By Atty. Julius Gregory B. Delgado

PHILIPPINE BANK OF COMMERCE VS. RIA DE GUZMAN RIVERA, G.R. NO. 217411 (DECEMBER 13, 2023): BANK HELD LIABLE FOR BREACH OF CONTRACT FOR FROM A CLIENT’S ACCOUNT BY VIRTUE OF A DUBIOUS STOP PAYMENT ORDER OF AN “ON-US CHECK” EARLIER CLEARED AND WHICH AMOUNT WAS ALREADY CREDITED 

The case stems from a Complaint filed by respondent Ria de Guzman Rivera (“Rivera”), a former assistant branch manager of a bank but then doing business under the name of Daddy’s Lechon Manok, against petitioner Philippine Bank of Commerce (“PBCOM”). In her Complaint before the Regional Trial Court of General Santos City, Rivera alleged that he presented for payment with PBCOM General Santos City a PBCOM Check dated January 4, 200, in the sum of Php100,000.00 issued by Gabriel Estocapio, Sr., an officer of LK Fishing Corporation. Upon the instructions of the account officers of PBCOM, Rivera opened a Savings Account since said check was a crossed “ON-US Check”, although payable to the order of cash.

Rivera alleged that simultaneous to her opening of savings account, the said PBCOM Check from LK Fishing Corporation was accepted and deposited since a full credit of Php100,000.00 was made to her savings account at exactly 12:44 p.m. of March 6, 2001. However, PBCOM supposedly did not allow her to withdraw from her savings account since the said check was supposedly subject to clearing. Rivera was surprised that PBCOM disallowed such withdrawal, as she knew that although ON-US check is only for deposit, the amount can be immediately withdrawn upon the option of the account holder. Nevertheless, she applied for a Current Account with an automatic fund transfer arrangement from her savings account. PBCOM approved the same upon her deposit of a maintaining balance of Php5,000.00 in her current account at 2:12 p.m. and Php10,000.00 in her savings account at 2:55 p.m.

On the following day, Rivera issued a PBCOM Check from her newly opened Current Account in the amount of Php100,000.00 in favor of Riester Tan. However, the said check was dishonored by PBCOM for reason of Drawn Against Insufficient Fund. Rivera was informed that a Stop Payment Order was made by LK Fishing Corporation before the check the latter issued was cleared. Rivera alleged that the said Stop Payment Order was fictitious, non-existent, and simulated to accommodate LK Fishing Corporation and that the need to further clear the PBCOM ON-US Check is dubious and illegal. 

Tan sent Rivera a Demand Letter to replace the dishonored check with cash under pain of litigation which allegedly caused her to suffer nervous breakdown and humiliation. On March 12, 2001, Rivera’s counsel served PBCOM and its General Manager a Demand Letter, to which PBCOM replied thru a letter dated March 13, 2001, explaining the circumstances behind the dishonored check issued by Rivera. Dissatisfied by the explanation, Rivera filed the Complaint. The trial court favored Rivera which was affirmed by the Court of Appeals. 

The Supreme Court dismissed the Petition for Certiorari and upheld the ruling of the Court of Appeals with modification. The Court held that PBCOM failed to prove that Rivera was sufficiently informed of the supposed clearing policy of ON-US checks. The Court held: “In the face of conflicting claims over the clearance requirement of ON-US checks, it was incumbent upon PBCOM to present its bank manager or cashier to testify on whether Rivera was indeed properly informed of the two-day clearing period, and to submit in evidence the SBBS which provides for PBCOM’s clearing policy on ON-US checks. However, PBCOM failed to do so. Instead, it only presented its unit clearing officer as witness, and failed to present the SBBS. AS aptly pointed out by Rivera in her Comment, PBCOM was given adequate time and opportunity to present SBBS to prove the two-day clearing requirement for ON-US checks. Instead of presenting SBBS, PBCOM sought to excuse the presentation thereof on the premise that it would undermine bank’s internal security. x x x The Court finds PBCOM’s position that the disclosure of its SBBS will compromise the security of its banking business as a flimsy excuse. PBCOM could have easily presented the portion of the SBBS which directly deals with the claimed two-day clearing period of ON-US checks. Instead, PBCOM presented its unit clearing officer to testify on the contents of the SBBS without presenting the relevant portion of the said document.”

More importantly, the Court held that PBCOM committed breach of contract when it debited Rivera’s account by virtue of a dubious Stop Payment Order even though the ON-US check from LK Fishing Corporation was deposited, cleared, and credited to her savings account. The Court held: “In this case, PBCOM did not present any witness to identify and testify on the stop payment order even if it was attached to the records as Annex ‘1’ of the Answer. Therefore, PBCOM’s claim that the stop payment order was made on March 6, 2001 at 4:29 p.m. remains a bare allegation. Besides, no probative value can given on the stop payment order, for failure to explain why the depositor’s signature in the stop payment order belongs to one ‘Yolanda Estopacio’, while the name typewritten below the signature belongs to ‘Gabriel Estopacio, Sr.’, an officer of LK Fishing Corporation. x x x Besides, ‘ON-US checks’ as defined in PBCOM’s Operations Bulletin No. 2001-018 refer to the client’s checks drawn and deposited on the same branch. The crossed PBCOM Check No. 056196 was drawn in the same PBCOM branch where Rivera presented it and where she subsequently opened her savings account. As such, the Court sees nothing in the records that would explain why PBCOM Check No. 056196 cannot be cleared and the amount it covers, be credited to Rivera’s savings account on the same day. For the same reason, the Court finds no merit in PBCOM’s argument that there was no ‘link’ among the accounts of the bank, and that it only went ‘online’ three months after PBCOM Check No. 056196 was presented for payment. x x x The fact remains that Rivera was able to establish that the amount of Php100,000.00 covered by PBCOM Check No. 056196 was already credited by PBCOM to her savings account at 12:44 p.m. On March 6, 2001, but was debited upon receipt of a stop payment order, resulting in the dishonor of Rivera’s PBCOM Check No. 088401 drawn from her current account, which has an automatic fund transfer arrangement with her savings account.”

The Court also awarded moral and exemplary damages to Rivera holding the fiduciary nature of the banking industry. The Court held: “Finally, it bears emphasizing that the banking system has become an indispensable institution in the modern world and plays a vital role in the economic life of every civilized society. Whether as mere passive entities for the safekeeping and saving of money or as active instruments of business and commerce, banks have attained a ubiquitous presence among people, who have come to regard them with respect and even gratitude and most of all, confidence. For this reason, banks should guard against injury attributable to negligence or bad faith on its part. Since the banking business is impressed with public trust, of paramount importance thereto is the trust and confidence of the public in general. Consequently, the highest degree of diligence is expected, and high standards of integrity and performance are even required of it.”