Allied Banking Corp. v. Bank of the Philippine Islands
REITERATIONFacts
The Antecedents: On October 10, 2002, Allied Banking Corporation (petitioner) accepted for deposit a post-dated check for ₱1,000,000.00, dated "Oct. 9, 2003," drawn against the account of Marciano Silva, Jr. with Bank of the Philippine Islands (respondent). Petitioner cleared the check, and the payee, Mateo Mgt. Group International (MMGI), withdrew the funds. A month later, Silva discovered the debit, and respondent credited his account. Respondent returned the check to petitioner on March 21, 2003, citing "Postdated." A dispute ensued, involving the Philippine Clearing House Corporation (PCHC), which suggested arbitration. Procedural History: Petitioner filed a complaint before the Arbitration Committee, asserting respondent should bear the loss due to its failure to return the check within the 24-hour reglementary period. Respondent counterclaimed, alleging petitioner's gross negligence in accepting the post-dated check. The Arbitration Committee ruled in favor of petitioner, applying the doctrine of Last Clear Chance and holding respondent solely liable. Respondent's motion for reconsideration was denied. Respondent filed a petition for review with the RTC, arguing that Section 20.3 of the Clearing House Rules and Regulations (CHRR) 2000 was applicable and that petitioner had the longer chance to discover the defect. The RTC affirmed the Arbitration Committee's decision with modification, deleting the award of attorney's fees, finding petitioner negligent for not following its standard operating procedure. The Court of Appeals (CA) set aside the RTC judgment, ruling for a 60-40 sharing of the loss, finding petitioner guilty of contributory negligence in accepting the post-dated check. Petitioner's motion for reconsideration was denied. The Petition: Petitioner seeks a partial reversal of the CA's decision and affirmation of the RTC's ruling, questioning the applicability of the doctrine of last clear chance and the justification for the 60-40 apportionment of loss.
Issue(s)
Whether the Doctrine of Last Clear Chance applies to hold BPI solely liable for the loss. Whether the 60-40 apportionment of loss ordered by the Court of Appeals was justified.
Ruling
The petition is denied. The Decision of the Court of Appeals dated March 19, 2009, is affirmed.
Ratio Decidendi
On Issue 1: The Supreme Court held that the Doctrine of Last Clear Chance does not necessarily preclude the application of contributory negligence rules in banking cases. While BPI's negligence was the proximate cause of the loss because it had the last fair chance to prevent the harm by exercising due diligence during the 24-hour clearing window, Allied’s initial acceptance of the post-dated check cannot be ignored. The Court emphasized that the doctrine assumes negligence on the part of the defendant and contributory negligence on the part of the plaintiff. Applying the ruling in Philippine Bank of Commerce v. Court of Appeals, the Court determined that although BPI had the last opportunity to avert the injury, Allied's failure to notice the irregularity on the face of the check was a breach of its duty to the public and a sign of its lack of due diligence. Thus, even if the defendant had the last clear chance, the plaintiff's own negligence mitigates the recovery of damages. On Issue 2: The Court affirmed the 60-40 sharing ratio as established by jurisprudence. The Court cited several cases, including Bank of America NT & SA v. Philippine Racing Club and Philippine National Bank v. F.F. Cruz and Co., Inc., where the Court consistently applied a 60-40 split when both banks were negligent. The high standard of diligence required of banks—more than that of a bonus pater familias—dictates that a collecting bank must bear the consequences of its omission to scrutinize checks. Allied's acceptance of the check despite it being post-dated by a full year was a clear violation of banking practices. Therefore, allocating 60% of the loss to the drawee bank (BPI) for the negligent clearing and 40% to the collecting bank (Allied) for contributory negligence satisfies the demands of substantial justice.
Main Doctrine
A collecting bank is guilty of contributory negligence when it accepts 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. In cases of comparative negligence between banks, the loss may be allocated on a ratio, such as 60-40, to satisfy the demands of substantial justice.