VOL. 326, FEBRUARY 29, 2000 641: Bank of The Philippine Islands vs. Court of Appeals
VOL. 326, FEBRUARY 29, 2000 641: Bank of The Philippine Islands vs. Court of Appeals
VOL. 326, FEBRUARY 29, 2000 641: Bank of The Philippine Islands vs. Court of Appeals
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* FIRST DIVISION.
642
643
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should exercise its functions not only with the diligence of a good father of
a family but it should do so with the highest degree of care.
Same; Same; Same; Words and Phrases; “Negligence,” Explained;
Negligence is the omission to do something which a reasonable man, guided
by those considerations which ordinarily regulate the conduct of human
affairs, would do, or the doing of something which a prudent and
reasonable man would do.—–In the case at bar, petitioner, in allowing the
withdrawal of private respondent’s deposit, failed to exercise the diligence
of a good father of a family. In total disregard of its own rules, petitioner’s
personnel negligently handled private respondent’s account to petitioner’s
detriment. As this Court once said on this matter: “Negligence is the
omission to do something which a reasonable man, guided by those
considerations which ordinarily regulate the conduct of human affairs,
would do, or the doing of something which a prudent and reasonable man
would do. The seventy-eight (78)-year-old, yet still relevant, case of Picart
v. Smith, provides the test by which to determine the existence of negligence
in a particular case which may be stated as follows: Did the defendant in
doing the alleged negligent act use that reasonable care and caution which
an ordinarily prudent person would have used in the same situation? If not,
then he is guilty of negligence. The law here in effect adopts the standard
supposed to be supplied by the imaginary conduct of the discreet pater
familias of the Roman law. The existence of negligence in a given case is
not determined by reference to the personal judgment of the actor in the
situation
644
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645
YNARES-SANTIAGO, J.:
1
This is a petition for review on certiorari of the Decision of the
Court of Appeals in CA-G.R. CV No. 37392 affirming 2
in toto that of
the Regional Trial Court of Makati, Branch 139, which dismissed
the complaint filed by petitioner Bank of the Philippine Islands
against private respondent Benjamin C. Napiza for sum of money.
On September 3, 1987, private respondent deposited in Foreign3
Currency Deposit Unit (FCDU) Savings Account No. 028-187
which he maintained in petitioner bank’s Buendia Avenue Extension
4
Branch, Continental Bank Manager’s Check No. 00014757 dated
August 17, 1984, payable to “cash” in the amount of Two Thousand
Five Hundred Dollars ($2,500.00)
5
and duly endorsed by private
respondent on its dorsal side. It appears that the check belonged to a
certain Henry Chan who went to the office of private respondent and
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646
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647
“Further, please take notice that said check was deposited on September 3,
1984 and withdrawn on October 23, 1984, or a total period of fifty (50) days
had elapsed at the time of withdrawal. Also, it may not be amiss to mention
here that I merely signed an authority to withdraw said deposit subject to its
clearing, the reason why the transaction is not reflected in the passbook of
the account. Besides, I did not receive its proceeds as may be gleaned from
the withdrawal slip under the captioned signature of recipient. If at all, my
obligation on the transaction is moral in nature, which (sic) I have been and
is (sic) still exerting utmost and maximum efforts to collect from Mr. Henry
Chan who is directly liable under the circumstances.
x x x x x x x x x.”
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12 Exh. I
13 Exh. 3.
648
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649
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(a) The matters and things mentioned in subdivisions (a), (6), and (c)
of the next preceding section; and
(b) That the instrument is at the time of his indorsement, valid and
subsisting.
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651
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dishonor be duly taken, he will pay the amount thereof to the holder, or to
any subsequent indorser who may be compelled to pay it.”
Section 65, on the other hand, provides for the following warranties
of a person negotiating an instrument by delivery or by qualified
indorsement: (a) that the instrument is genuine and in all respects
what it purports to be; (b) that he has a good
15
title to it; and (c) that
16
all prior parties had capacity to contract. In People v. Maniego,
this Court described the liabilities of an indorser as follows:
“Appellant’s contention that as mere indorser, she may not be made liable
on account of the dishonor of the checks indorsed by her, is likewise
untenable. 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, i.e., ‘a person placing his signature
upon an instrument otherwise than as a maker, drawer or acceptor * * unless
he clearly indicated by appropriate words his intention to be bound in some
other capacity.’ 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, and the necessary proceedings on dishonor be duly taken, he
will pay the amount thereof to the holder, or any subsequent indorser who
may be compelled to pay it.’ Maniego may also be deemed an
‘accommodation party’ in the light of the facts, i.e., a person ‘who has
signed the instrument as maker, drawer, acceptor, or indorser, without
receiving value therefor, and for the purpose of lending his name to some
other person.’ As such, she is under the law ‘liable on the instrument to a
holder for value, notwithstanding such holder at the time of taking the
instrument knew * * (her) to be only an accommodation party,’ although she
has the right, after paying the holder, to obtain reimbursement from the
party accommodated, ‘since the relation between them is in effect that of
principal and surety, the accommodation party being the surety.”
________________
652
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17 In Town Savings and Loan Bank, Inc. v. Court of Appeals, G.R. No. 106011, 223
SCRA 459 (1993), the Court held that the accommodation parties to a promissory
note are liable for the amount of the loan notwithstanding that they were not the
actual beneficiaries of such loan as they merely signed the promissory note in order
that the party accommodated could be granted the full amount of the loan.
