01 Maralit vs.

Imperial

G.R. No. 130756, 21 January 1999, SCRA 605

FACTS:

Petitioner Ester B. Maralit filed three complaints for estafa through falsification of commercial
documents through reckless imprudence against respondent Jesusa Corazon L. Imperial. Maralit
alleged that she was assistant manager of the Naga City branch of the PNB; that on May 20, 1992,
June 1, 1992, and July 1, 1992 respondent Imperial separately deposited in her savings account at
the PNB three United States treasury warrants and on the same days withdrew their peso equivalent
of P59,216.86, P130,743.60, and P130,326.00, respectively; and that the treasury warrants were
subsequently returned one after the other by the United States Treasury, through the Makati branch
of the Citibank, on the ground that the amounts thereof had been altered. Maralit claimed that, as a
consequence, she was held personally liable by the PNB for the total amount of P320,287.30.

In her counter-affidavit, respondent claimed that she merely helped a relative, Aida Abengoza,
encash the treasury warrants; that she deposited the treasury warrants in her savings account and
then withdrew their peso equivalent with the approval of petitioner; that she gave the money to Aida
Abengoza; that she did not know that the amounts on the treasury warrants had been altered nor did
she represent to petitioner that the treasury warrants were genuine; and that upon being informed of
the dishonor of the warrants she immediately contacted Aida Abengoza and signed an
acknowledgment of debt promising to pay the total amount of the treasury warrants.

MTC acquitted Imperial but held her civilly liable as indorser of the checks which are the subject
matter of the criminal action. The RTC held that the decision of the MTC did not really find
respondent liable for P320,286.46 because in fact it was petitioner who was found responsible for
making the defraudation possible.

ISSUE:

Whether or not respondent is civilly liable as indorser of the checks subject matter of the criminal
action.

RULING:

The Court symphatizes with the complainant that there was indeed damage and loss, but said loss is
chargeable to the accused who upon her indorsements warrant that the instrument is genuine in all
respect what it purports to be and that she will pay the amount thereof in case of dishonor. (Sec. 66
Negotiable Instrument Law)

Thus, while the MTC found petitioner partly responsible for the encashment of the altered checks, it
found respondent civilly liable because of her indorsements of the treasury warrants, in addition to
the fact that respondent executed a notarized acknowledgment of debt promising to pay the total
amount of said warrants.

02 BPI vs CA
BPI vs CA
BPI vs. Court of Appeals and Napiza
G.R. No. 112392. February 29, 2000, 326 scra 641
*accommodation party
**liability of general indorser

FACTS:
A certain Henry Chan owned a Continental Bank Manager’s Check payable to "cash" in
the amount of Two Thousand Five Hundred Dollars ($2,500.00).  Chan went to the
office of Benjamin Napiza and requested him to deposit the check in his dollar account
by way of accommodation and for the purpose of clearing the same. Private respondent
acceded, and agreed to deliver to Chan a signed blank withdrawal slip, with the
understanding that as soon as the check is cleared, both of them would go to the bank
to withdraw the amount of the check upon private respondent’s presentation to the bank
of his passbook.  Napiza thus endorsed the check and deposited it in a Foreign
Currency Deposit Unit (FCDU) Savings Account he maintained with BPI.  Using the
blank withdrawal slip given by private respondent to Chan, one Ruben Gayon, Jr. was
able to withdraw the amount of $2,541.67 from Napiza's FCDU account.  It turned out
that said check deposited by private respondent was a counterfeit check. 

*When BPI demanded the return of $2,500.00, private respondent claimed that he
deposited the check "for clearing purposes" only to accommodate Chan.

**Petitioner claims that private respondent, having affixed his signature at the dorsal
side of the check, should be liable for the amount stated therein in accordance with the
provision of the Negotiable Instruments Law on the liability of a general indorser (Sec.
66).

ISSUE:*
Whether private respondent is obliged to return the money paid out by BPI on a
counterfeit check even if he deposited the check "for clearing purposes" only to
accommodate Chan.

ISSUE:**
Whether or not respondent Napiza is liable under his warranties as a general indorser.
 
