Professional Documents
Culture Documents
FACTS
From April 2, 1959 to May 18, 1959, ten checks with a total face value of
P8,030.58 were deposited by Jai-Alai Corporation in its current account with BPI
bank which the former acquired from one Antonio Ramirez who was a sales agent
of Inter-Island Gas Corporation and a regular bettor at jai-alai games.
After Ramirez had resigned from the Inter-Island Gas and after the checks
had been submitted to inter-bank clearing, the Inter-Island Gas discovered that
all the indorsements made on the checks purportedly by its cashiers as well as the
rubber stamp impression thereon reading "Inter-Island Gas Service, Inc.," were
forgeries. Inter-Island Gas notified the Jai-Alai Corporation, BPI bank, the drawers
and the drawee-banks of the said checks about the forgeries, and filed a criminal
complaint against Ramirez with the Office of the City Fiscal of Manila.
The drawers of the checks, having been notified with the forgeries,
demanded reimbursement from the drawee-banks, which in turn demanded
from BPI, as collecting bank, the return of the amounts they had paid on account
thereof. When the drawee-banks returned the checks to the BPI, the latter paid
their value which the former in turn paid to the Inter-Island Gas.
BPI debited petitioner’s current account and forwarded to the latter the
checks containing the forged indorsements, which the petitioner refused to
accept. So when petitioner drew against its current account with BPI a check for
P135,000 payable to the order of Mariano Olondriz, the same was dishonored for
the insufficiency of funds.
The petitioner filed a complaint against the BPI with CFI Manila but it was
dismissed by the trial court as well as by Court of Appeals.
ISSUE
Whether BPI had the right to debit from petitioner’s current account the
value of the checks with the forged endorsements?
HELD
Yes. BPI acted within legal bounds when it debited the petitioner's account.
When the petitioner deposited the checks with the respondent, the nature of the
relationship created at that stage was one of agency, that is, the bank was to
collect from the drawees of the checks the corresponding proceeds.
FACTS
Petitioner was the Managing Director of Multinational Investment
Bancorporation, the Chairman and/or President of several other corporations
and also a depositor in good standing of respondent bank. Petitioner then
entrusted his credit cards, checkbook, blank checks, passbooks, etc. to his
secretary, Katherine Eugenio who was also in charge of verifying and reconciling
the statements of his checking account.
Between the dates September 5, 1980 and January 23, 1981, Eugenio
encashed and deposited to her personal account about 17 checks drawn
against petitioner’s account at the respondent bank with a total amount of
P119,634.34. The petitioner however did not bother to check his statement of
account until a business partner told him that he saw Eugenio using the
petitioner’s credit card.
Petitioner fired Eugenio and filed a complaint against her of Estafa thru
Falsification of commercial documents due to the forged signatures she made in
the checks. Respondent bank, through Mr. Dante Razon also filed a complaint
against Eugenio of Estafa thru falsification of commercial documents against
Eugenio.
Petitioner then requested respondent bank to credit back and restore to its
account the value of the checks which was encashed by Eugenio. The petitioner
contends that Manila Bank is liable for damages for its negligence in failing to
detect the discrepant checks. He adds that under Section 23 of the Negotiable
Instruments Law a forged check is inoperative and as a general rule a bank which
has obtained possession of a check upon an unauthorized or forged
endorsement of the payee’s signature and which collects the amount of the
check from the drawee is liable for the proceeds thereof to the payee. The
respondent points out that Section 23 of the Negotiable Instruments Law is
inapplicable, considering that the fact of forgery was never proven.
ISSUE
Whether Section 23 of the Negotiable Instruments is inapplicable, making
therefore Manila Bank not liable for damages for failing to detect a forged check.
HELD
Yes. Section 23 of the Negotiable Instruments law provides that a forged
check is inoperative, meaning there was no right to enforce payment against any
party. But it also provides an exception: “unless the party against whom it is sought
enforce such right is precluded from setting up the forgery or want of authority”.
To be entitled to damages, Ilusorio has the burden of proving that the bank
was negligent in failing to detect the discrepancy in the signatures on the checks.
Ilusorio had to establish the fact of forgery which he failed to do by failing to
submit his specimen signatures for NBI to conclusively establish forgery.
Furthermore, the Bank was not negligent in verifying the checks as they verified
the drawer’s signatures against their specimen signatures and in doubt, referred
to more experienced verifier for further verification.
FACTS
In April 2002, Noel M. Odrada sold a second-hand Mitsubishi Montero to
Lim. Lim obtained an auto-loan in RCBC. After initial payment, Odrada executed
a Deed of Absolute Sale to Lim while Lim took possession of the car. RCBC
delivered Manager’s checks to Odrada however prior to that, Lim informed
Odrada about the roadworthiness of the car. Lim requested Odrada to not
deposit the manager’s checks. Odrada did not heed. He deposited said checks.
The checks were consequently dishonoured upon Lim’s instruction to RCBC.
Because of the dishonour, Odrada filed a collection case against both Lim and
RCBC. Lim countered that the cancellation was not done ex parte but thru a
letter. RCBC contended that the dishonour was due to Lim’s cancellation of the
auto loan.
The RTC ruled in favour of Odrada. It held that the proper party who can
ask for the rescission in the case is Odrada, not Lim, since the former had already
complied with his undertaking under the contract, while Lim failed to pay the
payment. The defective condition of the Montero was not a supervening event
that would justify the dishonour of the checks, which is equivalent to cash, and
maybe treated as a promissory note with the bank as maker. The bank being the
party primarily liable for the check, the court ruled that RCBC was liable to
Odrada for the value of the manager’s checks.
