Professional Documents
Culture Documents
CA
[G.R. No. 113236. March 5, 2001]
Ponente: Quisumbing
Issue:
1.
2.
WON Luzon Development Bank should be held liable for damages suffered
by Firestone due to its allegedly belated notice of non-payment of the
subject withdrawal slips.
Facts:
In January 1978, Firestone Tire & Rubber Company of the Philippines (Firestone
for brevity) entered into a Franchised Dealership Agreement with Fojas-Arca
Enterprises Company (Fojas-Arca), whereby the latter has the privilege to
Held:
1.
From January 14, 1978 to May 15, 1978, Fojas-Arca purchased on credit Firestone
products with a total amount of P4,896,000. In payment for the said purchases.,
Fojas-Arca delivered six special withdrawal slips drawn upon Luzon Development
Bank. Consequently, these were deposited by Firestone in its current account with
Citibank. Since, all of them were honored and paid, Firestone believed and relied on
the fact that succeeding withdrawal slips drawn upon the said bank would be equally
funded. Relying on such confidence and belief, Firestone extended to Fojas-Arca
2.
No. Since the withdrawal slips in question were non-negotiable, the rules
governing the giving of immediate notice of dishonor of instruments do not
apply. Respondent bank was under no obligation to give immediate notice
that it would not make payment on the subject withdrawal slips. Citibank
should have known that withdrawal slips were not negotiable instruments
and it could not expect these slips to be treated as checks by other entities.
bound to accept the withdrawal slips as valid mode of deposit. But having
erroneously accepted them as such, Citibank and Firestone must bear the
risks attendant to the acceptance of these instruments and they could not
shift the risk and hold respondent bank liable for their mistake.