RULING:
Ordinarily private respondent may be held liable as an indorser of the check or even as
an accommodation party.  However, petitioner BPI, in allowing the withdrawal of private
respondent’s deposit, failed to exercise the diligence of a good father of a family.  BPI
violated its own rules by allowing the withdrawal of an amount that is definitely over and
above the aggregate amount of private respondent’s dollar deposits that had yet to be
cleared.  The proximate cause of the eventual loss of the amount of $2,500.00 on BPI's
part was its personnel’s negligence in allowing such withdrawal in disregard of its own
rules and the clearing requirement in the banking system. In so doing, BPI assumed the
risk of incurring a loss on account of a forged or counterfeit foreign check and hence, it
should suffer the resulting damage.

FACTS: Private Respondent Napiza deposited in Foreign Currency Deposit Unit

(FCDU) Savings Account which he maintained in petitioner’s bank Continental Bank
Manager’s Check payable to cash in the amount of Two Thousand Five Hundred
Dollars and duly endorsed by Napiza on its dorsal side. It appears that the check
belonged to Henry Chan who went to the office of Napiza and requested him to
deposit the check in his dollar account. Napiza agreed to deliver to Chan a signed
blank withdrawal slip with the understanding that as soon as the check is cleared ,
both of them would withdraw upon Napiza’s presentation of his passbook. Using the
blank withdrawal slip , one Ruben Gayon Jr was able to withdraw the amount. It
was later found out that the check was counterfeit. Petitioner filed a complaint
against Napiza praying for the return of the amount of $2,500.00 plus interest.

ISSUES:
1. Is respondent Napiza liable under his warranties as a general indorser?
2. Is petitioner grossly negligent in allowing the withdrawal?

HELD: 1. Ordinarily, private respondent may be held liable as in indorser of the

check or even as an accommodation party. Under the law, the holder or last
indorsee of a negotiable instrument has the right to enforce payment of the
instrument for the full amount thereof against all parties liable thereon. Among the
parties liable thereon is an indorser of the instrument. Such an indorser ‘ who
indorses without qualification ‘ inter alia ‘engages that on due presentment … the
instrument shall be accepted or paid, or both,as the case may be, according to its
tenor and that if it be dishonored ,he will pay the amount thereof to the holder.

However, to hold Napiza liable without considering the attending circumstances in

the case would result in an injustice and in erosion of the public trust in the banking
system. The interest of justice thus demands looking into the events that led to the
encashment of the check.

2. Yes. To withdraw the amount, a duly-filled up withdrawal slip and depositor’s

passbook must be presented. Such requirements were not complied with yet the
amount was withdrawn. Petitioner violated its own rules by allowing the withdrawal
of an amount that is definitely over and above the aggregate amount of private
respondent’s dollar deposits that had yet to be cleared.

The negligence of petitioner’s personnel was the proximate cause of the loss that
petitioner sustained. The proximate cause of the withdrawal and eventual loss of
the amount was part of the petitioner’s negligence in allowing such withdrawal in
disregard of its own rules.

03 Wong vs CA

04 Rigor vs People

Screenshot

05 State Investment House vs CA

STATE INVESTMENT
CORPORATION VS. CA G.R.
NO. 101163 JANUARY 11, 1993
Category: Law on Negotiable Instruments

Moulic issued to Corazon two post-dated checks to Victoriano as a

security for the two jewelry then the payee negotiated the check to
State Investment House. However, Moulic failed to sell the jewelry so
she returned them before the maturity of the checks but the checks
cannot be retrieved because it is already negotiated. Consequently,
before their maturity dates, MOULIC withdrew her funds from the
drawee bank. Upon presentment for payment, the checks were
dishonored for insufficiency of funds. On 20 December 1979, STATE
allegedly notified MOULIC of the dishonor of the checks and requested
that it be paid in cash instead, although MOULIC avers that no such
notice was given her. Is the drawer liable even if no notice of dishonor
was given to the drawer?

