Metropolitan Bank v CA

Facts:
38 Treasury Warrants were deposited by Ed Gomez with Golden Savings in the amount of P1.7 million. 6
of these were directly payable to Gomez, while the others were indorsed by their payees and Gomez as
the 2nd endorser. Castillo of Golden Savings indorsed the warrants to Metrobank for clearing. Before
clearing, Metrobank allowed Golden Savings to withdraw from the proceeds of the warrant, and thus 3
withdrawals were made totaling P968,000. Golden Savngs allowed Gomez to withdraw a total amount
of P1.16 million from his account. On July 21, 1979 Metrobank informed Golden Saving that 32 warrants
had been dishonored, and demanded a refund of the amount withdrawn, but was rejected by Golden
Savings. The RTC ruled in favor of Golden Savings and was affirmed by the CA.

Held:
Metrobank was negligent, and it was its agent that was responsible for the negligence. The treasury
warrants were not negotiable, and their dishonor was allegedly due to the forgery of the Gen. Manager
and Auditor of the drawer, but the forgery was not sufficiently established. The belated notice of
dishonor, was not made before Golden Savings made payment to Gomez. The treasury warrants were
payable out of a particular fund, fund 501. Since it is payable out of a particular fund, it is not negotiable.
It was also stamped at the back of the warrants that they were non-negotiable. The amount withdrawn
by Gomez should be charged to Metrobank (due to its negligence). The remaining amount of the
dishonor, P568,000 to be debited from Golden Savings.