SAMBOK MOTORS CO.

(BACOLOD)
SECOND DIVISION
By:

RODOLFO G. NONILLO
[G.R. No. L-39641. February 28, 1983.]
Asst. General Manager"

The maker, Dr. Villaruel defaulted in the

METROPOL (BACOLOD)
payment of his installments when they became
FINANCING & INVESTMENT
due, so on October 30, 1969 plaintiff formally
CORPORATION, plaintiff-
presented the promissory note for payment to the
appellee, vs. SAMBOK MOTOR
maker. Dr. Villaruel failed to pay the promissory
S COMPANY and
note as demanded, hence plaintiff
NG SAMBOK SONS MOTORS
notified Sambok as indorsee of said note of the
CO., LTD., defendant-appellants.
fact that the same has been dishonored and
demanded payment.

Rizal Quimpo & Cornelio P. Revena for Sambok failed to pay, so on November
plaintiff-appellee. 26, 1969 plaintiff filed a complaint for collection of
a sum of money before the Court of First Instance
Diosdado Garingalao for defendants- of Iloilo, Branch I. Sambok did not deny its liability
appellants. but contended that it could not be obliged to pay
until after its co-defendant Dr. Villaruel, has been
declared insolvent.
During the pendency of the case in the
trial court, defendant Dr. Villaruel died, hence, on
DECISION October 24, 1972 the lower court, on motion,
dismissed the case against Dr. Villaruel pursuant
to Section 21, Rule 3 of the Rules of Court. 1
On plaintiff's motion for summary
DE CASTRO, J p: judgment, the trial court rendered its decision
dated September 12, 1973, the dispositive portion
The former Court of Appeals, by its of which reads as follows:
resolution dated October 16, 1974 certified this
case to this Court the issue raised therein being "WHEREFORE,
one purely of law. judgment is rendered:

On April 15, 1969 Dr. Javier Villaruel "(a) Ordering Sambok M

executed a promissory note in favor of otors Company to pay to the
Ng Sambok Sons Motors Co., Ltd., in the amount plaintiff the sum of P15,939.00
of P15,939.00 payable in twelve (12) equal plus the legal rate of interest from
monthly installments, beginning May 18, 1969, October 30, 1969;
with interest at the rate of one percent per month.
It is further provided that in case on non-payment "(b) Ordering same
of any of the installments, the total principal sum defendant to pay to plaintiff the
then remaining unpaid shall become due and sum equivalent to 25% of
payable with an additional interest equal to twenty- P15,939.00 plus interest thereon
five percent of the total amount due. LLphil until fully paid; and cdrep

On the same date, Sambok Motors "(c) To pay the cost of

Company (hereinafter referred to as Sambok), a suit."
sister company of Ng Sambok Sons Motors Co.,
Not satisfied with the decision, the
Ltd., and under the same management as the
present appeal was instituted,
former, negotiated and indorsed the note in favor
appellant Sambok raising a lone assignment of
of plaintiff Metropol Financing & Investment
error as follows:
Corporation with the following indorsement:
"The trial court erred in
"Pay to the order
not dismissing the complaint by
of Metropol Bacolod Financing &
finding defendant-
Investment Corporation with
appellant Sambok Motors
recourse. Notice of Demand;
Company as assignor and a
Dishonor; Protest; and
qualified indorsee of the subject
Presentment are hereby waived.
 promissory note and in not need not even proceed against the maker before
holding it as only secondarily suing the indorser. LLphil
liable thereof."
WHEREFORE, the decision of the lower
Appellant Sambok argues that by adding court is hereby affirmed. No costs.
the words "with recourse" in the indorsement of the
SO ORDERED.
note, it becomes a qualified indorser; that being a
qualified indorser, it does not warrant that if said Makasiar, Concepcion, Jr., Guerrero an
note is dishonored by the maker on presentment, d Escolin, JJ., concur.
it will pay the amount to the holder; that it only
warrants the following pursuant to Section 65 of Aquino, J., is on leave.
the Negotiable Instruments Law: (a) that the Abad Santos, J., I concur and wish to add
instrument is genuine and in all respects what it the observation that the appeal could have been
purports to be; (b) that he has a good title to it; (c) treated as a petition for review under R.A.
that all prior parties had capacity to contract; (d) 5440 and dismissed by minute resolution.
that he has no knowledge of any fact which would
impair the validity of the instrument or render it
valueless.
||| (Metropol Financing & Investment Corp. v. Sambok
The appeal is without merit. Motors Co., Ltd., G.R. No. L-39641, [February 28,
A qualified indorsement constitutes the 1983], 205 PHIL 758-762)
indorser a mere assignor of the title to the
instrument. It may be made by adding to the
indorser's signature the words "without recourse"
or any words of similar import. 2 Such an SECOND DIVISION
indorsement relieves the indorser of the general
obligation to pay if the instrument is dishonored but
not of the liability arising from warranties on the [G.R. No. 130756. January 21, 1999.]
instrument as provided in Section 65 of the
Negotiable Instruments Law already mentioned ESTER
herein. However, appellant Sambok indorsed the
B. MARALIT, petitioner, vs.
note "with recourse" and even waived the notice of
JESUSA CORAZON
demand, dishonor, protest and presentment. L. IMPERIAL, respondent.
"Recourse" means resort to a person
who is secondarily liable after the default of the
person who is primarily liable. 3 Appellant, by Perfecto Nixon for petitioner.
indorsing the note "with recourse" does not make
itself a qualified indorser but a general indorser Oscar B. Villamora for respondent.
who is secondarily liable, because by such
indorsement, it agreed that if Dr. Villaruel fails to
pay the note, plaintiff-appellee can go after said
appellant. The effect of such indorsement is that DECISION
the note was indorsed without qualification. A
person who indorses without qualification engages
that on due presentment, the note shall be
accepted or paid, or both as the case may be, and MENDOZA, J p:
that if it be dishonored, he will pay the amount
thereof to the holder. 4 Appellant Sambok's This is a petition for review on certiorari of the
intention of indorsing the note without qualification decision, dated August 26, 1997, and the resolution,
is made even more apparent by the fact that the dated September 29, 1997, of the Regional Trial Court
notice of demand, dishonor, protest and of Naga City (Branch 21) in Special Civil Case No. RTC
presentment were all waived. The words added by '97-3744. cdphil
said appellant do not limit his liability, but rather
confirm his obligation as a general indorser. The facts are as follows:
Lastly, the lower court did not err in not Petitioner Ester B. Maralit filed three
declaring appellant as only secondarily liable complaints for estafa through falsification of
because after an instrument is dishonored by non- commercial documents through reckless imprudence
payment, the person secondarily liable thereon against respondent Jesusa Corazon
ceases to be such and becomes a principal L. Imperial. 1 Maralit alleged that she was assistant
debtor. 5 His liability becomes the same as that of manager of the Naga City branch of the Philippine
the original obligor. 6 Consequently, the holder National Bank (PNB); that on May 20, 1992, June 1,
1992, and July 1, 1992 respondent Imperial separately
deposited in her savings account at the PNB three
United States treasury warrants bearing USTW Nos.