 
 Yes. MOULIC, as drawer, is liable for the value of the checks she issued to the holder in due course,
STATE, without prejudice to any action for recompense she may pursue against the VICTORIANOs as
Third-‐Party Defendants who had already been declared as in default. (State Investment Corporation vs.
CA G.R. No. 101163 January 11, 1993)

State Investment House Inc. vs. CA

State Investment House Inc. vs. CA

GR No. 101163 January 11, 1993

Bellosillo, J.:

Facts:
Nora Moulic issued to Corazon Victoriano, as security for pieces of jewellery to be sold
on commission, two postdated checks in the amount of fifty thousand each. Thereafter,
Victoriano negotiated the checks to State Investment House, Inc. When Moulic failed to sell the
jewellry, she returned it to Victoriano before the maturity of the checks. However, the checks
cannot be retrieved as they have been negotiated. Before the maturity date Moulic withdrew her
funds from the bank contesting that she incurred no obligation on the checks because the
jewellery was never sold and the checks are negotiated without her knowledge and consent.
Upon presentment of for payment, the checks were dishonoured for insufficiency of funds.

Issues:
1. Whether or not State Investment House inc. was a holder of the check in due course
2. Whether or not Moulic can set up against the petitioner the defense that there was failure or
absence of consideration

Held:

Yes, Section 52 of the NIL provides what constitutes a holder in due course. The evidence shows
that: on the faces of the post dated checks were complete and regular; that State Investment
House Inc. bought the checks from Victoriano before the due dates; that it was taken in good
faith and for value; and there was no knowledge with regard that the checks were issued as
security and not for value. A prima facie presumption exists that a holder of a negotiable
instrument is a holder in due course. Moulic failed to prove the contrary.
No, Moulic can only invoke this defense against the petitioner if it was a privy to the purpose for
which they were issued and therefore is not a holder in due course.

No, Section 119 of NIL provides how an instruments be discharged. Moulic can only invoke
paragraphs c and d as possible grounds for the discharge of the instruments. Since Moulic failed
to get back the possession of the checks as provided by paragraph c, intentional cancellation of
instrument is impossible. As provided by paragraph d, the acts which will discharge a simple
contract of payment of money will discharge the instrument. Correlating Article 1231 of the
Civil Code which enumerates the modes of extinguishing obligation, none of those modes
outlined therein is applicable in the instant case. Thus, Moulic may not unilaterally discharge
herself from her liability by mere expediency of withdrawing her funds from the drawee bank.
She is thus liable as she has no legal basis to excuse herself from liability on her check to a
holder in due course. Moreover, the fact that the petitioner failed to give notice of dishonor is of
no moment. The need for such notice is not absolute; there are exceptions provided by Sec 114
of NIL.

06 Sycip Jr vs CA
FRANCISCO T. SYCIP v. CA, GR No. 125059, 2000-03-17
Facts:
Francisco T. Sycip agreed to buy, on installment, from Francel Realty Corporation (FRC), a
townhouse unit
Upon execution of the contract to sell, Sycip... issued to FRC
, forty-eight... postdated checks
After moving in his unit, Sycip complained to FRC regarding defects in the unit and
incomplete features of the townhouse project.
FRC continued to present for encashment Sycip's postdated checks in its possession. Sycip
sent "stop payment orders" to the bank. When FRC continued to present the other
postdated checks to the bank as the due date fell, the bank advised
Sycip to close his checking account to avoid paying bank charges every time he made a
"stop payment" order on the forthcoming checks. Due to the closure of petitioner's checking
account, the drawee bank dishonored six postdated checks. FRC filed a complaint against
petitioner... for violations of B.P. Blg. 22 involving said dishonored checks.
the trial court found petitioner guilty of violating Section 1 of B.P. Blg. 22
Issues:
whether or not the Court of Appeals erred in affirming the conviction of petitioner for
violation of the Bouncing Checks Law.
Ruling:
In this case, we find that although the first element of the offense exists, the other elements
have not been established beyond reasonable doubt.
Postdating simply means that on the date indicated on its face, the check would be properly
funded, not that the checks should be deemed as issued only then.
But we find from the records no showing that the time said checks were issued, petitioner
had knowledge that his deposit or credit in the bank would be insufficient to cover them
when presented for... encashment.
the closure of petitioner's Account... was not for insufficiency of funds.
It was made upon the advice of the drawee bank, to avoid payment of hefty bank charges
each time petitioner issued a "stop payment" order to... prevent encashment of postdated
checks in private respondent's possession.
we are of the view that petitioner had a valid cause to order his bank to stop payment.

