FACTS:

Warliza Sarande deposited a check in her account at PCI Bank. She confirmed with the bank that the check had been cleared. Relying on this confirmation, she issued a check to Rowena Ong. Ong presented the check to PCI Bank and requested for the proceeds to be converted into a manager's check, which she deposited in her account with Equitable Banking Corporation. However, Ong later received a notice that PCI Bank had stopped the payment of the manager's check. Ong demanded payment from PCI Bank but was refused, leading her to file a complaint. PCI Bank claimed that Sarande's original check was returned because the account was closed. Ong filed a motion for summary judgment, which PCI Bank failed to oppose or attend the hearing for. The trial court granted the motion and ordered PCI Bank to pay Ong. PCI Bank appealed the decision to the Court of Appeals, which affirmed the trial court's orders and decision. PCI Bank then filed a petition for review before the Supreme Court.

The petitioner, EPCI Bank, issued a manager's check to the respondent, Ong, who provided a personal check by Sarande as payment. However, Sarande's check was found to be unfunded. Despite this, EPCI Bank certified Sarande's check and issued the manager's check to Ong.

EPCI Bank argued that Ong's complaint lacked merit and filed a counterclaim for unjust enrichment. The trial court denied EPCI Bank's counterclaim, and this decision was upheld by the Court of Appeals.

EPCI Bank invoked the provisions on summary judgment, claiming that there was no genuine issue of material fact. The trial court ruled that EPCI Bank's liability was established when they acknowledged their error in clearing Sarande's check and issuing the manager's check to Ong. The trial court also stated that Ong, being a holder in due course, could not be affected by any defense of lack of consideration. EPCI Bank's counterclaim was based on their claim of unjust enrichment on the part of Ong.

ISSUES:

1. Whether or not there are genuine issues of fact that require trial in this case.

2. Whether or not the defendant is liable for unjust enrichment.

3. Whether or not the plaintiff is a holder in due course of the manager's check.

4. Whether Ong is a holder in due course and whether there was consideration for the issuance of the manager's check.

5. Whether PCI Bank exercised the requisite degree of care required of it.

6. Whether the act of Sarande in depositing the check of Ong and issuing the manager's check to Ong is undeniable.

7. Whether the proximate cause of the loss is attributable to PCI Bank.

RULING:

1. The court is justified in rendering summary judgment if the affidavits, depositions, or admissions demonstrate that the issues raised are sham or fictitious. A hearing is not necessary if the issues can be resolved based on the submitted evidence.

2. The defendant is liable for unjust enrichment because the transfer of value without just cause or consideration has been established. The plaintiff has been enriched, the defendant has been impoverished, and there is a lack of cause for the defendant's enrichment.

3. The plaintiff is a holder in due course of the manager's check because it was issued for value, taken in good faith, and without notice of any infirmity or defect in the instrument or title of the person negotiating it.

4. Ong is not a holder in due course and there was no consideration for the issuance of the manager's check. By accepting the check issued by Sarande and issuing a manager's check in exchange, PCI Bank assumed the liabilities of an acceptor.

5. PCI Bank did not exercise the highest degree of care required of it. It inadvertently sent a check through local clearing instead of inter-regional clearing, and failed to inform the depositor of its error.

6. The act of Sarande in depositing the check of Ong and issuing the manager's check to Ong is undeniable.

7. The proximate cause of the loss is attributable to PCI Bank.

PRINCIPLES:

• Summary judgment may be rendered if the issues raised in the answer are demonstrated to be sham or fictitious.

• Unjust enrichment occurs when one person is enriched at the expense of another without just cause or consideration.

• A holder in due course is one who takes a negotiable instrument under specific conditions, such as acquiring it before it is overdue, without notice of prior dishonor, in good faith, and for value.

• A manager's check is equivalent to cash and stands on the same footing as a certified check. Its issuance by the bank constitutes a written promise to pay upon demand, and the certification of the check transfers the funds to the payee or holder.

• When a check is certified by the bank, it is equivalent to acceptance and the certification implies that the check is drawn upon sufficient funds in the hands of the drawee.

• The degree of diligence required of banks is higher than that of a good father of a family, given the fiduciary nature of their relationship with depositors.

• Banks have a vital role in the economic life of society and are entrusted with the trust and confidence of the public.

• Moral damages may be awarded if they are the proximate result of the defendant's wrongful act or omission, and if the requisites for an award of moral damages are present.

• Proximate cause is that cause which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred.

• Exemplary or corrective damages may be imposed by way of example or correction for the public good, in addition to the moral, temperate, liquidated or compensatory damages.

• The banking system is an indispensable institution in the modern world and plays a vital role in the economic life of every civilized society, therefore banks should guard against injury attributable to negligence or bad faith on its part.

• The highest degree of diligence is expected, and high standards of integrity and performance are required of banks, considering the trust and confidence of the public in general.

• Proof of pecuniary loss is not necessary in order for moral, nominal, temperate, liquidated or exemplary damages to be adjudicated.

• The determination of the amount to be awarded (except liquidated damages) is left to the sound discretion of the court according to the circumstances of each case.