Case Summary (G.R. No. 156207)
Relevant Facts
On November 29, 1991, Warliza Sarande deposited TCBT Check No. 0249188 at PCI Bank's Magsaysay Avenue branch in Davao City, amounting to P225,000. Following a confirmation of clearance from PCI Bank on December 5, Sarande issued PCI Bank Check No. 073661 for P132,000 to Rowena Ong. Ong subsequently converted this check into a manager's check, which she later deposited. However, on December 9, she learned that the manager's check was dishonored due to "irregular issuance," prompting her to file a complaint against PCI Bank for non-payment and damages.
Issues Raised by PCI Bank
PCI Bank contended that the check issued to Ong was void due to insufficient funds, as the originating account was closed when the check was processed. The bank asserted that they notified both Sarande and Ong about the check's return on December 5 and sought return of the manager's check issued to Ong, alleging there was a failure of consideration.
Trial Court Proceedings
The trial court granted Ong's motion for summary judgment after PCI Bank failed to attend the scheduled hearings and did not file any opposition to her claims. On March 2, 1995, it ordered PCI Bank to pay Ong P132,000, with further proceedings on damages. After hearing Ong's evidence, a decision rendered on May 3, 1999, awarded her moral damages of P50,000, exemplary damages of P20,000, actual expenses of P3,500, and attorney's fees of P20,000.
Court of Appeals
PCI Bank appealed the trial court’s decision, but the Court of Appeals on October 29, 2002, upheld the lower court’s rulings, leading PCI Bank to seek a review by the Supreme Court.
Supreme Court's Analysis on Summary Judgment
The Supreme Court affirmed the trial court's decision, citing Section 1, Rule 35 of the 1997 Rules of Court regarding summary judgments. The requirements dictate that there should be no genuine issue of material fact and that the moving party is entitled to judgment as a matter of law. As PCI Bank admitted to errors in handling Sarande's check, it effectively validated Ong's claim, as the bank had certified the check when it issued the manager’s check to her.
Holder in Due Course
The Supreme Court clarified that Ong was a holder in due course as per the Negotiable Instruments Law, particularly noting that she took the check without any notice of defects or dishonor at the time of negotiation. Moreover, the Court emphasized that issues of consideration could not be interposed by PCI Bank against Ong, as she was a holder in due course, thus shielding her from claims of unjust enrichment.
Awarded Damages
The Court addressed PCI Bank’s liabi
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Case Background
- On November 29, 1991, Warliza Sarande deposited TCBT Check No. 0249188 for P225,000.00 at PCI Bank, Davao City Branch.
- On December 5, 1991, Sarande inquired about the status of the check and was assured by PCI Bank that it had cleared.
- Relying on this information, Sarande issued two checks, including PCI Bank Check No. 073661 for P132,000.00 to Rowena Ong.
- Ong presented Check No. 073661 for encashment but requested it to be converted into a manager’s check, which PCI Bank issued as Manager’s Check No. 10983.
- Ong deposited Manager’s Check No. 10983 in her account, only to be informed on December 9, 1991, that the check was returned due to "irregular issuance" since the original check from Sarande had not cleared.
PCI Bank's Defense
- PCI Bank contended that TCBT Check No. 0249188 was returned on December 5, 1991, as the account was closed.
- They claimed to have notified both Sarande and Ong about the return and demanded the return of the manager’s check, asserting lack of consideration.
Legal Proceedings
- Ong filed a Complaint against PCI Bank for the sum of money, damages, and attorney’s fees.
- Following a pre-trial conference, Ong moved for a summary judgment.
- PCI Bank failed to appear or respond to the motion; hence, the trial court granted Ong's motion for summary judgment on March 2, 1995.
Trial Court's Decision
- The trial court ruled in favor of Ong, ordering PCI Bank to pay P132,000.00, and scheduled a hearing for damages.
- On May 3