Criminal Law Case Digest: Sycip vs Court of Appeals G.R. No.

12059 March 17, 2000
Sycip vs Court of Appeals
G.R. No. 12059
March 17, 2000

Criminal Law

Criminal Case Digest

Facts: 

On August 24, 1989, Francisco T. Sycip, Jr., agreed to buy, on installment, from Francel Realty
Corporation (FRC), a townhouse unit in the latter’s project at Bacoor, Cavite. Upon execution of the
contract to sell, as required, issued to FRC, forty-eight (48) postdated checks, each in the amount of
P9,304.00, covering 48 monthly installments.

After moving in his unit, Sycip complained, to FRC regarding defects in the unit and incomplete features
of the townhouse project. FRC ignored the complaint. Dissatisfied, Sycip served on FRC two (2) notorial
notices to the effect that he was suspending his installment payments on the unit pending compliance
with the project plans and specifications, as approved by the Housing and Land Use Regulatory Board
(HLURB). Sycip and twelve(12) out of fourteen (14) unit buyers then filed a complaint with the HLURB.
The complaint was dismissed as to the defect, but FRC was ordered by the HLURB to finish all
incomplete features of its townhouse project. Sycip appealed the dismissal of the complaint as to the
alleged defects. 

Notwithstanding the notorial notices, FRC continued to present for encashment Sycip’s postdated checks
in its possession. Sycip sent “stop payment orders” to the bank. When FRC continued to present the
other postdated checks to the bank as the due date fell, the bank advised Sycip to close his checking
account to avoid paying bank charges every time he made a “stop payment” order on the forthcoming
checks. Due to the closure of petitioner’s checking account, the drawee bank dishonored six postdated
checks. FRC file a complaint against petitioner for violations of B.P. Blg. 22 involving said dishonored
checks.

Issues:

(a) Whether or not the accused is criminally liable of the B.P. Blg. 22?

(b) Whether or not the trial court erred in affirming the conviction of petitioner for violation of the Bouncing
Checks Law?

Held: 
he trial court finds accused Francisco T. Sycip guilty beyond reasonable doubt of a violation of Sec. 1 of
the Batas Pambansa Blg. 22 and, accordingly, he is hereby sentenced ordered to pay the offended party,
FRC, as and for actual damages with interest thereon at the legal rate from date of commencement of
these actions, until full payment thereof.

Dissastied, Sycip appealed the decision to the Court of Appeals. The Appellate Court erred in affirming
the decision of the lower court finding that the accused-appellant did not have any justifiable cause to stop
or otherwise prevent the payment of the subject checks by the drawee bank. The CA also erred that the
accused-appellant did not have sufficient funds with the drawee to cover the subject checks upon
resentment for payment thereof. 

However, while B.P. Blg. 22 was enacted to safeguard the interest of the banking system. It is difficult to
see how conviction of the accused in this case will protect the sanctity of the financial system. 

Given the findings of the HLURB as to incomplete features in the construction of petitioner’s and other
units of the subject condominium bought on installment from FRC, the Court of Appeals held that the
petitioner had a valid cause to order his bank to stop payment. Hence, it said that offenses punished by a
special law, like the Bouncing Checks Law, are not subject to the Revised Penal Code, the Code is
supplementary to such law. The petitioner, Francisco T. Sycip, Jr., is acquitted of the charges against him
under B.P. Blg. 22, for lack of sufficient evidence to prove the offenses charged beyond reasonable
doubt. No pronouncement as to costs. 

Facts:

-Francisco Sycip agreed to buy, on installment, from Francel Realty

Corporation (FRC), a townhouse unit.

-Upon execution of the contract to sell, Sycip, as required issued to FRC 48

postdated checks, each on the amount of P9,304 covering 48 monthly
instalments.

-After moving in his unit, Sycip complained to FRC regarding defects in the
unit and incomplete features of the townhouse project. FRC ignored the
complaint.

-Sycip served on FRC 2 notarial notices to the effect that he was suspending
his instalment payments on the unit pending compliance with the project
plans and specifications, as approved by the Housing and Land Use
Regulatory Board (HLURB).

