BARRANTES: 1 Q:
Lao drew a crossed check against his account in BDO payable to Wu for the delivery of sanity wares. Wu then delivered the check to New Wave Corporation (NWC) who has an account in Union Bank. NWC deposited the check to his account in Union Bank, prompting the bank to accommodate the check. Upon seeing the check and Union Bank’s accommodation, BDO encashed the check and credited it to NWC’s Union Bank account. Wu failed to deliver the sanity wares, which prompted Lao to go to BDO for the stoppage of payment, only to find out about the negotiation, encasement, and deposit of the check.
Is BDO liable to account for the encasement of the crossed check to NWC? A:
NO. Even with such clear violation by BDO of its duty, the loss would have ultimately pertained to Union Bank. By stamping at the back of the subject check the phrase “all prior endorsements and/or lack of it guaranteed,” Union Bank had, for all intents and purposes treated the check as a negotiable instrument and, accordingly, assumed the warranty of an endorser. Without such warranty, BDO would not have paid the proceeds of the check. Thus, Union Bank cannot now deny liability after the aforesaid warranty turned out to be false. Union Bank was clearly negligent when it allowed the check to be presented by, and deposited in the account of New Wave, despite knowledge that it was not the payee named therein. Further, it could not have escaped its attention that the subject checks were crossed checks. (BDO Unibank, Inc. Vs. Engr. Selwyn Lao, G.R. No. 227005; June 19, 2017)
2 Q:
Wesleyan University, for its annual giving of bonuses, issued crossedchecks payable to its employees . Wesleyan’s treasurer, Reyes, encashed these checks to the employees using the company’s treasury due to the employees’ request to receive the bonus in cash. She accommodated the check for its encasement in the bank and alleged that this action is the usual company practice.
Is the action of Reyes correct? A:
NO. Jurisprudence has pronounced that the crossing of a check means that the check may not be encashed but only deposited in the bank. As Treasurer, respondent knew or is at least expected to be aware of and abide by this basic banking practice and commercial custom. Clearly, the issuance of a crossed check reflects management’s intention to safeguard the funds covered thereby, its special instruction to have the same deposited to another account and its restriction on its encashment. (Wesleyan University Philippines v. Novella Reyes, G.R. No. 208321; July 30, 2014)
3 Q:
(a) Can good faith, because of considering trusted third person’s statements, be a defense against lack of diligence in wrongfully encasing crossed checks?
(b) Can banks recover from the cash recipient of wrongfully encased checks? A:
(a) NO. Good Faith cannot be a defense. The fact that a person, other than the named payee of the crossed check, was presenting it for deposit should have put the bank on guard. Banksshould verify if the payee authorized the holder to present the same in its behalf, or indorsed it to him. Such misplaced reliance on empty words is tantamount to gross negligence, which is the absence of or failure to exercise even slight care or diligence, or the entire absence of care, evincing a thoughtless disregard of consequences without exerting any effort to avoid them. (Equitable Banking Corporation v. Special Steel Products Inc., No. 175350; June 13, 2012)
G.R.
(b) YES. Banks can reimburse from the recipient of wrongfully encashed check. There is unjust enrichment when (1) a person is unjustly benefited, and (2) such benefit is derived at the expense of or with damages to another. Should the requisites be apparent or fulfilled in the case, the recipient has an obligation to reimburse whatever the bank has paid to the drawer.
(Equitable Banking Corporation v. Special Steel Products Inc., No. 175350; June 13, 2012)
G.R.
