G.R. No. 170865 and G.R. No. 170892, April 25, 2012
PHILIPPINE NATIONAL BANK vs. SPOUSES CHEAH CHEE CHONG and OFELIA CAMACHO CHEAH; and SPOUSES CHEAH CHEE CHONG and OFELIA CAMACHO CHEAH vs. PHILIPPINE NATIONAL BANK

FACTS

Respondent Ofelia Cheah, to accommodate a friend, deposited a $300,000.00 foreign check (Bank of America Check No. 1906) payable to cash into her and her husband’s joint dollar account with petitioner Philippine National Bank (PNB) Buendia Branch. PNB accepted the check for collection and sent it to its correspondent bank, Philadelphia National Bank. On November 6, 1992, PNB received a credit advice that the proceeds were temporarily credited. On November 16, PNB officer Alberto Garin informed Ofelia the check had “cleared,” and the bank credited the amount to the spouses’ account the next day. Ofelia and her friend subsequently withdrew the entire amount, which was given to the check’s presenter.
Unbeknownst to the branch, PNB Head Office had received a SWIFT message on November 16 from the correspondent bank dated November 13, stating the check was returned for insufficient funds. Due to internal misrouting, the Buendia Branch only learned of the dishonor on November 20-24. PNB demanded the spouses return the money. They attempted recovery, and the husband later signed a letter offering property as collateral, allegedly upon the bank officer’s plea that it was a mere formality. The arrangement did not materialize, and PNB sued the spouses for the sum.

ISSUE

Whether PNB can recover from the spouses Cheah the amount it credited to their account based on the subsequently dishonored foreign check.

RULING

Yes, but the parties must share the loss equally due to their concurrent negligence. The Supreme Court affirmed the Court of Appeals’ ruling. The legal logic rests on the principles of solutio indebiti and comparative negligence. Under Article 2154 of the Civil Code, money paid by mistake must be returned. PNB’s premature release of the funds before the completion of the clearing period—contravening its own internal circular requiring a 15-day guarantee period for U.S. dollar checks—constituted gross negligence. It created the illusion of clearance and induced the withdrawal.
However, the spouses Cheah were also negligent. Ofelia deposited a third-party check payable to cash for someone she did not know, acting as an unofficial accommodation party without receiving value, purely as a favor. This made her instrumental in introducing the fraudulent instrument into the banking system. Her act was the proximate cause of the bank’s involvement. The husband’s act of signing the collateral letter, while potentially borne from the bank’s pressure, did not absolve their initial fault. Since both parties’ negligence contributed to the loss, equity demands they share the burden. Thus, the loss is divided equally between them.