2034-91254963, 2034-91180047, and 2034-33330760
and on the same days withdrew their peso equivalent
of P59,216.86, P130,743.60, and P130,326.00,
respectively; and that the treasury warrants were
subsequently returned one after the other by the United
States Treasury, through the Makati branch of the
Citibank, on the ground that the amounts thereof had
been altered. Maralit claimed that, as a consequence,
she was held personally liable by the PNB for the total
amount of P320,287.30.
In her counter-affidavit, respondent claimed
that she merely helped a relative, Aida Abengoza,
encash the treasury warrants; that she deposited the
treasury warrants in her savings account and then
withdrew their peso equivalent with the approval of
petitioner; that she gave the money to Aida Abengoza;
that she did not know that the amounts on the treasury
warrants had been altered nor did she represent to
petitioner that the treasury warrants were genuine; and
that upon being informed of the dishonor of the
warrants she immediately contacted Aida Abengoza
and signed an acknowledgment of debt promising to
pay the total amount of the treasury warrants.
After preliminary investigation, the City
Prosecutor of Naga City filed three informations against
respondent in the Municipal Trial Court of Naga City
(Branch 3).
On September 26, 1996, judgment was
rendered as follows:
WHEREFORE, in view of
the foregoing considerations, the
Court finds no ground to hold the
accused criminally liable for which
she is charged, hence Corazon
Jesusa L. Imperial is ACQUITTED
of all the charges against her. The
accused however is civilly liable
as indorser of the checks which is
(sic) the subject matter of the
criminal action. 2
The decision having become final and
executory, the MTC, on November 11, 1996, ordered
the enforcement of the civil liability against the accused
arising from the criminal action. 3 The writ of execution,
dated December 9, 1996, directed the sheriff as
follows: 4
NOW, THEREFORE,
you are hereby commanded to
cause the execution of the
aforesaid judgment in the amount
of THREE HUNDRED TWENTY
THOUSAND TWO HUNDRED
EIGHTY SIX & 46/100
(P320,286.46) ONLY, equivalent
to the amount of the 3 three US$
checks amounting to $12,621.13,
and to levy the goods and chattels
of the defendant/s, except those
which are exempt from execution
and to make the sale thereat in
accordance with the procedure
outlined by Rule 39, Revised
Rules of Court and such cases
made and provided, together with
all your lawful fees for the services
of this writ.
Accordingly, the sheriff served a notice of
garnishment on the PNB.
Respondent at first moved to declare her
savings account exempt from execution on the ground
that the same represented her salary as an employee
of the Commission on Audit, which was not even
sufficient for her expenses and that of her family. Later,
she moved to quash the writ of execution on the ground
"that the judgment did not order the accused to pay [a]
specific amount of money to a particular person as it
merely adjudicated the criminal aspect but not the civil
aspect hence there was no judgment rendered which
can be the subject of execution."
Both motions of respondent were denied by
the MTC for lack of merit in its order, dated February
24, 1997. 5 Accordingly, an alias writ of execution was
issued.
On April 14, 1997, respondent filed a petition
for certiorari and prohibition in the Regional Trial Court
of Naga City, contending that the writ of execution
issued by the MTC was at variance with the judgment
in the criminal cases.
The RTC issued a writ of preliminary
injunction enjoining enforcement of the writ of
execution issued by the MTC. On August 26, 1997, it
rendered a decision, which, among other things, made
permanent the injunction. The RTC held that the
decision of the MTC did not really find respondent liable
for P320,286.46 because in fact it was petitioner who
was found responsible for making the defraudation
possible. prcd
Petitioner moved for reconsideration alleging
that respondent filed her petition for certiorari and
prohibition more than three months after the MTC had
ordered execution of its decision on November 11,
1996. However, her motion was denied on September
28, 1997. 6 The RTC held that the three-month period
should be counted from April 1, 1997, when the alias
writ of execution was issued, or from April 7, 1997,
when the MTC denied private respondent's motion for
reconsideration of the order denying her motion to
quash the writ of execution. The RTC likewise found
the second ground of petitioner's motion for
reconsideration, i.e., that its decision was contrary to
law and jurisprudence, devoid of merit.
 Hence, this petition. Petitioner raises the
following issues: 7
1. Whether respondent's Petition
for Certiorari and
Prohibition under Rule
65 of the Rules of Court
was filed out of time;
2. Whether this case warrants the
relaxation of the rule that
"Certiorari is not a and the writ of execution will
substitute for a lost or
lapsed appeal."
3. Whether or not the MTC
committed grave abuse
of discretion amounting
to lack or excess of
jurisdiction, when it
issued the Order of
Execution, Writ of
Execution and Alias Writ
of Execution to
implement its final and
executory civil judgment
in Criminal Cases No.
68697, 68698 and
68699, which reads: ". .
. The accused however
is civilly liable as indorser
of the checks subject
matter of the criminal
action."
4. Whether or not the MTC merely
adjudicated the criminal
aspect but not the civil
aspect of Criminal Cases
68697, 68698 and
68699.
5. Whether there was substantial
variance as between the
dispositive portion of the
civil judgment and the
writ of execution issued
thereunder.
6. Whether or not a court
exercising certiorari juris
diction has the authority
to modify or alter the final
and executory decision
of the lower court even
by way of an obiter
dictum.
Petitioner contends that the phrase "civilly
liable" in the judgment part of the MTC's decision also
connotes an order to pay on respondent's part.
It may fairly be assumed that the decision of
the MTC was an adjudication of both the criminal and
civil liability of respondent inasmuch as it does not
appear that petitioner instituted a separate civil action
or reserved or waived the right to bring such action.
The question is whether the decision of the MTC finds
respondent civilly liable and, in the affirmative, for how
much. As already stated, the RTC held that the MTC
did not really find respondent liable. In reaching that
conclusion, the RTC said:
A mere reading of the
dispositive portion of the judgment
readily show that there is variance
between the two. Whereas, the
judgment pronounced
[respondent herein] to be "civilly
liable as indorser of the checks
which is the subject matter of the
criminal action," the writ of
execution commanded the Sheriff
"to cause the execution of the
aforesaid judgment in the amount
of THREE HUNDRED TWENTY
THOUSAND TWO HUNDRED
EIGHTY SIX & 46/100
(P320,286.46) ONLY, equivalent
to the amount of the 3 three US$
checks amounting to $12,621.13,
. . . ." In the judgment, nothing is
mentioned about the amount for
which [respondent herein] is liable
as indorser, but in the writ of
execution, the civil liability of the
[respondent herein] has already
been fixed at P320,286.46. The
variance, therefor, between the
judgment and the writ of execution
is substantial because it consists
of the addition of the amount of the
civil liability of the [respondent
herein].
xxx xxx xxx
. . . The [MTC's] findings
of facts and conclusions of law as
expressed in the body of the
decision do not support the
dispositive portion of the
judgment that [respondent
herein] is civilly liable. On the
contrary a reading of the body
of the judgment in question will
show that [respondent] is not
civilly liable. For three (3) times,
the Court stated in the body of its
decision that it is
[petitioner] Maralit herself who
should be faulted and be held
responsible for the payment of
the dishonored US Dollar
checks.