18 Petition, p. 7.
653
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19 Exh. G or 1.
20 Petition, p. 6.
654
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“2. All deposits will be received as current funds and will be repaid in the
same manner; provided, however, that deposits of drafts, checks, money
orders, etc. will be accepted as subject to collection only and credited to the
account only upon receipt of the notice of final payment. Collection charges
by the Bank’s foreign correspondent in effecting such collection shall be for
the account of the depositor. If the account has sufficient balance, the
collection shall be debited by the Bank against the account. If, for any
reason, the proceeds of the deposited checks, drafts, money orders, etc.,
cannot be collected or if the Bank is required to return such proceeds, the
provisional entry therefor made by the Bank in the savings passbook and its
records shall be deemed automatically cancelled regardless of the time that
has elapsed, and whether or not the defective items can be returned to the
depositor; and the Bank is hereby authorized to execute immediately the
necessary corrections, amendments or changes in its record, as well as on
the savings passbook at the first opportunity to reflect such cancellation.”
(Italics and underlining supplied.)
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22 Exh. 2-a.
23 Philippine Airlines, Inc. v. Court of Appeals, L-49188, 181 SCRA 557, 568
(1990) citing Sec. 189 of the Negotiable Instruments Law; Art. 1249, Civil Code;
Bryan Landon Co. v. American Bank, 7 Phil. 255; Tan Sunco v. Santos, 9 Phil. 44 and
21 R.C.L. 60, 61.
656
value thereon only after the drawee bank shall have paid the amount
of the check or the check has been cleared for deposit. Again, this is
in accordance with ordinary banking practices and with this Court’s
pronouncement that “the collecting bank or last endorser generally
suffers the loss because it has the duty to ascertain the genuineness
of all prior endorsements considering that the act of presenting the
check for payment to the drawee is an assertion that the party
making the presentment has done 24
its duty to ascertain the
genuineness of the endorsements.” The rule finds more meaning in
this case where the check involved is drawn on a foreign bank and
therefore collection is more difficult than when the drawee bank is
25
a
local one even though the check in question is26a manager’s check.
In Banco Atlantico v. Auditor General, Banco Atlantico, a
commercial bank in Madrid, Spain, paid the amounts represented in
three (3) checks to Virginia Boncan, the finance officer of the
Philippine Embassy in Madrid. The bank did so without previously
clearing the checks with the drawee bank, the Philippine National
Bank in New York, on account of the “special treatment” that
Boncan received from the personnel of Banco Atlantico’s foreign
department. The Court held that the encashment of the checks
without prior clearance is “contrary to normal or ordinary banking
practice specially so where the drawee bank is a foreign bank and
the amounts involved were large.” Accordingly, the Court approved
the Auditor General’s denial of Banco Atlantico’s claim for pay-
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24 Associated Bank v. Court of Appeals, 322 Phil. 677, 699-700 citing Bank of the
Philippine Islands v. Court of Appeals, G.R. No. 102383, 216 SCRA 51, 63 (1992),
Banco de Oro v. Equitable Banking Corporation, G.R. No. 74917, 157 SCRA 188
(1988) and Great Eastern Life Insurance Co. v. Hongkong and Shanghai Banking
Corporation, 43 Phil. 678.
25 A manager’s check is like a cashier’s check which, in the commercial world, is
regarded substantially to be as good as the money it represents (Tan v. Court of
Appeals, G.R. No. 108555, 239 SCRA 310, 322 [1994]).
26 L-33549, 81 SCRA 335 (1978).
657
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27 Citytrust Banking Corporation v. Intermediate Appellate Court, G.R. No. 84281, 232
SCRA 559, 564 (1994) citing Simex International (Manila), Inc. v. Court of Appeals, G.R. No.
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658
judgment of the actor in the situation before him. The law considers what
would be reckless, blameworthy, or negligent in the man 29
of ordinary
intelligence and prudence and determines liability by that.”
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29 Ibid., at p. 676.
30 Exh. A.
31 Exh. A-1.
32 Exh. A-2.
33 Exh. A-3.
34 Exh: E.
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ger than the original deposit of $750.00 and the value of the check
deposited in the amount of $2,500.00 although they had not yet
received notice from the clearing bank in the United States on
whether or not the check was funded. Reyes’ contention that after
the lapse of the 35-day period the amount of a deposited check could
be withdrawn even in the absence of a clearance thereon, otherwise
it could take36
a long time before a depositor could make a
withdrawal, is untenable. Said practice amounts to a disregard of
the clearance requirement of the banking system.
While it is true that private respondent’s having signed a blank
withdrawal slip set in motion the events that resulted in the
withdrawal and encashment of the counterfeit check, the negligence
of petitioner’s personnel was the proximate cause of the loss that
petitioner sustained. Proximate cause, which is determined by a
mixed consideration of logic, common sense, policy and precedent,
is “that cause, which, in natural and continuous sequence, unbroken
by any efficient intervening cause, produces37
the injury, and without
which the result would not have occurred.” The proximate cause of
the withdrawal and eventual loss of the amount of $2,500.00 on
petitioner’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, petitioner assumed
the risk of incurring a loss on account of a forged or counterfeit
foreign check and hence, it should suffer the resulting damage.
WHEREFORE, the petition for review on certiorari is DENIED.
The Decision of the Court of Appeals in CA-G.R. CV No. 37392 is
AFFIRMED.
SO ORDERED.
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660
—–—–o0o—–—–
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