the
last clear chance doctrine, the CA held that PNB had the last clear opportunity
to avoid the impending loss of the money and yet, it glaringly exhibited its
negligence in allowing the withdrawal of funds without exhausting the 15-day
clearing period which has always been a standard banking practice as testified
to by PNBs own officers, and as provided in its own General Circular No.
52/101/88. To the CA, PNB cannot claim
from spouses Cheah even if the latter are accommodation parties under the law
as the banks own negligence is the proximate cause of the damage it
sustained. Nevertheless, it also found
Ofelia guilty of contributory negligence.
Thus, both parties should be made equally responsible for the resulting
loss.
Both
parties filed their respective Motions for Reconsideration[32] but same were denied in a
Resolution[33]
dated December 21, 2005.
Hence,
these Petitions for Review on Certiorari.
Our Ruling
The petitions for review lack
merit. Hence, we affirm the ruling of
the CA.
PNBs act of releasing the proceeds of the check prior to
the lapse of the 15-day clearing period was the proximate cause of the loss.
Proximate
cause is that cause, which, in natural and continuous sequence, unbroken by
any efficient intervening cause, produces the injury and without which the
result would not have occurred. x x x To determine the proximate cause of a
controversy, the question that needs to be asked is: If the event did not
happen, would the injury have resulted?
If the answer is no, then the event is the proximate cause.[34]
Here,
while PNB highlights Ofelias fault in accommodating a strangers check and
depositing it to the bank, it remains mum in its release of the proceeds
thereof without exhausting the 15-day clearing period, an act which contravened
established banking rules and practice.
It is
worthy of notice that the 15-day clearing period alluded to is construed as 15
banking days. As declared by Josephine Estella, the Administrative Service
Officer who was the banks Remittance Examiner, what was unusual in the
processing of the check was that the lapse of 15 banking days was not
observed.[35] Even PNBs agreement with Philadelphia
National Bank[36]
regarding the rules on the collection of the proceeds of US dollar checks
refers to business/ banking days. Ofelia deposited the subject check on
This
Court already held that the payment of the amounts of checks without previously
clearing them with the drawee bank especially so where the drawee bank is a
foreign bank and the amounts involved were large is contrary to normal or
ordinary banking practice.[37] Also, in Associated
Bank v. Tan,[38]
wherein the bank allowed the withdrawal of the value of a check prior to its
clearing, we said that [b]efore the check shall have been cleared for deposit,
the collecting bank can only assume at its own risk x x x that the check
would be cleared and paid out. The
delay in the receipt by PNB Buendia Branch of the November 13, 1992 SWIFT
message notifying it of the dishonor of the subject check is of no moment,
because had PNB Buendia Branch waited for the expiration of the clearing period
and had never released during that time the proceeds of the check, it would
have already been duly notified of its dishonor. Clearly, PNBs disregard of
its preventive and protective measure against the possibility of being
victimized by bad checks had brought upon itself the injury of losing a
significant amount of money.
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.[39] PNB miserably failed to do its duty of
exercising extraordinary diligence and reasonable business prudence. The disregard of its own banking policy
amounts to gross negligence, which the law defines as negligence characterized
by the want of even slight care, acting or omitting to act in a situation where
there is duty to act, not inadvertently but wilfully and intentionally with a
conscious indifference to consequences in so far as other persons may be
affected.[40] With regard to collection or encashment of
checks, suffice it to say that the law imposes on the collecting bank the duty
to scrutinize diligently the checks deposited with it for the purpose of
determining their genuineness and regularity.
The collecting bank, being primarily engaged in banking, holds itself
out to the public as the expert on this field, and the law thus holds it to a
high standard of conduct.[41] A bank is expected to be an expert in banking
procedures and it has the necessary means to ascertain whether a check, local
or foreign, is sufficiently funded.
Incidentally,
PNB obliges the spouses Cheah to return the withdrawn money under the principle
of solutio indebiti, which is laid down in Article 2154 of
the Civil Code:[42]
Art. 2154. If something is
received when there is no right to demand it, and it was unduly delivered
through mistake, the obligation to return it arises.
