PNB

V. CHOWKING (2008)

FACTS:
Between March 15, 1989 and August 10, 1989, Joe Kuan Food Corporation issued in favor of Chowking five (5) PSBank checks.
The total amount of the subject checks reached P556,981.86. On the respective due dates of each check, Chowkings acting
accounting manager, Rino T. Manzano, endorsed and encashed said checks with the Bustos branch of respondent PSBank.

All the 5 checks were honored by defendant Santos, even with only the endorsement of Manzano approving them. The
signatures of the other authorized officers of respondent corporation were absent in the 5 checks, contrary to usual banking
practice. Unexpectedly, Manzano absconded with and misappropriated the check proceeds.

When Chowking found out Manzanos scheme, it demanded reimbursement from PSBank. When PSBank refused to pay,
Chowking filed a complaint for a sum of money with damages before the RTC. Likewise impleaded were PSBanks president,
Antonio S. Abacan, and Bustos branch head, Santos.

Petitioner did not controvert the foregoing facts, but denied liability to respondent for the encashed checks. Petitioner bank
maintained it exercised due diligence in the supervision of all its employees. It even dismissed defendant Santos after she was
found guilty of negligence in the performance of her duties. Petitioner, Santos and Abacan were unanimous in asserting that
respondent is estopped from claiming reimbursement and damages since it was negligent in allowing Manzano to take hold,
endorse, and encash its checks. Petitioner pointed out that the proximate cause of respondents loss was its own negligence.

RTC: rendered judgment in favor of respondent; Through an Order, it reversed its earlier ruling and held that it was
respondents own negligence that was the proximate cause of the loss.
CA: reinstated the earlier ruling of the RTC; held that both petitioner PSBank and Santos should bear the loss; disagreed with
petitioners contention that respondents own negligence was the proximate cause of its loss.

ISSUE/S:
(1) W/N the respondent was estopped from asserting its claim against petitioner
(2) W/N respondents negligence was the proximate cause of its own loss

HELD/RATIO:
(1) NO. THE RESPONDENT WAS NOT ESTOPPED.

The doctrine of equitable estoppel or estoppel in pais finds no application in the present case. In Caltex (Philippines), Inc. v. CA:

Under the doctrine of estoppel, an admission or representation is rendered conclusive upon the person making it, and cannot be
denied or disproved as against the person relying thereon. A party may not go back on his own acts and representations to the
prejudice of the other party who relied upon them. In the law of evidence, whenever a party has, by his own declaration, act, or
omission, intentionally and deliberately led another to believe a particular thing true, to act upon such belief, he cannot, in any
litigation arising out of such declaration, act, or omission, be permitted to falsify it.

In Maneclang v. Baun:

In estoppel by pais, as related to the party sought to be estopped, it is necessary that there be a concurrence of the following
requisites: (a) conduct amounting to false representation or concealment of material facts or at least calculated to convey the
impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (b)
intent, or at least expectation that this conduct shall be acted upon, or at least influenced by the other party; and (c) knowledge,
actual or constructive of the actual facts.

A party invoking the doctrine must have been misled to ones prejudice. That is the final and most important of the elements
of equitable estoppel. It is this element that is lacking here. Chowking did not make any false representation or concealment of
material facts in relation to the encashments of the previous checks. Respondent may have allowed Manzano to previously
encash its checks, but it has always been accompanied with the endorsements of the other authorized signatories. Respondent
did not allow petitioner to have its checks encashed without the signature of all of its authorized signatories.

As the CA pointed out: We find at the back of those checks, whereon indorsement usually appears, the signature of
Manzano together with other signature/signatures though mostly are illegible. It appears then that, assuming the appellant
impliedly tolerated the act of Manzano in indorsing the checks, it did not allow Manzano alone to indorse its checks as what
actually happened in this case because his previous indorsements were coupled with other indorsements of the
appellants signatories. There is, therefore, no sufficient evidence to sustainPSBs submission. On this score alone, the
defense of estoppel must fail.

Neither can estoppel be appreciated in relation to petitioner itself. In Kalalo v. Luz:

As related to the party claiming the estoppel, the essential elements are (1) lack of knowledge and of the means of knowledge of
the truth as the facts in question; (2) reliance, in good faith, upon the conduct and statements of the party to be estopped; (3)
action or inaction based thereon of such character as to change the position or status of the party claiming the estoppel, to his
injury, detriment or prejudice.

