METROBANK vs.

CABILZO Case Digest

METROBANK vs. CABILZO G.R. No. 154469 December 6, 2006 510 SCRA 259 FACTS: On 12 November 1994, Cabilzo issued a Metrobank Check No. 985988, payable to CASH and postdated on 24 November 1994 in the amount of One Thousand Pesos (P1, 000.00). The check was drawn against Cabilzos Account with Metrobank Pasong Tamo Branch under Current Account No. 618044873-3 and was paid by Cabilzo to a certain Mr. Marquez, as his sales commission. Subsequently, the check was presented to Westmont Bank for payment. Westmont Bank, in turn, indorsed the check to Metrobank for appropriate clearing. After the entries thereon were examined, including the availability of funds and the authenticity of the signature of the drawer, Metrobank cleared the check for encashment in accordance with the Philippine Clearing House Corporation (PCHC) Rules. On 16 November 1994, Cabilzos representative was at Metrobank Pasong Tamo Branch to make some transaction when he was asked by bank personnel if Cabilzo had issued a check in the amount of P91, 000.00 to which the former replied in the negative. On the afternoon of the same date, Cabilzo himself called Metrobank to reiterate that he did not issue a check in the amount of P91, 000.00 and requested that the questioned check be returned to him for verification, to which Metrobank complied. Upon receipt of the check, Cabilzo discovered that Metrobank Check No. 985988 which he issued on 12 November 1994 in the amount of P1, 000.00 was altered to P91, 000.00 and the date 24 November 1994 was changed to 14 November 1994.Hence, Cabilzo demanded that Metrobank re-credit the amount of P91, 000.00 to his account. Metrobank, however, refused reasoning that it has to refer the matter first to its Legal Division for appropriate action. Repeated verbal demands followed but Metrobank still failed to re-credit the amount of P91, 000.00 to Cabilzos account

On 30 June 1995, Cabilzo, thru counsel, finally sent a letter-demand to Metrobank for the payment of P90, 000.00, after deducting the original value of the check in the amount of P1, 000.00. Such written demand notwithstanding, Metrobank still failed or refused to comply with its obligation. Consequently, Cabilzo instituted a civil action for damages against Metrobank before the RTC of Manila, Branch 13. In his Complaint docketed as Civil Case No. 9575651, Renato D. Cabilzo v. Metropolitan Bank and Trust Company, Cabilzo prayed that in addition to his claim for reimbursement, actual and moral damages plus costs of the suit be awarded in his favor.

ISSUE: Whether equitable estoppel can be appreciated in favor of petitioner HELD: The degree of diligence required of a reasonable man in the exercise of his tasks and the performance of his duties has been faithfully complied with by Cabilzo. In fact, he was wary enough that he filled with asterisks the spaces between and after the amounts, not only those stated in words, but also those in numerical figures, in order to prevent any fraudulent insertion, but unfortunately, the check was still successfully altered, indorsed by the collecting bank, and cleared by the drawee bank, and encashed by the perpetrator of the fraud, to the damage and prejudice of Cabilzo.

Metrobank cannot lightly impute that Cabilzo was negligent and is therefore prevented from asserting his rights under the doctrine of equitable estoppel when the facts on record are bare of evidence to support such conclusion. The doctrine of equitable estoppel states that when one of the two innocent persons, each guiltless of any intentional or moral wrong, must suffer a loss, it must be borne by the one whose erroneous conduct, either by omission or commission, was the cause of injury. Metrobanks reliance on this dictum is misplaced. For one, Metrobanks representation that it is an innocent party is flimsy and evidently, misleading. At the same time, Metrobank cannot asseverate that Cabilzo was negligent and this negligence was the proximate cause of the loss in the absence of even a scintilla proof to buttress such claim. Negligence is not presumed but must be proven by the one who alleges it, which petitioner failed to.

