NEGOTIABLE INSTRUMENTS-Forgery Full.doc

8/13/2019 NEGOTIABLE INSTRUMENTS-Forgery Full.doc

1/24

NEGOTIABLE INSTRUMENTS

FULL TEXT

1. G.R. No. 128927. September 14, 1999

REMEIOS NOTA SA!IERA,petitioner, vs."OURT OF A!!EALS #$% RAMONSUA, respondents.

2. G.R. No. 1&7'82(G.R. No. 1&7)12 *#$+#r '1, 199)

ASSO"IATE BAN-, petto$er, /0. ON. "OURT OF A!!EALS, !ROIN"E OF TARLA"#$% !ILI!!INE NATIONAL BAN-, re0po$%e$t0.

'. G.R. No. 11119& *+$e 27, 1993

LORETO . E LA I"TORIA, #0 "t F0#5 o6 M#$%#+e "t #$% $ 0 per0o$#5 #p#t#0 #r$0ee,petto$er, /0. ON. *OSE !. BURGOS, !re0%$ *+%e, RT", Br. XII,"eb+ "t, #$% RAUL . SESBREO, re0po$%e$t0.

4. G.R. No. 1'&)'2. September 28, 1999

!EO!LE OF TE !ILI!!INES,plaintiff-appellee, vs. NAT: "UA, accused;appellant.

3. G.R. No. 12141' *#$+#r 29, 2&&1

!ILI!!INE "OMMER"IAL INTERNATIONAL BAN-


2/24

SE"ON IISION

>G.R. No. 128927. September 14, 1999?

REMEIOS NOTA SA!IERA,petitioner, vs."OURT OFA!!EALS #$% RAMON SUA, respondents.

E " I S I O N

BELLOSILLO, J.@

REMEDIOS NOTA SAPIERA appeals to us through thispetition for review the Decision of the Court of Appeals [!whichac"uitte# her of the cri$e of estafa %ut hel# her lia%lenonetheless for the value of the chec&s she in#orse# in favorof private respon#ent Ra$on Sua'

On several occasions petitioner Re$e#ios Nota Sapiera(a sari)sari store owner( purchase# fro$ Monrico Mart certaingrocer* ite$s( $ostl* cigarettes( an# pai# for the$ with chec&sissue# %* one Arturo #e +u,$an- .a/ PCI0 Chec& No' 12314#ate# 56 7e%ruar* 482 for P93(333'33: .%/ PCI0 Chec& No'1232; #ate# 56 7e%ruar* 482 for P58(333'33: .c/ PCI0Chec& No' 12312 #ate# 52 7e%ruar* 482 forP

95(13'33:an#( #/ Metro%an& Chec& No' DA+ ) 39139218 PA #ate# 5March 482 for P51(333'33' These chec&s were signe# atthe %ac& %* petitioner' ence( four .9/ chargesof estafa were file# against petitioner with the Regional TrialCourt of Dagupan Cit*( #oc&ete# as Cri$' Cases Nos' D)8258(D)8254( D)82;3 an# D)82;' Arturo #e +u,$an was charge#with two .5/ counts of violation of 0'P' 0lg' 55( #oc&ete# asCri$' Cases Nos' D)82;; an# D)82;9' These cases againstpetitioner an# #e +u,$an were consoli#ate# an# trie# ?ointl*'

On 52 Dece$%er 484 the court a quo[5!ac"uitte#petitioner of all the charges of estafa %ut #i# not rule onwhether she coul# %e hel# civill* lia%le for the chec&s shein#orse# to private respon#ent' The trial court foun# Arturo #e+u,$an guilt* of @iolation of 0'P' 0lg' 55 on two .5/ countsan# sentence# hi$ to suffer i$prison$ent of si .6/ $onthsan# one ./ #a* in each of the cases( an# to pa* privaterespon#ent P62(13'33 as civil in#e$nit*'

Private respon#ent file# a notice of appeal with the trialcourt with regar# to the civil aspect %ut the court refuse# togive #ue course to the appeal on the groun# that the ac"uittalof petitioner was a%solute' Private respon#ent then file# apetition for mandamuswith the Court of Appeals( #oc&ete# asCA)+R SP No' 59656( pra*ing that the court a quo%e or#ere#to give #ue course to the appeal on the civil aspect of the#ecision' The Court of Appeals grante# the petition an# rule#that private respon#ent coul# appeal with respect to the civilaspect the ?u#g$ent of ac"uittal %* the trial court'

On 55 Banuar* 446( the Court of Appeals in CA)+R C@No' ;6;26 ren#ere# the assaile# Decision insofar as itsustaine# the appeal of private respon#ent on the civil aspectan# or#ering petitioner to pa* private respon#ent P;;1(333'33

representing the aggregate face value of the four .9/ chec&sin#orse# %* petitioner plus legal interest fro$ the notice of#ishonor'

Petitioner file# a $otion for reconsi#eration of theDecision' On 4 March 442 the Court of Appeals issue# aResolution noting the a#$ission of %oth parties that privaterespon#ent ha# alrea#* collecte# the a$ount of P51(333'33fro$ Arturo #e +u,$an with regar# to his civil lia%ilit* in Cri$'Cases Nos' 82;; an# 82;9' The appellate court note# that

private respon#ent was the sa$e offen#e# part* in the cri$inalcases against petitioner an# against #e +u,$an' Cri$inalCases Nos' 82;; an# 82;9 against De +u,$an( an# Cri$'Cases Nos' 82;3 an# 8254 against petitioner( involve# thesa$e chec&s( to wit- PCI0 Chec&s Nos' 12312forP

95(13'33 an# Metro%an& Chec& No' DA+)39139218 PAfor P51(333'33'

Thus( the Court of Appeals rule# that private respon#entcoul# not recover twice on the sa$e chec&s' Since he ha#collecte# P51(333'33 as civil in#e$nit* in Cri$' Cases Nos'82;; an# 82;9( this a$ount shoul# %e #e#ucte# fro$ the su$total of the civil in#e$nit* #ue hi$ arising fro$ the estafacases against petitioner' The appellate court then correcte# itsprevious awar#( which was erroneousl* place#at P;;1(333'33( toP;;1(13'33 as the su$ total of thea$ounts of the four .9/ chec&s involve#' De#ucting thea$ount of P51(333'33 alrea#* collecte# %* privaterespon#ent( petitioner was a#?u#ge# to pa* P53(13'33 ascivil lia%ilit* to private respon#ent' >ence( this petition allegingthat respon#ent Court of Appeals erre# in hol#ing petitionercivill* lia%le to private respon#ent %ecause her ac"uittal %* thetrial court fro$ charges of estafa in Cri$' Cases Nos' D)8258(D)8254( D)82;3 an# D)82; was a%solute( the trial courthaving #eclare# in its #ecision that the fact fro$ which the civillia%ilit* $ight have arisen #i# not eist'


3/24

$a% Sales nvoice "o. --/ dated 0ebruary 1, 234 in theamount of 53,---.--* that said items purchased were paidwith 567an& 6hec& "o. 84-49 dated 0ebruary 1, 234*

$b% Sales nvoice "o. --3 dated 0ebruary 1, 234 in theamount of 5/-,---.--* that said items purchased were paidwith 567an& "o. 84-82 dated 0ebruary 1, 234*

$c% Sales nvoice "o. -- dated 0ebruary 4, 234 in theamount of 5/,8-.--* that said items were paid with 567an&6hec& "o. 84-84 dated 0ebruary 4, 234*

$d% Sales nvoice "o. -/3 and -/2 both dated #arch ,234 in the amount of 5-,-9.48* said items were paid with#etroban& 6hec& "o. -/8-/483 dated #arch , 234 in theamount of58,---.--.

That all these checks were deposited with theConsolidated Bank and Trust Company, :agupan 7ranch,for collection from the drawee ban&*

;hat when presented for payment by the collecting ban& to thedrawee ban&, said chec&s were dishonored due to accountclosed, as evidenced by chec& return slips* x x x x.

0rom the evidence, the 6ourt finds that accused !emedios"ota Sapiera is the owner of a sariowever( %* herown testi$on*( petitioner a#$itte# having signe# the four .9/chec&s in "uestion on the reverse si#e' The evi#ence of theprosecution shows that petitioner purchase# goo#s fro$ thegrocer* store of private respon#ent as shown %* the salesinvoices issue# %* private respon#ent: that these purchaseswere pai# with the four .9/ su%?ect chec&s issue# %* #e+u,$an: that petitioner signe# the sa$e chec&s on thereverse si#e: an# when presente# for pa*$ent( the chec&swere #ishonore# %* the #rawee %an& #ue to the closure of the#rawer=s account: an#( petitioner was infor$e# of the #ishonor'

s notthe invasion or violation of every private right to be proved onlyby preponderance of evidence> s the right of the aggrieved

person any less private because the wrongful act is alsopunishable by the criminal law>[6!

7inall*( with regar# to the co$putation of the civil lia%ilit*of petitioner( the fin#ing of the Court of Appeals that petitioneris civill* lia%le for the aggregate value of the unpai# four .9/chec&s su%?ect of the cri$inal cases in the su$of P;;1(13'33( less the a$ount of P51(333'33 alrea#*collecte# %* private respon#ent pen#ing appeal( resulting in

3
http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/128927.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/128927.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/128927.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/128927.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/128927.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/128927.htm#_edn6


4/24

the a$ount of P53(13'33 still #ue private respon#ent( is afactual $atter which is %in#ing an# conclusive upon this Court'

EREFORE( the petition is DENIED' The Decision ofthe Court of Appeals #ate# 55 Banuar* 446 as a$en#e# %*its Resolution #ate# 4 March 442 or#ering petitionerRe$e#ios Nota Sapiera to pa* private respon#ent Ra$on Suathe re$aining a$ount of P53(13'33 as civil lia%ilit*( isA77IRMED' Costs against petitioners'

SO ORERE.

#endo)a, ?uisumbing, an#7uena, @@., concur.

