Metropolitan Bank v. Junnel's Marketing

SUPREME COURT REPORTS ANNOTATED VOLUME 867 12/16/19, 3:31 PM
G.R. No. 235511. June 20, 2018.*
METROPOLITAN BANK AND TRUST COMPANY,

petitioner, vs. JUNNELÊS MARKETING CORPORATION,
PURIFICACION DELIZO, and BANK OF COMMERCE,
respondents.
G.R. No. 235565. June 20, 2018.*
BANK OF COMMERCE, petitioner, vs. JUNNELÊS

MARKETING CORPORATION, PURIFICACION DELIZO,
and METROPOLITAN BANK AND TRUST COMPANY,
respondents.
Mercantile Law; Negotiable Instruments Law; Checks; The

instant case involves the unauthorized payment of valid checks,
i.e., the
_______________
* THIRD DIVISION.
612
612 SUPREME COURT REPORTS ANNOTATED

Metropolitan Bank and Trust Company vs. JunnelÊs
Marketing Corporation
payment of checks to persons other than the payee named

therein or his order. The subject checks herein are considered valid
http://www.central.com.ph/sfsreader/session/0000016f0d94709bd0d8455a003600fb002c009e/p/AUL173/?username=Guest Page 1 of 37
because they are complete and bear genuine signatures.·The

instant case involves the unauthorized payment of valid checks, i.e.,
the payment of checks to persons other than the payee named
therein or his order. The subject checks herein are considered valid
because they are complete and bear genuine signatures. Bank of
America is the leading jurisprudence that illustrates the respective
liabilities of a collecting bank and a drawee bank in cases of
unauthorized payment of valid checks. Notably, the facts of Bank of
America are parallel to the facts of the present case. Both Bank of
America and the present case involved crossed checks payable to
the order of a specified payee that were deposited in a
collecting bank under an account not belonging to the payee
or his indorsee but which, upon presentment, were subsequently
honored by the drawee bank.
Same; Same; Same; Bank of America held that, in cases
involving the unauthorized payment of valid checks, the drawee
bank becomes liable to the drawer for the amount of the checks but
the drawee bank, in turn, can seek reimbursement from the
collecting bank.·Bank of America held that, in cases involving the
unauthorized payment of valid checks, the drawee bank becomes
liable to the drawer for the amount of the checks but the
drawee bank, in turn, can seek reimbursement from the
collecting bank. The rationale of this rule on sequence of recovery
lies in the very basis and nature of the liability of a drawee bank
and a collecting bank in said cases. As the recent case of BDO
Unibank v. Lao explains: The liability of the drawee bank is based
on its contract with the drawer and its duty to charge to the latterÊs
accounts only those payables authorized by him. A drawee bank is
under strict liability to pay the check only to the payee or to the
payeeÊs order. When the drawee bank pays a person other than the
payee named in the check, it does not comply with the terms of the
check and violates its duty to charge the drawerÊs account only for
properly payable items. On the other hand, the liability of the
collecting bank is anchored on its guarantees as the last endorser of
the check. Under Section 66 of the Negotiable Instruments Law, an
endorser warrants „that the instrument is genuine and in all
respects what it purports to be; that he has good title to it; that all
prior parties had capacity to contract; and that the instrument is at
613
VOL. 867, JUNE 20, 2018 613

the time of his endorsement valid and subsisting.‰ It has been

repeatedly held that in check transactions, the collecting bank
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 its duty to ascertain
the genuineness of the endorsements. If any of the warranties made
by the collecting bank turns out to be false, then the drawee bank
may recover from it up to the amount of the check.
Same; Same; Same; When a drawee bank pays a person other
than the payee named on the check, it essentially commits a breach
of its obligation and renders the payment it made unauthorized.·A
drawee bank is contractually obligated to follow the explicit
instructions of its drawer-clients when paying checks issued by
them. The drawerÊs instructions · including the designation of the
payee or to whom the check should be paid · are reflected on the
face and by the terms thereof. When a drawee bank pays a person
other than the payee named on the check, it essentially commits a
breach of its obligation and renders the payment it made
unauthorized. In such cases and under normal circumstances, the
drawee bank may be held liable to the drawer for the amount
charged against the latterÊs account.
Same; Same; Same; Once an unauthorized payment on a check
has been made, the resulting liability of the drawee bank to the
drawer for such payment attaches even if the former had acted
merely upon the guarantees of a collecting bank.·The liability of
the drawee bank to the drawer in cases of unauthorized payment of
checks has been regarded in jurisprudence to be strict by nature.
This means that once an unauthorized payment on a check has
been made, the resulting liability of the drawee bank to the drawer
for such payment attaches even if the former had acted merely upon
the guarantees of a collecting bank. Indeed, it is only when the
unauthorized payment of a check had been caused or was attended
by the fault or negligence of the drawer himself can the drawee bank
be excused, whether wholly or partially, from being held liable to
the drawer for the said payment.
614

Same; Same; Same; Indorser; Collecting Bank; Words and

Phrases; A collecting or presenting bank · i.e., the bank that
receives a check for deposit and that presents the same to the drawee
bank for payment · is an indorser of such check. When a collecting
bank presents a check to the drawee bank for payment, the former
thereby assumes the same warranties assumed by an indorser of a
negotiable instrument pursuant to Section 66 of the Negotiable
Instruments Law.·A collecting or presenting bank · i.e., the bank
that receives a check for deposit and that presents the same to the
drawee bank for payment · is an indorser of such check. When a
collecting bank presents a check to the drawee bank for payment,
the former thereby assumes the same warranties assumed by an
indorser of a negotiable instrument pursuant to Section 66 of the
Negotiable Instruments Law. These warranties are: (1) that the
instrument is genuine and in all respects what it purports to be; (2)
that the indorser has good title to it; (3) that all prior parties had
capacity to contract; and (4) that the instrument is, at the time of
the indorsement, valid and subsisting. If any of the foregoing
warranties turns out to be false, a collecting bank becomes liable to
the drawee bank for payments made under such false warranty.
Here, it is clear that Bankcom had assumed the warranties of an
indorser when it forwarded the subject checks to PCHC for
presentment to Metrobank. By such presentment, Bankcom
effectively guaranteed to Metrobank that the subject checks had
been deposited with it to an account that has good title to the same.
This guaranty, however, is a complete falsity because the subject
checks were, in truth, deposited to an account that neither belongs
to the payees of the subject checks nor to their indorsees. Hence, as
the subject checks were paid under BankcomÊs false guaranty, the
latter · as collecting bank · stands liable to return the value of
such checks to Metrobank.
Same; Same; Same; Same; Jurisprudence has it that a