CITIBANK vs. SABENIANO Case Digest

CITIBANK vs. SABENIANO G.R.No. 156132, October 16, 2006 FACTS: Petitioner Citibank is a banking corporation duly authorized under the laws of the USA to do commercial banking activities n the Philippines. Sabeniano was a client of both Petitioners Citibank and FNCB Finance. Respondent filed a complaint against petitioners claiming to have substantial deposits, the proceeds of which were supposedly deposited automatically and directly to respondents account with the petitioner Citibank and that allegedly petitioner refused to despite repeated demands. Petitioner alleged that respondent obtained several loans from the former and in default, Citibank exercised its right to set-off respondents outstanding loans with her deposits and money. RTC declared the act illegal, null and void and ordered the petitioner to refund the amount plus interest, ordering Sabeniano, on the other hand to pay Citibank her indebtedness. CA affirmed the decision entirely in favor of the respondent. ISSUE: Whether petitioner may exercise its right to set-off respondents loans with her deposits and money in Citibank-Geneva RULING: Petition is partly granted with modification. 1. Citibank is ordered to return to respondent the principal amount of P318,897.34 and P203,150.00 plus 14.5% per annum 2. The remittance of US $149,632.99 from respondents Citibank-Geneva account is declared illegal, null and void, thus Citibank is ordered to refund said amount in Philippine currency or its equivalent using exchange rate at the time of payment. 3. Citibank to pay respondent moral damages of P300,000, exemplary damages for P250,000, attorneys fees of P200,000. 4. Respondent to pay petitioner the balance of her outstanding loans of P1,069,847.40 inclusive off interest.

NUGUID vs. NICDAO Case Digest

EMMA P. NUGUID vs. CLARITA S. NICDAO G.R. No. 150785 September 15, 2006 FACTS: Accused Clarita S. Nicdao is charged with having committed the crime of Violation of BP 22 in fourteen (14) counts. The criminal complaints allege that respondent and her husband approached petitioner and asked her if they could borrow money to settle some obligations. Having been convinced by them and because of the close relationship of respondent to petitioner, the latter lent the former her money. Thus, every month, she was persuaded to release P100,000.00 to the accused until the total amount reached P1,150,000.00. As security for the P1,150,000.00, respondent gave petitioner open dated checks with the assurance that if the entire amount is not paid within one (1) year, petitioner can deposit the checks.

Subsequently, petitioner demanded payment of the sums above-mentioned, but respondent refused to acknowledge the indebtedness. Thereafter, petitioner deposited all aforementioned checks in the bank totaling P1,150,000.00. The checks were all returned for having been drawn against insufficient funds. A verbal and written demand was made upon respondent to pay the amount represented by the bounced checks, but to no avail. Hence, a complaint for violation of BP 22 was filed against the respondent. The trial court convicted the defendant. The CA reversed the decision, thus acquitting Nicdao. Petitioner now contends that the civil liability of the defendant was not extinguished by the acquittal. ISSUE: Whether respondent remains civilly liable to petitioner despite her acquittal. HELD: No. From the standpoint of its effects, a crime has a dual character: (1) as an offense against the State because of the disturbance of the social order and (2) as an offense against the private person injured by the crime unless it involves the crime of treason, rebellion, espionage, contempt and others (wherein no civil liability arises on the part of the offender either because there are no damages to be compensated or there is no private person injured by the crime. What gives rise to the civil liability is really the obligation of everyone to repair or to make whole the damage caused to another by reason of his act or omission, whether done intentionally or negligently and whether or not punishable by law. Extinction of penal action does not carry with it the eradication of civil liability, unless the extinction proceeds from a declaration in the final judgment that the fact from which the civil liability might arise did not exist. The basic principle in civil liability ex delicto is that every person criminally liable is also civilly liable, crime being one of the five sources of obligations under the Civil Code. A person acquitted of a criminal charge, however, is not necessarily civilly free because the quantum of proof required in criminal prosecution (proof beyond reasonable doubt)

