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    PNB V Chong: (G.R. No. 170865 April 25, 2012) AUTHOR: Louis Tan TOPIC: Credit Transactions PONENTE: Del Castillo, J

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    Louis Tan
    PNB v Chong 1) PNB was found liable for releasing the proceeds of a check prior to the standard 15-day clearing period, violating banking rules and prudent practice. 2) The account holders, spouses Chea, were also found guilty of contributory negligence for fully trusting a stranger and participating in a suspicious transaction. 3) Both PNB and the account holders were equally negligent, so the court ruled they should equally share the loss from the bounced check.

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    PNB V Chong: (G.R. No. 170865 April 25, 2012) AUTHOR: Louis Tan TOPIC: Credit Transactions PONENTE: Del Castillo, J

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    Louis Tan
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    PNB v Chong 1) PNB was found liable for releasing the proceeds of a check prior to the standard 15-day clearing period, violating banking rules and prudent practice. 2) The account holders, spouses Chea, were also found guilty of contributory negligence for fully trusting a stranger and participating in a suspicious transaction. 3) Both PNB and the account holders were equally negligent, so the court ruled they should equally share the loss from the bounced check.

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    PNB v Chong

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    PNB v Chong 1) PNB was found liable for releasing the proceeds of a check prior to the standard 15-day clearing period, violating banking rules and prudent practice. 2) The account holders, spouses Chea, were also found guilty of contributory negligence for fully trusting a stranger and participating in a suspicious transaction. 3) Both PNB and the account holders were equally negligent, so the court ruled they should equally share the loss from the bounced check.

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    © All Rights Reserved
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    Download as docx, pdf, or txt
    31 views1 page

    PNB V Chong: (G.R. No. 170865 April 25, 2012) AUTHOR: Louis Tan TOPIC: Credit Transactions PONENTE: Del Castillo, J

    Uploaded by

    Louis Tan
    PNB v Chong 1) PNB was found liable for releasing the proceeds of a check prior to the standard 15-day clearing period, violating banking rules and prudent practice. 2) The account holders, spouses Chea, were also found guilty of contributory negligence for fully trusting a stranger and participating in a suspicious transaction. 3) Both PNB and the account holders were equally negligent, so the court ruled they should equally share the loss from the bounced check.

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    © All Rights Reserved
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    of 1

    PNB v Chong

    [G.R. No. 170865; April 25, 2012] AUTHOR: Louis Tan


    TOPIC: Credit Transactions
    PONENTE: Del Castillo, J.

    DOCTRINE: The negligence of the collecting bank in encashing a check prior to the clearing period, and
    contributory negligence on the part of the account holder renders them both equally liable.

    FACTS:
     Ofelia agreed to clear and encash Filipina’s Bank of America check for 300 US dollars for a service fee.
     Ofelia went to PNB where she and her husband Chea had a joint dollar savings account, to deposit the check
    who informed them that the process of clearing the check normally takes 15 days.
     PNB then sent it for clearing through its correspondent bank, which temporarily credited the proceeds of
    the check to PNB’s account.
     PNB then credited the same amount to the account of the spouses Chea. Filipina received all the proceeds.
     PNB was informed that the check has bounced, but Filipina told the spouses Chea that all the money has
    already been given away to several people.
     PNB sent a demand letter to the spouses for the return of the amount of the check and froze their accounts
    and filed a complaint against them.
     The RTC ruled in PNB’s favor, holding that the spouses were guilty of contributory negligence.
     The CA modified the decision ruling that PNB was equally negligent and both parties should equally duffer
    and shoulder the loss.
    ISSUE/S & RATIO:
    1. WON PNB is liable for releasing the proceeds of the check prior to the 15-day clearing period.
    o PNB’s act of releasing the proceeds of the check prior to the lapse of the 15-day clearing period
    was the proximate cause of the loss.
    o Here, while PNB highlights Ofelia’s fault in accommodating a stranger’s check and depositing it to
    the bank, it remains mum in its release of the proceeds thereof without exhausting the 15-day clearing
    period, an act which contravened established banking rules and practice.
    o The payment of the amounts of checks without previously clearing them with the drawee bank
    especially so where the drawee bank is a foreign bank and the amounts involved were large is contrary
    to normal or ordinary banking practice.
    o "the diligence required of banks is more than that of a Roman pater familias or a good father of a
    family. The highest degree of diligence is expected."
    o PNB miserably failed to do its duty of exercising extraordinary diligence and reasonable business
    prudence. The disregard of its own banking policy amounts to gross negligence.
     WON the spouses are guilty of contributory negligence.
    o The spouses Cheah are guilty of contributory negligence and are bound to share the loss with the
    bank
    o "Contributory negligence is conduct on the part of the injured party, contributing as a legal cause to
    the harm he has suffered, which falls below the standard to which he is required to conform for his own
    protection."
    o Ofelia failed to observe caution in giving her full trust in accommodating a stranger and this led
    her and her husband to be swindled.
    o Ofelia’s prior consultation with PNB officers is not enough to totally absolve her of any liability. In
    the first place, she should have shunned any participation in that palpably shady transaction.
    o In any case, the complaint against the spouses Cheah could not be dismissed. As PNB’s client,
    Ofelia was the one who dealt with PNB and negotiated the check such that its value was credited in her
    and her husband’s account. Being the ones in privity with PNB, the spouses Cheah are therefore the
    persons who should return to PNB the money released to them.
    o PNB and the spouses Cheah are equally negligent and should therefore equally suffer the loss. The
    two must both bear the consequences of their mistakes.
    RULING: Petition Denied, Judgment affirmed.

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