(i) TAN v.

COURT OF APPEALS
FACTS:
Petitioner maintained a checking account with Rizal Banking Commercial Corporation's (RCBC) Puerto Princesa
branch. To avoid carrying cash enroute to Manila, petitioner secured a cashier's check payable to his order
amounting to P30,000 from Philippine Commercial Industrial Bank (PCIB) Puerto Princesa branch. Petitioner
deposited said cashier's check in his account with RCBC Binondo branch, but erroneously filled the wrong deposit
slip. Due to the wrong deposit slip, RCBC sent the cashier's check for clearing with the then Central Bank which
was returned for having been "missent" or "misrouted". Relying on the common knowledge that a cashier's check
was as good as cash, and taking into consideration the usual banking practice in the clearing of checks, petitioner
issued two (2) personal checks in the name of Go Lac and MS Development Trading Corporation, amounting to
P5,500 and P6,053.70, respectively. Both checks were subsequently dishonored for insufficiency of funds. Petitioner
sued the bank for damages. He maintained that: (i) it was RCBC's responsibility to call his attention regarding the
erroneously filled deposit slip and it was negligence on the bank's part for not having done so; and (ii) RCBC was
remiss in the performance of its obligation when it "missent" the cashier's check to the Central Bank knowing that
the source of the check, PCIB Puerto Princesa branch, is not included in the areas required to be cleared by the
Central Bank. For its part, RCBC disowned any negligence and put the blame for the "misrouting" on petitioner for
using the wrong check depositslip.

Explanation:
In this case, Mr. Tan had a checking account with a bank called RCBC in Puerto Princesa. He wanted to avoid
carrying cash, so he got a cashier's check from another bank, PCIB, in Puerto Princesa. He deposited this check into
his RCBC account in Binondo, Manila, but he used the wrong deposit slip by mistake.

Because of this mistake, RCBC sent the check to the wrong place for processing. Mr. Tan thought the cashier's
check was as good as cash, so he wrote two personal checks based on that money. However, when RCBC tried to
process these checks, they bounced because there wasn't enough money in Mr. Tan's account.

Mr. Tan sued RCBC, claiming it was their fault for not telling him about the mistake with the deposit slip and for
sending the check to the wrong place. RCBC said it wasn't their fault and blamed Mr. Tan for using the wrong
deposit slip.

The court had to decide who was responsible for the mistake and the consequences.
Required:

1. Write the issue/s of the case.

 Whether RCBC has a responsibility to call the petitioner regarding erroneously filled deposit slip.
 Whether RCBC was negligent in “missending” or “misrouting” the cashiers check.
2. Was the petitioner, with regard to his claims, acceptable to sue the bank for damages? Explain.
 It is acceptable to sue the bank because it is negligence on their part. The petitioner claims that
RCBC failed in its responsibility to notify the petitioner about the erroneously filled deposit slip,
leading to the return of the cashier’s check. Furthermore, the RCBC was negligent in
“missending” the cashier’s slip to the Central Bank which caused a complication in the process
which ultimately dishonoured the petitioner’s cheque.

3. On RCBC's part to put the blame on the petitioner for using the wrong check deposit slip
admissible? Discuss your answer.

 Filling out the correct deposit slip is the responsibility of the depositor. However, RCBC also has
a duty to process transactions and alert the customers for errors. Upon receiving the incorrect
deposit, RCBC may have an obligation to inform the petitioner about the error because one of the
bank’s duties is to notify customers in terms they have issues regarding their transactions.
4. Provide the court ruling for this case and explain.
 The Supreme Court ruled in favor of Tan and reversed the decision of the Court of Appeals. Since
RCBC is liable for negligence and they were ordered to pay damages to the petitioner for
mishandling a cashier’s check and they failed their responsibility to immediately inform the
 petitioner of his mistake, this results in dishonoring of his check and damages the reputation of the
petitioner.