Both Lim and RCBC appealed to the CA, which however denied their
appeal. It ruled that the two manager’s checks, which were complete and
regular, reached the hands of Lim who deposited the same in his bank account
with the bank. RCBC knew that the amount reflected on the manager’s checks
represented Lim’s payment for the remaining balance of the Montero’s purchase
price. The appellate court held that when RCBC issued the manager’s checks in
favor of Odrada, RCBC admitted the existence of the payee and his then
capacity to endorse, and undertook that on due presentment the checks which
were negotiable instruments would be accepted or paid, or both according to
its tenor. The appellate court held that the effective delivery of the checks to
Odrada made RCBC liable for the checks. It negated RCBC’s defense of want
of consideration, finding Odrada a holder in due course of the manager’s checks.
ISSUE
Whether the drawee bank can still deny payment of a manager’s check
due to the Personal Defense of Lim that a defective Montero was sold to Lim.
HELD
As a general rule, the drawee bank is not liable until it accepts.
Acceptance, therefore, creates a privity of contract between the holder and the
drawee so that the latter, once it accepts, becomes the party primarily liable on
the instrument. Thus, once he accepts, the drawee admits the following: (a)
existence of the drawer; (b) genuineness of the drawer's signature; ( c) capacity
and authority of the drawer to draw the instrument; and ( d) existence of the
payee and his then capacity to endorse.
Odrada did not acquire the instrument in good faith as he sold a defective
Montero. He immediately presented the check for payment upon notice of the
Montero’s defect. RCBC acted in good faith in following the instructions of Lim.
The records show that Lim notified RCBC of the defective condition of the
Montero before Odrada presented the manager's checks.
Since Odrada was not a holder in due course, the instrument becomes
subject to personal defenses under the Negotiable Instruments Law. Hence, RCBC
may legally act on a countermand by Lim, the purchaser of the manager's
checks.
CHECKS
ADRIANO PANLILIO, Plaintiff-Appellant, v. TEODORO DAVID, JORGE B.
VARGAS, as Director of Lands and SILVERIO APOSTOL, as acting Secretary
of Agriculture and Natural Resources, Defendants-Appellants.
G.R. No: 26201
Date: March 14, 1927
FACTS
Panlilio and David are both bidders for lease of a big chunk of land owned
by the government. Panlilio had a higher bid than David. Both of their bids were
accompanied by uncertified checks, the amount for David’s is lesser than that of
Panlilio’s. Later, David equaled the bid of Panlilo by adding cash to the amount
of his check. With this, the lease was awarded to David. His check was encashed
and the proceeds were deposited with the Treasury. This award was questioned
by Panlilio by averting that the bid of David should have been denied since the
check he offered was uncertified. This prompted the withdrawal of the award to
David and instead, the lease was awarded to Panlilio, whom it was thought to
have submitted a certified check. After knowing that he too didn’t have a
certified check, his award was cancelled. Both appealed this to the appellate
court.
ISSUE
Whether the check to be offered should be certified.
HELD
Yes. The rule that the check to be offered should be certified is an office
rule. It sought to prevent the presentation of frivolous bids and to avoid difficulties
in the collection of the amount of the accepted bid. The Director of Lands
therefore had the authority to reject both bids in question on the ground that they
weren’t accompanied by certified checks. Nonetheless, this doesn’t mean that
if he accepted one of them, a merely formal defect would vitiate the award.
When David’s bid was accepted and the amount of the bid was paid and
covered into the Treasury, the government could hardly be heard to say that the
award was invalid because the amount paid was originally represented in part
by an uncertified check.
FINANCIAL REHABILITATION AND INSOLVENCY ACT
SPOUSES EDUARDO SOBREJUANITE and FIDELA SOBREJUANITE, Petitioners,
v. ASB DEVELOPMENT CORPORATION, Respondent.
G.R. No: 165675
Date: September 30, 2005
FACTS
The spouses Sobrejuanite and ASB Development Corporation (ASBDC)
entered into a contract to sell a condominium located in Mandaluyong. After full
payment and after repeated demands, the ASBDC failed to make good of its
obligation due to the rehabilitation plan of ASB Group of Companies, which
includes ASBDC. The spouses resorted the intervention of the Housing and Land
Use Regulatory Board (HLURB). HLURB resolved the complaint in favor of the
spouses Sobrejuanite. This was affirmed by the Office of the President. On appeal,
the Court of Appeals reversed and set aside the decision of the Office of the
President. It ratiocinated that the Sobrejuanite’s complaint for rescission and
damages is a claim under the contemplation of Presidential Decree (PD) No. 902-
A or the SEC Reorganization Act and A.M. No. 00-8-10-SC or the Interim Rules of
Procedure on Corporate Rehabilitation. Therefore, the Securities and Exchange
Commission (SEC) has jurisdiction over the complaint, not HLURB.
ISSUE
Whether the approval of the corporate rehabilitation plan and the
appointment of a receiver had the effect of suspending the proceeding in the
HLURB.
HELD
No. Section 6(c) of PD No. 902-A empowers the SEC:
c) To appoint one or more receivers of the property,
real and personal, which is the subject of the action pending
before the Commission whenever necessary in order to
preserve the rights of the parties-litigants and/or protect the
interest of the investing public and creditors: Provided, finally,
That upon appointment of a management committee,
rehabilitation receiver, board or body, pursuant to this
Decree, all actions for claims against corporations,
partnerships or associations under management or
receivership pending before any court, tribunal, board or
body shall be suspended accordingly.
Thus, in order to resolve whether the proceedings before the HLURB should
be suspended, it is necessary to determine whether the complaint for rescission
of contract with damages is a claim within the contemplation of PD No. 902-A.
Incidentally, although the petition for rehabilitation with prayer for
suspension of actions and proceedings was filed before the SEC on May 2, 2000,
or prior to the effectivity of the interim rules, the same would still apply pursuant to
Section 1, Rule 1 thereof which provides: