Maralit v.

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.
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, 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.