 Hereunder quoted are
portions of the body of the
decision in question showing that
[respondent] herein should not be
held civilly liable and that it was
[petitioner] Maralit who should be
blamed and be held responsible:
. . . The Court
however is quite
intrigue[d] on why the
accused was allowed to
encash the peso
equivalent despite the
fact that the check was
deposited for collection
and clearing. It is the
established procedure of
banks that out of town
checks and US Treasury
Warrants should first be
cleared before the same
is to be paid. More so if
the holder is a second
indorser. The private
complainant in this
regard explained that [as
assistant branch
manager] she has the
discretion and that there
is no hold order
appearing in the savings
account of the accused.
She likewise explained
that she trusted the
accused whom she knew
is working in the same
building and a depositor.
In short she took the risk
of approving the
withdrawal of the peso
equivalent, without the
check being cleared and
if the same is dishonored
she should be
responsible. (page 5,
judgment).
The information
accuses the accused for
disregarding the banking
laws and procedure of
the PNB. This is a
generous statement. In
the first place the
accused is not an
employee of the bank.
She has no control nor
supervision over its
employees. If there is
anyone who has
disregarded banking
laws, it is the private
complainant for
approving withdrawals
before the check were
cleared. Mrs. Maralit is
more knowledgeable of
the banking procedures
of the bank of which she
is the assistant manager.
She knows the risk of
approving encashment
before clearing. She
took the risk therefore
she should be
responsible for the
outcome of the risk she
has taken. (page 6,
Judgment).
The Court is of
the opinion that there
was negligence on both
the complainant and the
accused but greater
responsibility should
be borne by the private
complainant. The
accused could not have
encashed and deposited
the checks without her
approval. If the
complainant was not
remiss in her duty in
imposing the banking
rules strictly, then these
things could not have
happened. (page 7,
Judgment). 8
This portion of the decision of the MTC
actually refers to respondent's criminal liability and not
her civil liability. More specifically, the portion in
question refers to the allegations in the three
informations that respondent committed falsification of
commercial documents through reckless imprudence
by "1) taking advantage of [her] position as state
auditor of the Commission on Audit assigned at the
PNB, Naga Branch, 2) disregard[ing] existing
procedure, banking laws, policies, and circulars of the
PNB, 3) . . . not tak[ing] the necessary precaution to
determine the genuineness of the Treasury Warrants
and the alteration of the amount[s] therein deposited
and [in] encash[ing] the checks, and 4) . . . [her]
negligence, carelessness, and imprudence [which]
caused damage and loss to
[petitioner]." 9 Nevertheless, the MTC held that
respondent was civilly liable as the penultimate
paragraph of its decision makes clear:
The Court sympathizes
with the complainant that there
was indeed damage and loss, but
said loss is chargeable to the
accused who upon her
 indorsements warrant that the
instrument is genuine in all
respect what it purports to be and
that she will pay the amount
thereof in case of dishonor. (Sec.
66, Negotiable Instrument
Law) 10
Thus, while the MTC found petitioner partly
responsible for the encashment of the altered checks,
it found respondent civilly liable because of her
indorsements of the treasury warrants, in addition to
the fact that respondent executed a notarized
acknowledgment of debt promising to pay the total
amount of said warrants. llcd
In this case, to affirm the RTC's decision
would be to hold that respondent was absolved from
both criminal and civil liability by the MTC. Such
reading of the MTC decision will not, however, bear
analysis. For one, the dispositive portion of the decision
of the MTC expressly declares respondent to be "civilly
liable as indorser of the checks which is [sic] the
subject matter of the criminal action." To find therefore
that there is no declaration of civil liability of respondent
would be to disregard the judgment of the MTC. Worse,
it would be to amend a final and executory decision of
a court.
It is argued that the decision of the MTC did
not order respondent, as accused in the case, to pay a
specific amount of money to any particular person such
that it could not be an adjudication of respondent's civil
liability. However, the ambiguity can easily be clarified
by a resort to the text of the decision or, what is properly
called, the opinion part. Doing so, it is clear that it can
only be to petitioner that respondent was made liable
as the former was the offended party in the case. As
for what amount respondent is liable, it can only be for
the total amount of the treasury warrants subject of the
case, determined according to their peso equivalent, in
the decision of the MTC.
For another, that respondent should pay
petitioner the amounts of the altered treasury warrants
is the logical consequence of the MTC's holding that
private respondent is civilly liable for the treasury
warrants subject of the case. 11
WHEREFORE, the decision of the Regional
Trial Court of Naga City (Branch 21) is
REVERSED. cdlex
SO ORDERED.
||| (Maralit v. Imperial, G.R. No. 130756, [January 21,
1999], 361 PHIL 532-542)
SECOND DIVISION
[G.R. No. 128927. September 14, 1999.]
REMEDIOS
NOTA SAPIERA, petitioner, vs.
COURT OF APPEALS and
RAMON SUA, respondents.
Tanopo & Serafica for petitioner.
Hermogenes S. Decano for private
respondent.
DECISION
BELLOSILLO, J p:
REMEDIOS NOTA SAPIERA appeals to us
through this petition for review the
Decision of the Court of Appeals 1 which acquitted
her of the crime of estafa but held her liable
nonetheless for the value of the checks she indorsed in
favor of private respondent Ramon Sua. cdrep
On several occasions petitioner Remedios
Nota Sapiera, a sari-sari store owner, purchased from
Monrico Mart certain grocery items, mostly cigarettes,
and paid for them with checks issued by one Arturo de
Guzman: (a) PCIB Check No. 157059 dated 26
February 1987 for P140,000.00; (b) PCIB Check No.
157073 dated 26 February 1987 for P28,000.00; (c)
PCIB Check No. 157057 dated 27 February 1987 for
P42,150.00; and, d) Metrobank Check No. DAG —
045104758 PA dated 2 March 1987 for P125,000.00.
These checks were signed at the back by petitioner.
When presented for payment the checks were
dishonored because the drawer's account was already
closed. Private respondent Ramon Sua informed
Arturo de Guzman and petitioner about the dishonor
but both failed to pay the value of the checks. Hence,
four (4) charges of estafa were filed against petitioner
with the Regional Trial Court of Dagupan City,
docketed as Crim. Cases Nos. D-8728, D-8729, D-
8730 and D-8731. Arturo de Guzman was charged with
two (2) counts of violation of B.P. Blg. 22, docketed as
Crim. Cases Nos. D-8733 and D-8734. These cases
against petitioner and de Guzman were consolidated
and tried jointly.
On 27 December 1989 the court a
quo 2 acquitted petitioner of all the charges of estafa
but did not rule on whether she could be held civilly
liable for the checks she indorsed to private
respondent. The trial court found Arturo de Guzman
guilty of Violation of B.P. Blg. 22 on two (2) counts and
sentenced him to suffer imprisonment of six (6) months
and one (1) day in each of the cases, and to pay private
respondent P167,150.00 as civil indemnity.
Private respondent filed a notice of appeal
with the trial court with regard to the civil aspect but
the court refused to give due course to the appeal on acquitted her of the criminal charges. Section 2, par.
the ground that the acquittal of petitioner was absolute. (b), of Rule 111 of the Rules of Court, as amended,
Private respondent then filed a petition specifically provides: "Extinction of the penal action
for mandamus with the Court of Appeals, docketed does not carry with it extinction of the civil, unless the
as CA-GR SP No. 24626, praying that the court a extinction proceeds from a declaration in a final
quo be ordered to give due course to the appeal on the judgment that the fact from which the civil might arise
civil aspect of the decision. did not exist.
The Court of Appeals granted the petition and ruled
that private respondent could appeal with respect to the The judgment of acquittal extinguishes the
civil aspect the judgment of acquittal by the liability of the accused for damages only when it
trial court. prcd includes a declaration that the fact from which the civil
liability might arise did not exist. Thus, the civil liability
On 22 January 1996, is not extinguished by acquittal where: (a) the acquittal
the Court of Appeals in CA-GR CV No. 36376 is based on reasonable doubt; (b) where
rendered the assailed Decision insofar as it sustained the court expressly declares that the liability of the
the appeal of private respondent on the civil aspect and accused is not criminal but only civil in nature; and, (c)
ordering petitioner to pay private respondent where the civil liability is not derived from or based on
P335,000.00 representing the aggregate face the criminal act of which the accused is
value of the four (4) checks indorsed by petitioner plus acquitted. 3 Thus, under Art. 29 of the Civil Code —
legal interest from the notice of dishonor.
When the accused in a
Petitioner filed a motion for criminal prosecution is acquitted
reconsideration of the Decision. On 19 March 1997 on the ground that his guilt has not
the Court of Appeals issued a Resolution noting the been proved beyond reasonable
admission of both parties that private respondent had doubt, a civil action for damages
already collected the amount of P125,000.00 from for the same act or omission may
Arturo de Guzman with regard to his civil liability in be instituted. Such action requires
Crim. Cases Nos. 8733 and 8734. The only a
appellate court noted that private respondent was the preponderance of evidence. Upon
same offended party in the criminal cases against motion of the defendant,
petitioner and against de Guzman. Criminal Cases the court may require the plaintiff
Nos. 8733 and 8734 against De Guzman, and Crim. to file a bond to answer for
Cases Nos. 8730 and 8729 against petitioner, involved damages in case the complaint
the same checks, to wit: PCIB Checks Nos. 157057 for should be found to be
P42,150.00 and Metrobank Check No. DAG- malicious. dctai
045104758 PA for P125,000.00.
In a criminal case where
Thus, the Court of Appeals ruled that private the judgment of acquittal is based
respondent could not recover twice on the same upon reasonable doubt,
checks. Since he had collected P125,000.00 as civil the court shall so declare. In the
indemnity in Crim. Cases Nos. 8733 and 8734, this absence of any declaration to that
amount should be deducted from the sum total of the effect, it may be inferred from the
civil indemnity due him arising from the estafa cases text of the decision whether or not
against petitioner. The appellate court then corrected acquittal is due to that ground.
its previous award, which was erroneously placed at
P335,000.00, to P335,150.00 as the sum total of the An examination of the decision in the criminal
amounts of the four (4) checks involved. Deducting the cases reveals these findings of the trial court —
amount of P125,000.00 already collected by private
Evidence for the
respondent, petitioner was adjudged to pay
prosecution tends to show that on
P210,150.00 as civil liability to private respondent.
various occasions, Remedios
Hence, this petition alleging that
Nota Sapiera purchased from
respondent Court of Appeals erred in holding
Monrico Mart grocery items
petitioner civilly liable to private respondent because
(mostly cigarettes) which
her acquittal by the trial court from charges of estafa in
purchases were paid with checks
Crim. Cases Nos. D-8728, D-8729, D-8730 and D-
issued by Arturo de Guzman; that
8731 was absolute, the trial court having declared in its
those purchases and payments
decision that the fact from which the civil liability might
with checks were as follows:
have arisen did not exist.
(a) Sales Invoice No. 20104 dated
We cannot sustain petitioner. The issue is
February 26, 1987 in the
whether respondent Court of Appeals committed
amount of P28,000.00;
reversible error in requiring petitioner to pay civil
that said items
indemnity to private respondent after the trial court had
purchased were paid
 with PCIBank Check No. signature of Arturo de Guzman;
157073 dated February that she pays in cash; sometimes
26, 1987; delayed by several days; that she
signed the four (4) checks on the
(b) Sales Invoice No. 20108 dated reverse side; that she did not
February 26, 1987 in the know the subject invoices; that de
amount of P140,000.00; Guzman made the purchases and
that said items he issued the checks; that the
purchased were paid goods were delivered to de
with PCIBank No. Guzman; that she was not
157059 dated February informed of dishonored checks;
26, 1987; and that counsel for Ramon Sua
informed de Guzman and told him
(c) Sales Invoice No. 20120 dated
to pay . . . . LLjur
February 27, 1987 in the
amount of P42,150.00; In the case of accused
that said items were paid Remedios Nota Sapiera, the
with PCIBank Check No. prosecution failed to prove
157057 dated February conspiracy.
27, 1987;
Based on the above findings of the trial court,
(d) Sales Invoice No. 20148 and the exoneration of petitioner of the charges of estafa
20149 both dated March was based on the failure of the prosecution to present
2, 1987 in the sufficient evidence showing conspiracy between her
amount of P120,103.75; and the other accused Arturo de Guzman in defrauding
said items were paid with private respondent. However, by her own testimony,
Metrobank Check No. petitioner admitted having signed the four (4) checks in
045104758 dated March question on the reverse side. The evidence of the
2, 1987 in the prosecution shows that petitioner purchased goods
amount of P125,000.00. from the grocery store of private respondent as shown
by the sales invoices issued by private respondent; that
That all these checks
these purchases were paid with the four (4) subject
were deposited with the
checks issued by de Guzman; that petitioner signed the
Consolidated Bank and Trust
Company, Dagupan Branch, for same checks on the reverse side; and when presented
for payment, the checks were dishonored by the
collection from the drawee bank;
drawee bank due to the closure of the drawer's
That when presented for account; and, petitioner was informed of the dishonor.
payment by the collecting bank to
We affirm the
the drawee bank, said checks
findings of the Court of Appeals that despite the
were dishonored due to account
conflicting versions of the parties, it is undisputed that
closed, as evidenced by check
return slips; . . . . the four (4) checks issued by de Guzman were signed
by petitioner at the back without any indication as to
From the evidence, how she should be bound thereby and, therefore, she
the Court finds that accused is deemed to be an indorser thereof. The Negotiable
Remedios Nota Sapiera is the Instruments Law clearly provides —
owner of a sari-sari store inside
SECTION
the public market; that she sells
17. Construction where
can(ned) goods, candies and
instrument is ambiguous. —
assorted grocery items; that she
Where the language of the
knows accused Arturo De
instrument is ambiguous, or there
Guzman, a customer since
are admissions therein, the
February 1987; that de Guzman
following rules of construction
purchases from her grocery items
apply: . . . . (f) Where a signature
including cigarettes; that she
is so placed upon the instrument
knows Ramon Sua; that she has
that it is not clear in what capacity
business dealings with him for 5
the person making the same
years; that her purchase orders
intended to sign, he is deemed an
were in clean sheets of paper; that
indorser. . .
she never pays in check; that
Ramon Sua asked her to sign SECTION 63. When
subject checks as person deemed indorser. — A
identification of the
 person placing his signature upon
an instrument otherwise than as
maker, drawer or acceptor, is
deemed to be an indorser unless
he clearly indicates by appropriate
words his intention to be bound in
some other capacity.
