EPCIB V.

ONG

Facts:
Warliza Sarande deposited in her account at PCI Bank a check in the amount of
Php 225,000.00. Upon inquiry on whether the check had been cleared, she
received an affirmative answer.
Relying on this assurance, she issued 2 checks drawn against the proceeds of
the said check.
o One of these was issued to respondent Rowena Ong owing to a business
transaction.
On the same day, Ong presented to PCIB the said check and instead of
encashing it, requested PCIB to convert the proceeds thereof into a managers
check. She was therefore issued a managers check for the sum of Php 132,000.
Ong deposited the check in her account with Equitable Bank. However a few
days after her deposit, she received a check return slip informing her that PCIB
stopped the payment of the check on the ground of irregular issuance.
Despite repeated demands for the payment of the amount, PCIB refused. Thus,
Ong filed a complaint for sum of money, damages, and attorneys fees against
PCIB.
PCIBs defense: The check was returned on the ground that the account against
which it was drawn was already closed. It immediately gave notice to Sarande
and Ong about the return of said check. Ong was also requested to return the
managers check on the ground of want of consideration as a result of the closed
account.
RTC: ruled in favor of Ong after summary judgment.
CA: denied PCIBs appeal and affirmed the RTC decision.
Hence, the instant petition filed by PCIB before the SC.

Issues and Held:

WoN the court erred in issuing a summary judgment- NO.
o PCIB: The summary judgment was an error because there are genuine,
material, and factual issues which require the presentation of evidence.
o SC: When the facts as pleaded appear uncontested or undisputed, then
there is no real or genuine issue or question as to the facts and summary
judgment is called for. By admitting it committed an error, clearing the
check of Sarande and issuing in favor of Ong not just any check but a
managers check for that matter, PCIBs liability is fixed.
WoN PCIB can be compelled to make good the managers check it issued to
Ong- YES.
o PCIB: It cannot be compelled to do so because it would constitute unjust
enrichment on Ongs part.
o SC: The fundamental element of unjust enrichment is the transfer of value
without cause or consideration. It is based on the equitable postulate that
it is unjust for a person to retain benefit without paying for it. It must be
stressed that Sarandes check had been cleared by PCIB for which
reason it issued the managers check to Ong. A check which has been
cleared and credited to the account of the creditor shall be equivalent to a
delivery to the creditor of cash in an amount equal to the amount credited
to his account. Having cleared the check, it became liable to Ong and
 cannot allege want or failure of consideration between it and Sarande.
Ong is a stranger as regards the transaction between PCIB and Sarande.
WoN Ong became a holder in due course- YES.
o PCIB: Ong did not become a holder in due course since there was no
consideration for the issuance of the managers check.
o SC: A managers check is an order of the bank to pay, drawn upon itself,
committing in effect its total resources, integrity and honor behind its
issuance. By its peculiar character and general use in commerce, it is
regarded substantially to be as good as the money it represents. It stands
on the same footing as a certified check.
o Under Sec. 187 of the NIL, certification of a check is equivalent to an
acceptance. By issuing such managers check therefore, PCIB assumed
the liabilities of an acceptor under Sec. 62 of the NIL.
WoN PCIB exercised the highest degree of diligence reuiqred from it by the law-
NO.
o SC: The check was inadvertently sent by PCIB through local clearing
when it should have been sent through inter-regional clearing.

Ruling:
Petition denied. CA decision affirmed.