collecting bankÊs mere act of presenting a check for payment to the
drawee bank is itself an assertion, on the part of the former, that it
had done its duty to ascertain the validity of prior indorsements.·
Jurisprudence has it that a collecting bankÊs mere act of presenting
a check for payment to the drawee bank is itself an assertion, on the
part of the former, that it had done its duty to ascertain the validity
of prior indorsements. Hence, in Banco De Oro v. Equitable Banking
Corporation, 157 SCRA 188 (1998), we stated: Apropos the matter of
for-
615
VOL. 867, JUNE 20, 2018 615

gery in endorsements, this Court has presently succinctly

emphasized 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 its duty to ascertain
the genuineness of the endorsements. This is laid down in the
case of PNB v. National City Bank. x x x More than such
pronouncement, however, Section 17 of the PCHC Rules and
Regulations expressly provides that checks „cleared through the
PCHC‰ that do not bear the mentioned guarantees shall
nonetheless „be deemed guaranteed by the [collecting bank] as to all
prior endorsements and/or lack of endorsement‰ such that „no
drawee bank shall return any [check] received by it through clearing
by reason only of the absence or lack of such guarantee. . . as long as
there is evidence appearing on the [check] itself that the same had
been deposited with the [collecting bank] x x x.‰
Same; Same; Same; Reimbursement; The sequence of recovery in
cases of unauthorized payment of checks, however, does not
ordinarily stop with the collecting bank. In the event that it is made
to reimburse the drawee bank, the collecting bank can seek similar
reimbursement from the very persons who caused the checks to be

deposited and received the unauthorized payments.·The sequence
of recovery in cases of unauthorized payment of checks, however,
does not ordinarily stop with the collecting bank. In the event that
it is made to reimburse the drawee bank, the collecting bank can
seek similar reimbursement from the very persons who caused the
checks to be deposited and received the unauthorized payments.
Such persons are the ones ultimately liable for the unauthorized
payments and their liability rests on their absolute lack of valid
title to the checks that they were able to encash. Verily, Bankcom
ought to have a right of recourse against the persons that caused
the anomalous deposit of the subject checks and received payments
therefor. Unfortunately · as none of such persons were impleaded
in the case before us · no pronouncement as to this matter can be
made in favor of Bankcom.
PETITIONS for review on certiorari of the decision and

resolution of the Court of Appeals.
616

The facts are stated in the opinion of the Court.

Subido, Pagente, Certeza, Mendoza & Binay for
Metrobank.
Rodrigo, Berenguer & Guno for Bank of Commerce.
Suzette A. Ner for respondent JunnelÊs Marketing
Corp.
VELASCO, JR., J.:
At bench are two appeals1 assailing the Decision2 dated

22 March 2017 and Resolution3 dated 19 October 2017 of
the Court of Appeals (CA) in C.A.-G.R. CV No. 102462. The
first appeal was filed by the Metropolitan Bank and Trust
Company (Metrobank), while the second by the Bank of

Commerce (Bankcom).
The facts are as follows:
Respondent JunnelÊs Marketing Corporation (JMC) is a
domestic corporation engaged in the business of selling
wines and liquors. It has a current account with
Metrobank4 from which it draws checks to pay its different
suppliers. Among JMCÊs suppliers are Jardine Wines and
Spirits (Jardine) and Premiere Wines (Premiere).
_______________
1 Both appeals are made via a Petition for Review on Certiorari under
Rule 45 of the Rules of Court.
2 Rollo (G.R. No. 235565), pp. 39-52. The decision was penned by
Associate Justice Ramon M. Bato, Jr. for the Eleventh Division of the
Court of Appeals, with Associate Justices Manuel M. Barrios and Renato
C. Francisco, concurring.
3 Id., at pp. 54-55. The resolution was penned by Associate Justice
Ramon M. Bato, Jr. for the Former Eleventh Division of the Court of
Appeals, with Associate Justices Manuel M. Barrios and Renato C.
Francisco, concurring.
4 Specifically, Metrobank F.B. Harrison branch.
617
VOL. 867, JUNE 20, 2018 617

In 2000, during an audit of its financial records,5 JMC

discovered an anomaly involving eleven (11) checks (subject
checks) it had issued to the orders of Jardine and Premiere
on various dates between October 1998 to May 1999. As it
was, the subject checks had already been charged against
JMCÊs current account but were, for some reason, not
covered by any official receipt from Jardine or Premiere.
The subject checks, which are all crossed checks and
amounting to P1,481,292.00 in total, are as follows:
Checks Payable to the Order of Jardine:
1. Check No. 3010048953 – issued on 11 October 1998 in

the amount of P181,440.00.
2. Check No. 3010048955 – issued on 24 October 1998 in
3. Check No. 3010069098 – issued on 18 May 1999 in the
amount of P58,164.56.
7. Check No. 3010048954 – issued on 29 December 1998
in the amount of P195,840.00.
_______________
5 The idea of an audit was conceived by JMC after it received

communication from Jardine requesting for the settlement of an invoice
that · per JMCÊs records · was supposedly covered by a check it (JMC)
already issued (See Rollo [G.R. No. 235565], p. 40).
618

Checks Payable to the Order of Premiere:

3. Check No. 3010049410 – issued on 18 April 1999 in
4. Check No. 3010049150 – issued on 27 November 1998

Examination of the dorsal portion of the subject checks

revealed that all had been deposited with Bankcom, Dau
branch, under Account No. 0015-32987-7.6 Upon inquiring
with Jardine and Premiere, however, JMC was able to
confirm that neither of the said suppliers owns Bankcom
Account No. 0015-32987-7.
Meanwhile, on 30 April 2000, respondent Purificacion
Delizo (Delizo), a former accountant of JMC, executed a
handwritten letter7 addressed to one Nelvia Yusi, President
of JMC. In the said letter, Delizo confessed that, during her
time as an accountant for JMC, she stole several company
checks drawn against JMCÊs current account. She professed
that the said checks were never given to the named payees
but were forwarded by her to one Lita Bituin (Bituin).
Delizo further admitted that she, Bituin and an unknown
bank manager colluded to cause the deposit and encashing
of the stolen checks and shared in the proceeds thereof.
JMC surmised that the subject checks are among the checks
purportedly stolen by Delizo.
_______________
6 As revealed in the dorsal portion of the checks.

