G.R. No. 85419 March 9, 1993 DEVELOPMENT BANK OF RIZAL, plaintiff-petitioner, vs. SIMA WEI and/or LEE KIAN HUAT, MARY CHENG UY, SAMSON TUNG, ASIAN INDUSTRIAL PLASTIC CORPORATION and PRODUCERS BANK OF THE PHILIPPINES, PHILIPPINES, defendants-respondents. CAMPOS, JR., J.: Facts: Sima Wei has a pre-existing loan to the petitioner bank. In order to pay his balance, she issued two crossed checks payable to petitioner Bank but the said check were not delivered to the petitioner bank. The checks came into the possession of Lee Kian Huat who deposited the checks with forged payee’s signature to the account of Plastic Corporation in Producers Bank. Hence, this petition. Issue: Whether or not Development of Bank has a cause of action against respondents other than Sima We i Held: NO, the Supreme Court held that the petitioner does not have a cause of action arising from the checks. In a check, there are three (3) parties parties involved which are: the drawer, drawee and payee. However, the the payee of a negotiable instrument only acquires interest therein upon its delivery to him and delivery means the transfer of possession, actual or constructive from one person to another (Section 191). In this case, the checks were never delivered to the payee Bank. This means that he has no cause of action accruing from the said checks against the respondents because he has no privity with t hem. His recourse is to go after Sima for the balance due thereon because because the two crossed checks did not relieve her of her liability.
Jai-Alia vs. Bank of the Philippine Islands Facts: Checks were issued payable to the order of Inter-Island Gas Corporation and Ramirez was a collector of the said corporation, an ordinary collector. Because of his job, he was able to take possession of the checks. He negotiated the checks to Jai Alai by forging the signature of the signatory of the corporation. Jai-Alai, on the other hand, deposited the said checks to BPI. After clearing, the drawee banks paid the collecting bank, BPI and the latter credited the amount to Jai-Alai’s Jai-Alai’s account. But when BPI was informed of the forgery, it returned the amounts to the drawee banks and debited petitioner’s account. When JaiJai Alai issued another check in payment of an obligation, the same bounced due to insufficiency of funds. Hence, this petition by Jai-Alai against BPI. Issue:
Whether or not BPI was right in debiting the account of Jai-Alai Held: YES, the Supreme Court held that BPI was right in doing such because Jai-Alai should bear the loss. The Court said that petitioner should bear the loss because of its gross negligence. In the first place, it did not question the validity of negotiation considering the fact that Ramirez is just a mere collector of the corporation and he has no authority to negotiate the same. Because of this gross negligence, it is precluded from getting a reimbursement.
G.R. No. L-40796 July 31, 1975 REPUBLIC vs. MAURICIA T. EBRADA, defendant-appellant.
BANK, plaintiff-appellee,
MARTIN, J.: Facts: A check was issued to a payee who was already dead by the Bureau of Treasury. The payee’s signature and was indorsed from one person to another. After its indorsement to Ebrada, she presented the check to Republic Bank for encashment and was paid. Upon knowing the forgery, Bureau of treasury demanded Republic Bank to refund the amount paid and in turn, Republic Bank demanded Ebrada to reimburse the amount paid but the latter refused raising the defense that she is just an accommodation. Hence, petitioner bank filed an action against Ebrada. Issue: Whether or not Ebrada is liable for the reimbursement of the amount Held: YES, the Supreme Court held that Ebrada should reimburse the petitioner bank. Section 23 of the Nil states that a forged signature is inoperative. However, this does not mean that no one is liable because there are those who are precluded from setting up forgery and one of them is the indorser. Being the last indorser, Ebrada warrants to Republic Bank that the check is genuine and what it purports to be. Thus, Ebrada is liable because of the breach of warranty. MWSS vs. PNB Facts:
BANCO
DE
ORO
SAVINGS
AND
MORTGAGE
BANK, petitioner,
vs.
EQUITABLE BANKING CORPORATION, PHILIPPINE CLEARING HOUSE CORPORATION, AND REGIONAL TRIAL COURT OF QUEZON CITY, BRANCH XCII (92), respondents. Facts: Checks drawn on Equitable Banking Corporation were deposited at Banco De Oro. The latter stamped at the back of the checks the usual indorsements and submitted it to PCHC for clearing. Consequently, Equitable Bank paid BDO and the BDO credited the amount to its depositor’s account. Upon knowing that the payee’s signature was forged, the respondent bank asked for reimburs ement from the petitioner bank. Issue: Whether or not Banco De Oro as a collecting bank should reimburse the drawee bank Held: YES, the Supreme Court held that Banco De Oro should reimburse Equitable Bank because it should bear the loss. A drawee bank is not The law imposes a duty of diligence on the collecting bank to scrutinize checks deposited with it for the purpose of determining their genuineness and regularity. Because of this, the collecting bank has warranties the same as that of an indorser. In this case, BDO is liable to reimburse Equitable Bank because of its breach of warranty i.e. the instrument is genuine and what it purports to be.
G.R. No. 92244 February 9, 1993 NATIVIDAD GEMPESAW, petitioner, vs. THE HONORABLE COURT OF APPEALS and PHILIPPINE BANK OF COMMUNICATIONS, respondents. CAMPOS, JR., J.: Facts: Gempesaw is the owner of four grocery stores. As payment to supplier, her bookkeeper will prepare checks and fill up all material particulars. Afterwards, she would sign the same along with the corresponding invoice receipts. Petitioner signed each and every check without bothering to verify the accuracy of the checks against the corresponding invoices because she reposed full and implicit trust and confidence on her bookkeeper. The issuance and delivery of the checks to the payees named therein were left to the bookkeeper. Petitioner admitted that she did not make any verification as to whether or not the checks were delivered to their respective payees. Although the respondent drawee Bank notified her of all checks presented to and paid by the bank, petitioner did not verify the correctness of the returned checks, much less check if the payees actually received the checks in
payment for the supplies she received. In the span of 2 years, 82 checks were issued and these checks were all presented to respondent drawee bank by the indorsees as holders thereto and these were honored by the said bank. The amount were debited against Gempesaw’s checking account. Apparently, the signatures of the payees of all the 82 checks were forged. Hence, Gempesaw filed an action against respondent bank. Issue: Whether or not respondent bank is liable for reimbursement of Gempesaw Held: YES BUT ONLY HALF OF THE AMOUNT. The Supreme Court held that both parties are negligent which is they shall both bear the loss. On the part of Gempesaw, she was negligent is issuing the checks and on the part of PBCOM, it was negligent on not noticing the irregularity in the instrument. Hence, both are liable for the loss.
