G.R. No. 156207 September 15, 2006
Lessons Applicable: Promissory Notes and Checks (Negotiable Instruments Law)
FACTS:
- Warliza Sarande deposited in her account at Philippine Commercial International (PCI) Bank a PCI Bank TCBT Check of P225K.
- December 5 1991: Upon inquiry by Serande at PCI Bank on whether the TCBT Check had been cleared, she received an affirmative answer.
- Relying on this assurance, she issued 2 checks drawn against the proceeds of TCBT Check.
- PCI Bank Check No. 073661 dated 5 December 1991 for P132K which Sarande issued to respondent Rowena Ong owing to a business transaction.
- On the same day, Ong presented to PCI Bank requesting PCI Bank to convert the proceeds into a manager's check, which the PCI Bank obliged.
- December 6 1991: Ong deposited PCI Bank Manager's Check in her account with Equitable Banking Corporation
- December 9 1991: she received a check return-slip informing her that PCI Bank had stopped the payment of the check on the ground of irregular issuance.
- Despite several demands made, it was refused
- Ong was constrained to file a Complaint for sum of money, damages and attorney's fees against PCI Bank
- CA affirmed RTC: favored Ong
ISSUE: W/N Ong can hold PCI liable
HELD: YES. Petition is DENIED. CA affirmed.
- By admitting it committed an error, clearing the check of Sarande and issuing in favor of Ong not just any check but a manager's check for that matter, PCI Bank's liability is fixed
- certification = acceptance,
- Equitable PCI as drawee bank is bound on the instrument upon certification and it is immaterial to such liability in favor of Ong who is a holder in due course whether the drawer (Warliza Sarande) had funds or not with the Equitable PCI Bank
- No unjust enrichment
SECTION 52. What constitutes a holder in due course. – A holder in due course is a holder who has taken the instrument under the following conditions:
(a) That it is complete and regular upon its face;
(b) That he became the holder of it before it was overdue, and without notice it had been previously dishonored, if such was the fact;
(c) That he took it in good faith and for value;
(d) That at the time it was negotiated to him, he had no notice of any infirmity in the instrument or defect in the title of the person negotiating it.
The same law provides further:
Sec. 24. Presumption of consideration. – Every negotiable instrument is deemed prima facie to have been issued for a valuable consideration; and every person whose signature appears thereon to have become a party thereto for value.
Sec. 26. What constitutes holder for value. – Where value has at any time been given for the instrument, the holder is deemed a holder for value in respect to all parties who become such prior to that time.
Sec. 28. Effect of want of consideration. – Absence or failure of consideration is a matter of defense as against any person not a holder in due course; and partial failure of consideration is a defense pro tanto, whether the failure is an ascertained and liquidated amount or otherwise.
- manager's check
- an order of the bank to pay, drawn upon itself, committing in effect its total resources, integrity and honor behind its issuance
- regarded substantially to be as good as the money it represents
- same footing as a certified check
- The object of certifying a check, as regards both parties, is to enable the holder to use it as money.
- check operates as an assignment of a part of the funds to the creditors
Sec. 187. Certification of check; effect of. – Where a check is certified by the bank on which it is drawn, the certification is equivalent to an acceptance
Section 63 of the Central Bank Act to the effect "that a check which has been cleared and credited to the account of the creditor shall be equivalent to a delivery to the creditor in cash in an amount equal to the amount credited to his account
Sec. 62. Liability of acceptor. – The acceptor by accepting the instruments engages that he will pay it according to the tenor of his acceptance; and admits –
(a) The existence of the drawer, the genuineness of his signature, and his capacity and authority to draw the instrument; and
(b) The existence of the payee and his then capacity to indorse.