7 Rollo (G.R. No. 235565), p. 61.
619
VOL. 867, JUNE 20, 2018 619

On 28 January 2002, JMC filed before the Regional Trial

Court (RTC) of Pasay City a complaint for sum of money8
against Delizo, Bankcom and Metrobank. The complaint
was raffled to Branch 115 and was docketed as Civil Case
No. 02-0193.
In its complaint, JMC alleged that the wrongful conversion of

the subject checks was caused by a combination of the „tortious and
felonious‰ scheme of Delizo and the „negligent and unlawful acts‰ of
Bankcom and Metrobank, to wit:9
1. Delizo, by her own admission, stole the company

checks of JMC. Among these checks, as confirmed by
JMCÊs audit, are the subject checks.
2. After stealing the subject checks, Delizo and her
accomplices, Bituin and an unknown bank manager,
caused the subject checks to be deposited in Bankcom,
Dau branch, under Account No. 0015-32987-7.
Bankcom, on the other hand, negligently accepted the
subject checks for deposit under the said account
despite the fact that they are crossed checks payable
to the orders of Jardine and Premiere and neither of
them owns the concerned account.
3. Thereafter, Bankcom presented the subject checks for
payment to Metrobank which, also in negligence,
decided to honor the said checks even though
Bankcom Account No. 0015-32987-7 belongs to
neither Jardine nor Premiere.
On the basis of the foregoing averments, JMC prayed

that Delizo, Bankcom and Metrobank be held solidarily
liable in its favor for the amount of the subject checks.
_______________
8 Id., at pp. 56-60.

9 Id.
620

Delizo, Bankcom and Metrobank filed their individual
answers denying liability.10 Incorporated in MetrobankÊs

answer, moreover, is a cross-claim against Bankcom and
Delizo wherein Metrobank asks for the right to be
reimbursed in the event it is ordered liable in favor of
JMC.11
On 28 May 2013, the RTC rendered a decision12 holding
both Bankcom and Metrobank liable to JMC · on a 2/3 to
1/3 ratio, respectively · for the amount of subject checks
plus interest as well as attorneyÊs fees, but absolving Delizo
from any liability.13 The trial court, in the same decision,
also dismissed MetrobankÊs cross-claim against Bankcom.
The dispositive portion of the decision reads:14
WHEREFORE, judgment is rendered against defendants

[Bankcom] and [Metrobank] for the total value of the 11
checks. [Bankcom] and Metrobank are adjudged solidarily
liable to pay [JMC] at the ratios of 2/3 and 1/3, respectively:
1. The actual loss of P1,481,292 including 6% legal interest
from the filing of the complaint;
2. Plus 12% interest on the principal of P1,481,292 including
6% interest on the principal, from the date this Decision
becomes final and executory;
3. The attorneyÊs fees of 15% of the total of number one and
two above;
4. Costs against [Bankcom] and Metrobank.
MetrobankÊs cross-claim against [Bankcom] is DISMISSED,
both being negligent.
SO ORDERED.
_______________
10 Rollo (G.R. No. 235511), pp. 84-100.

11 Id., at pp. 93-94.
12 Rollo (G.R. No. 235565), pp. 220-234.
13 Id.
14 Id., at pp. 233-234.
621
VOL. 867, JUNE 20, 2018 621

The RTCÊs decision was hinged on the following

findings:15
1. The subject checks were complete and not forged.

They were, however, stolen by unknown malefactors
and were wrongfully encashed due to the negligence
of Bankcom and Metrobank.
2. DelizoÊs complicity in the acquisition and negotiation
of the subject checks was not proven. No direct
evidence linking Delizo to the deeds was presented.
Moreover, DelizoÊs supposed handwritten confession
must be discredited for being made under duress,
intimidation and threat. It was established during
trial that Delizo was only forced by Yusi to confess
about the missing checks and to execute the
handwritten confession. Hence, Delizo must be
absolved from any liability.
3. The involvement of Bankcom and Metrobank on the
wrongful encashment of the subject checks, however,
were clearly established:
a. Bankcom accepted the subject checks for deposit
under Account No. 0015-32987-7, endorsed them
and sent them for clearance with the Philippine
Clearing House Corporation (PCHC). Bankcom
did all these despite the fact that the subject
checks were all crossed checks and that Account
No. 0015-32987-7 neither belongs to Jardine nor
Premiere · the payees named in the subject
checks. In this regard, Bankcom was clearly
negligent.
b. Metrobank, on the other hand, is also negligent
for its failure to scrutinize the subject checks
before clearing and honoring them. Had
Metrobank done so, it would have noticed that
BankcomÊs ID band
_______________
15 Id., at pp. 220-234.
622

stamped at the back of the subject checks did not

contain any initials and are, therefore, defective. In this
regard, Metrobank was remiss in its duty to ensure
that the subject checks are paid only to the named
payees.
In view of the comparative negligence of Bankcom and

Metrobank, they should be held liable to JMC, on a
2/3 to 1/3 ratio, respectively, for the amount of subject
checks plus interest.
Bankcom and Metrobank filed their respective appeals

with the CA.
On 22 March 2017, the CA rendered its decision16
affirming, albeit with modification, the decision of the RTC.
The disposition of the decision reads:17
WHEREFORE, the Decision dated 28 May 2013 of the [RTC]

in Civil Case No. 02-0193 is AFFIRMED with
MODIFICATION in that: (a) the award of attorneyÊs fees is
DELETED; and (b) [Bankcom] and [Metrobank] are ordered
to pay interest at the rate of 12% per annum on the principal
of P1,481,292 including 6% interest on the principal, from the
date of the Decision (28 May 2013) until June 2013 and
6% per annum from 1 July 2013 until full satisfaction. The
Decision is affirmed in all other respects.
SO ORDERED.
The CA agreed with the RTC that Bankcom and

Metrobank should be held liable to JMC, on a 2/3 to 1/3
ratio, respectively, for the amount of subject checks. The

appellate court, however, differed with the trial court with
respect to the
_______________
16 Id., at pp. 39-52.

