G.R. No. 217411 . December 13, 2023
PHILIPPINE BANK OF COMMUNICATIONS, PETITIONER, VS. RIA DE GUZMAN RIVERA, RESPONDENT.

FACTS

Respondent Ria de Guzman Rivera deposited a crossed “ON-US” check (drawn and payable within the same PBCOM branch) for ₱100,000.00 into her newly opened savings account with petitioner Philippine Bank of Communications (PBCOM). The bank credited the amount to her account but informed her the check was still subject to clearing. The following day, Rivera issued a check from her linked current account for ₱100,000.00 to a third party, Riester Tan. This check was dishonored for “Drawn Against Insufficient Funds” because PBCOM had enforced a stop payment order from the check’s drawer, LK Fishing Corporation, after the initial credit but before the clearing process was complete. PBCOM consequently debited the ₱100,000.00 from Rivera’s account. Rivera suffered embarrassment from the dishonor and filed a complaint for damages against PBCOM and LK Fishing Corporation.
The Regional Trial Court ruled in favor of Rivera, holding PBCOM and LK Fishing solidarily liable for the check’s value, moral and exemplary damages, and attorney’s fees. The Court of Appeals affirmed this decision. PBCOM appealed to the Supreme Court, arguing it followed standard banking procedures by treating the ON-US check as still subject to clearing and honoring the stop payment order.

ISSUE

Whether PBCOM is liable for damages for enforcing a stop payment order on an ON-US check after it had been credited to the payee’s account, resulting in the dishonor of the payee’s own issued check.

RULING

Yes, PBCOM is liable. The Supreme Court affirmed the lower courts’ decisions. The legal logic centers on the nature of an ON-US check and the bank’s contractual obligations. An ON-US check, being drawn and deposited within the same branch, is considered cleared upon acceptance and credit to the payee’s account. The bank’s act of crediting the amount constitutes final payment. Consequently, the drawer loses the right to issue a stop payment order, and the bank is precluded from debiting the credited amount from the payee’s account.
By allowing Rivera to open an account, crediting the check, and permitting her to operate the account (including issuing her own check based on that credit), PBCOM entered into a contract of deposit with her. Its subsequent enforcement of a late stop payment order and debit of her account constituted a breach of that contract. This breach directly caused the dishonor of Rivera’s check, leading to her financial injury and moral suffering. The bank’s defense of standard procedure is unavailing, as its own actions in granting full credit determined the rights of the parties. The award of damages, including the face value of the check with interest, moral damages for the anguish caused, and exemplary damages due to the bank’s disregard of its fiduciary duty, was therefore proper.