is greater than that required for civil liability (mere preponderance of evidence). In order to be completely free from civil liability, a person's acquittal must be based on the fact that he did not commit the offense. If the acquittal is based merely on reasonable doubt, the accused may still be held civilly liable since this does not mean he did not commit the act complained of. It may only be that the facts proved did not constitute the offense charged. Acquittal will not bar a civil action in the following cases: (1) where the acquittal is based on reasonable doubt as only preponderance of evidence is required in civil cases; (2) where the court declared the accused's liability is not criminal but only civil in nature and (3) where the civil liability does not arise from or is not based upon the criminal act of which the accused was acquitted. In this petition, we find no reason to ascribe any civil liability to respondent. As found by the CA, her supposed civil liability had already been fully satisfied and extinguished by payment. The statements of the appellate court leave no doubt that respondent, who was acquitted from the charges against her, had already been completely relieved of civil liability.

FIRAZA vs. PEOPLE OF THE PHILIPPINES Case Digest

ALFONSO FIRAZA vs. PEOPLE OF THE PHILIPPINES G.R. No. 154721 March 22, 2007 FACTS: Henry Samar, Jr. (private complainant) was the owner of a parcel land located in Peafrancia, Daraga, Albay. In an agreement dated 13 May 1994, private complainant sold the land to Alfonzo Firaza to be paid on several occasion. When private complainant presented PNB Check No. 395532-S for payment, the Philippine National Bank (PNB) dishonored the check by reason of account closed. Meanwhile, petitioner subdivided the land, sold the subdivided lots, and retained the unsold lots. Despite verbal and written demands for the payment of the value of the check, petitioner failed to pay the amount of the dishonored check. Thus, private complainant charged petitioner with estafa for violation of paragraph 2 (d), Article 315 of the revised Penal Code. Upon his arraignment, petitioner pleaded not guilty to the charge. After due trial, the trial court convicted petitioner and ruled that petitioner knew t the time of the issuance of the check that it was not funded. The trial court did not accept petitioners defense that the private complainant knew that said check was not funded and that the same was issued only as a guaranty for the payment of the balance of the purchase price of the land. Upon appeal, the decision was appealed by the Court of Appeals. Hence, the present case. ISSUE: Whether petitioner is guilty of estafa under paragraph 2 (d), Articled 315 of the Revised Penal Code. HELD: The elements of estafa under paragraph 2 (d), Article 315 of the RPC are the following:

1. Postdating or issuance of a check in payment of an obligation contracted at the time the check was issued; 2. Lack of sufficiency of funds to cover the check; and 3. Damage to payee. All the elements are present in this case. Petitioner issued PNB Check No. 395532-S to obtain the title of the land from private complainant. As found by the Court of Appeals, petitioner issued the check to induce private complainant to execute the deed of sale in his favor. Petitioners claim that private complainant knew that the checks did not have sufficient funds was denied by private complainant who testified that he was informed that petitioners account was in good standing and that there were sufficient funds for the postdated checks issued. It was established that private complainant would not have parted with his property if he knew that the checks were not funded. The damage suffered by private complainant had also been established. Private complainant had already transferred the title to the property to petitioner who subsequently subdivided the land and started selling the subdivided portions of the land. Yet, despite several demands, petitioner failed to pay the value of the dishonored check.