Repu%lic of the PhilippinesSU!REME "OURT

Manila

SE"ON IISION

G.R. No. 1&7'82(G.R. No. 1&7)12 *#$+#r '1, 199)

ASSO"IATE BAN-,petitioner(vs'ON. "OURT OF A!!EALS, !ROIN"E OF TARLA" #$%!ILI!!INE NATIONAL BAN-,respon#ents'

G.R. No. 1&7)12 *#$+#r '1, 199)

!ILI!!INE NATIONAL BAN-, petto$er,/0.ONORABLE "OURT OF A!!EALS, !ROIN"E OF

TARLA", #$% ASSO"IATE BAN-, respon#ents'

E " I S I O N

ROMERO, J.@

ospital'5The allot$ent chec&s forsai# govern$ent hospital are #rawn to the or#er of

Concepcion E$ergenc* >ospital( Concepcion( Tarlac or TheChief( Concepcion E$ergenc* >ospital( Concepcion( Tarlac'The chec&s are release# %* the Office of the ProvincialTreasurer an# receive# for the hospital %* its a#$inistrativeofficer an# cashier'

In Banuar* 48( the %oo&s of account of the ProvincialTreasurer were post)au#ite# %* the Provincial Au#itor' It wasthen #iscovere# that the hospital #i# not receive severalallot$ent chec&s #rawn %* the Province'

On 7e%ruar* 4( 48( the Provincial Treasurer re"ueste# the$anager of the PN0 to return all of its cleare# chec&s whichwere issue# fro$ 422 to 483 in or#er to verif* the regularit*of their encash$ent' After the chec&s were ea$ine#( theProvincial Treasurer learne# that ;3 chec&s a$ounting toP53;(;33'33 were encashe# %* one 7austo Pangilinan( withthe Associate# 0an& acting as collecting %an&'

It turne# out that 7austo Pangilinan( who was thea#$inistrative officer an# cashier of pa*ee hospital until hisretire$ent on 7e%ruar* 58( 428( collecte# the "uestione#chec&s fro$ the office of the Provincial Treasurer' >e clai$e#to %e assisting or helping the hospital follow up the release ofthe chec&s an# ha# official receipts';Pangilinan sought toencash the first chec&9with Associate# 0an&' >owever( the$anager of Associate# 0an& refuse# an# suggeste# thatPangilinan #eposit the chec& in his personal savings accountwith the sa$e %an&' Pangilinan was a%le to with#raw the$one* when the chec& was cleare# an# pai# %* the #rawee%an&( PN0'

After forging the signature of Dr' A#ena Canlas who was chiefof the pa*ee hospital( Pangilinan followe# the sa$e proce#urefor the secon# chec&( in the a$ount of P1(333'33 an# #ate#April 53( 428(1as well as for twent*)eight other chec&s ofvarious a$ounts an# on various #ates' The last chec&negotiate# %* Pangilinan was for f8(333'33 an# #ate# 7e%ruar*3( 48' 6All the chec&s %ore the sta$p of Associate# 0an&which rea#s All prior en#orse$ents guarantee#ASSOCIATED 0ANF'

Besus Davi#( the $anager of Associate# 0an& testifie# thatPangilinan $a#e it appear that the chec&s were pai# to hi$ forcertain pro?ects with the hospital' 2>e #i# not fin# as irregularthe fact that the chec&s were not pa*a%le to Pangilinan %ut tothe Concepcion E$ergenc* >ospital' un#re# Three Thousan# Three

>un#re# .P53;(;33'33/ Pesos with legal interestthereon fro$ March 53( 48 until full* pai#:

4
http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt1http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt1http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt2http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt2http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt2http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt3http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt3http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt4http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt4http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt4http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt5http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt5http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt5http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt6http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt7http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt8http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt8http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt9http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt9http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt10http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt11http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt1http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt2http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt3http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt4http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt5http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt6http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt7http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt8http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt9http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt10http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt11


5/24

5' On the thir#)part* co$plaint( in favor of#efen#antHthir#)part* plaintiff Philippine National 0an&.PN0/ an# against thir#)part* #efen#antHfourth)part*plaintiff Associate# 0an& or#ering the latter torei$%urse to the for$er the a$ount of Two >un#re#Three Thousan# Three >un#re# .P53;(;33'33/Pesos with legal interests thereon fro$ March 53(

48 until full* pai#:'

;' On the fourth)part* co$plaint( the sa$e is here%*or#ere# #is$isse# for lac& of cause of action asagainst fourth)part* #efen#ant A#ena Canlas an# lac&of ?uris#iction over the person of fourth)part*#efen#ant 7austo Pangilinan as against the latter'

9' On the counterclai$s on the co$plaint( thir#)part*co$plaint an# fourth)part* co$plaint( the sa$e arehere%* or#ere# #is$isse# for lac& of $erit'

SO ORDERED'5

PN0 an# Associate# 0an& appeale# to the Court ofAppeals';Respon#ent court affir$e# the trial courtGs #ecisionin toto on Septe$%er ;3( 445'

>ence these consoli#ate# petitions which see& a reversal ofrespon#ent appellate courtGs #ecision'

PN0 assigne# two errors' 7irst( the %an& conten#s thatrespon#ent court erre# in ee$pting the Province of Tarlacfro$ lia%ilit* when( in fact( the latter was negligent %ecause it#elivere# an# release# the "uestione# chec&s to 7austoPangilinan who was then alrea#* retire# as the hospitalGscashier an# a#$inistrative officer' PN0 also $aintains itsinnocence an# alleges that as %etween two innocent persons(the one whose act was the cause of the loss( in this case theProvince of Tarlac( %ears the loss'

Net( PN0 asserts that it was error for the court to or#er it topa* the province an# then see& rei$%urse$ent fro$Associate# 0an&' Accor#ing to petitioner %an&( respon#entappellate Court shoul# have #irecte# Associate# 0an& to pa*the a#?u#ge# lia%ilit* #irectl* to the Province of Tarlac to avoi#circuit*' 9

Associate# 0an&( on the other han#( argues that the or#er oflia%ilit* shoul# %e totall* reverse#( with the #rawee %an& .PN0/solel* an# ulti$atel* %earing the loss'

Respon#ent court allege#l* erre# in appl*ing Section 5; of thePhilippine Clearing >ouse Rules instea# of Central 0an&Circular No' 183( which( %eing an a#$inistrative regulationissue# pursuant to law( has the force an# effect of law' 1ThePC>C Rules are $erel* contractual stipulations a$ong an#%etween $e$%er)%an&s' As such( the* cannot prevail over theaforesai# C0 Circular'

It li&ewise conten#s that PN0( the #rawee %an&( is estoppe#fro$ asserting the #efense of guarantee of prior in#orse$entsagainst Associate# 0an&( the collecting %an&' In sta$ping theguarantee .for all prior in#orse$ents/( it $erel* followe# a$an#ator* re"uire$ent for clearing an# ha# no choice %ut toplace the sta$p of guarantee: otherwise( there woul# %e no

clearing' The %an& will %e in a no)win situation an# willalwa*s %ear the loss as against the #rawee %an&'6

Associate# 0an& also clai$s that since PN0 alrea#* cleare#an# pai# the value of the forge# chec&s in "uestion( it is nowestoppe# fro$ asserting the #efense that Associate# 0an&guarantee# prior in#orse$ents' The #rawee %an& allege#l*has the pri$ar* #ut* to verif* the genuineness of pa*eeGsin#orse$ent %efore pa*ing the chec&' 2

ence( when thein#orse$ent is a forger*( onl* the person whose signature isforge# can raise the #efense of forger* against a hol#er in #uecourse' 5

The chec&s involve# in this case are or#er instru$ents( hence(the following #iscussion is $a#e with reference to the effects ofa forge# in#orse$ent on an instru$ent pa*a%le to or#er'


6/24

An in#orser of an or#er instru$ent warrants that theinstru$ent is genuine an# in all respects what it purports to %e:that he has a goo# title to it: that all prior parties ha# capacit*to contract: an# that the instru$ent is at the ti$e of hisin#orse$ent vali# an# su%sisting' 5;>e cannot interpose the#efense that signatures prior to hi$ are forge#'

A collecting %an& where a chec& is #eposite# an# whichin#orses the chec& upon present$ent with the #rawee %an&( issuch an in#orser' So even if the in#orse$ent on the checeposite# %* the %an&sGs client is forge#( the collecting %an& is%oun# %* his warranties as an in#orser an# cannot set up the#efense of forger* as against the #rawee %an&'

The %an& on which a chec& is #rawn( &nown as the #rawee%an&( is un#er strict lia%ilit* to pa* the chec& to the or#er of thepa*ee' The #rawerGs instructions are reflecte# on the face an#%* the ter$s of the chec&' Pa*$ent un#er a forge#in#orse$ent is not to the #rawerGs or#er' owever( if the #rawee %an& can prove a failure %* thecusto$erH#rawer to eercise or#inar* care that su%stantiall*contri%ute# to the $a&ing of the forge# signature( the #rawer ispreclu#e# fro$ asserting the forger*'

If at the sa$e ti$e the #rawee %an& was also negligent to the

point of su%stantiall* contri%uting to the loss( then such lossfro$ the forger* can %e apportione# %etween the negligent#rawer an# the negligent %an&'56

In cases involving a forge# chec&( where the #rawerGssignature is forge#( the #rawer can recover fro$ the #rawee%an&' No #rawee %an& has a right to pa* a forge# chec&' If it#oes( it shall have to recre#it the a$ount of the chec& to theaccount of the #rawer' The lia%ilit* chain en#s with the #rawee%an& whose responsi%ilit* it is to &now the #rawerGs signaturesince the latter is its custo$er'52

In cases involving chec&s with forge# in#orse$ents( such asthe present petition( the chain of lia%ilit* #oes not en# with the

#rawee %an&' The #rawee %an& $a* not #e%it the account ofthe #rawer %ut $a* generall* pass lia%ilit* %ac& through thecollection chain to the part* who too& fro$ the forger an#( ofcourse( to the forger hi$self( if availa%le'58In other wor#s( the#rawee %an& cansee& rei$%urse$ent or a return of the a$ountit pai# fro$ the presentor %an& or person' 54Theoreticall*( thelatter can #e$an# rei$%urse$ent fro$ the person whoin#orse# the chec& to it an# so on' The loss falls on the part*who too& the chec& fro$ the forger( or on the forger hi$self'

In this case( the chec&s were in#orse# %* the collecting %an&.Associate# 0an&/ to the #rawee %an& .PN0/' The for$er willnecessaril* %e lia%le to the latter for the chec&s %earing forge#in#orse$ents' If the forger* is that of the pa*eeGs or hol#erGsin#orse$ent( the collecting %an& is hel# lia%le( without

pre?u#ice to the latter procee#ing against the forger'

Since a forge# in#orse$ent is inoperative( the collecting %an&ha# no right to %e pai# %* the #rawee %an&' The for$er $ustnecessaril* return the $one* pai# %* the latter %ecause it waspai# wrongfull*' ;3

More i$portantl*( %* reason of the statutor* warrant* of ageneral in#orser in section 66 of the Negotia%le Instru$ents

aw( a collecting %an& which in#orses a chec& %earing aforge# in#orse$ent an# presents it to the #rawee %an&guarantees all prior in#orse$ents( inclu#ing the forge#in#orse$ent' It warrants that the instru$ent is genuine( an#that it is vali# an# su%sisting at the ti$e of his in#orse$ent'0ecause the in#orse$ent is a forger*( the collecting %an&co$$its a %reach of this warrant* an# will %e accounta%le to

the #rawee %an&' This lia%ilit* sche$e operates without regar#to fault on the part of the collectingHpresenting %an&' Even if thelatter %an& was not negligent( it woul# still %e lia%le to the#rawee %an& %ecause of its in#orse$ent'

The Court has consistentl* rule# that the collecting %an& orlast en#orser generall* suffers the loss %ecause it has the #ut*to ascertain the genuineness of all prior en#orse$entsconsi#ering that the act of presenting the chec& for pa*$ent tothe #rawee is an assertion that the part* $a&ing thepresent$ent has #one its #ut* to ascertain the genuineness ofthe en#orse$ents';