(ii) METROPOLITAN BANK & TRUST COMPANY v. COURT OF APPEALS

FACTS:
On April 6, 1982, petitioner commercial bank, as depositary bank for respondent rural bank, received from the then
Central Bank a credit memo in the amount of P304,000, for the account of respondent rural bank. On the basis of
said credit memo, respondent Katigbak, as president of respondent rural bank, issued several checks against its
account with petitioner. Said checks, however, were returned on April 12, 1982 for having been 'Drawn Against
Insufficient Funds." Records show that the amount P304,000 was credited by petitioner to the appropriate account
only on April 15, 1982, in view of the inadvertence of the petitioner's messenger to deliver the credit advice from the
Central Bank to the department in charge of processing the same. Such inadvertence and delay caused the return of
the checks issued by respondent rural bank.

EXPLANATION: In the case of Metropolitan Bank & Trust Company v. Court of Appeals, the petitioner, a
commercial bank, acted as the depositary bank for a rural bank, the respondent in this case. On April 6, 1982, the
Central Bank, now known as the Bangko Sentral ng Pilipinas (BSP), issued a credit memo to the petitioner
commercial bank, indicating that P304,000 was credited to the account of the respondent rural bank.

Upon receiving this credit memo, the president of the respondent rural bank, Katigbak, proceeded to issue several
checks against the account held with the petitioner commercial bank. However, when these checks were presented
for payment on April 12, 1982, they were returned due to insufficient funds.

It was revealed through records that the amount of P304,000 was actually credited to the appropriate account by the
petitioner commercial bank only on April 15, 1982. This delay occurred due to the inadvertence of the petitioner's
messenger, who failed to promptly deliver the credit advice from the Central Bank to the department responsible for
processing such transactions.

As a consequence of this delay and inadvertence on the part of the petitioner commercial bank, the checks issued by
the respondent rural bank were returned due to insufficient funds, causing financial inconvenience and likely
damages to the respondent.

The case likely revolves around whether the petitioner commercial bank should be held liable for the damages
incurred by the respondent rural bank as a result of the delayed crediting of the funds. It would involve legal
arguments regarding the duty of care owed by banks in handling financial transactions, the standard practices in the
banking industry, and the extent of liability for losses arising from delays or errors in processing transactions. The
decision would depend on how the court interprets these legal principles in the context of the specific facts of the
case.

Required:

1. Write the issue/s of the case.

 Whether Metropolitan Bank & Trust Company is liable for the return of the checks due to Drawn
Against Insufficient Funds (DAIF).
 Whether the delay in crediting the amount by Metropolitan Bank & Trust Company constitutes
negligence.
 What remedies, if any, are available to the parties involved.

2. Who shall be liable for the return of the checks due to DAIF? Discuss.
 Metropolitan Bank & Trust Company (petitioner commercial bank) is primarily liable for the
return of the checks due to Drawn Against Insufficient Funds (DAIF). As the depositary bank, its
failure to promptly process the credit memo from the Central Bank resulted in the delay in
crediting the funds to the rural bank's account, leading to the dishonor of the checks. Additionally,
the rural bank might be held negligent if it issued checks against unverified funds.
3. Provide the court ruling for this case and explain.
  MBTC was held liable for damages due to negligence in dishonoring the checks and insulting
behavior of its officer. In this case, the dishonoring of the respondent's checks committed through
negligence by the petitioner bank was rectified only on April 15, 1992, or 9 days after they
received the Central Bank credit memo. Petitioner Bank was clearly remiss in its duty and
obligation to treat private respondents' accounts with the highest degree of care, considering the
fiduciary nature of their relationship. It must, therefore, bear the blame for failing to discover the
mistake of its employee despite the established procedure requiring bank papers to pass through
bank personnel whose duty it is to check and counter check them for possible errors.

