Allied Bank Corp. V Bpi

ALLIED BANKING CORPORATION V BPI
(692 SCRA 186)
“DOCTRINE OF LAST CLEAR CHANCE”

“CONTRIBUTORY NEGLIGENCE”
Petitioner : ALLIED BANKING CORPORATION
Respondents : BANK OF THE PHILIPPINE ISLANDS
FACTS:
On October 10, 2002, a check in the amount of P1,000,000.00 payable to "Mateo

Mst. Group International" (MMGI) was presented for deposit and accepted at petitioner's
(Allied Bank) Kawit Branch. The check, post-dated "Oct. 9, 2003", was drawn against
the account of Marciano Silva, Jr. (Silva) with respondent BPI Bel-Air Branch.
Upon receipt, petitioner sent the check for clearing to respondent through the Philippine
Clearing House Corporation (PCHC).
The check was cleared by respondent and petitioner credited the account of
MMGI with P1,000,000.00. On October 22, 2002, MMGl's account was closed and all
the funds therein were withdrawn. A month later, Silva discovered the debit of
P1,000,000.00 from his account. In response to Silva's complaint, respondent credited
his account with the aforesaid sum.
Petitioner filed a complaint before the Arbitration Committee, asserting that respondent
should solely bear the entire face value of the check due to its negligence in failing to
return the check to petitioner within the 24-hour reglementary period as provided in
Section 20.1of the Clearing House Rules and Regulations (CHRR) 2000. In its Answer
with Counterclaims, respondent charged petitioner with gross negligence for accepting
the post-dated check in the first place. It contended that petitioner's admitted negligence
was the sole and proximate cause of the loss.
ISSUES:
1. W/N the Doctrine of Last Clear chance applies to this case.

2. W/N the 60-40 apportionment of loss ordered by the CA was justified
HELD:
1. YES, the doctrine of last clear chance applies to this case.
The doctrine of last clear chance, stated broadly, is that the negligence of the
plaintiff does not preclude a recovery for the negligence of the defendant where it
Mark John Ramos | OBLIGATIONS AND CONTRACTS

appears that the defendant, by exercising reasonable care and prudence, might
have avoided injurious consequences to the plaintiff notwithstanding the plaintiff’s
negligence. The doctrine necessarily assumes negligence on the part of the
defendant and contributory negligence on the part of the plaintiff, and does not
apply except upon that assumption. Stated differently, the antecedent negligence
of the plaintiff does not preclude him from recovering damages caused by the
supervening negligence of the defendant, who had the last fair chance to prevent
the impending harm by the exercise of due diligence. Moreover, in situations
where the doctrine has been applied, it was defendant’s failure to exercise such
ordinary care, having the last clear chance to avoid loss or injury, which was the
proximate cause of the occurrence of such loss or injury.
2. YES, the 60-40 apportionment of loss ordered by the CA was justified
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." Admittedly, petitioner’s
acceptance of the subject check for deposit despite the one year postdate written
on its face was a clear violation of established banking regulations and practices.
In such instances, payment should be refused by the drawee bank and returned
through the PCHC within the 24-hour reglementary period. As aptly observed by
the CA, petitioner’s failure to comply with this basic policy regarding post-dated
checks was "a telling sign of its lack of due diligence in handling checks coursed
through it."
In the cited case of Philippine Bank of Commerce v. Court of Appeals, while the
Court found petitioner bank as the culpable party under the doctrine of last clear
chance since it had, thru its teller, the last opportunity to avert the injury incurred
by its client simply by faithfully observing its own validation procedure, it
nevertheless ruled that the plaintiff depositor (private respondent) must share in
the loss on account of its contributory negligence.
Therefore, Following the establishment of jurisprudential precedents, The SC

believe the allocation of sixty percent (60%) of the actual damages involved in
this case (represented by the amount of the checks with legal interest) to
petitioner is proper under the premises. Respondent should, in light of its
contributory negligence, bear forty percent (40%) of its
own loss.
Mark John Ramos | OBLIGATIONS AND CONTRACTS

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ALLIED BANKING CORPORATION V BPI

(692 SCRA 186)

“DOCTRINE OF LAST CLEAR CHANCE”

Petitioner : ALLIED BANKING CORPORATION

Respondents : BANK OF THE PHILIPPINE ISLANDS

On October 10, 2002, a check in the amount of P1,000,000.00 payable to "Mateo

1. W/N the Doctrine of Last Clear chance applies to this case.

1. YES, the doctrine of last clear chance applies to this case.

Mark John Ramos | OBLIGATIONS AND CONTRACTS

2. YES, the 60-40 apportionment of loss ordered by the CA was justified

Contributory negligence is conduct on the part of the injured party, contributing as

Therefore, Following the establishment of jurisprudential precedents, The SC

Mark John Ramos | OBLIGATIONS AND CONTRACTS

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