The #rawee %an& is not si$ilarl* situate# as the collecting %an&

%ecause the for$er $a&es no warrant* as to the genuineness'of an* in#orse$ent';5The #rawee %an&Gs #ut* is %ut to verif*the genuineness of the #rawerGs signature an# not of thein#orse$ent %ecause the #rawer is its client'

Moreover( the collecting %an& is $a#e lia%le %ecause it is priv*to the #epositor who negotiate# the chec&' The %an& &nowshi$( his a##ress an# histor* %ecause he is a client' It hasta&en a ris& on his #eposit' The %an& is also in a %etter positionto #etect forger*( frau# or irregularit* in the in#orse$ent'

>ence( the #rawee %an& can recover the a$ount pai# on thechec& %earing a forge# in#orse$ent fro$ the collecting %an&'>owever( a #rawee %an& has the #ut* to pro$ptl* infor$ the

presentor of the forger* upon #iscover*' If the #rawee %anela*s in infor$ing the presentor of the forger*( there%*#epriving sai# presentor of the right to recover fro$ the forger(the for$er is #ee$e# negligent an# can no longer recover fro$the presentor';;

Appl*ing these rules to the case at %ench( PN0( the #rawee%an&( cannot #e%it the current account of the Province ofTarlac %ecause it pai# chec&s which %ore forge# in#orse$ents'>owever( if the Province of Tarlac as #rawer was negligent tothe point of su%stantiall* contri%uting to the loss( then the#rawee %an& PN0 can charge its account' If %oth #rawee%an&)PN0 an# #rawer)Province of Tarlac were negligent( theloss shoul# %e properl* apportione# %etween the$'

The loss incurre# %* #rawee %an&)PN0 can %e passe# on tothe collecting %an&)Associate# 0an& which presente# an#in#orse# the chec&s to it' Associate# 0an& can( in turn( hol#the forger( 7austo Pangilinan( lia%le'

If PN0 negligentl* #ela*e# in infor$ing Associate# 0an& of theforger*( thus #epriving the latter of the opportunit* to recoverfro$ the forger( it forfeits its right to rei$%urse$ent an# will %e$a#e to %ear the loss'

After careful ea$ination of the recor#s( the Court fin#s thatthe Province of Tarlac was e"uall* negligent an# shoul#(therefore( share the %ur#en of loss fro$ the chec&s %earing aforge# in#orse$ent'

The Province of Tarlac per$itte# 7austo Pangilinan to collectthe chec&s when the latter( having alrea#* retire# fro$govern$ent service( was no longer connecte# with thehospital'


7/24

allot$ent chec&s were release# to Pangilinan an# the others toEli,a%eth Buco( the new cashier' The fact that there were nowtwo persons collecting the chec&s for the hospital is anun$ista&a%le sign of an irregularit* which shoul# have alerte#e$plo*ees in the TreasurerGs office of the frau# %eingco$$itte#' There is also evi#ence in#icating that the provinciale$plo*ees were aware of PangilinanGs retire$ent an#

conse"uent #issociation fro$ the hospital' Bose Meru( theProvincial Treasurer( testifie#-'

ATTK' MOR+A-

L Now( is it true that for a given $onth there were tworeleases of chec&s( one went to Mr' Pangilinan an#one went to Miss Buco

BOSE MER-

A Kes( sir'

L ospital is an# was suppose# to %e MissBuco

A ence( the Province of Tarlac shoul# %e lia%le forpart of the total a$ount pai# on the "uestione# chec&s'

The #rawee %an& PN0 also %reache# its #ut* to pa* onl*accor#ing to the ter$s of the chec&' >ence( it cannot escapelia%ilit* an# shoul# also %ear part of the loss'

As earlier state#( PN0 can recover fro$ the collecting %an&'

In the case of'ssociated 7an& v'6'( ;1si crosse# chec&swith forge# in#orse$ents were #eposite# in the forgerGsaccount with the collecting %an& an# were later pai# %* four#ifferent #rawee %an&s' The Court foun# the collecting %an&.Associate#/ to %e negligent an# hel#-

The 0an& shoul# have first verifie# his right toen#orse the crosse# chec&s( of which he was not thepa*ee( an# to #eposit the procee#s of the chec&s tohis own account' The 0an& was %* reason of thenature of the chec&s put upon notice that the* were

issue# for #eposit onl* to the private respon#entGsaccount' ' ' '

The situation in the case at %ench is analogous to the a%ovecase( for it was not the pa*ee who #eposite# the chec&s withthe collecting %an&' >ere( the chec&s were all pa*a%le toConcepcion E$ergenc* >ospital %ut it was 7austo Pangilinanwho #eposite# the chec&s in his personal savings account'

Although Associate# 0an& clai$s that the guarantee sta$pe#on the chec&s .All prior an#Hor lac& of en#orse$entsguarantee#/ is $erel* a re"uire$ent force# upon it %* clearinghouse rules( it cannot %ut re$ain lia%le' The sta$pguaranteeing prior in#orse$ents is not an e$pt* ru%ric which a%an& $ust fulfill for the sa&e of convenience' A %an& is notre"uire# to accept all the chec&s negotiate# to it' It is within the

%an&Gs #iscretion to receive a chec& for no %an&ing institutionwoul# consciousl* or #eli%eratel* accept a chec& %earing aforge# in#orse$ent' ouse Corporation Rules co$es to fore'n#er Section 9.c/ of C0 Circular No' 183( ite$s %earing aforge# en#orse$ent shall %e returne# within twent*)Sour .59/hours after #iscover* of the forger* %ut in no event %e*on# theperio# fie# or provi#e# %* law for filing of a legal action %* thereturning %an&' Section 5; of the PC>C Rules #elete# there"uire$ent that ite$s %earing a forge# en#orse$ent shoul#%e returne# within twent*)four hours' Associate# 0an& nowargues that the afore$entione# Central 0an& Circular isapplica%le' Since PN0 #i# not return the "uestione# chec&swithin twent*)four hours( %ut several #a*s later( Associate#0an& alleges that PN0 shoul# %e consi#ere# negligent an# notentitle# to rei$%urse$ent of the a$ount it pai# on the chec&s'

The Court #ee$s it unnecessar* to #iscuss Associate# 0an&Gs

assertions that C0 Circular No' 183 is an a#$inistrativeregulation issue# pursuant to law an# as such( $ust prevailover the PC>C rule' The Central 0an& circular was in force forall %an&s until Bune 483 when the Philippine Clearing >ouseCorporation .PC>C/ was set up an# co$$ence# operations'0an&s in Metro Manila were covere# %* the PC>C while %an&slocate# elsewhere still ha# to go through Central 0an&Clearing' In an* event( the twent*)four)hour return rule wasa#opte# %* the PC>C until it was change# in 485' Theconten#ing %an&s herein( which are %oth %ranches in Tarlacprovince( are therefore not covere# %* PC>C Rules %ut %* C0Circular No' 183' Clearl* then( the C0 circular was applica%lewhen the forger* of the chec&s was #iscovere# in 48'

The rule $an#ates that the chec&s %e returne# within twent*)four hours after #iscover* of the forger* %ut in no event %e*on#the perio# fie# %* law for filing a legal action' The rationale ofthe rule is to give the collecting %an& .which in#orse# thechec&/ a#e"uate opportunit* to procee# against the forger' Ifpro$pt notice is not given( the collecting %an& $a*%epre?u#ice# an# lose the opportunit* to go after its #epositor'

The Court fin#s that even if PN0 #i# not return the "uestione#chec&s to Associate# 0an& within twent*)four hours( as$an#ate# %* the rule( PN0 #i# not co$$it negligent #ela*'n#er the circu$stances( PN0 gave pro$pt notice toAssociate# 0an& an# the latter %an& was not pre?u#ice# ingoing after 7austo Pangilinan' After the Province of Tarlacinfor$e# PN0 of the forgeries( PN0 necessaril* ha# to inspectthe chec&s an# con#uct its own investigation' Thereafter( itre"ueste# the Provincial TreasurerGs office on March ;( 48to return the chec&s for verification' The Province of Tarlacreturne# the chec&s onl* on April 55( 48' Two #a*s later(Associate# 0an& receive# the chec&s fro$ PN0' ;6

Associate# 0an& was also furnishe# a cop* of the ProvinceGsletter of #e$an# to PN0 #ate# March 53( 48( thus giving itnotice of the forgeries' At this ti$e( however( PangilinanGs

7
http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt34http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt35http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt36http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt34http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt35http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt36


8/24

account with Associate# ha# onl* P59'6; in it';2>a#Associate# 0an& #eci#e# to #e%it PangilinanGs account( it coul#not have recovere# the a$ounts pai# on the "uestione#chec&s' In a##ition( while Associate# 0an& file# a fourth)part*co$plaint against 7austo Pangilinan( it #i# not presentevi#ence against Pangilinan an# even presente# hi$ as itsre%uttal witness';8>ence( Associate# 0an& was not pre?u#ice#

%* PN0Gs failure to co$pl* with the twent*)four)hour returnrule'

Net( Associate# 0an& conten#s that PN0 is estoppe# fro$re"uiring rei$%urse$ent %ecause the latter pai# an# cleare#the chec&s' The Court fin#s this contention un$eritorious'Even if PN0 cleare# an# pai# the chec&s( it can still recoverfro$ Associate# 0an&' This is true even if the pa*eeGs ChiefOfficer who was suppose# to have in#orse# the chec&s is alsoa custo$er of the #rawee %an&';4PN0Gs #ut* was to verif* thegenuineness of the #rawerGs signature an# not thegenuineness of pa*eeGs in#orse$ent' Associate# 0an&( as thecollecting %an&( is the entit* with the #ut* to verif* thegenuineness of the pa*eeGs in#orse$ent'

PN0 also avers that respon#ent court erre# in a#?u#gingcircuitous lia%ilit* %* #irecting PN0 to return to the Province ofTarlac the a$ount of the chec&s an# then #irecting Associate#0an& to rei$%urse PN0' The Court fin#s nothing wrong withthe $o#e of the awar#' The #rawer( Province of Tarlac( is aclientor custo$er of the PN0( not of Associate# 0an&' There isno privit* of contract %etween the #rawer an# the collecting%an&'

The trial court $a#e PN0 an# Associate# 0an& lia%le with legalinterest fro$ March 53( 48( the #ate of etra?u#icial #e$an#$a#e %* the Province of Tarlac on PN0' The pa*$ents to %e$a#e in this case ste$ fro$ the #eposits of the Province ofTarlac in its current account with the PN0' 0an& #eposits are

consi#ere# un#er the law as loans' 93Central 0an& CircularNo' 96 prescri%es a twelve percent .5/ interest per annu$for loans( fore%earance of $one*( goo#s or cre#its in thea%sence of epress stipulation' Nor$all*( current accounts areli&ewise interest)%earing( %* epress contract( thus eclu#ingthe$ fro$ the coverage of C0 Circular No' 96' In this case(however( the actual interest rate( if an*( for the current accountopene# %* the Province of Tarlac with PN0 was not given inevi#ence' >ence( the Court #ee$s it wise to affir$ the trialcourtGs use of the legal interest rate( or si percent .6/ perannu$' The interest rate shall %e co$pute# fro$ the #ate of#efault( or the #ate of ?u#icial or etra?u#icial #e$an#' 9Thetrial court #i# not err in granting legal interest fro$ March 53(48( the #ate of etra?u#icial #e$an#'