(iii) PHILIPPINE NATIONAL BANK v. COURT OF APPEALS

FACTS:
On July 11, 1989, private respondent Carmelo H. Flores (Flores) purchased from petitioner (Philippine National
Bank) at its Manila Pavilion Hotel unit, two (2) manager's checks worth P500,000 each, paying a total of
P1,000,040, including the service charge. A receipt for said amount was issued by the petitioner.
On July 12, 1989, Flores presented these checks at the Baguio Hyatt Casino unit of petitioner. Petitioner refused to
encase one (1) of the checks but after a lengthy discussion, it agreed to encash one (1) of the checks. However, it
deferred the payment of the other check until after Flores agreed that it be broken down to five (5) manager's checks
of P100,000 each. Furthermore, petitioner refused to encash one (1) of the five checks until after it is cleared by the
Manila Pavilion Hotel unit. Having no other option, Flores agreed to such an arrangement. However, upon his return
to Manila, he made representations to petitioner through its Malate Branch so that the check may be enchased but to
no avail... Petitioner insisted that only P900,000 and P40 bank charges were actually paid by Flores when he
purchased two (2) manager's checks worth P1,000,000. Further, petitioner insists that the issue in the instant case is
not the content of the subject receipt but the exact amount of money Flores paid to PNB, an inquiry which, petitioner
avers, allows the presentation of evidence aliunde.

EXPLANATION: The case of Philippine National Bank v. Court of Appeals revolves around a dispute between the
Philippine National Bank (PNB), the petitioner, and Carmelo H. Flores, the private respondent. Here's an elaboration
on the facts and issues involved:

Transaction and Dispute: On July 11, 1989, Carmelo H. Flores purchased two manager's checks worth P500,000
each from PNB's Manila Pavilion Hotel unit, paying a total of P1,000,040, including service charges. PNB issued a
receipt for this amount. The following day, Flores presented these checks at PNB's Baguio Hyatt Casino unit for
encashment. PNB, however, refused to encash one of the checks immediately. After a discussion, PNB agreed to
encash one of the checks but deferred the payment of the other check. It further required Flores to break down the
deferred check into five manager's checks of P100,000 each. Additionally, PNB refused to encash one of these five
checks until it was cleared by the Manila Pavilion Hotel unit.

Subsequent Attempts for Encashment: Flores, upon his return to Manila, attempted to encash the deferred check at
PNB's Malate Branch but was unsuccessful.

PNB's Assertion: PNB argued that Flores only paid P900,000 and P40 as bank charges for the two manager's checks
worth P1,000,000. PNB insisted that the actual issue in the case was not the content of the receipt but rather the
exact amount Flores paid to PNB. PNB contended that this inquiry allowed for the presentation of evidence from
sources other than the receipt itself (aliunde evidence).

Legal Issue: The main legal issue in the case was whether the receipt issued by PNB accurately reflected the amount
paid by Flores for the two manager's checks. PNB argued that evidence beyond the receipt could be considered to
determine the actual amount paid.

Ruling: The Court of Appeals ruled in favor of Flores, holding that the receipt constituted prima facie evidence of
the amount paid by Flores for the manager's checks. The court found that PNB failed to present sufficient evidence
to rebut the presumption raised by the receipt. As a result, the court ordered PNB to honor the checks in accordance
with the amount stated in the receipt.

In summary, the case involved a dispute over the amount paid by Flores for manager's checks purchased from PNB.
PNB argued that evidence beyond the receipt could be considered to determine the actual amount paid, while Flores
relied on the receipt as prima facie evidence of the transaction. The Court of Appeals ultimately sided with Flores,
holding PNB accountable for honoring the checks based on the amount stated in the receipt.
Aliunde means from another place or outside source. It is often used to refer to evidence given aliunde when
meaning cannot be derived from a document or instrument itself.

Required:
1. Write the issue/s of the case.

 Whether the discrepancy in the amount paid by Carmelo H. Flores for the two manager’s checks
purchased from the Philippine National Bank (PNB).
 Whether the PNB’s negligence in the issuance of two manager’s checks purchased by Flores.

2. Provide the court ruling for this case and explain.

 The decision of the Court of Appeals was in favor of Flores. The Court of Appeal found out that
the bank was negligent in the issuance and encashment of the manager's checks, which led to the
loss suffered by Flores. The court held the bank liable for the damages incurred by Flores,
emphasizing the bank's failure to exercise the necessary diligence and care in handling the
financial instruments. This negligence was the primary basis for the court's decision to rule in
favor of Flores and award him damages.