[T]he indispensable requisites of the juridical relation
known as solutio indebiti, are, (a)
that he who paid was not under obligation to do so; and (b) that the payment
was made by reason of an essential mistake of fact.[43]
In the case at
bench, PNB cannot recover the proceeds of the check under the principle it
invokes. In the first place, the gross
negligence of PNB, as earlier discussed, can never be equated with a mere
mistake of fact, which must be something excusable and which requires the
exercise of prudence. No recovery is due
if the mistake done is one of gross negligence.
The spouses Cheah are guilty of contributory negligence
and are bound to share the loss with the bank
Contributory negligence
is conduct on the part of the injured party,
contributing
as a legal cause to the harm he has suffered, which falls below the standard to
which he is required to conform for his own protection.[44]
The
CA found Ofelias credulousness blameworthy.
We agree. Indeed, Ofelia failed
to observe caution in giving her full trust in accommodating a complete
stranger and this led her and her husband to be swindled. Considering that Filipina was not personally
known to her and the amount of the foreign check to be encashed was
$300,000.00, a higher degree of care is expected of Ofelia which she, however,
failed to exercise under the circumstances. Another circumstance which should
have goaded Ofelia to be more circumspect in her dealings was when a bank
officer called her up to inform that the Bank of America check has already been
cleared way earlier than the 15-day clearing period. The fact that the check was cleared after
only eight banking days from the time it was deposited or contrary to what
Garin told her that clearing takes 15 days should have already put Ofelia on
guard. She should have first verified
the regularity of such hasty clearance considering that if something goes wrong
with the transaction, it is she and her husband who would be put at risk and
not the accommodated party. However,
Ofelia chose to ignore the same and instead actively participated in
immediately withdrawing the proceeds of the check. Thus, we are one with the CA in ruling
that Ofelias prior consultation with PNB officers is not enough to totally
absolve her of any liability. In the first place, she should have shunned any
participation in that palpably shady transaction.
In any case, the complaint against the spouses Cheah
could not be dismissed. As PNBs client,
Ofelia was the one who dealt with PNB and negotiated the check such that its
value was credited in her and her husbands account. Being the ones in privity with PNB, the
spouses Cheah are therefore the persons who should return to PNB the money
released to them.
All told, the Court concurs with the findings of the CA
that PNB and the spouses Cheah are equally negligent and should therefore
equally suffer the loss. The two must
both bear the consequences of their mistakes.
WHEREFORE, premises considered, the Petitions for Review on Certiorari in G.R. No. 170865 and in
G.R. No. 170892 are both DENIED. The assailed
SO
ORDERED.
MARIANO C.
Associate Justice
WE
CONCUR:
RENATO C. CORONA
Chief Justice
Chairperson
|
TERESITA J. LEONARDO-DE CASTRO Associate Justice |
LUCAS P. BERSAMIN Associate Justice |
MARTIN S. VILLARAMA, JR.
Associate Justice
C E R T I F I C A T I O N
Pursuant to Section 13,
Article VIII of the Constitution, it is hereby certified that the conclusions
in the above Decision had been reached in consultation before the case was
assigned to the writer of the opinion of the Courts Division.
RENATO C. CORONA
Chief Justice
[1] Consolidated
pursuant to our Resolution dated
[2] Docketed
as G.R. No. 170865, rollo, pp.
105-129.
[3] Docketed
as G.R. No. 170892, id. at 11-39.
[4] CA rollo,
pp. 172-188; penned by Associate Justice Jose Catral Mendoza (now a member of
this Court) and concurred in by Presiding Justice Romeo A. Brawner and
Associate Justice Mario L. Guaria III.
[5]
[6] Records,
p. 199.
[7] TSN,
[8] Records,
p.
200.
[9] TSN,
[10] Records, pp. 201
and 425.
[11]
[12]
[13] Stands for Society for
Worldwide Interbank Financial Telecommunication. It is an international transaction processing system
owned by and serving the financial community worldwide. It handles financial messages such as: a.
customer transfers or payment orders; b. bank transfers; c. foreign exchange
confirmation; d. debit confirmation; e. credit confirmation; f. statement of
account; g. collections; h. documentary credits; i. syndications; j. travelers
checks; See Joint Affidavit of Gregorio SC Termulo and Leoncio M. David,
Assistant Department Manager II and Division Chief III of the Cable Division,
International Department of PNB, id. at 312-315.