Here, the first two elements are wanting. Petitioner has knowledge of the truth and the means to it as to the proper
endorsements necessary in encashing respondents checks. Respondent has an account with petitioner bank and, as such, is
privy to the proper signatories to endorse respondents checks.

Neither can petitioner claim good faith. It is elementary that estoppel cannot be sustained in doubtful inference. Absent the
conclusive proof that its essential elements are present, estoppel must fail. Because estoppel, when misapplied, becomes a
most effective weapon to accomplish an injustice, inasmuch as it shuts a mans mouth from speaking the truth.

(2) NO. IT WAS PETITIONERS OWN NEGLIGENCE THAT WAS THE PROXIMATE CAUSE OF RESPODNENTS LOSS.

Petitioner failed to prove that it has observed the due diligence required of banks under the law. Contrary to petitioners view,
its negligence is the proximate cause of respondents loss. The banking business is impressed with public interest. Of
paramount importance is the trust and confidence of the public in general in the banking industry. 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.

The General Banking Law of 2000requires of banks the highest standards of integrity and performance. Needless to say, a
bank is under obligation to treat the accounts of its depositors with meticulous care. The fiduciary nature of the relationship
between the bank and the depositors must always be of paramount concern. Petitioner, through Santos, was clearly negligent
when it honored respondents checks with the lone endorsement of Manzano.

Proximate cause is determined by the facts of the case. It 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. The proximate
cause of the loss is not respondents alleged negligence in allowing Manzano to take hold and encash respondents checks. The
proximate cause is petitioners own negligence in the supervision of its employees when it overlooked the irregular practice of
encashing checks even without the requisite endorsements.

CERVANTES V. PEOPLE. (2008)

FACTS:
On July 8, 1994, an information for reckless imprudence resulting in homicide was filed against the petitioner before the RTC
of Bulacan, docketed as Criminal Case No. 2235-M-94. Trial on the merits ensued and on August 19, 1998, the trial court
convicted the petitioner as charged. In his appeal, the petitioner, for the first time, questioned the trial courts jurisdiction.

The CA, however, in the challenged decision, considered the petitioner to have actively participated in the trial and to have
belatedly attacked the jurisdiction of the RTC; thus, he was already estopped by laches from asserting the trial courts lack of
jurisdiction. Finding no other ground to reverse the trial courts decision, the CA affirmed the petitioners conviction but
modified the penalty imposed and the damages awarded.

ISSUE/S:
W/N the petitioner was barred by estoppel by laches from asserting the trial courts lack of jurisdiction

HELD/RATIO:
NO. THE PETITIONER IS NOT BARRED BY ESTOPPEL BY LACHES.

Applied uniformly is the familiar rule that the jurisdiction of the court to hear and decide a case is conferred by the law in force
at the time of the institution of the action, unless such statute provides for a retroactive application thereof. In this case, at the
time the criminal information for reckless imprudence resulting in homicide with violation of the Automobile Law (now Land
Transportation and Traffic Code) was filed, Section 32(2) of BP Blg. 129 had already been amended by RA No. 7691. As the
imposable penalty for the crime charged herein is prision correccional in its medium and maximum periods, jurisdiction to
hear and try the same is conferred on the Municipal Trial Courts. Clearly, the RTC of Bulacan does not have jurisdiction.

While both the CA and the Solicitor General acknowledge this fact, they nevertheless are of the position that the principle of
estoppel by laches has already precluded the petitioner from questioning the jurisdiction of the RTCthe trial went on for 4
years with the petitioner actively participating therein and without him ever raising the jurisdictional infirmity. The petitioner,
for his part, counters that the lack of jurisdiction of a court over the subject matter may be raised at any time even for the first
time on appeal. As undue delay is further absent herein, the principle of laches will not be applicable.

As early as 1901, this Court has declared that unless jurisdiction has been conferred by some legislative act, no court or
tribunal can act on a matter submitted to it. Jurisdiction over the subject-matter in a judicial proceeding is conferred by the
sovereign authority which organizes the court; it is given only by law and in the manner prescribed by law and an objection
based on the lack of such jurisdiction can not be waived by the parties.
In Tijam v. Sibonghanoy, the defense of lack of jurisdiction was raised for the first time in a motion to dismiss filed by the
Surety almost 15 years after the questioned ruling had been rendered. At several stages of the proceedings, in the court a quo
as well as in the CA, the Surety invoked the jurisdiction of the said courts to obtain affirmative relief and submitted its case for
final adjudication on the merits. It was only when the adverse decision was rendered by the CA that it finally woke up to raise
the question of jurisdiction. That a party may be barred by laches from invoking lack of jurisdiction at a late hour for the
purpose of annulling everything done in the case with the active participation of said party invoking the plea. A party may be
estopped or barred from raising a question in different ways and for different reasons. Thus, we speak of estoppel in pais, of
estoppel by deed or by record, and of estoppel by laches.

Laches, in a general sense, is failure or neglect, for an unreasonable and unexplained length of time, to do that which, by
exercising due diligence, could or should have been done earlier; it is negligence or omission to assert a right within a
reasonable time, warranting a presumption that the party entitled to assert it either has abandoned it or declined to assert it.
The doctrine of laches or of "stale demands" is based upon grounds of public policy which requires, for the peace of society, the
discouragement of stale claims and, unlike the statute of limitations, is not a mere question of time but is principally a question
of the inequity or unfairness of permitting a right or claim to be enforced or asserted.

It has been held that a party cannot invoke the jurisdiction of a court to secure affirmative relief against his opponent and,
after obtaining or failing to obtain such relief, repudiate or question that same jurisdiction. The question whether the court
had jurisdiction either of the subject matter of the action or of the parties was not important in such cases because the party is
barred from such conduct not because the judgment or order of the court is valid and conclusive as an adjudication, but for the
reason that such a practice cannot be toleratedobviously for reasons of public policy. Moreover, after voluntarily submitting
a cause and encountering an adverse decision on the merits, it is too late for the loser to question the jurisdiction or power of
the court. Further, it is not right for a party who has affirmed and invoked the jurisdiction of a court in a particular matter to
secure an affirmative relief, to afterwards deny that same jurisdiction to escape a penalty.

In Calimlim v. Ramirez, it was pointed out that Sibonghanoy was developing into a general rule rather than the exception,
overthrowing the time-honored principle that the issue of jurisdiction is not lost by waiver or by estoppel. In subsequent cases
decided after Calimlim, the Sibonghanoy doctrine, as foretold in Calimlim, became the rule rather than the exception.

However, in the 2005 case of Metromedia Times Corporation v. Pastorin, where the issue of lack of jurisdiction was raised only
in the National Labor Relations Commission (NLRC) on appeal, the Court stated, after examining the doctrines of jurisdiction
vis--vis estoppel, that the ruling in Sibonghanoy stands as an exception, rather than the general rule. Metromedia was not
estopped from assailing the jurisdiction of the labor arbiter before the NLRC on appeal.

Further, the ruling in Sibonghanoy on the matter of jurisdiction is, however, the exception rather than the rule. Estoppel by
laches may be invoked to bar the issue of lack of jurisdiction only in cases in which the factual milieu is analogous to that in the
cited case. In such controversies, laches should be clearly present; that is, lack of jurisdiction must have been raised so
belatedly as to warrant the presumption that the party entitled to assert it had abandoned or declined to assert it.

The general rule remains: a courts lack of jurisdiction may be raised at any stage of the proceedings, even on appeal. The
reason is that jurisdiction is conferred by law, and lack of it affects the very authority of the court to take cognizance of and to
render judgment on the action. Moreover, jurisdiction is determined by the averments of the complaint, not by the defenses
contained in the answer. In the more recent Regalado v. Go, the Court again emphasized that laches should be clearly present
for the Sibonghanoy doctrine to be applicable.

Applying the said doctrine to the instant case, the petitioner is in no way estopped by laches in assailing the jurisdiction of the
RTC, considering that he raised the lack thereof in his appeal before the appellate court. At that time, no considerable period
had yet elapsed for laches to attach. True, delay alone, though unreasonable, will not sustain the defense of "estoppel by
laches" unless it further appears that the party, knowing his rights, has not sought to enforce them until the condition of the
party pleading laches has in good faith become so changed that he cannot be restored to his former state, if the rights be then
enforced, due to loss of evidence, change of title, intervention of equities, and other causes.

Estoppel, being in the nature of a forfeiture, is not favored by law. It is to be applied rarelyonly from necessity, and only in
extraordinary circumstances. The doctrine must be applied with great care and the equity must be strong in its favor. When
misapplied, the doctrine of estoppel may be a most effective weapon for the accomplishment of injustice. A judgment rendered
without jurisdiction over the subject matter is void. Hence, the Revised Rules of Court provides for remedies in attacking
judgments rendered by courts or tribunals that have no jurisdiction over the concerned cases. No laches will even attach when
the judgment is null and void for want of jurisdiction.