17 Id., at p. 52.
623
VOL. 867, JUNE 20, 2018 623

basis of MetrobankÊs liability. According to the CA, MetrobankÊs

negligence consisted, not in its inability to notice that BankcomÊs ID
band does not contain any initials, but in its failure to ascertain
that only four (4) out of the 11 subject checks were stamped by
Bankcom with the express guarantees „ALL PRIOR
ENDORSEMENTS AND/OR LACK OF ENDORSEMENT
GUARANTEED‰ and „NONNEGOTIABLE‰ as required by Section
17 of the PCHC Rules and Regulations.18
The CA also sustained the ruling of the RTC anent the
absolution of Delizo and the dismissal of MetrobankÊs cross-
claim.
Finally, the CA modified the rate of interest due on the
amount of the subject checks that was fixed by the RTC
and also deleted the RTCÊs award of attorneyÊs fees in favor
of JMC.19
Bankcom and Metrobank filed their motions for
reconsideration, but the CA remained steadfast. Hence the
present consolidated appeals.
Both Metrobank and Bankcom pray for absolution but
they differ in the arguments they raise in support of their
prayer:20
1. Metrobank posits that it should be absolved because it
had exercised absolute diligence in verifying the
genuineness of the subject checks. Metrobank argues
that the RTC erred in holding it negligent on its

failure to ascertain that only four (4) out of the 11
subject checks were stamped with BankcomÊs express
guarantees. Metrobank claims that while Section 17
of the PCHC Rules and Regulations does require all
checks cleared through the PCHC to contain the
collecting
_______________
18 Id., at pp. 39-52.

19 Id.
20 See Rollo (G.R. No. 235511), pp. 10-30; Rollo (G.R. No. 235565), pp.
10-31.
624

bankÊs express guarantees, the same provision

precludes it, as a drawee bank, to return any checks
presented to it for payment just because the same
does not contain such express guarantees „for as long
as there is evidence appearing on the cheque itself that
the same had been deposited with the [collecting]
[b]ank, e.g., PCHC machine sprayed tracer/ID band.‰
In this regard, Metrobank points out that all the
subject checks had been stamped in their dorsal
portion with PCHCÊs tracer ID for Bankcom.
Metrobank submits that, under the circumstances, it
should be Bankcom · as the last indorser of the
subject checks · that should bear the loss and be
held solely liable to JMC.
2. Bankcom, on the other hand, argues that it should be
absolved because it was never a party to the wrongful
encashment of the subject checks. It claims that
Account No. 0015-32987-7 does not exist in its system
and, therefore, denies that the subject checks were

ever deposited with it.
Bankcom proffers the view that it is JMC that should
bear the loss of the subject checks. Bankcom argues
that it was JMCÊs faulty accounting procedures which
led to the subject checks being stolen and
misappropriated.
Our Ruling
The consolidated appeals must be denied as neither

Metrobank nor Bankcom are entitled to absolution.
Be that as it may, there is a need to modify the decision
of the CA and the RTC with respect to the manner by
which Metrobank and Bankcom are held liable under the
circumstances. Instead of holding both Metrobank and
Bankcom liable to JMC in accordance with a fixed ratio, we
find that
625
VOL. 867, JUNE 20, 2018 625

the two banks should have been ordered sequentially liable

for the entire amount of the subject checks pursuant to the
seminal case of Bank of America v. Associated Citizens
Bank.21
Accordingly, we rule: (1) Metrobank liable to return to
JMC the entire amount of the subject checks plus interest
and (2) Bankcom liable to reimburse Metrobank the same
amount plus interest.
The Rule on Sequence

of Recovery in Cases of
Unauthorized Payment
of Checks; The Case of
Bank of America
The instant case involves the unauthorized payment of

valid checks, i.e., the payment of checks to persons other
than the payee named therein or his order. The subject
checks herein are considered valid because they are
complete and bear genuine signatures.
Bank of America is the leading jurisprudence that
illustrates the respective liabilities of a collecting bank and
a drawee bank in cases of unauthorized payment of valid
checks. Notably, the facts of Bank of America are parallel to
the facts of the present case. Both Bank of America and the
present case involved crossed checks payable to the
order of a specified payee that were deposited in a
collecting bank under an account not belonging to
the payee or his indorsee but which, upon presentment,
were subsequently honored by the drawee bank, thus:
1. Bank of America involved four (4) crossed checks
drawn against the Bank of America (the drawee
bank) and made payable to the order of a Miller
Offset
_______________
21 G.R. Nos. 141001 & 141018, May 21, 2009, 588 SCRA 51.
626

Press, Inc. (the designated payee). These checks were then

deposited to the Associated Citizens Bank (the collecting
bank) under a joint bank account of one Ching Uy Seng and a
certain Uy Chung Guan Seng (an account that does not
belong to the payee or its indorsee). The checks were then
presented to the Bank of America, which honored it, resulting
to loss on the part of BA Finance Corporation (the drawer.)
2. The instant case involves eleven (11) crossed checks
that were drawn against Metrobank (the drawee
bank) and made payable to the orders of Jardine and

Premiere (the designated payees). These checks were
deposited with Bankcom (the collecting bank) under
Account No. 0015-32987-7 (an account that does not
belong to either payee or their indorsees). The checks
were then presented to Metrobank, which honored it,
resulting to loss on the part of JMC (the drawer.)
Bank of America held that, in cases involving the

unauthorized payment of valid checks, the drawee bank
becomes liable to the drawer for the amount of the
checks but the drawee bank, in turn, can seek
reimbursement from the collecting bank. The
rationale of this rule on sequence of recovery lies in the
very basis and nature of the liability of a drawee bank and
a collecting bank in said cases. As the recent case of BDO
Unibank, Inc. v. Lao22 explains:
The liability of the drawee bank is based on its contract with

the drawer and its duty to charge to the latterÊs accounts only
those payables authorized by him. A drawee bank is under
strict liability to pay the check only to the payee or to the
payeeÊs order. When the drawee bank pays a person other
than the payee named in the check,
_______________
22 G.R. No. 227005, June 19, 2017, 827 SCRA 481.
627
VOL. 867, JUNE 20, 2018 627

it does not comply with the terms of the check and violates its
duty to charge the drawerÊs account only for properly payable
items.
On the other hand, the liability of the collecting bank is
anchored on its guarantees as the last endorser of the check.

