Metrobank v. United Overseas Bank
REITERATIONFacts
The Antecedents: A check for P91,000.00, originally dated January 13, 1997, payable to cash and drawn against the account of Bienvenido C. Tan with Metropolitan Bank & Trust Company (Metrobank), was deposited with United Overseas Bank (UOB). Metrobank cleared the check on January 14, 1997, through the Philippine Clearing House Corporation (PCHC). However, Metrobank later returned the check to UOB on January 27, 1997, alleging material alteration of the date and amount. UOB refused to accept the return and reimburse Metrobank, leading to a dispute over who should bear the loss. Procedural History: Metrobank initiated arbitration proceedings before the PCHC Arbitration Committee, arguing UOB's failure to exercise due diligence in examining the altered check. UOB countered that it exercised due diligence and that Metrobank was negligent in clearing the check. The Arbitration Committee directed Metrobank to submit the check for forensic examination. Metrobank repeatedly sought postponements due to the unavailability of the examination results. Ultimately, Metrobank's counsel failed to appear at a scheduled hearing, leading to the dismissal of the case by the Arbitration Committee. Metrobank's subsequent motions for reconsideration were denied by both the Arbitration Committee and the PCHC Board of Directors. Metrobank then filed a Petition for Review with the Regional Trial Court (RTC), which dismissed the case for lack of jurisdiction, ruling that the petition was filed out of time and that Metrobank had failed to prosecute. The Court of Appeals affirmed the RTC's dismissal, though it found the petition to be timely filed, it agreed that the case was correctly dismissed due to Metrobank's lack of interest and violation of clearing house rules. The Petition: Metrobank filed the instant petition for review on certiorari with the Supreme Court, seeking to overturn the Court of Appeals' decision. The core of Metrobank's argument, as presented in its petition, is that the lower courts erred in dismissing its case. However, the Supreme Court noted that Metrobank's chosen procedural remedy of filing a petition for review with the RTC was erroneous. Citing Insular Savings Bank v. Far East Bank and Trust Company, the Court emphasized that PCHC Rules cannot confer jurisdiction on the RTC to review arbitral awards. The proper remedies would have been a motion to vacate the award with the RTC, a petition for review with the Court of Appeals under Rule 43, or a petition for certiorari with the Court of Appeals under Rule 65. Since Metrobank failed to avail of the correct procedural remedies, the Supreme Court denied its petition.
Issue(s)
Whether the Regional Trial Court (RTC) had jurisdiction to review the arbitral award. Whether the dismissal of the case before the PCHC Arbitration Committee was proper. Whether Metrobank was negligent in clearing the altered check.
Ruling
The petition is denied. The Supreme Court affirmed the dismissal of the case by the RTC and CA, primarily on the ground that the RTC lacked jurisdiction to review the arbitral award filed under the PCHC Rules.
Ratio Decidendi
On the jurisdiction of the RTC to review the arbitral award: The Supreme Court reiterated that the PCHC Rules cannot confer jurisdiction upon the RTC to review arbitral awards. The PCHC Rules, being a result of an agreement among member banks, do not have the force of law to grant such jurisdiction. The proper recourse from an arbitral award denial of a motion for reconsideration by the Arbitration Committee is to file either a motion to vacate the arbitral award with the RTC, a petition for review with the Court of Appeals under Rule 43 of the Rules of Court, or a petition for certiorari under Rule 65 of the Rules of Court. In this case, Metrobank erroneously filed a petition for review with the RTC, which consequently lacked jurisdiction over the subject matter. The RTC correctly dismissed the petition, not because it was filed out of time, but due to lack of jurisdiction. On the dismissal of the case for failure to prosecute: While the Court of Appeals found the petition for review to be filed on time, it affirmed the dismissal on account of Metrobank's lack of interest to prosecute and its violation of the 24-hour clearing house rule. The Court noted Metrobank's repeated motions for postponement and the failure of its counsel to appear at a scheduled hearing, which led to the dismissal by the Arbitration Committee. The subsequent filing of a motion for reconsideration with a medical certificate and the PNP report did not cure the initial procedural lapses that demonstrated a lack of diligence in prosecuting the case. On Metrobank's alleged negligence: The Court found no compelling reason to resolve the issue of Metrobank's negligence in clearing the altered check, given that the procedural defect regarding jurisdiction was fatal to the petition. The Court acknowledged the general jurisprudence that a drawee-bank should bear the loss if it mistakenly cleared a forged or altered check, but this was not the basis for the dismissal of the petition before the Supreme Court.
Main Doctrine
A petition for review of an arbitral award under the Philippine Clearing House Corporation (PCHC) Rules cannot be filed with the Regional Trial Court (RTC) as it lacks jurisdiction over the subject matter. The proper recourse is to file a motion to vacate the arbitral award with the RTC, a petition for review with the Court of Appeals under Rule 43 of the Rules of Court, or a petition for certiorari under Rule 65 of the Rules of Court.