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  • 72 Banco Atlantico Vs Auditor General Digest

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    Charm Divina Lascota
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    Banco Atlantico sued the Auditor General to recover funds it released to a Philippine Embassy employee, Boncan, on checks that were later dishonored. The court held that Banco Atlantico was not a holder in due course because it should have been aware of defects in the checks given that Boncan, who had special relations with bank employees, requested the checks not be deposited until later despite their large amounts. Allowing payment before clearing was also abnormal banking practice. As such, the Philippine Embassy was not liable as the checks appeared to be fraudulently altered by Boncan.

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    72 Banco Atlantico vs Auditor General Digest

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    72 Banco Atlantico vs Auditor General Digest

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    Banco Atlantico sued the Auditor General to recover funds it released to a Philippine Embassy employee, Boncan, on checks that were later dishonored. The court held that Banco Atlantico was not a holder in due course because it should have been aware of defects in the checks given that Boncan, who had special relations with bank employees, requested the checks not be deposited until later despite their large amounts. Allowing payment before clearing was also abnormal banking practice. As such, the Philippine Embassy was not liable as the checks appeared to be fraudulently altered by Boncan.

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    Attribution Non-Commercial (BY-NC)
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    60 views1 page

    72 Banco Atlantico Vs Auditor General Digest

    Uploaded by

    Charm Divina Lascota
    Banco Atlantico sued the Auditor General to recover funds it released to a Philippine Embassy employee, Boncan, on checks that were later dishonored. The court held that Banco Atlantico was not a holder in due course because it should have been aware of defects in the checks given that Boncan, who had special relations with bank employees, requested the checks not be deposited until later despite their large amounts. Allowing payment before clearing was also abnormal banking practice. As such, the Philippine Embassy was not liable as the checks appeared to be fraudulently altered by Boncan.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
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    of 1

    BANCO ATLANTICO V.

    AUDITOR GENERAL 81 SCRA 335

    FACTS:
    Boncan was the Finance Officer of the Philippine Embassy in Madrid who on many occasions negotiated with Banco Atlantico checks, allegedly endorsed to her by the embassy. On these occasions, the bank allowed the payment of the checks, notwithstanding the fact that the drawee bank has not yet cleared the checks for collection. This was premised on the finding that Boncan had special relations with the employees of the bank. And that upon presentment to the drawee bank, the checks were dishonored due to non-acceptance allegedly on the ground that the drawer has ordered the stoppage of payment. This prompted Banco Atlantico to collect from the Philippine Embassy for the funds released to Boncan but the latter refused. This eventually led to filing of money claim of the bank with the Auditor General.

    HELD:
    On whether or not Banco Atlantico was a holder in due course, it is not. Following the decision of the Auditor General in denying the claim of the bank, the checks were demand notes. It should have been put on guard when Boncan negotiated the checks with them and subsequently deposited the same to her account. Even though it were demand notes, she instructed the bank that the same be not presented for collection till a later date. The fact that the amount was quite big and it was the payee herself who made the request that the same be not presented for collection until a fixed date in the future was proof of a glaring infirmity or defect in the instrument. It loudly proclaims Take me at your own risk. It was obvious by then that the bank had knowledge of the infirmity or defect of the checks. Furthermore, what it did when it allowed payment before clearing is beyond the normal and ordinary banking practice especially when the bank involved is a foreign bank and the amounts involved were large. Boncan wasn't even a client of the bank but was someone who had special relations with its officers. In view of the foregoing, the embassy as the drawer of the 3 checks in question cannot be held liable. It is apparent that the said 3 checks were (fraudulently altered) by Boncan as to their accounts and therefore wholly inoperative (note: should be avoided).

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