The Court fin#s as reasona%le( the proportionate sharing offift* percent ) fift* percent .13)13/' Due to the negligence ofthe Province of Tarlac in releasing the chec&s to anunauthori,e# person .7austo Pangilinan/( in allowing theretire# hospital cashier to receive the chec&s for the pa*eehospital for a perio# close to three *ears an# in not properl*ascertaining wh* the retire# hospital cashier was collectingchec&s for the pa*ee hospital in a##ition to the hospitalGs realcashier( respon#ent Province contri%ute# to the loss a$ountingto P53;(;33'33 an# shall %e lia%le to the PN0 for fift* .13/percent thereof' In effect( the Province of Tarlac can onl*recover fift* percent .13/ of P53;(;33'33 fro$ PN0'

The collecting %an&( Associate# 0an&( shall %e lia%le to PN0for fift* .13/ percent of P53;(;33'33' It is lia%le on itswarranties as in#orser of the chec&s which were #eposite# %*7austo Pangilinan( having guarantee# the genuineness of allprior in#orse$ents( inclu#ing that of the chief of the pa*eehospital( Dr' A#ena Canlas' Associate# 0an& was also re$issin its #ut* to ascertain the genuineness of the pa*eeGsin#orse$ent'

IN @IE< O7 T>E 7ORE+OIN+( the petition for review file# %*the Philippine National 0an& .+'R' No' 3265/ is here%*PARTIAK +RANTED' The petition for review file# %* theAssociate# 0an& .+'R' No' 32;85/ is here%* DENIED' The#ecision of the trial court is MODI7IED' The Philippine National0an& shall pa* fift* percent .13/ of P53;(;33'33 to theProvince of Tarlac( with legal interest fro$ March 53( 48 until

the pa*$ent thereof' Associate# 0an& shall pa* fift* percent.13/ of P53;(;33'33 to the Philippine National 0an&( li&ewise(with legal interest fro$ March 53( 48 until pa*$ent is $a#e'

SO ORDERED'

!egalado, 5uno and #endo)a, @@.,concur'

Repu%lic of the PhilippinesSU!REME "OURT

Manila

7IRST DI@ISION

G.R. No. 11119& *+$e 27, 1993

LORETO . E LA I"TORIA, #0 "t F0#5 o6 M#$%#+e"t #$% $ 0 per0o$#5 #p#t #0 #r$0ee,petitioner(vs'ON. *OSE !. BURGOS, !re0%$ *+%e, RT", Br. XII,"eb+ "t, #$% RAUL . SESBREO, respon#ents'

BELLOSILLO, J.%

RA >' SES0REO file# a co$plaint for #a$ages againstAssistant Cit* 7iscals 0ienveni#o N' Ma%anto( Br'( an# Dario D'Ra$a( Br'( %efore the Regional Trial Court of Ce%u Cit*' Aftertrial ?u#g$ent was ren#ere# or#ering the #efen#ants to pa*P(333'33 to the plaintiff( private respon#ent herein' The#ecision having %eco$e final an# eecutor*( on $otion of thelatter( the trial court or#ere# its eecution' This or#er was"uestione# %* the #efen#ants %efore the Court of Appeals'>owever( on 1 Banuar* 445 a writ of eecution was issue#'

On 9 7e%ruar* 445 a notice of garnish$ent was serve# onpetitioner oreto D' #e la @ictoria as Cit* 7iscal of Man#aueCit* where #efen#ant Ma%anto( Br'( was then #etaile#' Thenotice #irecte# petitioner not to #is%urse( transfer( release orconve* to an* other person ecept to the #eput* sheriffconcerne# the salar* chec&s or other chec&s( $onies( or cash#ue or %elonging to Ma%anto( Br'( un#er penalt* of law' 1On 3March 445 private respon#ent file# a $otion %efore the trialcourt for ea$ination of the garnishees'

On 51 Ma* 445 the petition pen#ing %efore the Court ofAppeals was #is$isse#' Thus the trial court( fin#ing no $orelegal o%stacle to act on the $otion for ea$ination of thegarnishees( #irecte# petitioner on 9 Nove$%er 445 to su%$ithis report showing the a$ount of the garnishe# salaries of

Ma%anto( Br'( within fifteen .1/ #a*s fro$ receipt 2ta&ing intoconsi#eration the provisions of Sec' 5( pars' .f/ an# .i/( Rule;4 of the Rules of Court'

On 59 Nove$%er 445 private respon#ent file# a $otion tore"uire petitioner to eplain wh* he shoul# not %e cite# inconte$pt of court for failing to co$pl* with the or#er of 9Nove$%er 445'

8
http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt37http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt37http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt38http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt38http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt38http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt39http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt39http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt39http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt40http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt40http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt41http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt41http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt37http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt38http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt39http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt40http://www.lawphil.net/judjuris/juri1996/jan1996/gr_107382_1996.html#fnt41


9/24

On the other han#( on 4 Banuar* 44; petitioner $ove# to"uash the notice of garnish$ent clai$ing that he was not inpossession of an* $one*( fun#s( cre#it( propert* or an*thing ofvalue %elonging to Ma%anto( Br'( ecept his salar* an# RATAchec&s( %ut that sai# chec&s were not *et properties ofMa%anto( Br'( until #elivere# to hi$' >e further clai$e# that( assuch( the* were still pu%lic fun#s which coul# not %e su%?ect to

garnish$ent'

On 4 March 44; the trial court #enie# %oth $otions an#or#ere# petitioner to i$$e#iatel* co$pl* with its or#er of 9Nove$%er 445' 'It opine# that the chec&s of Ma%anto( Br'(ha# alrea#* %een release# through petitioner %* theDepart$ent of Bustice #ul* signe# %* the officer concerne#'pon service of the writ of garnish$ent( petitioner as custo#ianof the chec&s was un#er o%ligation to hol# the$ for the?u#g$ent cre#itor' Petitioner %eca$e a virtual part* to( or aforce# intervenor in( the case an# the trial court there%*ac"uire# ?uris#iction to %in# hi$ to its or#ers an# processeswith a view to the co$plete satisfaction of the ?u#g$ent'A##itionall*( there was no sufficient reason for petitioner tohol# the chec&s %ecause the* were no longer govern$entfun#s an# presu$a%l* #elivere# to the pa*ee( confor$a%l*with the last sentence of Sec' 6 of the Negotia%le Instru$entsaw'

is onl* #ut* was to turn over thegarnishe# chec&s to the trial court which issue# the or#er ofeecution' 3

Petitioner raises the following relevant issues- ./ whether achec& still in the han#s of the $a&er or its #ul* authori,e#representative is owne# %* the pa*ee %efore ph*sical #eliver*to the latter- an#( .5/ whether the salar* chec& of a govern$ent

official or e$plo*ee fun#e# with pu%lic fun#s can %e su%?ect togarnish$ent'

Petitioner reiterates his position that the salar* chec&s werenot owne# %* Ma%anto( Br'( %ecause the* were not *et#elivere# to hi$( an# that petitioner as garnishee has no legalo%ligation to hol# an# #eliver the$ to the trial court to %eapplie# to Ma%anto( Br'Gs ?u#g$ent #e%t' The thesis ofpetitioner is that the salar* chec&s still for$e# part of pu%licfun#s an# therefore %e*on# the reach of garnish$entprocee#ings'

Petitioner has well argue# his case'

+arnish$ent is consi#ere# as a species of attach$ent forreaching cre#its %elonging to the ?u#g$ent #e%tor owing to hi$fro$ a stranger to the litigation' )E$phasis is lai# on thephrase %elonging to the ?u#g$ent #e%tor since it is the focalpoint in resolving the issues raise#'

As Assistant Cit* 7iscal( the source of the salar* of Ma%anto(Br'( is pu%lic fun#s' >e receives his co$pensation in the for$of chec&s fro$ the Depart$ent of Bustice through petitioner as

Cit* 7iscal of Man#aue Cit* an# hea# of office' n#er Sec' 6of the Negotia%le Instru$ents aw( ever* contract on anegotia%le instru$ent is inco$plete an# revoca%leuntil delivery of the instru$ent for the purpose of giving effectthereto' As or#inaril* un#erstoo#( #eliver* $eans the transferof the possession of the instru$ent %* the $a&er or#rawer with intent to transfer title to the payee and recogni)e

him as the holder thereof.7

Accor#ing to the trial court( the chec&s of Ma%anto( Br'( werealrea#* release# %* the Depart$ent of Bustice #ul* signe# %*the officer concerne# through petitioner an# upon service ofthe writ of garnish$ent %* the sheriff petitioner was un#ero%ligation to hol# the$ for the ?u#g$ent cre#itor' It recogni,e#the role of petitioner ascustodian of the chec&s' At the sa$eti$e however it consi#ere# the chec&s as no longergovern$ent fun#s an# presu$e# #elivere# to the pa*ee %ase#on the last sentence of Sec' 6 of the Negotia%le Instru$entsaw which states- An# where the instru$ent is no longer inthe possession of a part* whose signature appears thereon( avali# an# intentional #eliver* %* hi$ is presu$e#' Ket( thepresu$ption is not conclusive %ecause the last portion of theprovision sa*s until the contrar* is prove#' >owever thisphrase was deleted%* the trial court for no apparent reason'Proof to the contrar* is its own fin#ing that the chec&s were inthe custo#* of petitioner' Inas$uch as sai# chec&s ha# not *et%een #elivere# to Ma%anto( Br'( the* did not belong to himan#still ha# the character of pu%lic fun#s' In ;irov'Aontanosas 8we rule# that J

The salar* chec& of a govern$ent officer ore$plo*ee such as a teacher #oes not %elongto hi$ %efore it is ph*sicall* #elivere# to hi$'ntil that ti$e the chec& %elongs to thegovern$ent' Accor#ingl*( %efore there isactual #eliver* of the chec&( the pa*ee has

no power over it: he cannot assign it withoutthe consent of the +overn$ent'

As a necessar* conse"uence of %eing pu%lic fun#( the chec&s$a* not %e garnishe# to satisf* the ?u#g$ent' 9The rationale%ehin# this #octrine is o%vious consi#eration of pu%lic polic*'The Court succinctl* state# in 6ommissioner of 5ublicAighways v. San :iego 1&that J

The functions an# pu%lic services ren#ere#%* the State cannot %e allowe# to %eparal*,e# or #isrupte# %* the #iversion ofpu%lic fun#s fro$ their legiti$ate an# specifico%?ects( as appropriate# %* law'

9


10/24

In #en*ing petitionerGs $otion for reconsi#eration( the trial courtepresse# the a##itional ratiocination that it was not the #ut* ofthe garnishee to in"uire or ?u#ge for hi$self whether theissuance of the or#er of eecution( the writ of eecution( an#the notice of garnish$ent was ?ustifie#( citing our rulingin 5hilippine 6ommercial ndustrial 7an& v. 6ourt of

'ppeals' 11Our precise ruling in that case was that [I!t is not

incu$%ent upon the garnishee to in"uire or to ?u#ge for itselfwhether or not the or#er for the a#vance eecution of a?u#g$ent is vali#' 0ut that is invo&ing onl* the general rule'AR+ED'

SO ORDERED'

?uiason and Bapunan, @@., concur.