-Notwithstanding the notarial notices, FRC continued to present for

encashment Sycip’s postdated checks in its possession. Sycip sent “stop
payment orders” to the bank.

-The bank (Citibank) advised Sycip to close his checking account to avoid
paying bank charges evry time he made a “stop payment” order.
-Due to the closure of petitioner’s checking account, the drawee bank
dishonoured six postdated checks. FRC filed a complaint against petitioner
for violations of BP Blg 22 involving said dishonoured checks.

-RTC and CA found petitioner guilty of violating Sec 1 of BP Blg 22 in each

of the six cases.

Issue: w/n the CA erred in affirming the conviction of petitioner for violation of

the Bouncing Checks Law.

[Or yung related sa topic] w/n petitioner has a valid defense to the charges
against him

Held: Petitioner’s exercise of a right of the buyer under Article 23 of PD 957

is a valid defense to the charges against him.  Petition is granted. Petitioner
is ACQUITTED of the charges against him under BP Blg. 22.

RD:

-We find that although the first element of the offense exists, the other
elements have not been established beyond reasonable doubt.

Under the provisions of BP Blg 22, an offense is committed when the

following elements are present: (1) the making, drawing and issuance of any
check to apply for account or for value; (2) the knowledge of the maker,
drawer, or issuer that at the time of issue he does not have sufficient funds in
or credit with the drawee bank for the payment of such check in full upon its
presentment; and (3) the subsequent dishonour of the check by the drawee
bank for insufficiency of funds or credit or dishonor for the same reason had
not the drawer, without any valid cause, ordered the bank to stop payment.
We find from the records no showing that at the time said checks were
issued, petitioner had knowledge that his deposit or credit in the bank would
be insufficient to cover them when presented for encashment.

-We are of the view that petitioner had a valid cause to order his bank to stop
payment. The third element of “subsequent dishonour of the check…without
valid cause” appear to us not established by the prosecution.

-Following Article 11 (5) of the RPC, petitoner’s exercise of a right of the

buyer under Art 23 of PD 957 is a valid defense to charges against him.

Sec 23 of PD 957: The buyer of a townhouse unit has the right to suspend
his amortization payments, should the subdivision or condominium
developer fail to develop or complete the project in accordance with duly
approved plans and specifications.

07 Bank of America, NT and SA vs. Associated Citizens Bank

Bank of America, NT and SA vs. Associated Citizens Bank G.R. No. 141001,
May 21, 2009
MARCH 16, 2014LEAVE A COMMENT

The Bank is under strict liability, based on the contract between the bank and its customer
(drawer), to pay the check only to the payee or the payee’s order. The drawer’s instructions are
reflected on the face and by the terms of the check. When the drawee bank pays a person other
than the payee named on the check, it does not comply with the terms of the check and violates its
duty to charge the drawer’s account only for properly payable items.

Facts:    BA-Finance Corporation (BA Finance) and Miller Offset Press, Inc. (Miller) entered into a
credit line facility agreement whereby Miller can discount and assign its trade receivables with the
BA Finance. At the same time, Uy Kiat Chung, Ching Uy Seng, and Uy Chung Guan Seng, acting
for Miller, executed a Continuing Suretyship Agreement with BA-Finance.  Under the
agreement, they jointly and severally guaranteed the full and prompt payment of any and all
indebtedness which Miller may incur with BA-Finance.

Miller discounted and assigned several trade receivables to BA-Finance by executing Deeds of
Assignment in favor of the latter. In consideration thereof, BA-Finance issued four checks payable to
the order of Miller with the notation “For Payee’s Account Only.” These checks were drawn against
Bank of America. The four checks were deposited by Ching Uy Seng in Associated Citizens Bank
with his joint account with Uy Chung Seng. Associated Bank stamped the checks and guaranteed all
prior endorsements and/or lack of endorsements and sent them through clearing. Later, Bank of
America as drawee bank honored the checks and paid the proceeds to Associated Bank as the
collecting bank. When Miller failed to deliver to BA-Finance the proceeds of the assigned trade
receivables, BA-Finance filed a collection suit against Miller and impleaded the three representative
of the latter.