SECTION
66. Liability of general indorser.
— Every indorser who indorses
without qualification, warrants to
all subsequent holders in due
course: (a) The matters and things
mentioned in subdivisions (a), (b)
and (c) of the next preceding
section; and (b) That the
instrument is, at the time of the
indorsement, valid and subsisting;
And, in addition, he
engages that, on due
presentment, it shall be accepted
or paid or both, as the case may
be, according to its tenor, and that
if it be dishonored and the
necessary proceedings on
dishonor be duly taken, he will pay
the amount thereof to the holder or
to any subsequent indorser who
may be compelled to pay it. cdtai
The dismissal of the criminal cases against
petitioner did not erase her civil liability since the
dismissal was due to insufficiency of evidence and not
from a declaration from the court that the fact from
which the civil action might arise did not exist. 4 An
accused acquitted of estafa may nevertheless be held
civilly liable where the facts established by the
evidence so warrant. The accused should be adjudged
liable for the unpaid value of the checks signed by her
in favor of the complainant. 5
The rationale behind the award of civil
indemnity despite a judgment of acquittal when
evidence is sufficient to sustain the award was
explained by the Code Commission in connection with
Art. 29 of the Civil Code, to wit:
The old rule that the
acquittal of the accused in a
criminal case also releases him
from civil liability is one of the
most serious flaws in the
Philippine legal system. It has
given rise to numberless
instances of miscarriage of justice
, where the acquittal was due to a
reasonable doubt in the
mind of the court as to the
guilt of the accused. The
reasoning followed is that
inasmuch as the civil responsibility
is derived from the criminal
offense, when the latter is not
proved, civil liability cannot be
demanded.
This is one of those
cases where confused thinking
leads to unfortunate and
deplorable consequences. Such
reasoning fails to draw a clear
line of demarcation between
criminal liability and civil
responsibility, and to determine
the logical result of the distinction.
The two liabilities are separate
and distinct from each other. One
affects the social order and the
other private rights. One is for
punishment or correction of the
offender while the other is for
reparation of damages suffered
by the aggrieved party . . . . It is
just and proper that for the
purposes of imprisonment of or
fine upon the accused, the offense
should be proved beyond
reasonable doubt. But for the
purpose of indemnifying the
complaining party, why should the
offense also be proved beyond
reasonable doubt? Is not the
invasion or violation of every
private right to be proved only by
preponderance of evidence? Is
the right of the aggrieved person
any less private because the
wrongful act is also punishable by
the criminal law? 6
Finally, with regard to the computation of the
civil liability of petitioner, the
finding of the Court of Appeals that petitioner is civilly
liable for the aggregate value of the unpaid four (4)
checks subject of the criminal cases in the
sum of P335,150.00, less the amount of P125,000.00
already collected by private respondent pending
appeal, resulting in the amount of P210,150.00 still due
private respondent, is a factual matter which is binding
and conclusive upon this Court.
WHEREFORE, the petition is DENIED. The
Decision of the Court of Appeals dated 22 January
1996 as amended by its Resolution dated 19 March
1997 ordering petitioner Remedios Nota Sapiera to
pay private respondent Ramon Sua the remaining
amount of P210,150.00 as civil liability, is AFFIRMED.
Costs against petitioners.
SO ORDERED. Cdpr
||| (Sapiera v. Court of Appeals, G.R. No. 128927,
[September 14, 1999], 373 PHIL 148-157)
 FIRST DIVISION
[G.R. No. 112392. February 29, 2000.]
BANK OF THE PHILIPPINE
ISLANDS, petitioner, vs. COURT
OF APPEALS and BENJAMIN
C. NAPIZA, respondents.
Benedicto Tale & Associates for petitioner.
Renato M. Coronado for private respondent.
DECISION
YNARES-SANTIAGO, J p:
This is a petition for review on certiorari of the
Decision 1 of the Court of Appeals in CA-G.R. CV No.
37392 affirming in toto that of the Regional
Trial Court of Makati, Branch 139, 2 which dismissed
the complaint filed by petitioner Bank of the Philippine
Islands against Benjamin C. Napiza for sum of money.
On September 3, 1987, private respondent
deposited in Foreign Currency Deposit Unit (FCDU)
Savings Account No. 028-187 3 which he maintained
in petitioner bank's Buendia Avenue Extension Branch,
Continental Bank Manager's Check No.
00014757 4 dated August 17, 1984, payable to "cash"
in the amount of Two Thousand Five Hundred Dollars
($2,500.00) and duly endorsed by private respondent
on its dorsal side. 5 It appears that the check belonged
to a certain Henry Chan who went to the
office of private respondent and requested him to
deposit the check in his dollar account by
way of accommodation and for the purpose of clearing
the same. Private respondent acceded, and agreed to
deliver to Chan a signed blank withdrawal slip, with the
understanding that as soon as the check is cleared,
both of them would go to the bank to withdraw the
amount of the check upon private respondent's
presentation to the bank of his passbook.
Using the blank withdrawal slip given by
private respondent to Chan, on October 23, 1984, one
Ruben Gayon, Jr. was able to withdraw the
amount of $2,541.67 from FCDU Savings Account No.
028-187. Notably, the withdrawal slip shows that the
amount was payable to Ramon A. de Guzman and
Agnes C. de Guzman and was duly initialed by the
branch assistant manager, Teresita Lindo. 6
On November 20, 1984, petitioner received
communication from the Wells Fargo Bank
International of New York that the said check
deposited by private respondent was a counterfeit
check 7 because it was "not of the type or
style of checks issued by Continental Bank
International." 8 Consequently, Mr. Ariel Reyes, the
manager of petitioner's Buendia Avenue Extension
Branch, instructed one of its employees, Benjamin
D. Napiza IV, who is private respondent's son, to
inform his father that the check bounced. 9 Reyes
himself sent a telegram to private respondent regarding
the dishonor of the check. In turn, private respondent's
son wrote to Reyes stating that the check had been
assigned "for encashment" to Ramon A. de Guzman
and/or Agnes C. de Guzman after it shall have been
cleared upon instruction of Chan. He also said that
upon learning of the dishonor of the check, his father
immediately tried to contact Chan but the latter was
out of town. 10
Private respondent's son undertook to return
the amount of $2,500.00 to petitioner bank. On
December 18, 1984, Reyes reminded private
respondent of his son's promise and warned that
should he fail to return that amount within seven (7)
days, the matter would be referred to the bank's
lawyers for appropriate action to protect the bank's
interest. 11 This was followed by a letter of the bank's
lawyer dated April 8, 1985 demanding the return of the
$2,500.00. 12
In reply, private respondent wrote petitioner's
counsel on April 20, 1985 13 stating that he deposited
the check "for clearing purposes" only to accommodate
Chan. He added:
"Further, please take
notice that said check was
deposited on September 3, 1984
and withdrawn on October 23,
1984, or a total period of fifty (50)
days had elapsed at the
time of withdrawal. Also, it may
not be amiss to mention here that
I merely signed an authority to
withdraw said deposit subject to
its clearing, the reason why the
transaction is not reflected in the
passbook of the account.