Under Section 66 of the Negotiable Instruments Law, an
endorser warrants „that the instrument is genuine and in all
respects what it purports to be; that he has good title to it;
that all prior parties had capacity to contract; and that the
instrument is at the time of his endorsement valid and
subsisting.‰
It has been repeatedly held that in check transactions, the
collecting bank 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 its duty to ascertain the genuineness of
the endorsements. If any of the warranties made by the
collecting bank turns out to be false, then the drawee bank
may recover from it up to the amount of the check. (Citations
omitted)
This rule should have been applied to the case at bench.
Metrobank is Liable
to JMC
Metrobank, as drawee bank, is liable to return to JMC

the amount of the subject checks.
A drawee bank is contractually obligated to follow the
explicit instructions of its drawer-clients when paying
checks issued by them.23 The drawerÊs instructions ·
including the designation of the payee or to whom the
check should be paid
_______________
23 Bank of America, NT & SA v. Associated Citizens Bank, supra note

21.
628

· are reflected on the face and by the terms

thereof.24 When a drawee bank pays a person other than
the payee named on the check, it essentially commits a
breach of its obligation and renders the payment it made
unauthorized.25 In such cases and under normal
circumstances, the drawee bank may be held liable to the
drawer for the amount charged against the latterÊs
account.26
The liability of the drawee bank to the drawer in cases of
unauthorized payment of checks has been regarded in
jurisprudence to be strict by nature.27 This means that
once an unauthorized payment on a check has been made,
the resulting liability of the drawee bank to the drawer for
such payment attaches even if the former had acted merely
upon the guarantees of a collecting bank.28 Indeed, it is
only when the unauthorized payment of a check had been
caused or was attended by the fault or negligence of the
drawer himself can the drawee bank be excused, whether
wholly or partially, from being held liable to the drawer for
the said payment.29
In the present case, it is apparent that Metrobank had
breached JMCÊs instructions when it paid the value of the
subject checks to Bankcom for the benefit of a certain
Account No. 0015-32987-7. The payment to Account No.
0015-32987-7 was unauthorized as it was established that
the said account does not belong to Jardine or Premiere,
the payees of the subject checks, or to their indorsees. In
addition, causal or
_______________
24 Id.
25 Id.
26 Id.
27 See Bank of America, NT & SA v. Associated Citizens Bank, id.;
and Associated Bank v. Court of Appeals, G.R. Nos. 107382 and 107612,
January 31, 1996, 252 SCRA 620.
28 See Bank of America, NT & SA v. Associated Citizens Bank, id.
29 See Gempesaw v. Court of Appeals, G.R. No. 92244, February 9,
1993, 218 SCRA 682; and Bank of America NT & SA v. Philippine Racing
Club, G.R. No. 150228, July 30, 2009, 594 SCRA 301.
629
VOL. 867, JUNE 20, 2018 629

concurring negligence on the part of JMC had not been

proven. Under such circumstances, Metrobank is clearly
liable to return to JMC the amount of the subject checks.
MetrobankÊs insistence that it should be absolved for it
merely complied with Section 17 of the PCHC Rules and
Regulations and thereby only relied upon the concomitant
guarantees of Bankcom when it paid the subject checks,
cannot stand insofar as JMC is concerned. In Bank of
America, we rejected a similar argument interposed by a
drawee bank (Bank of America) precisely on the ground of
the latterÊs strict liability to its drawer (BA-Finance), viz.:30
Bank of America denies liability for paying the amount of the

four checks issued by BA-Finance to Miller, alleging that it
(Bank of America) relied on the stamps made by
Associated Bank stating that all prior endorsement
and/or lack of endorsement guaranteed, through which
Associated Bank assumed the liability of a general endorser
under Section 66 of the Negotiable Instruments Law.
Moreover, Bank of America contends that the proximate
cause of BA-Finances injury, if any, is the gross negligence
of Associated Bank which allowed Ching Uy Seng (Robert
Ching) to deposit the four checks issued to Miller in the
personal joint bank account of Ching Uy Seng and Uy Chung
Guan Seng.
We are not convinced.
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 payeeÊs order.
x x x.
xxxx
_______________
30 Bank of America, NT & SA v. Associated Citizens Bank, supra note

21.
630

In this case, the four checks were drawn by BA-Finance and

made payable to the Order of Miller Offset Press, Inc. The
checks were also crossed and issued For PayeeÊs Account
Only. Clearly, the drawer intended the check for deposit only
by Miller Offset Press, Inc. in the latterÊs bank account.
Thus, when a person other than Miller, i.e., Ching Uy
Seng, a.k.a. Robert Ching, presented and deposited the
checks in his own personal account (Ching Uy Sengs
joint account with Uy Chung Guan Seng), and the
drawee bank, Bank of America, paid the value of the
checks and charged BA-Finances account therefor, the
drawee Bank of America is deemed to have violated
the instructions of the drawer, and therefore, is liable
for the amount charged to the drawerÊs account.
(Citations omitted. Emphasis supplied)
Accordingly, we find Metrobank liable to return to JMC

the amount of the subject checks.
Bankcom is Liable
to Metrobank
While MetrobankÊs reliance upon the guarantees of

Bankcom does not excuse it from being liable to JMC, such
reliance does enable Metrobank to seek reimbursement

from Bankcom · the collecting bank.
A collecting or presenting bank · i.e., the bank that
receives a check for deposit and that presents the same to
the drawee bank for payment · is an indorser of such
check.31 When a collecting bank presents a check to the
drawee bank for payment, the former thereby assumes the
same warranties assumed by an indorser of a negotiable
instrument pursuant to Section 66 of the Negotiable
Instruments Law. These warranties are: (1) that the
instrument is genuine and in all
_______________
31 Associated Bank v. Court of Appeals, supra note 27.
631
VOL. 867, JUNE 20, 2018 631

respects what it purports to be; (2) that the indorser has

good title to it; (3) that all prior parties had capacity to
contract; and (4) that the instrument is, at the time of the
indorsement, valid and subsisting.32 If any of the foregoing
warranties turns out to be false, a collecting bank becomes
liable to the drawee bank for payments made under such
false warranty.
Here, it is clear that Bankcom had assumed the warranties of an
indorser when it forwarded the subject checks to PCHC for
presentment to Metrobank. By such presentment, Bankcom
effectively guaranteed to Metrobank that the subject checks had
been deposited with it to an account that has good title to the same.
This guaranty, however, is a complete falsity because the subject
checks were, in truth, deposited to an account that neither belongs
to the payees of the subject checks nor to their indorsees. Hence, as
the subject checks were paid under BankcomÊs false guaranty, the
latter · as collecting bank · stands liable to return the value of
such checks to Metrobank.

BankcomÊs assertion that it should be absolved as the
subject checks were allegedly never deposited with it must
fail. Such allegation is readily disproved by the fact that
the subject checks all contained, at their dorsal side, a
stamp bearing BankcomÊs tracer/ID band.33 Under the
PCHC Rules and Regulations, the stamped tracer/ID band
of Bankcom signifies that the checks had been deposited
with it and that Bankcom indorsed the said checks and
sent them to PCHC.34 As observed by the RTC:35
Record shows that the pieces of evidence presented by [JMC],

particularly the 11 subject checks were endorsed and were
allowed to be encashed by [Bankcom], as indi-
_______________
32 Section 66 of the NEGOTIABLE INSTRUMENTS LAW.

