ALLIED BANKING CORPORATION vs.

BANK OF THE PHILIPPINE ISLANDS

G.R. No. 188363, February 27, 2013
VILLARAMA, JR., J.

FACTS:
A P1,000,000.00 check payable to "Mateo Mgt. Group International" (MMGI) was
deposited to and accepted by petitioner. The check, post-dated "Oct. 9, 2003", was drawn against
Marciano Silva, Jr. (Silva)’s account with respondent BPI. Upon receipt, petitioner sent the
check for clearing to respondent through the Philippine Clearing House Corporation (PCHC).

The check was cleared by respondent and petitioner credited the account of MMGI with
P1,000,000.00. Later, MMGI’s account was closed and all the funds therein were withdrawn. A
month later, Silva discovered the debit of P1,000,000.00 from his account. In response to Silva’s
complaint, respondent credited his account with the aforesaid sum.

Petitioner filed a complaint before the Arbitration Committee, asserting that respondent
should solely bear the entire face value of the check due to its negligence in failing to return the
check to petitioner within the 24-hour their own reglementary period. Respondent charged
petitioner with gross negligence for accepting the post-dated check in the first place claiming that
was the proximate cause.

ISSUE: Is the respondent liable for the instrument?

RULING: YES.
The evidence shows that the proximate cause of the unwarranted encashment of the
subject check was the negligence of respondent who cleared a post-dated check without
observing its own verification procedure. If respondent exercised ordinary care in the clearing
process, it could have easily noticed the glaring defect upon seeing the date written on the face of
the check "Oct. 9, 2003" and then promptly dishonored it. Thus, petitioner can seek
reimbursement from respondent the amount credited to the payee’s account .

The doctrine of last clear chance is that the negligence of the plaintiff does not preclude a
recovery for the negligence of the defendant where it appears that the defendant, by exercising
reasonable care and prudence, might have avoided injurious consequences to the plaintiff
notwithstanding the plaintiff’s negligence.
Tiong V. Ang
G.R. No. L-26767, February 22, 1968
Castro, J.
Facts:
Ting issued a P4,000 Philippine Bank of Communications(PBC) check payable to cash or
bearer with Ang’s signature on the back as indorsement. Tiong received said check and
presented it to PBC which dishonored it. Tiong then made written demands to Ting and Ang to
make good with said check. When defendants did not comply, a suit was filed. Both MTC and
CA ruled in favor of Tiong, thus this petition.
Issues:
1. Is the instrument negotiable?
2. Is he a general indorser?
3. Would being an accommodation party change Ang’s liability?
Ruling:
1. The genuineness and the due execution of the instrument was not controverted and appellee
is a holder for value; hence, the instrument is negotiable as the presumption of negotiability
was never overcome.
2. Yes, there is nothing in the instrument which states otherwise and according to NIL section
66 ordains that "every indorser who indorses without qualification, warrants to all subsequent
holders in due course" (a) that the instrument is genuine and in all respects what it purports to
be; (b) that he has a good title to it; (c) that all prior parties have capacity to contract; and (d)
that the instrument is at the time of his indorsement valid and subsisting. In addition, "he
engages that on due presentment, it shall be accepted or paid, or both, as the case may be, and
that if it be dishonored, he will pay the amount thereof to the holder."
3. No, even as an accommodation party, he is still liable to the instrument according to Sec. 29
of the NIL which states that an accommodation party is one who has signed the instrument as
maker, drawer, acceptor, or indorser, without receiving value therefor, and for the purpose of
lending his name to some other person. Such a person is liable on the instrument to a holder
for value, notwithstanding such holder, at the time of taking the instrument, knew him to be
only an accommodation party.