Facts:

In the case of Banco De Oro-EPCI, Inc. (formerly Equitable PCI Bank) vs. John Tansipek, the legal dispute arose from a complaint filed by J.O. Construction, Inc. (JOCI) against the Philippine Commercial and Industrial Bank (PCIB). The complaint was lodged in the Regional Trial Court (RTC) of Makati City, under Civil Case No. 97-508, as a consequence of an alleged breach of contract. The issue started when JOCI, engaged in the business of construction, entered into a contract with Duty Free Philippines, Inc. for the construction of a Duty Free Shop in Mandaue City. During the project, JOCI made several progress billings, receiving payments directly and through John Tansipek, who served as its authorized collector.

However, a significant payment through PNB Check No. 0000302572 amounting to ₱4,050,136.51 was not remitted by Tansipek to JOCI. Instead, he deposited it into his account at PCIB, Wilson Branch, San Juan, Metro Manila. This deposit was problematic because the check was

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Facts:

Background and Contractual Relations

• J.O. Construction, Inc. (JOCI), a domestic construction company based in Cebu City, entered into a contract with Duty Free Philippines, Inc. for the construction of a Duty Free Shop in Mandaue City.
• As the construction progressed, JOCI prepared progress billings with corresponding payments made either directly or via its authorized collector, John Tansipek.

Payment and Deposit Controversy

• Payments received by respondent Tansipek were initially remitted to JOCI; however, a critical payment through PNB Check No. 0000302572 amounting to ₱4,050,136.51 was not turned over to JOCI.
• Instead of remitting the check, Tansipek endorsed it and deposited it in his account at PCIB’s Wilson Branch, despite the check being crossed "for payee's account only" and Tansipek’s alleged lack of authority to do so.

Initiation of Lawsuits and Pleadings

• JOCI filed a complaint in the RTC of Makati City (Civil Case No. 97-508), seeking the amount of the check along with attorney’s fees, expenses, costs, and exemplary damages.
• PCIB moved to dismiss the complaint on two main grounds—non-impleading of an indispensable party and lack of a cause of action against it by JOCI.

Bank’s Defenses and Counterclaims

• In answering, PCIB asserted that Tansipek had been clothed with authority by JOCI, invoking estoppel; additionally, it maintained that JOCI had no cause of action against the bank.
• The bank also raised several defenses including the adequacy of bank practices in accepting the deposit, the barring of claims by laches, and that the damages alleged by JOCI were speculative.
• PCIB counterclaimed for exemplary damages and litigation expenses and attorney’s fees, and later sought to incorporate a third-party complaint against Tansipek for subrogation.

Judicial Proceedings and Motions

• The RTC denied PCIB’s motions to dismiss, ruling in favor of JOCI by ordering PCIB to pay the check amount with interest, while denying other damages as speculative.
• On the third-party complaint, Tansipek was ordered to pay PCIB all amounts it might be liable for in connection with the case.
• Tansipek’s subsequent motions—including a Motion for Reconsideration of the Default Order and a Petition for Certiorari in the Court of Appeals—were dismissed on technical grounds such as failure to attach necessary orders and filing out of time.

Issues on Appeal and the Default Order

• Respondent Tansipek appealed the RTC decision on the main case, challenging the order declaring him in default and other procedural aspects, including allegations of being deprived of his right to be heard.
• The Court of Appeals granted Tansipek’s appeal in part by reversing the RTC’s handling of the default order, remanding the case for further proceedings on the third-party complaint, yet upholding the main case decision in favor of JOCI.

Succession and Final Issue Presented

• Banco de Oro-EPCI, Inc., as the successor-in-interest to PCIB, filed the petition for review on certiorari before the Supreme Court.
• The sole issue raised was whether the Court of Appeals could reverse its decision that had been handed down eight years earlier.

Issue:

Procedural Issue on Default

• Whether the trial court erred in allowing the bank’s motion to declare Tansipek in default and thus depriving him of his day in court.
• Whether respondent Tansipek’s failure to file a timely Motion to Lift the Order of Default (as required under Section 3(b), Rule 9 of the Rules of Court) affected his right to challenge the default order.

Merits of the Deposit and Authority

• Whether PCIB erred in permitting the deposit of the check marked "for payee's account only" into Tansipek’s account despite the absence of proper authority for endorsement.
• Whether the board resolution and the Articles of Incorporation—which purportedly clothed Tansipek with authority to act for JOCI—were genuine and constituted a valid defense against JOCI’s claim.

Applicability of the Doctrine of the Law of the Case

• Whether the doctrine prevents the re-litigation of the issue on the Order of Default that had already been decided in previous appellate proceedings.
• Whether a Petition for Certiorari (as opposed to an ordinary appeal) may circumvent the established finality of the previous ruling on the default order.

Ruling:

• (Subscriber-Only)

Ratio:

• (Subscriber-Only)

Doctrine:

• (Subscriber-Only)