Bank of America filed a third party complaint against Associated Bank. In its answer to the third
party complaint, Associated Bank admitted having received the four checks for deposit in the joint
account of Ching Uy Seng and Uy Chung Guan Seng, but alleged that Ching Uy Seng, being one of
the corporate officers of Miller, was duly authorized to act for and on behalf of Miller.

Issues: Whether or not Bank of America is liable to pay BA-Finance and whether or not Associated
Bank should reimburse Bank of America the amount of the four checks.

Held:    The bank on which a check is drawn, known as the drawee bank (Bank of America), is under
strict liability, based on the contract between the bank and its customer (drawer), to pay the check
only to the payee or the payee’s order. The drawer’s instructions are reflected on the face and by the
terms of the check. When the drawee bank pays a person other than the payee named on the check, it
does not comply with the terms of the check and violates its duty to charge the drawer’s account only
for properly payable items.  On the part of Associated Bank, the law imposes a duty of diligence on
the collecting bank to scrutinize checks deposited with it for the purpose of determining their
genuineness and regularity. The collecting bank being primarily engaged in banking holds itself out
to the public as the expert and the law holds it to a high standard of conduct. In presenting the checks
for clearing and for payment, the defendant [collecting bank] made an express guarantee on the
validity of “all prior endorsements.” Thus, stamped at the back of the checks are the defendant’s
clear warranty. As the warranty has proven to be false and inaccurate, Associated Bank is liable for
any damage arising out of the falsity of its representation.

Held:    A bank that regularly processes checks that are neither payable to the customer nor duly
indorsed by the payee is apparently grossly negligent in its operations. This Court has recognized the
unique public interest possessed by the banking industry and the need for the people to have full trust
and confidence in their banks. For this reason, banks are minded to treat their customer’s accounts
with utmost care, confidence, and honesty. In a checking transaction, the drawee bank has the duty to
verify the genuineness of the signature of the drawer and to pay the check strictly in accordance with
the drawer’s instructions, i.e., to the named payee in the check. It should charge to the drawer’s
accounts only the payables authorized by the latter. Otherwise, the drawee will be violating the
instructions of the drawer and it shall be liable for the amount charged to the drawer’s account.
Rodriguez checks are payable to order since the bank failed to prove that the named payees therein
are fictitious.

Hence, the fictitious-payee rule which will make the instrument payable to bearer does not apply.
PNB accepted the 69 checks for deposit to the PEMSLA account even without any indorsement from
the named payees. It bears stressing that order instruments can only be negotiated with a valid
indorsement.
08 Yu Oh vs CA

09 PNB vs Soriano

G.R. No. 164051, October 3, 2012

[Double Jeopardy, Novation]

1.) When the prosecution moves for the withdrawal of the criminal cases and the court approves
the same, does the reinstatement of the cases amount to double jeopardy against the accused?

No, it does not place the accused in double jeopardy. For double jeopardy to occur, there must
be a first jeopardy. A first jeopardy attaches only (a) after a valid indictment, (b) before a
competent court, (c) after arraignment, (d) when a valid plea has been entered, and (e) when
the accused has been acquitted or convicted, or the case dismissed or otherwise terminated
without his express consent.

Withdrawal of the criminal cases, with the court's approval, does not necessarily mean dismissal
of the cases by the court. Without the categorical dismissal of the cases by the court, there can
be no first jeopardy. Without first jeopardy, there can be no double jeopardy.

2.) Novation, while it extinguishes an obligation, does not completely erase the obligor-obligee
relationship. It only ends the original obligation but a new obligation is created to replace the old
one.

Novation cannot be presumed; it must be clearly stated or understood that the purpose of the
new contract is to replace the old one.

In order to determine if the entruster-entrustee relationship was replaced by an ordinary

creditor-debtor relationship, we must examine if the first obligation is incompatible with the
second obligation that was purported to replace the first. In payment of sum of money, the first
obligation is not novated by a second obligation that (1) expressly recognizes the first obligation,
(2) changes only the terms of payment, (3) adds other obligation not incompatible with the old
ones, or (4) merely supplements the first one.

In this case, the second obligation (restructuring) arose due to the failure of the accused to
account for the sum of money received in trust.