FIRST IISION

>G.R. No. 1'&)'2. September 28, 1999?

!EO!LE OF TE !ILI!!INES,plaintiff-appellee, vs. NAT:"UA, accused;appellant.

E " I S I O N

AIE, *R., J.@

In a #ecision[!ren#ere# in Cri$inal Case No' C);992 for

estafa un#er Article ;1.5/ .#/ of the Revise# PenalCo#e[5!an# Cri$inal Cases Nos' C);998 to C);995 forviolations of 0atas Pa$%ansa 0lg' 55([;!the Regional TrialCourt of Faloo&an( 0ranch ;3( foun# accuse#)appellant Nat*Chua .hereafter NATK/ guilt* %e*on# reasona%le #ou%t in allcases'

The Infor$ation in Cri$inal Case No' C);992 charge#NATK with estafa allege#l* co$$itte# as follows-

That on( a%out an# so$eti$e #uring the $onth of Octo%er488 in Faloo&an Cit*( Metro Manila( an# within the ?uris#ictionof this >onora%le Court( the a%ove)na$e# accuse# #efrau#e#an# #eceive# one Ro%ert oo Tian in the following $anner towit- the sai# accuse# receive# fro$ sai# co$plainant cash$one* a$ounting to P5;5(613'33 an# in echange thereofissue# in favor of sai# co$plainant the following chec&s to wit-

Na$e of 0an& Chec&No' Date A$ount

7ar East 0an& TrustCo' 434535 ;H59H84 P 2(133'33

E"uita%le0an& 5526;11 9H53H84 1(13'33

r%an0an& 388844 9H31H84 53(333'33

E"uita%le0an& 5526;16 1H5;H84 33(333'33

E"uita%le0an& 5526;12 6H36H84 13(333'33

E"uita%le0an& 5526;18 6H5;H84 13(333'33

when sai# accuse# &new full* well at the ti$e that she ha[#! nosufficient fun#s in the %an& an# woul# not have such fun#seven on the #ate state# on the face thereof an# uponpresent$ent of such chec&s to the #rawee %an& for pa*$ent(the sa$e were all #ishonore# for the reasons Drawn Against

Insufficient 7un#sQ an# Account Close#Q: that #espite #uenotice as re"uire# %* Repu%lic Act No' 9881 an#notwithstan#ing repeate# #e$an#s( the herein accuse#( #i#then an# there wilfull*( unlawfull* an# feloniousl* refuse an#fail to $a&e goo# her chec&s in the total a$ountof P5;5(613'33 an# still refuses an# fails to #o so( to the#a$age an# pre?u#ice of the sai# co$plainant in theafore$entione# a$ount'

Contrar* to aw'[9!

The accusator* portion of the infor$ation in Cri$inalCase No' C);998 rea#s as follows-

That on or a%out an# so$eti$e #uring the $onth of Octo%er488 in Caloocan Cit*( Metro Manila( an# within the ?uris#ictionof this >onora%le Court( the a%ove)na$e# accuse#( #i# thenan# there willfull*( unlawfull* an# feloniousl* $a&e an# issueChec& No 5526;11 #rawn against the E"uita%le 0an&ingCorp'( in the a$ount of P1(13'33 #ate# April 53( 484 toappl* for value in favor of RO0ERT OO TIAN well &nowing atthe ti$e of issue that she ha# no sufficient fun#s in or cre#itwith the #rawee %an& for the pa*$ent of such chec& in fullupon its present$ent( which chec& was su%se"uentl*#ishonore# for the reason Drawn Against Insufficient 7un#sQan# with the intent to #efrau#( faile# an# still fails to pa* thesai# co$plainant the a$ount of P1(13'33 #espite receipt ofnotice fro$ the #rawee %an& that sai# chec& ha# %een#ishonore# an# ha# not %een pai#'

Contrar* to law'[1!

The Infor$ations in Cri$inal Cases Nos' C);994 to C);995[6!are si$ilarl* wor#e# as in Cri$inal Case No' C);998ecept as to the #ates of issue( an# the nu$%ers an# a$ountsof the chec&s' Involve# therein are Chec& No' 5526;16 #ate#5; Ma* 484 in the a$ount of P33(333: Chec& No' 5526;12#ate# 6 Bune 484 in the a$ount of P13(333: an# Chec& No'5526;18 #ate# 5; Bune 484 in the a$ount of P13(333' Thegroun# for the #ishonor of the chec&s was Drawn AgainstInsufficient 7un#s'Q

The cases were consoli#ate# an# ?ointl* trie#' pon

arraign$ent( NATK plea#e# not guilt* in each case'[2!

The evi#ence for the prosecution is su$$ari,e# in thechallenge# #ecision of the trial court as follows-

Co$plainant Ro%ert oo Tian testifie# that so$eti$e inOcto%er 488( his sister)in)law Teresita i$ %rought to hishouse in Faloo&an Cit* the herein accuse# Nat* Chua an#intro#uce# her to hi$' The accuse# wante# to %orrow $one*in the a$ount of P533(333'33' >e was at first reluctant an#

10
http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/130632.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/130632.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/130632.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/130632.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/130632.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/130632.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/130632.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/130632.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/130632.htm#_edn7http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/130632.htm#_edn1http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/130632.htm#_edn2http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/130632.htm#_edn3http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/130632.htm#_edn4http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/130632.htm#_edn5http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/130632.htm#_edn6http://sc.judiciary.gov.ph/jurisprudence/1999/sept99/130632.htm#_edn7


11/24

tol# the$ to co$e %ac& after two or three #a*s' /' 0othletters were returne# %* the Post Office for the reason that the*were unclai$e# %* the accuse#' >e notice#( however( that theenvelope of one of the letters .Ehi%it +/ was alrea#* opene#when returne# to hi$'

Co$plainant file# with the Faloo&an Cit* Police Station a caseagainst the accuse# .Ehi%it I/ which case was su%se"uentl*forwar#e# to the Office of the 7iscal .Ehi%it B/' During theconfrontation( at the 7iscal=s Office( the accuse# appeare#personall* an# offere# to settle the case %* pa*ing to hi$ thea$ount of P(333'33 a $onth( an offer which he re?ecte# for itwoul# ta&e her 2 *ears to co$plete the pa*$ent'

Teresita i$ corro%orate# his testi$on* in all $aterial points'

Alfre#o #e la Cru,( signature verifier of the E"uita%le 0an&ingCorporation( who appeare# pursuant to a subpoenaducestecum( pro#uce# %efore the Court the state$ent of account ofaccuse# Nat* Chua with the 0an& .Ehi%it /' >e testifie# thatChec& No' 5526;11 .Ehi%it 0/ was #eposite# on April 53(484 %ut was returne# the following #a* for the reasonInsufficient 7un#Q .TSN( Bune 51( 443( p' 2' See also Ehi%it)5 on Ehi%it /: that the account of Nat* Chua was close# onBune 5( 484: that the three other chec&s .Ehi%its D( E( 7/were no longer reflecte# in the state$ent of account since heraccount ha# %een close#( so that sai# chec&s were #ishonore#an# returne# for the reason Account Close#Q' .TSN( Bune 51(443( pp' 8( 4/'[8!

On the other han#( NATK interpose# the #efense of#enial' She #enie# &nowing Ro%ert oo Tian .hereafterRO0ERT/ an# issuing chec&s to hi$' She testifie# that she

receive# a subpoenafro$ the Cit* Prosecutor=s Office ofFaloo&an Cit* so$eti$e in Bul* 484' Since she #i# not &nowthe co$plainant( she #ee$e# it proper not to atten# thehearing'Q She sent her $other to the prosecutor=s office to fin#out who file# the case against her' >er $other reporte# thatthe co$plainant was one Ro%ert oo Tian an# that the latterwas intereste# in ?ust settling the case' >er $other an#

RO0ERT agree# at the prosecutor=s office to $eet at Al#*=sRestaurant at 5-33 p'$'( an# her $other a#vise# her to $eetwith RO0ERT'

Acco$panie# %* her $other( her uncle 0en?a$in Manalo(an# her frien# Prec*( NATK went to Al#*=s Restaurant at theappointe# hour' Mrs' oo Tian was there waiting outsi#e therestaurant' Since the restaurant was still close#( her unclesuggeste# that the* go instea# to Silver Cit* Restaurant acrossthe street an# ?ust wait for RO0ERT there'


12/24

There is no #ou%t in the $in# of the Court that the si .6/chec&s .Ehi%its A( 0( C( D( E( 7/ are replace$ent chec&s.TSN( Ma* 5( 443( pp' 99( 96' See also Affi#avit of Ro%ertoo Tian( Ehi%it I/ $a#e( issue# an# #elivere# %* the accuse#to the co$plainant to replace the si .6/ personal chec&s allpost#ate# previousl* issue# %* her which she a#$itte# wereunfun#e# on their #ue #ate' Not onl* #i# the accuse# fail to

#eposit the a$ount necessar* to cover the pa*$ent of theoriginal si post#ate# chec&s %ut she also faile# to #eposit thea$ount to cover the pa*$ent of the four of the si replace$entchec&s' Thus( there was frau# or #eceit( constituting falsepretense an# frau#ulent acts' The Court is convince# that theprosecution has proven %e*on# reasona%le #ou%t the guilt ofthe accuse#'[!