(iv). BANK OF THE PHILIPPINE ISLANDS v. COURT OF APPEALS

FACTS:
Private respondent, a client of BPI, deposited in his foreign currency deposit unit (FCDU) savings account with BPI
a manager's check issued by a foreign bank payable to "cash" in the amount of USD2,500 duly endorsed by private
respondent on its dorsal side. The check apparently belonged to private respondent's friend who requested that it be
deposited in the respondent's dollar account by way of accommodation and for the purpose of clearing the same.
Private respondent acceded, and agreed to deliver to his friend 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. A third party, however, was able to
withdraw the amount of USD2,541.67 from FDCU savings account in collusion with one of the bank's employees,
using the pre-signed blank withdrawal slip even without the presentation of the passbook. BPI was subsequently
advised that the check was a counterfeit.

EXPLANATION: In the case of Bank of the Philippine Islands (BPI) v. Court of Appeals, the facts revolve around a
situation where a client of BPI, referred to as the private respondent, deposited a manager's check issued by a
foreign bank into his foreign currency deposit unit (FCDU) savings account with BPI. The check was made payable
to "cash" and amounted to USD 2,500. It's important to note that the private respondent endorsed the check on its
back.

The circumstances surrounding the deposit were somewhat complex. The check actually belonged to a friend of the
private respondent, who requested that it be deposited into the respondent's dollar account as a favor, ostensibly to
help with clearing the check. The private respondent agreed to this arrangement and even provided a signed blank
withdrawal slip to his friend. The understanding was that once the check was cleared, they would both visit the bank
to withdraw the amount, with the private respondent presenting his passbook.

However, a third party, in collusion with an employee of the bank, managed to withdraw USD 2,541.67 from the
FCDU savings account. Notably, this was accomplished using the pre-signed blank withdrawal slip, without the
requirement of presenting the passbook. Subsequently, BPI was informed that the check deposited by the private
respondent was actually a counterfeit.
This case presents several legal issues, including:

Negligence and Liability: BPI's liability for the unauthorized withdrawal hinges on whether the bank exercised due
diligence in handling the withdrawal transaction. There are questions regarding the bank's internal controls and
whether its employee colluded with the third party to facilitate the fraudulent withdrawal.

Responsibility for Losses: The dispute also concerns who should bear the losses resulting from the counterfeit check
and the unauthorized withdrawal. The private respondent might argue that the bank failed to protect his interests and
should therefore bear the loss, while the bank may contend that the private respondent's actions, such as providing a
pre-signed blank withdrawal slip, contributed to the unauthorized withdrawal.

Validity of the Endorsement: The fact that the check was endorsed by the private respondent is significant. The bank
might argue that by endorsing the check, the private respondent assumed responsibility for its validity, while the
private respondent could claim that his endorsement did not absolve the bank from its duty to verify the authenticity
of the deposited instrument.

Overall, this case raises complex legal questions regarding banking practices, customer responsibilities, and the duty
of care owed by financial institutions to their clients. The resolution would likely depend on a careful examination of
the facts, relevant banking regulations, and precedents in similar cases.
Required:

1. Write the issue/s of the case.

 Whether the bank violated its duty of care in allowing funds to be withdrawn from the private
respondent's account using a pre-signed withdrawal slip without presentation of the passbook.
 Whether the private respondent's conduct in providing a pre-signed withdrawal slip contributed to
the unauthorized withdrawal.
2. Did the bank violate any bank rules in this particular case? Discuss.
 Yes, the bank violated such rules about account verification and passbook requirements. Banks
typically have rules mandating account verification; like signatures, ID) and presentation of the
passbook for withdrawals. Accepting a pre-signed blank withdrawal slip without these
verifications could be considered a violation.
3. Provide the court ruling for this case and explain.
 The court ruling for this case was in favor of the private respondents. The bank has its duty and
responsibility to ensure legitimacy of the funds deposited into their accounts. The unauthorized
withdrawal of funds from the account constitutes a breach in this contract, for which the bank may
be held liable.