Allied Banking Corporation v · G.R. 133179

Petitioner: Allied Banking Corporation
Respondent: Lim Sio Wan
Citation: G.R. No. 133179
Court: Supreme Court
Division: Second Division
Ponente: Velasco, Jr., J.
Decided: March 27, 2008

Summary

Supreme Court case involving liability allocation among multiple banks for unauthorized release of money market placement proceeds. Lim Sio Wan deposited P1.15 million with Allied Banking, which negligently released funds to unauthorized person Deborah Santos based on phone call impersonation. The manager's check was deposited at Metrobank with forged endorsement to pay Filipinas Cement Corporation's obligation with Producers Bank. The Court applied comparative negligence principles, holding Allied 60% liable for improper release and Metrobank 40% liable for guaranteeing forged endorsement without verification. Additionally, Producers Bank was ordered to reimburse both banks under unjust enrichment doctrine, having benefited when its debt to FCC was extinguished using Lim Sio Wan's money. The decision establishes important precedents for banking liability, comparative negligence in multi-party financial transactions, and application of unjust enrichment principles in complex commercial disputes involving negotiable instruments.

Statutes applied

Civil Code, Art. 22

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By the Intellegal Editorial Board · March 27, 2008

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