33 Rollo (G.R. No. 235565), p. 230.
34 See Section 17 of PCHC Rules and Regulations.
35 Rollo (G.R. No. 235565), p. 230.
632

cated in the dorsal portion of the checks where [PCHC]

machineÊs tracer, or the ID band of [Bankcom] was stamped.
And this stamped tracer ID band of [Bankcom] signifies that
[Bankcom] certified that the checks were deposited to
[Bankcom] and [Bankcom] endorsed these checks and sent
them to PCHC.
Neither do we find the liability of Bankcom to be

affected by the fact that only four (4) out of the eleven (11)
subject checks were actually stamped with the guarantees
„ALL PRIOR ENDORSEMENTS AND/OR LACK OF
ENDORSEMENT GUARANTEED‰ and

„NONNEGOTIABLE‰ as required under Section 17 of the
PCHC Rules and Regulations. The stamping of such
guarantees is not necessary to fix the liability of Bankcom
as an indorser for all the subject checks.
To begin with, jurisprudence has it that a collecting
bankÊs mere act of presenting a check for payment to the
drawee bank is itself an assertion, on the part of the
former, that it had done its duty to ascertain the validity of
prior indorsements. Hence, in Banco de Oro v. Equitable
Banking Corporation,36 we stated:
Apropos the matter of forgery in endorsements, this Court

has presently succinctly emphasized 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 its duty to
ascertain the genuineness of the endorsements. This is
laid down in the case of PNB v. National City Bank.
(Citations omitted. Emphasis supplied)
More than such pronouncement, however, Section 17 of

the PCHC Rules and Regulations expressly provides that
checks
_______________
36 No. L-74917, January 20, 1998, 157 SCRA 188.
633
VOL. 867, JUNE 20, 2018 633

„cleared through the PCHC‰ that do not bear the mentioned

guarantees shall nonetheless „be deemed guaranteed by the
[collecting bank] as to all prior endorsements and/or lack of
endorsement‰ such that „no drawee bank shall return any

[check] received by it through clearing by reason only of the
absence or lack of such guarantee. . . as long as there is
evidence appearing on the [check] itself that the same had
been deposited with the [collecting bank] x x x.‰ The full provision
reads:
Sec. 17. Bank Guarantee.·All checks cleared through the

PCHC shall bear the guarantee affixed thereto by the
Presenting Bank/Branch which shall read as follows:
Cleared thru the Philippine Clearing House Corporation all

prior endorsements and/or lack of endorsement guaranteed
NAME OF BANK/BRANCH BRSTN (Date of Clearing).
Checks to which said guarantee has not been affixed

shall, nevertheless, be deemed guaranteed by the
Presenting Bank as to all prior endorsement and/or
lack of endorsement.
No drawee bank shall return any cheque received by it

through clearing by reason only of the absence or lack
of such guarantee stamped at the back of said cheque,
for as long as there is evidence appearing on the
cheque itself that the same had been deposited wit
„tracer/ID band.‰ (Emphasis supplied)
In the present case, all the subject checks have been

transmitted by Bankcom to the PCHC for clearing and
presentment to Metrobank. As earlier adverted to, all of
the said checks also bear the PCHC machine sprayed
tracer/ID band of Bankcom. Such circumstances, pursuant
to prevailing banking practices as laid out under the PCHC
Rules and Regulations, are enough to fix the liability of
Bankcom as an indorser of the subject
634

checks even sans the stamp „ALL PRIOR

ENDORSEMENTS AND/OR LACK OF ENDORSEMENT
GUARANTEED‰ and „NONNEGOTIABLE.‰ As the
stamping of such guarantees are not required before the
warranties of an indorser could attach against Bankcom,
we find the latter liable to reimburse Metrobank the value
of all the subject checks.
Recourse of Bankcom
The sequence of recovery in cases of unauthorized

payment of checks, however, does not ordinarily stop with
the collecting bank. In the event that it is made to
reimburse the drawee bank, the collecting bank can seek
similar reimbursement from the very persons who caused
the checks to be deposited and received the unauthorized
payments.37 Such persons are the ones ultimately liable for
the unauthorized payments and their liability rests on
their absolute lack of valid title to the checks that they
were able to encash.
Verily, Bankcom ought to have a right of recourse
against the persons that caused the anomalous deposit of
the subject checks and received payments therefor.
Unfortunately · as none of such persons were impleaded
in the case before us · no pronouncement as to this matter
can be made in favor of Bankcom.
At this juncture, we express our concurrence to the
absolution of Delizo. The RTC and the CA were uniform in
their finding that the participation of Delizo · as the
supposed thief of the subject checks · had not been
established in this case. We reviewed the evidence on hand
and saw no cogent reason to deviate from this factual
finding.
_______________
37 See Bank of America, NT & SA v. Associated Citizens Bank, supra

note 21.
635
VOL. 867, JUNE 20, 2018 635

Doctrine of Comparative
Negligence Does Not Ap-
ply to the Instant Case
Instead of applying the rule on the sequence of recovery

to the case at bench, the RTC and the CA held both
Metrobank and Bankcom liable to JMC in accordance with
a fixed ratio. In so doing, the RTC and the CA seemingly
relied on the doctrine of comparative negligence38 as
applied in the cases of Bank of the Philippine Islands v.
Court of Appeals39 and Allied Banking Corporation v. Lim
Sio Wan.40 In both cases, the Court held the drawee bank
and collecting bank liable for the wrongful encashment of
checks under a 60% and 40% ratio.
It must be emphasized, however, that the factual
contexts of Bank of the Philippine Islands and Allied
Banking Corporation are starkly different from the instant
case:
1. Bank of the Philippine Islands involved two (2)
cashierÊs checks issued by the Bank of the
Philippine Islands (BPI) in favor of a certain Eligia
Fernando (Eligia). The checks are supposed to
represent the proceeds of a pre-terminated money
market placement of Eligia with BPI. BPI issued the
checks upon the mere phone request of a person who
introduced herself as Eligia. The checks were
subsequently de-
_______________
38 The doctrine of comparative negligence is a legal principle that

limits the extent of reparation that may be recovered by a person who is
guilty of contributory negligence. Under this doctrine, a person who is
guilty of contributory negligence, though allowed to seek recourse

against the principal tortfeasor, must nonetheless bear a portion of the
losses proportionate to the amount of his negligence. The application of
this doctrine is sanctioned in our jurisdiction by the second sentence of
Article 2179 of the Civil Code.
39 G.R. No. 102383, November 26, 1992, 216 SCRA 51.
40 G.R. No. 133179, March 27, 2008, 549 SCRA 504.
636