Besides, I did not receive its
proceeds as may be gleaned from
the withdrawal slip under the
captioned signature of recipient.
"If at all, my obligation on
the transaction is moral in nature,
which (sic) I have been and is (sic)
still exerting utmost and maximum
efforts to collect from Mr. Henry
Chan who is directly liable under
the circumstances.
xxx xxx xxx"
On August 12, 1986, petitioner filed a
complaint against private respondent, praying for the
return of the amount of $2,500.00 or the prevailing
peso equivalent plus legal interest from
date of demand to date of full payment, a sum
equivalent to 20% of the total amount due as attorney's
fees, and litigation and/or costs of suit.
Private respondent filed his answer, admitting
that he indeed signed a "blank" withdrawal slip with the
understanding that the amount deposited would be
withdrawn only after the check in question has been
cleared. He likewise alleged that he instructed the party
to whom he issued the signed blank withdrawal slip to
return it to him after the bank draft's clearance so that
he could lend that party his passbook for the
purpose of withdrawing the amount of $2,500.00.
However, without his knowledge, said party was able
to withdraw the amount of $2,541.67 from his dollar
savings account through collusion with
one of petitioner's employees. Private respondent
added that he had "given the plaintiff fifty-one (51) days
with which to clear the bank draft in question."
Petitioner should have disallowed the withdrawal
because his passbook was not presented. He claimed
that petitioner had no one to blame except itself "for
being grossly negligent"; in fact, it had allegedly
admitted having paid the amount in the check "by
mistake" . . . "if not altogether due to collusion and/or
bad faith on the part of (its) employees." Charging
petitioner with "apparent ignorance of routine bank
procedures," by way of counterclaim, private
respondent prayed for moral damages of P100,000.00,
exemplary damages of P50,000.00 and attorney's
fees of 30% of whatever amount that would be
awarded to him plus an honorarium of P500.00 per
appearance in court.
Private respondent also filed a motion for
admission of a third party complaint against Chan. He
alleged that "thru statagem and/or manipulation," Chan
was able to withdraw the amount of $2,500.00 even
without private respondent's passbook. Thus, private
respondent prayed that third party defendant Chan be
made to refund to him the amount withdrawn and to
pay attorney's fees of P5,000.00 plus P300.00
honorarium per appearance.
Petitioner filed a comment on the motion for
leave of court to admit the third party complaint,
wherein it asserted that per paragraph 2 of the Rules
and Regulations governing BPI savings accounts,
private respondent alone was liable "for the
value of the credit given on account of the draft or
check deposited." It contended that private respondent
was estopped from disclaiming liability because he
himself authorized the withdrawal of the amount by
signing the withdrawal slip. Petitioner prayed for the
denial of the said motion so as not to unduly delay the
disposition of the main case asserting that private
respondent's claim could be ventilated in another case.
Private respondent replied that for the parties
to obtain complete relief and to avoid
multiplicity of suits, the motion to admit third party
complaint should be granted. Meanwhile, the
trial court issued orders on August 25, 1987 and
October 28, 1987 directing private respondent to
actively participate in locating Chan. After private
respondent failed to comply, the trial court, on May 18,
1988, dismissed the third party complaint without
prejudice.
On November 4, 1991, a decision was
rendered dismissing the complaint. The
lower court held petitioner could not hold private
respondent liable based on the check's face value
alone. To so hold him liable "would render inutile the
requirement of 'clearance' from the drawee bank
before the value of a particular foreign check or draft
can be credited to the account of a depositor making
such deposit." The lower court further held that "it was
incumbent upon the petitioner to credit the value of the
check in question to the account of the private
respondent only upon receipt of the notice of final
payment and should not have authorized the
withdrawal from the latter's account of the value or
proceeds of the check." Having admitted that it
committed a "mistake" in not waiting for the
clearance of the check before authorizing the
withdrawal of its value or proceeds, petitioner should
suffer the resultant loss.
On appeal, the Court of Appeals affirmed the
lower court's decision. The appellate court held that
petitioner committed "clear gross negligence" in
allowing Ruben Gayon, Jr. to withdraw the money
without presenting private respondent's passbook and,
before the check was cleared and in crediting the
amount indicated therein in private respondent's
account. It stressed that the mere deposit of a check in
private respondent's account did not mean that the
check was already private respondent's property. The
check still had to be cleared and its proceeds can only
be withdrawn upon presentation of a passbook in
accordance with the bank's rules and regulations.
Furthermore, petitioner's contention that private
respondent warranted the check's genuineness by
endorsing it is untenable for it would render useless the
clearance requirement. Likewise, the
requirement of presentation of a passbook to ascertain
the propriety of the accounting reflected would be a
meaningless exercise. After all, these requirements are
designed to protect the bank from deception or fraud.
The Court of Appeals cited the
case of Roman Catholic Bishop of Malolos,
Inc. v. IAC, 14 where this Court stated that a personal
check is not legal tender or money, and held that the
check deposited in this case must be cleared before its
value could be properly transferred to private
respondent's account.
Without filing a motion for the
reconsideration of the Court of Appeal's Decision,
petitioner filed this petition for review on certiorari,
raising the following issues:
 1. WHETHER OR NOT "Appellant's contention
RESPONDENT NAPIZA that a mere indorser, she may not
IS LIABLE UNDER HIS be liable on account of the
WARRANTIES AS A dishonor of the checks indorsed
GENERAL INDORSER. by her, is likewise untenable.
