GR 123871; (August, 1998) (Digest)
G.R. No. 123871 August 31, 1998
ALLIED BANKING CORPORATION, petitioner, vs. COURT OF APPEALS and BANK OF THE PHILIPPINE ISLANDS, INC., respondents.
FACTS
Hyatt Terraces Baguio issued two crossed checks drawn against Allied Banking Corporation (ALLIED) in favor of Meszellen Commodities Services, Inc. (MESZELLEN). The checks were deposited with the defunct Commercial Bank and Trust Company (COMTRUST), which stamped a warranty on the back guaranteeing all prior endorsements. After the checks were cleared through the Philippine Clearing House Corporation (PCHC), ALLIED paid the proceeds to COMTRUST. MESZELLEN sued ALLIED for damages, alleging the checks were paid to someone other than the payee. Nearly ten years later, before ALLIED finished presenting its evidence in the main case, it filed a third-party complaint against Bank of the Philippine Islands (BPI) as COMTRUST’s successor-in-interest, seeking reimbursement if held liable to MESZELLEN. The trial court admitted the third-party complaint but later dismissed it upon BPI’s motion, citing lack of jurisdiction and prescription. The Court of Appeals affirmed the dismissal.
ISSUE
Whether the trial court correctly dismissed the third-party complaint filed by one bank against another involving a check cleared through the PCHC, on the ground that primary recourse should be to the PCHC Arbitration Committee as per their agreement.
RULING
Yes. The Supreme Court denied the petition and affirmed the dismissal of the third-party complaint. The general rule that a trial court with jurisdiction over the main action also acquires jurisdiction over a third-party complaint does not apply to banks that are members of the PCHC. By participating in the PCHC’s clearing operations, banks, including ALLIED and BPI, manifest their agreement to submit disputes involving checks cleared through the PCHC to arbitration under its rules. Primary recourse must first be made to the PCHC Arbitration Committee, without prejudice to an appeal to the trial courts. Therefore, without first exhausting this arbitral remedy, the filing of the third-party complaint in court was premature. The Court cited Banco de Oro Savings and Mortgage Bank v. Equitable Banking Corporation and Associated Bank v. Court of Appeals, which upheld the PCHC’s authority to settle such disputes and required arbitration as a condition precedent to court action.