posited with the China Banking Corporation (CBC) under an

account that was opened by a person who identified herself as
Eligia. This person thereafter encashed the checks.
It was later established, however, that Eligia never
requested the pre-termination of her money market
placement nor opened an account with the CBC. It
was an impostor who did so.
2. Allied Banking Corporation, on the other hand,
involved a managerÊs check issued by the Allied
Banking Corporation (ABC) in favor of a certain Lim
Sio Wan (Lim). The check is supposed to represent the
proceeds of a pre-terminated money market
placement of Lim with ABC. ABC issued the checks
upon the mere phone request of a person who
introduced herself as Lim. The checks, now bearing
an indorsement of Lim, were then deposited with the
Metrobank under the account of a certain Filipinas
Cement Corporation. The checks were eventually
encashed.
It was later established, however, that Lim never
requested the pre-termination of his money market
placement and that his indorsement in the check was
forged.
A glaring peculiarity in the cases of Bank of the
Philippine Islands and Allied Banking Corporation is that

the drawee bank · which is essentially also the
drawer in the scenario · is not only guilty of
wrongfully paying a check but also of negligence in
issuing such check. Indeed, this is the very reason why
the drawee bank in the two cases were adjudged co-liable
with the collecting bank under a fixed ratio and the former
was not allowed to claim reimbursement from the latter.41
The drawee bank cannot claim that its participa-
_______________
41 Id.
637
VOL. 867, JUNE 20, 2018 637

tion in the wrongful payment of a check was merely limited to its

reliance on the guarantees of the collecting bank. In other words,
the drawee bank was held liable in its own right because it was the
one that negligently issued the checks in the first place.
That, however, is clearly not the situation in the case at
bench. Here, no negligence similar to that committed by
the drawee banks in Bank of the Philippine Islands and
Allied Banking Corporation · whether in type or in
magnitude · can be attributed to Metrobank. Metrobank,
though guilty of the unauthorized check payments, only
acted upon the guarantees deemed made by Bankcom
under prevailing banking practices. While MetrobankÊs
reliance upon the guarantees of Bankcom did not excuse it
from being answerable to JMC, such reliance does enable
Metrobank to seek reimbursement from Bankcom on the
ground of the breach in the latterÊs warranties as a
collecting bank. Under such circumstances, we cannot deny
MetrobankÊs right to seek reimbursement from Bankcom.
Hence, given the differences in the factual milieu
between this case on one hand and the cases of Bank of the
Philippine Islands and Allied Banking Corporation on the
other, we find that the doctrine of comparative negligence
cannot be applied so as to apportion the respective
liabilities of Metrobank and Bankcom. The liabilities of
Metrobank and Bankcom, as already discussed in length,
must be governed by the rule on sequential recovery
pursuant to Bank of America.
Interests
As a final matter, we also saw it fit to impose legal

interest upon the respective principal liabilities of
Metrobank and Bankcom.
638

In Nacar v. Gallery Frames,42 we laid out the following

guidelines for the imposition and computation of legal
interests:
To recapitulate and for future guidance, the

guidelines laid down in the case of Eastern Shipping
Lines are accordingly modified to embody BSP MB
Circular No. 799, as follows:
I. When an obligation, regardless of its source, i.e.,
law, contracts, quasi-contracts, delicts or quasi-delicts
is breached, the contravener can be held liable for
damages. The provisions under Title XVIII on
„Damages‰ of the Civil Code govern in determining
the measure of recoverable damages.
II. With regard particularly to an award of interest
in the concept of actual and compensatory damages,
the rate of interest, as well as the accrual thereof, is
imposed, as follows:
1. When the obligation is breached, and it

consists in the payment of a sum of
money, i.e., a loan or forbearance of money,
the interest due should be that which may
have been stipulated in writing.
Furthermore, the interest due shall itself
earn legal interest from the time it is
judicially demanded. In the absence of
stipulation, the rate of interest shall be 6% per
annum to be computed from default, i.e., from
judicial or extrajudicial demand under and
subject to the provisions of Article 1169 of the
Civil Code.
2. When an obligation, not constituting a loan
or forbearance of money, is breached, an
interest on the amount of damages
awarded may be imposed at the discretion
of the court at the rate of 6% per annum. No
interest, however, shall be adjudged on
unliquidated claims or damages, except
_______________
42 G.R. No. 189871, August 13, 2013, 703 SCRA 439.
639
VOL. 867, JUNE 20, 2018 639

when or until the demand can be established with

reasonable certainty. Accordingly, where the
demand is established with reasonable certainty,
the interest shall begin to run from the time the
claim is made judicially or extrajudicially (Art.
1169, Civil Code), but when such certainty cannot be
so reasonably established at the time the demand is
made, the interest shall begin to run only from the date
the judgment of the court is made (at which time the

quantification of damages may be deemed to have been
reasonably ascertained). The actual base for the
computation of legal interest shall, in any case, be on
the amount finally adjudged.
3. When the judgment of the court awarding a
sum of money becomes final and executory,
the rate of legal interest, whether the case
falls under paragraph 1 or paragraph 2,
above, shall be 6% per annum from such
finality until its satisfaction, this interim
period being deemed to be by then an
equivalent to a forbearance of credit.
And, in addition to the above, judgments that have

become final and executory prior to July 1, 2013, shall
not be disturbed and shall continue to be
implemented applying the rate of interest fixed
therein. (Citations omitted. Emphasis supplied)
Applying the foregoing guidelines to the case at bench,

we fix the legal interests due against Metrobank and
Bankcom thusly:
1. The liability of Metrobank to JMC consists in

returning the amount it charged against JMCÊs
current account. Current accounts, like all bank
deposits, are considered under the law as loans.43
Normally, current accounts are interest-bearing by
express con-
_______________
43 Article 1980 of the CIVIL CODE OF THE PHILIPPINES.
640

tract. However, the actual interest rate, if any, for the

current account opened by JMC with Metrobank was
not given in evidence.44
Under these circumstances, we find it proper to
subject MetrobankÊs principal liability to JMC to a
legal interest of 6% per annum from 28 January 2002
until full satisfaction.45 The date 28 January 2002 is
the date when JMC filed its complaint with the RTC.
2. The liability of Bankcom to Metrobank, on the other hand,
consists in returning the amount it was paid by
_______________
44 Confronted with a similar scenario, the case of Associated Bank v.