The trial court li&ewise foun# NATK guilt* of violation of0atas Pa$%ansa 0lg' 55 for having issue# four worthlesschec&s' The law punishes the $ere issuance( regar#less ofthe intent of the parties( of an* &in# of chec& which issu%se"uentl* #ishonore#'

Accor#ingl*( the trial court ren#ere# ?u#g$ent against

NATK' In the estafa case it sentence# her to suffer the penalt*of thirt* .;3/ *ears of reclusion perpetuaan# to in#e$nif* theoffen#e# part* RO0ERT in the a$ount of P5;5(613( plus 5interest per annu$ fro$ #ate of #e$an#: an# in each of thefour cases for violations of 0atas Pa$%ansa 0lg' 55( iti$pose# upon her the penalt* of i$prison$ent of one ./ *ear'

NATK interpose# an appeal fro$ the #ecision to theCourt of Appeals( which was( however( referre# to us in view ofthe penalt* of reclusion perpetuai$pose# in the estafa case'

EO@EREMIN+ E@IDENCE T>AT T>EPRI@ATE COMPAINANT >IMSE7( INCONSPIRACK >IS SISTER)IN)AE IS CASE:

.>/ @IOAT[IN+! [>ER! CONSTITTIONARI+>T TO PRESMPTION O7 INNOCENCEIN CON@ICTIN+ >ER ON E@IDENCE E REASONA0E)DO0TSTANDARD IN CRIMINA CASES ANDT>RO+> ITS TOTA AND CON@ENIENTDISRE+ARD O7 T>E DE7ENSE E@IDENCE IN

T>IS CASE'NATK argues that one of the ele$ents of estafa un#er

Article ;1 .5/ .#/ of the Revise# Penal Co#e is a fin#ing%e*on# reasona%le #ou%t that the issuance of the chec& wasthe efficient causeQ an# the $eans use# to o%tain a valua%leconsi#eration'Q This ele$ent was a%sent in her case %ecausethe issuance of the chec&s was not the in#uce$ent for the loanto her' The in#uce$ents were the intercession $a#e %*Teresita i$( RO0ERT=s sister)in)law( an# the interest to %eearne# on the $one* lent' NATK further stresses that thechec&s for which she was convicte# were not the sa$e chec&soriginall* issue#( %ut replace$ent chec&s issue# so$eti$e inMarch 484 when her loan o%ligation was alrea#* four $onthsol#' >ence( there was alrea#* a pre)eisting o%ligation for

which the replace$ent chec&s were $a#e to answer' She #i#not( therefore( co$$it the cri$e of estafa'

In a##ition( NATK faults the trial court for refusing toconsi#er her clai$ that she ha# alrea#* pai# her loan asshown %* the fifteen receipts totalling P

61(333'

In the Appellee=s 0rief( the Office of the Solicitor +eneral.OS+/ su%$its that NATK cannot %e convicte# of estafa un#erArticle ;1 .5/ .#/ of the Revise# Penal Co#e( since the su%?ectchec&s were replace$ent chec&s issue# an# #elivere# inpa*$ent of a pre)eisting o%ligation' >ence( the chec&s coul#no longer %e consi#ere# as the $eans e$plo*e# %* NATK too%tain a loan fro$ co$plainant' The ele$ent of #eceit wasthus lac&ing'

>owever( the OS+ agrees with the trial court that NATKviolate# 0'P' 0lg' 55 in the issuance of the four replace$entchec&s' She issue# the chec&s as pa*$ent for the $one* she%orrowe# fro$ co$plainant( %ut all the chec&s%ounce#' Despite #e$an#( she faile# to $a&e goo# thechec&s'

The OS+ then reco$$en#s that NATK=s conviction forestafa %e reverse# an# she %e ac"uitte# thereof( while herconviction for violation of 0'P' 0lg' 55 %e affir$e# with the$o#ification that she %e re"uire# to in#e$nif* the offen#e#part* of the a$ount e"uivalent to the value of the chec&s shepersonall* issue#'

After #eli%erating on the assigne# errors an# the %riefs

su%$itte# %* the parties( we fin# NATK=s appeal partiall*i$presse# with $erit'

NATK shoul# %e ac"uitte# in the case for estafa' She ischarge# un#er Article ;1.5/ .#/ of the Revise# Penal Co#e( asa$en#e# %* R'A' No' 9881( which penali,es an* person whoshall #efrau# another %* post#ating a chec& or issuing a chec&in pa*$ent of an o%ligation when the offen#er ha# no fun#s inthe %an& or his fun#s #eposite# therein were not sufficient tocover the a$ount of the chec&'Q The ele$ents therefor are ./post#ating or issuance of a chec& in pa*$ent of an o%ligationcontracte# at the ti$e the chec& was issue#: .5/ lac& orinsufficienc* of fun#s to cover the chec&: an# .;/ #a$age tothe pa*ee thereof'[5!Da$age an# #eceit are essentialele$ents of the offense an# $ust %e esta%lishe# withsatisfactor* proof to warrant conviction([;!while the falsepretense or frau#ulent act $ust %e co$$itte# prior to( orsi$ultaneousl* with( the issuance of the %a# chec&' [9!


13/24

another set of si post#ate# chec&s( four of which were herpersonal chec&s an# the other two were issue# %* anotherwhich NATK in#orse# to RO0ERT' Inelucta%l*( thereplace$ent chec&s were issue# in pa*$ent of an o%ligationlong contracte# an# incurre#' It cannot therefore %e sai# thatNATK co$$itte# frau#ulent acts in the issuance an# thein#orse$ent of the replace$ent chec&s' In short( the

replace$ent chec&s were %* no $eans the #evice use# %*NATK to in#uce RO0ERT to len# her $one* without which thetransaction woul# not have %een consu$$ate#'

Even assu$ing arguendothat the chec&s su%?ect of thiscase were the original post#ate# chec&s issue# %* NATK atthe ti$e of the transaction( still no estafa was co$$itte#' Thetrial court ha# overloo&e# portions of the testi$on* of RO0ERTo%viousl* in#icating that what transpire# %etween RO0ERTan# NATK was a si$ple loan transaction( the principal of whichwas pa*a%le at a future #ate with interest' [1!This was a$pl*corro%orate# %* prosecution witness Teresita i$( who#eclare# that it was she who intro#uce# NATK to RO0ERTan# as&e# the latter whether he coul# lend$one* to NATK'[6!RO0ERT hi$self a#$itte# that what $otivate# hi$ to len#

the a$ount to NATK was not her issuing the original post#ate#chec&s[2!%ut the epectation that he woul# receive an intereste"uivalent to a $onth of the total a$ount %orrowe# fro$hi$'

>owever( NATK is lia%le un#er 0atas Pa$%ansa 0lg' 55for issuing four replace$ent chec&s' The law $a&es the $ereact of issuing a worthless chec& punisha%le as a specialoffense'[8!The grava$en of the offense un#er this law is theact of issuing a worthless chec& or a chec& that is #ishonore#upon its present$ent for pa*$ent'[4!The law has $a#e the$ere act of issuing a %u$ chec& a malum prohibitum( an actproscri%e# %* legislature for %eing #ee$e# pernicious an#ini$ical to pu%lic welfare'[53!It is un#ispute# that the fourreplace$ent chec&s in "uestion were issue# %* NATK an# that

these were all #ishonore# #ue to insufficienc* of fun#s'EREFORE( in view of the foregoing( ?u#g$ent is

here%* ren#ere# RE@ERSIN+ the challenge# #ecision of theRegional Trial Court of Faloo&an Cit*( 0ranch ;3( insofar asCri$inal Case No' C);992 is concerne# an# ACLITTIN+accuse#)appellant NATK C>A of the cri$e of estafa charge#therein: an# A77IRMIN+ it insofar as the conviction of NATKC>A in Cri$inal Cases Nos' C);998 to C);995 forviolations of 0atas Pa$%ansa 0lg' 55 an# the i$position of thepenalt* of i$prison$ent of one ./ *ear in each case areconcerne#( with the $o#ification that she is further or#ere# topa* the offen#e# part* Ro%ert oo Tian the face value of thechec&s involve# therein( to wit- P1(13: P33(333: P13(333:an# P13(333( or a total of P531(13( with legal interest fro$the filing of the infor$ations until the finalit* of this #ecision an#at the rate of 5 per annu$ thereafter until the a$ounts arefull* pai#'

No pronounce$ent as to costs'

SO ORERE.

5uno, Bapunan, 5ardo, an#Cnares


14/24

The aforesai# chec& was #eposite# with the#egen#ant I0AA .now PCI0an&/ an# wassu%se"uentl* cleare# at the Central 0an&' ponpresent$ent with the #efen#ant Citi%an&( theprocee#s of the chec& was pai# to I0AA as collectingor #epositor* %an&'

The procee#s of the sa$e Citi%an& chec& of theplaintiff was never pai# to or receive# %* the pa*eethereof( the Co$$issioner of Internal Revenue'

As a conse"uence( upon #e$an# of the 0ureauan#Hor Co$$issioner of Internal Revenue( the plaintiffwas co$pelle# to $a&e a secon# pa*$ent to the0ureau of Internal Revenue of itspercentageH$anufacturersG sales taes for the thir#"uarter of 422 an# that sai# secon# pa*$ent ofplaintiff in the a$ount of P9(296(9'9 was #ul*receive# %* the 0ureau of Internal Revenue'

It is further a#$itte# %* #efen#ant Citi%an& that #uring

the ti$e of the transactions in "uestion( plaintiff ha#%een $aintaining a chec&ing account with #efen#antCiti%an&: that Citi%an& Chec& No' SN)39862 whichwas #rawn an# issue# %* the plaintiff in favor of theCo$$issioner of Internal Revenue was a crosse#chec& in that( on its face were two parallel lines an#written in %etween sai# lines was the phrase Pa*eeGsAccount Onl*: an# that #efen#ant Citi%an& pai# thefull face value of the chec& in the a$ount ofP9(296(9'9 to the #efen#ant I0AA'

It has %een #ul* esta%lishe# that for the pa*$ent ofplaintiffGs percentage ta for the last "uarter of 422(the 0ureau of Internal Revenue issue# Revenue Ta

Receipt No' 8292335( #ate# Octo%er 53( 422(#esignating therein in Muntinlupa( Metro Manila( asthe authori,e# agent %an& of Metro%anl( Ala%ang%ranch to receive the ta pa*$ent of the plaintiff'

On Dece$%er 4( 422( plaintiffGs Citi%an& Chec& No'SN)39862( together with the Revenue Ta ReceiptNo' 8292335( was #eposite# with #efen#ant I0AA(through its Er$ita 0ranch' The latter accepte# thechec& an# sent it to the Central Clearing >ouse forclearing on the sa$# #a*( with the in#orse$ent at the%ac& all prior in#orse$ents an#Hor lac& ofin#orse$ents guarantee#' Thereafter( #efen#antI0AA presente# the chec& for pa*$ent to #efen#antCiti%an& on sa$e #ate( Dece$%er 4( 422( an# the

latter pai# the face value of the chec& in the a$ountof P9(296(9'9' Conse"uentl*( the a$ount ofP9(296(9'9 was #e%ite# in plaintiffGs account withthe #efen#ant Citi%an& an# the chec& was returne# tothe plaintiff'

pon verification( plaintiff #iscovere# that its Citi%an&Chec& No' SN)39862 in the a$ount of P9(296(9'9was not pai# to the Co$$issioner of InternalRevenue' >ence( in separate letters #ate# Octo%er56( 424( a##resse# to the #efen#ants( the plaintiffnotifie# the latter that in case it will %e re)assesse# %*the 0IR for the pa*$ent of the taes covere# %* thesai# chec&s( then plaintiff shall hol# the #efen#ants

lia%le for rei$%urse$ent of the face value of thesa$e' 0oth #efen#ants #enie# lia%ilit* an# refuse# topa*'

In a letter #ate# 7e%ruar* 58( 483 %* the ActingCo$$issioner of Internal Revenue a##resse# to theplaintiff ) suppose# to %e Ehi%it D( the latter wasofficiall* infor$e#( a$ong others( that its chec& in thea$ount of P9( 296(9'9 was not pai# to thegovern$ent or its authori,e# agent an# instea#

encashe# %* unauthori,e# persons( hence( plaintiffhas to pa* the sai# a$ount within fifteen #a*s fro$receipt of the letter' pon a#vice of the plaintiffGslaw*ers( plaintiff on March ( 485( pai# to the0ureau of Internal Revenue( the a$ount ofP9(296(9'9( representing pa*$ent of plaintiffGspercentage ta for the thir# "uarter of 422'

