G.R. No. 188363 - Allied Banking Corp. vs. Bank of the Philippine Islands

On October 10, 2002, petitioner Allied Banking Corporation received a check drawn against Marciano Silva, Jr.’s account at respondent Bank of the Philippine Islands (BPI) Bel-Air Branch.
The check, amounting to P1,000,000.00 and payable to Mateo Mgt. Group International (MMGI), was post-dated to October 9, 2003.
Despite being post-dated, the check was accepted for deposit at Allied Banking Corporation’s Kawit Branch and forwarded through the Philippine Clearing House Corporation (PCHC) for clearing.

The check was processed and cleared by respondent BPI, with the funds being credited to MMGI’s account.
Shortly after, on October 22, 2002, MMGI’s account was closed and all funds therein were withdrawn.
A month later, Silva discovered the debit from his account and, upon his complaint, respondent credited his account with the debited P1,000,000.00.

On March 21, 2003, respondent returned a photocopy of the check citing that it was “postdated.”
Petitioner's refusal to accept the returned photocopy led to a series of exchanges between the banks, with the charge slip being tossed back and forth until May 6, 2003.
Eventually, respondent requested the PCHC to take custody of the original check, invoking its authority under Clearing House Operating Memo (CHOM) No. 279 dated September 6, 1996, which provided for a 50/50 split in case of a “Ping-Pong” controversy.

Petitioner filed a complaint before the PCHC Arbitration Committee alleging that respondent should bear the entire loss due to its negligence in failing to return the check within the mandatory 24-hour period as specified in Section 20.1 of the Clearing House Rules and Regulations (CHRR) 2000.
The Arbitration Committee ruled in favor of petitioner by noting that respondent not only missed the returning window but also did not initiate a formal complaint under Section 20.3, thus attributing fault solely to respondent.
Respondent, in its Answer with Counterclaims, argued that petitioner was also grossly negligent for initially accepting the post-dated check.

On December 13, 2005, the RTC of Makati City (Branch 57) rendered a decision that affirmed, with modifications, the Arbitration Committee’s ruling by deleting the award for attorney’s fees.
The RTC emphasized that petitioner’s own negligence was evident in not recognizing the post-dated nature of the check promptly, compounded by its failure to abide by its standard operating procedures.

On March 19, 2009, the Court of Appeals set aside the RTC decision, holding that the petitioner was partly at fault for its failure to detect the irregularity on the check.
The CA applied the doctrine of contributory negligence by apportioning the loss on a 60-40 ratio, with petitioner bearing 60% of the loss and respondent 40%.
The appellate ruling further noted that a collecting bank has a duty to exercise due diligence to ensure that only valid checks are processed, and its failure to do so constituted a breach of duty despite the drawee bank’s larger role in the clearing process.

Whether the doctrine of last clear chance applies to the case wherein a post-dated check was processed despite clear signs of its irregularity.
Whether respondent’s failure to return the check within the prescribed 24-hour period, as stipulated in the CHRR 2000, constitutes negligence warranting full liability.

Whether allocating the loss on a 60-40 basis, with petitioner shouldering 60% due to contributory negligence, is proper.
Whether the comparative negligence of both banks, especially petitioner’s acceptance of a clearly post-dated check, mitigates respondent’s liability.