Under the law, the holder or last
2. WHETHER OR NOT A indorsee of a negotiable
CONTRACT OF AGEN instrument has the right 'to enforce
CY WAS CREATED payment of the instrument for the
BETWEEN full amount thereof against all
RESPONDENT NAPIZA parties liable thereon.' Among the
AND RUBEN GAYON. 'parties liable thereon' is an
indorser of the instrument, i.e., 'a
3. WHETHER OR NOT
person placing his signature upon
PETITIONER WAS
an instrument otherwise than as
GROSSLY NEGLIGENT
maker, drawer or acceptor **
IN ALLOWING THE
unless he clearly indicated by
WITHDRAWAL.
appropriate words his intention to
Petitioner claims that private respondent, be bound in some other capacity.'
having affixed his signature at the dorsal side of the Such an indorser 'who indorses
check, should be liable for the amount stated therein in without qualification,' inter
accordance with the following alia 'engages that on due
provision of the Negotiable Instruments Law (Act No. presentment, ** (the instrument)
2031): shall be accepted or paid, or both,
as the case may be, according to
"SECTION its tenor, and that if it be
66. Liability of general indorser. dishonored, and the necessary
— Every indorser who indorses proceedings on dishonor be duly
without qualification, warrants to taken, he will pay the amount
all subsequent holders in due thereof to the holder, or any
course — subsequent indorser who may be
compelled to pay it.' Maniego may
(a) The matters and also be deemed an
things mentioned in subdivisions 'accommodation party' in the
(a), (b), and (c) of the next light of the facts, i.e., a person
preceding section; and 'who has signed the instrument as
(b) That the instrument is maker, drawer, acceptor, or
at the time of his indorsement, indorser, without receiving value
valid and subsisting. therefor, and for the
purpose of lending his name to
And, in addition, he some other person.' As such, she
engages that on due presentment, is under the law 'liable on the
it shall be accepted or paid, or instrument to a holder for value,
both, as the case may be, notwithstanding such holder at the
according to its tenor, and that if it time of taking the instrument knew
be dishonored, and the necessary ** (her) to be only an
proceedings on dishonor be duly accommodation party,' although
taken, he will pay the amount she has the right, after paying the
thereof to the holder, or to any holder, to obtain reimbursement
subsequent indorser who may be from the party accommodated,
compelled to pay it." 'since the relation between them is
in effect that of principal and
Section 65, on the other hand, provides for the surety, the accommodation party
following warranties of a person negotiating an being the surety."
instrument by delivery or by qualified indorsement: (a)
that the instrument is genuine and in all respects what It is thus clear that ordinarily private
it purports to be; (b) that he has good title to it, and (c) respondent may be held liable as an indorser of the
that all prior parties had capacity to check or even as an accommodation
contract. 15 In People v. party. 17 However, to hold private respondent liable for
Maniego, 16 this Court described the liabilities of an the amount of the check he deposited by the strict
indorser as follows: application of the law and without considering the
attending circumstances in the case would result in an
injustice and in the erosion of the public trust in the
banking system. The interest of justice thus demands
looking into the events that led to the
encashment of the check.
Petitioner asserts that by signing the
withdrawal slip, private respondent "presented the
opportunity for the withdrawal of the amount in
question." Petitioner relied "on the genuine signature
on the withdrawal slip, the personality of private
respondent's son and the lapse of more than fifty (50)
days from date of deposit of the Continental Bank
draft, without the same being returned yet." 18 We hold
however, that the propriety of the withdrawal should be
gauged by compliance with the rules thereon that both
petitioner bank and its depositors are duty-bound to
observe.
In the passbook that petitioner issued to
private respondent, the following rules on
withdrawal of deposits appear:
"4. Withdrawals must be
made by the depositor personally
but in some exceptional
circumstances, the Bank may
allow withdrawal by another upon
the depositor's written authority
duly authenticated; and neither a
deposit nor a withdrawal will be
permitted except upon the
presentation of the depositor's
savings passbook, in which the
amount deposited withdrawn shall
be entered only by the Bank.
5. Withdrawals may be
made by draft, mail or telegraphic
transfer in currency of the account
at the request of the depositor in
writing on the withdrawal slip or by
authenticated cable. Such request
must indicate the name of the
payee/s, amount and the place
where the funds are to be paid.
Any stamp, transmission and
other charges related to such
withdrawals shall be for the
account of the depositor and shall
be paid by him/her upon demand.
Withdrawals may also be made in
the form of travelers checks and in
pesos. Withdrawals in the
form of notes/bills are allowed
subject however, to their
(availability).
6. Deposits shall not be
subject to withdrawal by check,
and may be withdrawn only in the
manner above provided, upon
presentation of the depositor's
savings passbook and with the
withdrawal form supplied by the
Bank at the counter." 19
Under these rules, to be able to withdraw from
the savings account deposit under the Philippine
foreign currency deposit system, two requisites must
be presented to petitioner bank by the person
withdrawing an amount: (a) a duly filled-up withdrawal
slip; and (b) the depositor's passbook. Private
respondent admits that he signed a blank withdrawal
slip ostensibly in violation of Rule No. 6 requiring that
the request for withdrawal must name the payee, the
amount to be withdrawn and the place where such
withdrawal should be made. That the withdrawal slip
was in fact a blank one with only private respondent's
two signatures affixed on the proper spaces is
buttressed by petitioner's allegation in the instant
petition that had private respondent indicated therein
the person authorized to receive the money, then
Ruben Gayon, Jr. could not have withdrawn any
amount. Petitioner contends that "(i)n failing to do so
(i.e., naming his authorized agent), he practically
authorized any possessor thereof to write any amount
and to collect the same." 20
Such contention would have been valid if not
for the fact that the withdrawal slip itself indicates a
special instruction that the amount is payable to
"Ramon A. de Guzman &/or Agnes C. de Guzman."
Such being the case, petitioner's personnel should
have been duly warned that Gayon, who was also
employed in petitioner's Buendia Ave. Extension
branch, 21 was not the proper payee of the
proceeds of the check. Otherwise, either Ramon or
Agnes de Guzman should have issued another
authority to Gayon for such withdrawal. Of course, at
the dorsal side of the withdrawal slip is an "authority to
withdraw" naming Gayon the person who can withdraw
the amount indicated in the check. Private respondent
does not deny having signed such authority. However,
considering petitioner's clear admission that the
withdrawal slip was a blank one except for private
respondent's signature, the unavoidable conclusion is
that the typewritten name of "Ruben C. Gayon, Jr." was
intercalated and thereafter it was signed by Gayon or
whoever was allowed by petitioner to withdraw the
amount. Under these facts, there could not have been
a principal-agent relationship between private
respondent and Gayon so as to render the former liable
for the amount withdrawn.
Moreover, the withdrawal slip contains a
boxed warning that states: "This receipt must be signed
and presented with the corresponding foreign currency
savings passbook by the depositor in person. For
withdrawals thru a representative, depositor should
accomplish the authority at the back." The
requirement of presentation of the passbook when
withdrawing an amount cannot be given mere lip
service even though the person making the withdrawal
is authorized by the depositor to do so. This is clear
from Rule No. 6 set out by petitioner so that, for the
protection of the bank's interest and as a reminder to
the depositor, the withdrawal shall be entered in the
depositor's passbook. The fact that private
respondent's passbook was not presented during the
withdrawal is evidenced by the entries therein showing
that the last transaction that he made with the bank was
on September 3, 1984, the date he deposited the
controversial check in the amount of $2,500.00. 22
In allowing the withdrawal, petitioner likewise
overlooked another rule that is printed in the passbook.