As a conse"uence of #efen#antGs refusal to rei$%urseplaintiff of the pa*$ent it ha# $a#e for the secon#ti$e to the 0IR of its percentage taes( plaintiff file#on Banuar* 53( 48; its original co$plaint %efore thisCourt'

On Dece$%er 59( 481( #efen#ant I0AA was $erge#with the Philippine Co$$ercial International 0an&.PCI 0an&/ with the latter as the surviving entit*'

Defen#ant Citi%an& $aintains that: the pa*$ent it$a#e of plaintiffGs Citi%an& Chec& No' SN)39862 inthe a$ount of P9(296(9'9 was in #ue course: it

$erel* relie# on the clearing sta$p of the#epositor*Hcollecting %an&( the #efen#ant I0AA thatall prior in#orse$ents an#Hor lac& of in#orse$entsguarantee#: an# the proi$ate cause of plaintiffGsin?ur* is the gross negligence of #efen#ant I0AA inin#orsing the plaintiffGs Citi%an& chec& in "uestion'

It is a#$itte# that on Dece$%er 4( 422 when theprocee#s of plaintiffGs Citi%an& Chec& No' SN)398862was pai# to #efen#ant I0AA as collecting %an&(plaintiff was $aintaining a chec&ing account with#efen#ant Citi%an&'1

Although it was not a$ong the stipulate# facts( an investigation

%* the National 0ureau of Investigation .N0I/ reveale# thatCiti%an& Chec& No' SN)39862 was recalle# %* +o#ofre#oRivera( the +eneral e#ger Accountant of 7or#' >e purporte#l*nee#e# to hol# %ac& the chec& %ecause there was an error inthe co$putation of the ta #ue to the 0ureau of InternalRevenue .0IR/'


15/24

whatever a$ount the latter has pai# or $a*pa* to the plaintiff in accor#ance with netprece#ing paragraph:

;' The counterclai$s asserte# %* the#efen#ants against the plaintiff( as well asthat asserte# %* the cross)#efen#ant against

the cross)clai$ant are #is$isse#( for lac& of$erits: an#

9'


16/24

On April 53( 424( 7or# #rew another Citi%an& Chec& No' SN)6138 in the a$ount of P6(;(14'2;( representing thepa*$ent of percentage ta for the first "uarter of 424 an#pa*a%le to the Co$$issioner of Internal Revenue' Again a 0IRRevenue Ta Receipt No' A)64263 was issue# for the sai#purpose'

0oth chec&s were crosse# chec&s an# contain two #iagonallines on its upper corner %etween( which were written thewor#s pa*a%le to the pa*eeGs account onl*'

The chec&s never reache# the pa*ee( CIR' Thus( in a letter#ate# 7e%ruar* 58( 483( the 0IR( Region 9)0( #e$an#e# forthe sai# ta pa*$ents the correspon#ing perio#s a%ove)$entione#'

As far as the 0IR is concernce#( the sai# two 0IR RevenueTa Receipts were consi#ere# fa&e an# spurious' Thisano$al* was confir$e# %* the N0I upon the initiative of the0IR' The fin#ings force# 7or# to pa* the 0IR a new( while anaction was file# against Citi%an& an# PCI0an& for the recover*

of the a$ount of Citi%an& Chec& Nu$%ers SN)3142 an#6138'

The Regional Trial Court of Ma&ati( 0ranch 12( which trie# thecase( $a#e its fin#ings on the modus operandi of thes*n#icate( as follows-

A certain Mr' +o#ofre#o Rivera was e$plo*e# %* theplaintiff 7ORD as its +eneral e#ger Accountant' Assuch( he prepare# the plaintiffGs chec& $ar&e# E' GAG[Citi%an& Chec& No' Sn)3142! for pa*$ent to the0IR' Instea#( however( fo #elivering the sa$e of thepa*ee( he passe# on the chec& to a co)conspiratorna$e# Re$%erto Castro who was a pro)$anager of

the San An#res 0ranch of PCI0'V In connivance withone ence( thispetition'

Petitioner 7or# pra*s that ?u#g$ent %e ren#ere# setting asi#ethe portion of the Court of Appeals #ecision an# its resolution#ate# March 1( 442( with respect to the #is$issal of theco$plaint against PCI0an& an# hol#ing Citi%an& solel*

responsi%le for the procee#s of Citi%an& Chec& Nu$%ers SN)3142 an# 6138 for P1(81(236'2; an# P6(;(14'2;respectivel*'

7or# avers that the Court of Appeals erre# in #is$issing theco$plaint against #efen#ant PCI0an& consi#ering that-

I' Defen#ant PCI0an& was clearl* negligent when itfaile# to eercise the #iligence re"uire# to %eeercise# %* it as a %an&ing insitution'

II' Defen#ant PCI0an& clearl* faile# to o%serve the#iligence re"uire# in the selection an# supervision ofits officers an# e$plo*ees'

III' Defen#ant PCI0an& was( #ue to its negligence(clearl* lia%le for the loss or #a$age resulting to theplaintiff 7or# as a conse"uence of the su%stitution ofthe chec& consistent with Section 1 of Central 0an&Circular No' 183 series of 422'

I@' Assu$ing arguedothat #efe#ant PCI0an& #i# notaccept( en#orse or negotiate in #ue course the

16


17/24

su%?ect chec&s( it is lia%le( un#er Article 519 of theCivil Co#e( to return the $one* which it a#$its havingreceive#( an# which was cre#ite# to it its Central %an&account'6

The $ain issue presente# for our consi#eration %* thesepetitions coul# %e si$plifie# as follows- >as petitioner 7or# the

right to recover fro$ the collecting %an& .PCI0an&/ an# the#rawee %an& .Citi%an&/ the value of the chec&s inten#e# aspa*$ent to the Co$$issioner of Internal Revenue Or has7or#Gs cause of action alrea#* prescri%e#

Note that in these cases( the chec&s were #rawn against the#rawee %an&( %ut the title of the person negotiating the sa$ewas allege#l* #efective %ecause the instru$ent was o%taine#%* frau# an# unlawful $eans( an# the procee#s of the chec&swere not re$itte# to the pa*ee' It was esta%lishe# that instea#of pa*ing the chec&s to the CIR( for the settle$ent of theapproprite "uarterl* percentage taes of 7or#( the chec&s were#iverte# an# encashe# for the eventual #istri%ution a$ong the$$%ers of the s*n#icate' As to the unlawful negotiation of the

chec& the applica%le law is Section 11 of the Negotia%leInstru$ents aw .NI/( which provi#es-


18/24

against the #rawer'5This rule li&ewise applies to the chec&sfrau#ulentl* negotiate# or #iverte# %* the confi#entiale$plo*ees who hol# the$ in their possession'

CGs0oar# of Directors that-

GIn presenting the chec&s for clearing an# forpa*$ent( the #efen#ant $a#e an epress guaranteeon the vali#it* of all prior en#orse$ents' Thus(sta$pe# at the %ac& of the chec&s are the #efe#antGsclear warrant*- A PRIOR ENDORSEMENTSANDHOR ACF O7 ENDORSEMENTS+ARANTEED'


19/24

The trial court an# the Court of Appeals foun# that PCI0an&ha# no official act in the or#inar* course of %usiness that woul#attri%ute to it the case of the e$%e,,le$ent of Citi%an& Chec&Nu$%ers SN)3142 an# 6138( %ecause PCI0an& #i# notactuall* receive nor hol# the two 7or# chec&s at all' The trialcourt hel#( thus-

Neither is there an* proof that #efen#ant PCI0an&contri%ute# an* official or conscious participation inthe process of the e$%e,,le$ent' This Court isconvince# that the switching operation .involving thechec&s while in transit for clearing/ were theclan#estine or hi##en actuations perfor$e# %* the$e$%ers of the s*n#icate in their own personl( covertan# private capacit* an# #one without the &nowle#geof the #efen#ant PCI0an&52

In this case( there was no evi#ence presente# confir$ing theconscious particiapation of PCI0an& in the e$%e,,le$ent' Asa general rule( however( a %an&ing corporation is lia%le for thewrongful or tortuous acts an# #eclarations of its officers or

agents within the course an# scope of their e$plo*$ent'58

A%an& will %e hel# lia%le for the negligence of its officers oragents when acting within the course an# scope of theire$plo*$ent' It $a* %e lia%le for the tortuous acts of its officerseven as regar#s that species of tort of which $alice is anessential ele$ent' In this case( we fin# a situation where thePCI0an& appears also to %e the victi$ of the sche$e hatche#%* a s*n#icate in which its own $anage$ent e$plo*ees ha#particiapte#'

The pro)$anager of San An#res 0ranch of PCI0an&(Re$%erto Castro( receive# Citi%an& Chec& Nu$%ers SN)3142 an# 6138' >e passe# the chec&s to a co)conspirator(an Assistant Manager of PCI0an&Gs Meralco 0ranch( whohelpe# Castro open a Chec&ing account of a fictitious person

na$e# Re*nal#o Re*es' Castro #eposite# a worthless 0an&of A$erica Chec& in eactl* the sa$e a$ount of 7or# chec&s'The s*n#icate ta$pere# with the chec&s an# succee#e# inreplacing the worthless chec&s an# the eventual encash$entof Citi%an& Chec& Nos' SN 3142 an# 6138' The PCI0an&Ptro)$anager( Castro( an# his co)conspirator AssistantManager apparentl* perfor$e# their activities using facilities intheir official capacit* or authorit* %ut for their personal an#private gain or %enefit'

A %an& hol#ing out its officers an# agents as worth* ofconfi#ence will not %e per$itte# to profit %* the frau#s theseofficers or agents were ena%le# to perpetrate in the apparentcourse of their e$plo*$ent: nor will t %e per$itte# to shir& its

responsi%ilit* for such frau#s( even though no %enefit $a*accrue to the %an& therefro$' 7or the general rule is that a%an& is lia%le for the frau#ulent acts or representations of anofficer or agent acting within the course an# apparent scope ofhis e$plo*$ent or authorit*'54An# if an officer or e$plo*ee ofa %an&( in his official capacit*( receives $one* to satisf* anevi#ence of in#e%ete#ness lo#ge# with his %an& for collection(the %an& is lia%le for his $isappropriation of such su$';3

Moreover( as correctl* pointe# out %* 7or#( Section 1;ofCentral 0an& Circular No' 183( Series of 422 provi#es thatan* theft affecting ite$s in transit for clearing( shall %e for theaccount of sen#ing %an&( which in this case is PCI0an&'

0ut in this case( responsi%ilit* for negligence #oes not lie onPCI0an&Gs shoul#ers alone'

The evi#ence on recor# shows that Citi%an& as #rawee %an&was li&ewise negligent in the perfor$ance of its #uties'Citi%an& faile# to esta%lish that its pa*$ent of 7or#Gs chec?swere $a#e in #ue course an# legall* in or#er' In its #efense(Citi%an& clai$s the genuineness an# #ue eecution of sai#chec&s( consi#ering that Citi%an& ./ has no &nowle#ge of an*infor$it* in the issuance of the chec&s in "uestion .5/ couple#

