Ramon Tan deposited a cashier's check into his account with Rizal Commercial Banking Corporation (RCBC). RCBC erroneously sent the check for clearing to the Central Bank, where it was returned. RCBC then debited Tan's account for the amount, without informing him. Tan subsequently issued checks that bounced due to insufficient funds. Tan sued RCBC for damages. The trial court ruled in Tan's favor but the Court of Appeals reversed. The Supreme Court held that the Court of Appeals erred in concluding RCBC was not negligent, as RCBC had failed in its duty to properly handle the cashier's check and notify Tan of the error. A cashier's check is generally viewed as good as cash in
Ramon Tan deposited a cashier's check into his account with Rizal Commercial Banking Corporation (RCBC). RCBC erroneously sent the check for clearing to the Central Bank, where it was returned. RCBC then debited Tan's account for the amount, without informing him. Tan subsequently issued checks that bounced due to insufficient funds. Tan sued RCBC for damages. The trial court ruled in Tan's favor but the Court of Appeals reversed. The Supreme Court held that the Court of Appeals erred in concluding RCBC was not negligent, as RCBC had failed in its duty to properly handle the cashier's check and notify Tan of the error. A cashier's check is generally viewed as good as cash in
Ramon Tan deposited a cashier's check into his account with Rizal Commercial Banking Corporation (RCBC). RCBC erroneously sent the check for clearing to the Central Bank, where it was returned. RCBC then debited Tan's account for the amount, without informing him. Tan subsequently issued checks that bounced due to insufficient funds. Tan sued RCBC for damages. The trial court ruled in Tan's favor but the Court of Appeals reversed. The Supreme Court held that the Court of Appeals erred in concluding RCBC was not negligent, as RCBC had failed in its duty to properly handle the cashier's check and notify Tan of the error. A cashier's check is generally viewed as good as cash in
Ramon Tan deposited a cashier's check into his account with Rizal Commercial Banking Corporation (RCBC). RCBC erroneously sent the check for clearing to the Central Bank, where it was returned. RCBC then debited Tan's account for the amount, without informing him. Tan subsequently issued checks that bounced due to insufficient funds. Tan sued RCBC for damages. The trial court ruled in Tan's favor but the Court of Appeals reversed. The Supreme Court held that the Court of Appeals erred in concluding RCBC was not negligent, as RCBC had failed in its duty to properly handle the cashier's check and notify Tan of the error. A cashier's check is generally viewed as good as cash in
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G.R. No.
108555 December 20, 1994
RAMON TAN, petitioner, vs. THE HONORABLE COURT OF APPEALS and RIZAL COMMERCIAL BANKING CORPORATION
FACTS:
Petitioner Ramon Tan had maintained Current Account with respondent bank. To avoid carrying cash while enroute to Manila, he secured a Cashier's Check payable to his order. He deposited the check in his account with RCBC Binondo. RCBC erroneously sent the same cashier's check for clearing to the Central Bank which was returned for having been "missent" or "misrouted." RCBC debited the amount covered by the same cashier's check from the account of the petitioner. Respondent bank at this time had not informed the petitioner of its action. Petitioner issued two (2) personal checks. Check in the name of MS Development Trading Corporation was returned twice for insufficiency of funds.
Petitioner, alleging to have suffered humiliation and loss of face in the business sector due to the bounced checks, filed a complaint against RCBC for damages.
Petitioner sought to prove that it was RCBC's responsibility to call his attention there and then that he had erroneously filled the wrong deposit slip and it was negligence on RCBC's part not to have done
RCBC disowning any negligence, put the blame for the "misrouting" on the petitioner for using the wrong check deposit slip.
The trial court rendered in petitioner's favor. The CA reversed the decision of the trial court.
ISSUE: Whether THE HONORABLE COURT OF APPEALS COMMITTED GROSS AND MANIFEST ERROR IN CONCLUDING THAT THE NEGLIGENCE WAS ASCRIBABLE TO HEREIN PETITIONER.
HELD:
YES. The Court do not subscribe to RCBC's assertion that petitioner's use of the wrong deposit slip was the proximate cause of the clearing fiasco and so, petitioner must bear the consequence. The conclusion is inevitable that respondent RCBC had been remiss in the performance of its duty and obligation to its client, as well as to itself.
An ordinary check is not a mere undertaking to pay an amount of money. There is an element of certainty or assurance that it will be paid upon presentation that is why it is perceived as a convenient substitute for currency in commercial and financial transactions.
What was presented for deposit in the instant cases was not just an ordinary check but a cashier's check payable to the account of the depositor himself. A cashier's check by its peculiar character and general use in the commercial world is regarded substantially to be as good as the money which it represents. In this case, therefore, PCIB by issuing the check created an unconditional credit in favor of any collecting bank.
All these considered, petitioner's reliance on the layman's perception that a cashier's check is as good as cash is not entirely misplaced, as it is rooted in practice, tradition, and principle.