Thus:
"2. All deposits will be
received as current funds and will
be repaid in the same manner;
provided, however,
that deposits of drafts, checks,
money orders, etc. will be
accepted as subject to collection
only and credited to the account
only upon receipt of the
notice of final payment. Collection
charges by the Bank's foreign
correspondent in effecting such
collection shall be for the
account of the depositor. If the
account has sufficient balance,
the collection shall be debited by
the Bank against the account. If,
for any reason, the
proceeds of the deposited
checks, drafts, money orders, etc.,
cannot be collected or if the Bank
is required to return such
proceeds, the provisional entry
therefor made by the Bank in the
savings passbook and its records
shall be deemed automatically
cancelled regardless of the time
that has elapsed, and whether or
not the defective items can be
returned to the depositor; and the
Bank is hereby authorized to
execute immediately the
necessary corrections,
amendments or changes in its
record, as well as on the savings
passbook at the first opportunity to
reflect such cancellation."
(Emphasis supplied.)
As correctly held by the Court of Appeals, in
depositing the check in his name, private respondent
did not become the outright owner of the amount stated
therein. Under the above rule, by depositing the check
with petitioner, private respondent was, in a way,
merely designating petitioner as the collecting bank.
This is in consonance with the rule that a negotiable
instrument, such as a check, whether a manager's
check or ordinary check, is not legal tender. 23 As
such, after receiving the deposit, under its own rules,
petitioner shall credit the amount in private
respondent's account or infuse value thereon only after
the drawee bank shall have paid the amount of the
check or the check has been cleared for deposit. Again,
this is in accordance with ordinary banking practices
and with this Court's pronouncement that "the
collecting bank or last endorser generally suffers the
loss because it has the duty to ascertain the
genuineness of all prior endorsements considering that
the act of presenting the check for payment to the
drawee is an assertion that the party making the
presentment has done its duty to ascertain the
genuineness of the endorsements." 24 The rule finds
more meaning in this case where the check involved is
drawn on a foreign bank and therefore collection is
more difficult than when the drawee bank is a local one
even though the check in question is a manager's
check. 25
In Banco Atlantico v. Auditor
General, 26 Banco Atlantico, a commercial bank in
Madrid, Spain, paid the amounts represented in three
(3) checks to Virginia Boncan, the finance officer of the
Philippine Embassy in Madrid. The bank did so without
previously clearing the checks with the drawee bank,
the Philippine National Bank in New York, on
account of the "special treatment" that Boncan
received from the personnel of Banco Atlantico's
foreign department. The Court held that the
encashment of the checks without prior clearance is
"contrary to normal or ordinary banking practice
specially so where the drawee bank is a foreign bank
and the amounts involved were large." Accordingly,
the Court approved the Auditor General's
denial of Banco Atlantico's claim for payment of the
value of the checks that was withdrawn by Boncan.
Said ruling brings to light the fact that the
banking business is affected with public interest. By the
nature of its functions, a bank is under obligation to
treat the accounts of its depositors "with meticulous
care, always having in mind the fiduciary nature of their
relationship." 27 As such, in dealing with its depositors
a bank should exercise its functions not only with the
diligence of a good father of a family but it should do so
with the highest degree of care. 28
In the case at bar, petitioner, in allowing the
withdrawal of private respondent's deposit, failed to
exercise the diligence of a good father of a family. In
total disregard of its own rules, petitioner's personnel
negligently handled private respondent's account to
petitioner's detriment. As this Court once said on this
matter:
"Negligence is the
omission to do something which a
reasonable man, guided by those
considerations which ordinarily
regulate the conduct of human
affairs, would do, or the
doing of something which a
prudent and reasonable man
would do. The seventy-eight (78)-
year-old, yet still relevant,
 case of Picart v. Smith, provides
the test by which to determine the
existence of negligence in a the United States on whether or not the check was
particular case which may be
stated as follows: Did the
defendant in doing the alleged
negligent act use that reasonable
care and caution which an
ordinarily prudent person would
have used in the same situation?
If not, then he is
guilty of negligence. The law here
in effect adopts the standard
supposed to be supplied by the
imaginary conduct of the
discreet pater-familias of the
Roman law. The
existence of negligence in a given
case is not determined by
reference to the personal
judgment of the actor in the
situation before him. The law
considers what would be reckless,
blameworthy, or negligent in the
man of ordinary intelligence and
prudence and determines liability
by that." 29
Petitioner violated its own rules by allowing
the withdrawal of an amount that is definitely over and
above the aggregate amount of private respondent's
dollar deposits that had yet to be cleared. The bank's
ledger on private respondent's account shows that
before he deposited $2,500.00, private respondent had
a balance of only $750.00. 30 Upon private
respondent's deposit of $2,500.00 on September 3,
1984, that amount was credited in his ledger as a
deposit resulting in the corresponding total
balance of $3,250.00. 31 On September 10, 1984, the
amount of $600.00 and the additional
charges of $10.00 were indicated therein as withdrawn
thereby leaving a balance of $2,640.00. On September
30, 1984, an interest of $11.59 was reflected in the
ledger and on October 23, 1984, the
amount of $2,541.67 was entered as withdrawn with a
balance of $109.92. 32 On November 19, 1984 the
word "hold" was written beside the
balance of $109.92. 33 That must have been the time
when Reyes, petitioner's branch manager, was
informed unofficially of the fact that the check
deposited was a counterfeit, but petitioner's Buendia
Ave. Extension Branch received a copy of the
communication thereon from Wells Fargo Bank
International in New York the following day, November
20, 1984. 34 According to Reyes, Wells Fargo Bank
International handled the clearing of checks drawn
against U.S. banks that were deposited with
petitioner. 35
deposited in the amount of $2,500.00 although they
had not yet received notice from the clearing bank in
funded. Reyes' contention that after the lapse of the
35-day period the amount of a deposited check could
be withdrawn even in the absence of a clearance
thereon, otherwise it could take a long time before a
depositor could make a withdrawal, 36 is untenable.
Said practice amounts to a disregard of the clearance
requirement of the banking system.
While it is true that private respondent's
having signed a blank withdrawal slip set in motion the
events that resulted in the withdrawal and
encashment of the counterfeit check, the
negligence of petitioner's personnel was the proximate
cause of the loss that petitioner sustained. Proximate
cause, which is determined by a mixed
consideration of logic, common sense, policy and
precedent, 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." 37 The
proximate cause of the withdrawal and eventual
loss of the amount of $2,500.00 on petitioner's part
was its personnel's negligence in allowing such
withdrawal in disregard of its own rules and the
clearing requirement in the banking system. In so
doing, petitioner assumed the risk of incurring a loss on
account of a forged or counterfeit foreign check and
hence, it should suffer the resulting damage.
WHEREFORE, the petition for review
on certiorari is DENIED. The
Decision of the Court of Appeals in CA-G.R. CV No.
37392 is AFFIRMED.
SO ORDERED.
||| (Bank of the Philippine Islands v. Court of Appeals,
G.R. No. 112392, [February 29, 2000], 383 PHIL 538-
557)

From these facts on record, it is at once

apparent that petitioner's personnel allowed the
withdrawal of an amount bigger than the original
deposit of $750.00 and the value of the check