%* the fact that sai# chec&s were sufficientl* fun#e# an# .;/ theen#orse$ent of the Pa*ee or lac& thereof was guarantee# %*PCI 0an& .for$erl* I0AA/( thus( it has the o%ligation to honoran# pa* the sa$e'

7or its part( 7or# conten#s that Citi%an& as the #rawee %an&owes to 7or# an a%solute an# contractual #ut* to pa* the

procee#s of the su%?ect chec& onl* to the pa*ee thereof( theCIR' Citing Section 65;5of the Negotia%le Instru$ents aw(7or# argues that %* accepting the instru$ent( the acceptrowhich is Citi%an& engages that it will pa* accor#ing to the tenorof its acceptance( an# that it will pa* onl* to the pa*ee( .theCIR/( consi#ering the fact that here the chec& was crosse# withannotation Pa*ees Account Onl*'

As rule# %* the Court of Appeals( Citi%an& $ust li&ewiseanswer for the #a$ages incurre# %* 7or# on Citi%an& Chec&sNu$%ers SN 3142 an# 6138( %ecause of the contractualrelationship eisting %etween the two' Citi%an&( as the #rawee%an& %reache# its contractual o%ligation with 7or# an# such#egree of culpa%ilit* contri%ute# to the #a$age cause# to the

latter' On this score( we agree with the respon#ent courtGsruling'

Citi%an& shoul# have scrutini,e# Citi%an& Chec& Nu$%ers SN3142 an# 6138 %efore pa*ing the a$ount of the procee#sthereof to the collecting %an& of the 0IR' One thing is clearfro$ the recor#- the clearing sta$ps at the %ac& of Citi%an&Chec& Nos' SN 3142 an# 6138 #o not %ear an* initials'Citi%an& faile# to notice an# verif* the a%sence of the clearingsta$ps' >a# this %een #ul* ea$ine#( the switching of theworthless chec&s to Citi%an& Chec& Nos' 3142 an# 6138woul# have %een #iscovere# in ti$e' 7or this reason( Citi%an&ha# in#ee# faile# to perfor$ what was incu$%ent upon it(which is to ensure that the a$ount of the chec&s shoul# %epai# onl* to its #esignate# pa*ee' The fact that the #rawee

%an& #i# not #iscover the irregularit* seasona%l*( in our view(consitutes negligence in carr*ing out the %an&Gs #ut* to its#epositors' The point is that as a %usiness affecte# with pu%licinterest an# %ecause of the nature of its functions( the %an& isun#er o%ligation to treat the accounts of its #epositors with$eticulous care( alwa*s having in $in# the fi#uciar* nature oftheir relationship';;

Thus( invo&ing the #octrine of co$parative negligence( we areof the view that %oth PCI0an& an# Citi%an& faile# in theirrespective o%ligations an# %oth were negligent in the selectionan# supervision of their e$plo*ees resulting in the encash$entof Citi%an& Chec& Nos' SN 3142 AND 6138' Thus( we areconstraine# to hol# the$ e"uall* lia%le for the loss of the

procee#s of sai# chec&s issue# %* 7or# in favor of the CIR'

Ti$e an# again( we have stresse# that %an&ing %usiness is soi$presse# with pu%lic interest where the trust an# confi#enceof the pu%lic in general is of para$ount u$portance such thatthe appropriate stan#ar# of #iligence $ust %e ver* high( if notthe highest( #egree of #iligence';9A %an&Gs lia%ilit* as o%ligor isnot $erel* vicarious %ut pri$ar*( wherein the #efense ofeercise of #ue #iligence in the selection an# supervision of itse$plo*ees is of no $o$ent';1

0an&s han#le #ail* transactions involving $illions ofpesos';60* the ver* nature of their wor& the #egree ofresponsi%ilit*( care an# trustworthiness epecte# of their

e$plo*ees an# officials is far greater than those of or#inar*cler&s an# e$plo*ees';20an&s are epecte# to eercise thehighest #egree of #iligence in the selection an# supervision oftheir e$plo*ees';8

On the issue of prescription( PCI0an& clai$s that the action of7or# ha# prescri%e# %ecause of its ina%ilit* to see& ?u#icialrelief seasona%l*( consi#ering that the allege# negligent acttoo& place prior to Dece$%er 4( 422 %ut the relief wassought onl* in 48;( or seven *ears thereafter'

19


20/24


21/24

SO ORDERED'[8!

Petitioner appeale# to the Court of Appeals allegingthat- the RTC has no ?uris#iction over the offense charge# inthe ten infor$ations: it overloo&e# the fact that no notice of#ishonor ha# %een given to the appellant as #rawer of the#ishonore# chec&s: it faile# to consi#er that the reason of

close# accountQ for the #ishonor of the ten chec&s in thesecases is not the statutor* cause to warrant prosecution( $uch$ore a conviction( un#er 0'P' 0lg' 55: it faile# to consi#er thatthere is onl* one act which cause# the offense( if an*( an# notten separate cases: an# it #isregar#e# the #efinition of what aXchec&= is un#er Sec' 81 of the Negotia%le Instru$ents aw' [4!

7in#ing the appeal to %e without $erit( the Court ofAppeals affir$e# the #ecision of the trial court with costsagainst appellant'

>ence( herein petition raising the following errors-

I

T>AT T>E CORT O7 APPEAS ERRED IN NOTRESO@IN+ T>E BRISDICTIONA ISSE IN7A@OR O7 T>E ACCSED)APPEANT 0KNBSTK DEPRI@IN+ >ER O7 T>E E+A0ENE7ITS O7 +I@IN+ RETROACTI@E E77ECTTO T>E PRO@ISIONS O7 R'A' NO' 264EUPANDIN+ T>E BRISDICTION O7 T>EIN7ERIOR CORTS TO CO@ER T>E O77ENSESIN@O@ED IN T>ESE CASES PRSANT TOART' 55 O7 T>E RE@ISED PENA CODE( T>SIN E77ECT RENDERIN+ T>E BD+MENT O7CON@ICTION PROM+ATED 0K T>E TRIACORT 0EO< AND A77IRMED 0K T>E CORTO7 APPEAS PATENTK N AND @OID 7OR>A@IN+ 0EEN RENDERED OT OR IN

EUCESS O7 BRISDICTION'

II

T>AT T>E CORT O7 APPEAS ERRED IN NOTRESO@IN+ IN 7A@OR O7 ACCSED)APPEANT T>E 7ACT T>AT NO NOTICE O7DIS>ONOR >AD 0EEN +I@EN >ER AS DRAE DIS>ONORED C>ECFSQ PRSANTTO T>E RELIREMENT EUPRESSKPRO@IDED NDER 0ATAS PAM0ANSA 0IAN+55'

III

T>AT T>E CORT O7 APPEAS ERRED INCONSTRIN+ T>E PRO@ISIONS O7 0ATASPAM0ANSA 0IAN+ 55 CONTRARK TO T>EED RE O7 STATTORKCONSTRCTION T>AT PENA STATTES(S0STANTI@E AND REMEDIA ORPROCEDRA( ARE( 0K T>E CONSECRATEDRE( CONSTRED STRICTK A+AINST T>ESTATE( OR I0ERAK IN 7A@OR O7 T>EACCSEDQ AND T>AT IT IS AE DTKO7 T>E CORT TO RESO@E T>ECIRCMSTANCES O7 E@IDENCE PON AT>EORK O7 INNOCENCE RAT>ER T>AN PON

A T>EORK O7 +IT ERE IT IS POSSI0ETO DO SOQ( AND IN SO DOIN+ T>E DECISIONAPPEAED 7ROM IND+ED ITSE7 INBDICIA E+ISATIONQ TO 7A@OR T>EPROSECTION AND TO E ACCSED'

Si$pl* wor#e#( the issues of this case $a* %e state# asfollows- ./ whether or not the appellate court erre# in not

granting retroactive effect to Repu%lic Act No' 264[3!in viewof Art' 55 of the Revise# Penal Co#e .RPC/: .5/ whether or notnotice of #ishonor is #ispensa%le in this case: an# .;/ whetheror not the appellate court erre# in construing 0'P' 0lg' 55'


22/24

for its violations' It also #efines cri$e( treats of its nature an#provi#es for its punish$ent'[1!R'A' No' 264 #oes not prohi%itcertain acts or provi#es penalties for its violation: neither #oesit treat of the nature of cri$es an# itspunish$ent' Conse"uentl*( R'A' No' 264 is not a penal law(an# therefore( Art' 55 of the RPC #oes not appl* in the presentcase'

0' P' 0lg' 55( which too& effect on April 59( 424(provi#es the penalt* of i$prison$ent of not less than thirt*#a*s %ut not $ore than one *ear or %* a fine of not less than%ut not $ore then #ou%le the a$ount of the chec& which fineshall in no case ecee# P533(333'33( or %oth such fine an#i$prison$ent at the #iscretion of the court'

R'A' No' 264 which too& effect on Bune 1( 449(a$en#e# 0'P' 0lg' 54( an# veste# on the Metropolitan(Municipal an# Municipal Circuit Trial Courts ?uris#iction to tr*cases punisha%le %* i$prison$ent of not $ore than si .6/*ears'[6! Since R'A' No' 264 vests ?uris#iction on courts( it isapparent that sai# law is substantive'[2!

In the case of6ang vs. 6ourt of 'ppeals([8! this Court

hel# that ?uris#iction %eing a $atter of su%stantive law( theesta%lishe# rule is that the statute in force at the ti$e of theco$$ence$ent of the action #eter$ines the ?uris#iction of thecourt'Q[4! R'A' No' 264 was not *et in force at the ti$e of theco$$ence$ent of the cases in the trial court' It too& effectonl* #uring the pen#enc* of the appeal %efore the Court ofAppeals'[53! There is therefore no $erit in the clai$ ofpetitioner that R'A' No' 264 shoul# %e retroactivel* applie# tothis case an# the sa$e %e re$an#e# to the MTC' The Courthas hel# that a law vesting a##itional ?uris#iction in the courtcannot %e given retroactive effect'Q [5!

;hird issue


23/24


24/24

su%$itte# #uring the preli$inar* investigation that at the ti$eof issuance of the su%?ect chec&s( she was aware an# eventol# private co$plainant that the chec&s $ight not %e a%le tocover the a$ount state# therein'

The Court of Appeals sustaine# the RTC( to wit-

' ' ' Neither can un#re# Thousan# Pesos .P133(333'33/ with 5 interest perannu$ fro$ #ate of finalit* of herein ?u#g$ent'

SO ORERE.

7ellosillo, $6hairman%, ?uisumbing, an#6allejo, Sr.,@@., concur.
http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn46http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn47http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn47http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn48http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn48http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn49http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn49http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn50http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn50http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn51http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn51http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn51http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn52http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn53http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn53http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn54http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn55http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn46http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn47http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn48http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn49http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn50http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn51http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn52http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn53http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn54http://sc.judiciary.gov.ph/jurisprudence/2003/jun2003/125297.htm#_ftn55

Documents

NEGOTIABLE INSTRUMENTS-Forgery Full.doc