Roberto Dino vs. Maria Luisa Judal-Loot Facts: Petitioner was induced to lend a syndicate P3,000,000.00 to be secured by a real estate mortgage on several parcels of land situated in Canjulao, Lapu-lapu City. Upon scrutinizing the documents involving the properties, petitioner discovered that the documents covered rights over government properties. Realizing he had been deceived, petitioner advised Metrobank to stop payment of his checks. However, only the payment of Check No. C-MA- 142119406-CA was ordered stopped. The other two checks were already encashed by the payees. Meanwhile, Check No. C-MA- 142119406-CA (a cross-check) was negotiated and indorsed to respondents by petitioner in exchange for cash in the sum of P948,000.00, which respondents borrowed from Metrobank and charged against their credit line. Drawee bank, Metrobank, Cebu-Mabolo Branch, which is also their depositary bank, answered that the checks were suffiiently funded. However, the same was dishonored by the drawee bank when they tried to deposit it for reason PAYMENT STOPPED. Respondents filed a collection suit against petitioner and Lobitana before the trial court. The trial court ruled in favor of respondents and declared them due course holders of the subject check, since there was no privity between respondents and defendants. CA affirmed but modified the trial courts decision by deleting the award of interest, moral damages, attorneys fees and litigation expenses. The Court of Appeals opined that petitioner was only exercising (although incorrectly), what he perceived to be his right to stop the payment of the check which he rediscounted. The Court of Appeals ruled that petitioner acted in good faith in ordering the stoppage of payment of the subject check and thus, he must not be made liable for those amounts. Issue: WON The respondents were holders in due course? Held: PETITION GRANTED. Section 52 of the Negotiable Instruments Law defines a holder in due course, thus: A holder in due course is a holder who has taken the instrument under the following conditions: (a) That it is complete and regular upon its face; (b) That he became the holder of it before it was overdue, and without notice that it has been previously dishonored, if such was the fact; (c) That he took it in good faith and for value; (d) That at the time it was negotiated to him, he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it. In the case of a crossed check, as in this case, the following principles must additionally be considered: A crossed check (a) may not be encashed but only deposited in the bank; (b) may be negotiated only once to one who has an account with a bank; and (c) warns the holder that it has been issued for a definite purpose so that the holder thereof must inquire if he has received the check pursuant to that purpose; otherwise, he is not a holder in due

course. Based on the foregoing, respondents had the duty to ascertain the indorsers, in this case Lobitanas, title to the check or the nature of her possession. This respondents failed to do. Respondents verification from Metrobank on the funding of the check does not amount to determination of Lobitanas title to the check. Failing in this respect, respondents are guilty of gross negligence amounting to legal absence of good faith,[15] contrary to Section 52(c) of the Negotiable Instruments Law. Hence, respondents are not deemed holders in due course of the subject check. However, the fact that respondents are not holders in due course does not automatically mean that they cannot recover on the check. The Negotiable Instruments Law does not provide that a holder who is not a holder in due course may not in any case recover on the instrument. The only disadvantage of a holder who is not in due course is that the negotiable instrument is subject to defenses as if it were non-negotiable. Among such defenses is the absence or failure of consideration,[ which petitioner sufficiently established in this case. Petitioner issued the subject check supposedly for a loan in favor of Consings group, who turned out to be a syndicate defrauding gullible individuals. Since there is in fact no valid loan to speak of, there is no consideration for the issuance of the check. Consequently, petitioner cannot be obliged to pay the face value of the check.

UAZON V. HEIRS OF BARTOLOME RAMOS

463 SCRA 408 FACTS:
Respondents alleged that on a relevant date, spouses Tuazon purchased from their predecessor-in-interest cavans of rice. That on the total number of cavans, only a certain portion has been paid for. In payment thereof, checks have been issued but on presentment, the checks were dishonored. Respondents alleged that since spouses anticipated the forthcoming suit against them, they made fictitious sales over their properties. As defense, the spouses averred that it was the wife of Bartolome who effected the sale and that Maria was merely her agent in selling the rice. The true buyer of the cavans was Santos. The spouses further averred that when Ramos got the check from Santos, she took it in good faith and didn't knew that the same were unfunded.

HELD:
First, there is no contract of agency.

If it was truly the intention of the parties to have a contract of agency, then when the spouses sued Santos on a separate civil action, they should have instituted the same on behalf and for the respondents. They didn't do so. The filing in their own names negate their claim that they acted as mere agents in selling the rice.

Second, the spouses are liable on the check.

As indorser, Tuazon warranted that upon due presentment, according to their tenor, and that in case they were dishonored, she would pay the corresponding amount. After the instrument is dishonored by nonpayment, indorsers cease to be merely secondarily liable. They became

principal debtors whose liability becomes identical to that of the original obligor. The holder of a negotiable instrument need not even proceed Santos is not an indispensable party to the suit against the

against the maker before suing the indorser. spouses.