[14]
[15]
[16]
[17]
[18] Based
on the records of the case at bar, upon the NBIs investigation, the withdrawn
money was divided among Transmedian Management (Adelina Guarins office), Nilo
Montalban, Patricio Valleser, and Lucresio Semblante, who all received a part
of the proceeds as commissions, while the rest of the amount was divided
between Felix Sajot and Eduardo Rosales, id. at 276-277. The NBI, suspecting a conspiracy among the
bank officers and the beneficiaries, filed an estafa case against Adelina
Guarin and PNB officials Lorenzo Bal, Ponciano Felix, Teresita Gregorio, and
Domingo Posadas before the Office of the Ombudsman, but this was dismissed, id.
at 402-407. Criminal case for estafa was
likewise filed by the Makati Prosecutor against Filipina Tuazon, Nilo Montalban,
Patricio Vallaser, Lucresio Semblante, Eduardo Rosales and Felix Sajot before
the Regional Trial Court of Makati, id. at 426-427.
[19] TSN,
[20] Records,
pp. 207-208.
[21]
[22]
[23] Under
Account Nos. 265-560184-0
and 265-705612-2.
[24] Records,
pp. 1-9.
[25] Converted
to peso at a rate of $1 = P27.695.
The amount recovered was deducted from the $300,000, then computed at an
interest rate of 7.5% per annum.
[26] Said
Circular dated
The
existing cash letter services of our foreign correspondents [sic] bank make it
possible for PNB to obtain immediate credit, subject to final payment for US
dollar denominated checks withdrawn on banks in the
[27]
[28]
[29] Sec.
29. Liability of accommodation party. -
An accommodation party is one who has signed the instrument as maker, drawer,
acceptor, or indorser, without receiving value therefor, and for the purpose of
lending his name to some other person. Such a person is liable on the
instrument to a holder for value, notwithstanding such holder, at the time of
taking the instrument, knew him to be only an accommodation party.
[30] Supra
note 4.
[31] CA
rollo, pp. 187-188.
[32] See
PNBs Motion for Reconsideration, id. at 194-207 and the spouses Cheahs Motion
for Reconsideration, id. at 208-231.
[33] Supra
note 5.
[34] Allied Banking Corporation v. Lim Sio Wan, G.R.
No. 133179,
[35] TSN,
[36] Records,
pp. 281-285.
[37] Banco Atlantico v. Auditor General, 171
Phil. 298, 304 (1978).
[38] 487
Phil. 512, 525 (2004).
[39] Philippine Savings Bank v. Chowking Food
Corporation, G.R. No. 177526, July 4, 2008, 557 SCRA 318, 330, citing Bank of the Philippine Islands v. Court of
Appeals, 383 Phil. 538, 554 (2000); Philippine
Bank of Commerce v. Court of Appeals, 336 Phil. 667, 681 (1997) and Philippine Commercial International Bank v.
Court of Appeals, 403 Phil. 361, 388 (2001).
[40]
Victoriano v. People, G.R. Nos. 171322-24, November 30, 2006, 509
SCRA 483, 493, citing Fonacier v.
Sandiganbayan, G.R. Nos. 50691, 52263, 52766, 52821, 53350, 53397, 53415
and 53520, December 5, 1994, 238 SCRA 655, 687-688.
[41] Metropolitan Bank and Trust Company v.
Philippine Bank of Communications, G.R. Nos. 141408 and 141429, October 18,
2007, 536 SCRA 556, 563, citing Banco de
Oro Savings and Mortgage Bank v. Equitable Banking Corporation, 241 Phil.
187, 200 (1988).
[42] N.B. Solutio indebiti also covers mistake
in law under Article 2155 of the Civil Code.
[43] City of
[44] Valenzuela v. Court of Appeals, 323
Phil. 374, 388 (1996).