Court of Appeals, G.R. Nos. 107382 and 107612 ruled that the drawee
bank should just be subjected to a 6% legal interest. The pertinent
portion of the ruling reads:
The trial court made PNB and Associated Bank liable with
legal interest from March 20, 1981, the date of extrajudicial
demand made by the Province of Tarlac on PNB. The payments to
be made in this case stem from the deposits of the Province of
Tarlac in its current account with the PNB. Bank deposits are
considered under the law as loans. Central Bank Circular No. 416
prescribes a twelve percent (12%) interest per annum for loans,
forebearance of money, goods or credits in the absence of express
stipulation. Normally, current accounts are likewise interest-
bearing, by express contract, thus excluding them from the
coverage of CB Circular No. 416. In this case, however, the
actual interest rate, if any, for the current account opened
by the Province of Tarlac with PNB was not given in
evidence. Hence, the Court deems it wise to affirm the trial
courtÊs use of the legal interest rate, or six percent (6%) per
annum. The interest rate shall be computed from the date
of default, or the date of judicial or extrajudicial demand.
(Emphasis supplied)
45 See Associated Bank v. Court of Appeals, supra note 27.
641
VOL. 867, JUNE 20, 2018 641

Metrobank. This stems from a breach by Bankcom of

its warranties as a collecting bank.
Accordingly, we find it proper to subject BankcomÊs
principal liability to Metrobank to a legal interest of
6% per annum from 5 March 2003 until full
satisfaction.46 The date 5 March 2003 is the date
when Metrobank filed its answer with cross-claim
against Bankcom.
WHEREFORE, the consolidated appeals are DENIED.

The Decision dated 22 March 2017 and Resolution dated 19
October 2017 of the Court of Appeals (CA) in C.A.-G.R. CV
No. 102462 are herein MODIFIED with respect to the
individual liabilities of the Metropolitan Bank and Trust
Company and the Bank of Commerce, as follows:
1. The Metropolitan Bank and Trust Company is
adjudged liable to pay respondent JunnelÊs Marketing
Corporation the following:
a. The principal amount of P1,481,292.00, and
b. Interest on the said principal at the rate of
6% per annum from 28 January 2002 until full
satisfaction.
2. The Bank of Commerce is adjudged liable to pay the
Metropolitan Bank and Trust Company the following:
a. The principal amount of P1,481,292.00, and
b. Interest on the said principal at the rate of
6% per annum from 5 March 2003 until full
satisfaction.
Other findings and pronouncements of the Court of
Appeals in its Decision dated 22 March 2017 and
Resolution dated 19 October 2017 in C.A.-G.R. CV No.
102462 that are not contrary to this Decision
are AFFIRMED.
_______________
46 Id.
642

Costs against the Metropolitan Bank and Trust

Company and the Bank of Commerce.
SO ORDERED.
Leonen, Martires and Gesmundo, JJ., concur.

Bersamin, J., On Leave.
Petitions denied, judgment and resolution modified.
Notes.·The liability of the collecting bank is anchored

on its guarantees as the last endorser of the check. Under
Section 66 of the Negotiable Instruments Law, an endorser
war-rants „that the instrument is genuine and in all
respects what it purports to be; that he has good title to it;
that all prior parties had capacity to contract; and that the
instrument is at the time of his endorsement valid and
subsisting.‰ (BDO Unibank, Inc. vs. Lao, 827 SCRA 481
[2017])
A check therefore is subject to prescription of actions
upon a written contract. (Evangelista vs. Screenex, Inc., 845
SCRA 131 [2017])
··o0o··
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SUPREME COURT REPORTS ANNOTATED VOLUME 867 12/16/19, 3:31 PM

G.R. No. 235511. June 20, 2018.*

METROPOLITAN BANK AND TRUST COMPANY,

G.R. No. 235565. June 20, 2018.*

BANK OF COMMERCE, petitioner, vs. JUNNELÊS

Mercantile Law; Negotiable Instruments Law; Checks; The

612 SUPREME COURT REPORTS ANNOTATED

payment of checks to persons other than the payee named

because they are complete and bear genuine signatures.·The

VOL. 867, JUNE 20, 2018 613

the time of his endorsement valid and subsisting.‰ It has been

the drawer for the said payment.

614 SUPREME COURT REPORTS ANNOTATED

Same; Same; Same; Indorser; Collecting Bank; Words and

Same; Same; Same; Same; Jurisprudence has it that a

VOL. 867, JUNE 20, 2018 615

gery in endorsements, this Court has presently succinctly

reimbursement from the very persons who caused the checks to be

PETITIONS for review on certiorari of the decision and

616 SUPREME COURT REPORTS ANNOTATED

The facts are stated in the opinion of the Court.

At bench are two appeals1 assailing the Decision2 dated

Company (Metrobank), while the second by the Bank of

VOL. 867, JUNE 20, 2018 617

In 2000, during an audit of its financial records,5 JMC

Checks Payable to the Order of Jardine:

1. Check No. 3010048953 – issued on 11 October 1998 in

5 The idea of an audit was conceived by JMC after it received

618 SUPREME COURT REPORTS ANNOTATED

Checks Payable to the Order of Premiere:

1. Check No. 3010049149 – issued on 9 December 1998

4. Check No. 3010049150 – issued on 27 November 1998

Examination of the dorsal portion of the subject checks

6 As revealed in the dorsal portion of the checks.

VOL. 867, JUNE 20, 2018 619

On 28 January 2002, JMC filed before the Regional Trial

In its complaint, JMC alleged that the wrongful conversion of

1. Delizo, by her own admission, stole the company

On the basis of the foregoing averments, JMC prayed

8 Id., at pp. 56-60.

620 SUPREME COURT REPORTS ANNOTATED

Delizo, Bankcom and Metrobank filed their individual

answers denying liability.10 Incorporated in MetrobankÊs

WHEREFORE, judgment is rendered against defendants

10 Rollo (G.R. No. 235511), pp. 84-100.

VOL. 867, JUNE 20, 2018 621

Metropolitan Bank and Trust Company vs. JunnelÊs

The RTCÊs decision was hinged on the following

1. The subject checks were complete and not forged.

15 Id., at pp. 220-234.

622 SUPREME COURT REPORTS ANNOTATED

stamped at the back of the subject checks did not

In view of the comparative negligence of Bankcom and

Bankcom and Metrobank filed their respective appeals

WHEREFORE, the Decision dated 28 May 2013 of the [RTC]

The CA agreed with the RTC that Bankcom and

ratio, respectively, for the amount of subject checks. The

16 Id., at pp. 39-52.

VOL. 867, JUNE 20, 2018 623