1) BPI vs.

ROXAS
Facts:
Gregorio C. Roxas, respondent, is a trader. Sometime in March 1993, he delivered stocks of vegetable oil to spouses Rodrigo and Marissa
Cawili. As payment therefor, spouses Cawili issued a personal check in the amount of P348,805.50. However, when respondent tried to
encash the check, it was dishonored by the drawee bank. Spouses Cawili then assured him that they would replace the bounced check with
a cashiers check from the Bank of the Philippine Islands (BPI), petitioner.
On March 31, 1993, Respondent and Rodrigo Cawili went to petitioners branch at Shaw Boulevard to replace the check. The cashiers
check was drawn against the account of Marissa Cawili. Rodrigo then handed the check to respondent in front of the branch manager,
Elma. The following day, respondent returned to the same branch to encash the cashiers check but it was dishonored. Elma informed him
that Marissas account was closed on that date, April 1, 1993.
Respondent filed a complaint for sum of money against petitioner. He prayed that petitioner be ordered to pay the amount of the check,
damages, and cost of suit.
RTC: rendered judgment in favor of Roxas and orders BPI to pay Roxas.
CA: Affirmed the trial courts judgment
Issue: (1) Whether the respondent is a holder in due course; and (2) Whether the petitioner is liable to respondent for the amount of the
cashiers check.
Held:
Petition denied.
Section 52 of the Negotiable Instruments Law provides:

SEC. 52. What constitutes a holder in due course. A holder in due course is a holder who has taken the
instrument under the following conditions:
(a) That it is complete and regular upon its face;
(b)

That he became the holder of it before it was overdue and without notice that it had been previously dishonored,
if such was the fact;

(c) That he took it in good faith and for value;

(d)

That at the time it was negotiated to him, he had no notice of any infirmity in the instrument or defect in the title
of person negotiating it.

As a general rule, under the above provision, every holder is presumed prima facie to be a holder in due course. One who claims
otherwise has the onus probandi to prove that one or more of the conditions required to constitute a holder in due course are lacking. In
this case, petitioner contends that the element of value is not present, therefore, respondent could not be a holder in due course.

Petitioners contention lacks merit. Section 25 of the same law states:

SEC. 25. Value, what constitutes. Value is any consideration sufficient to support a simple contract. An antecedent or
pre-existing debt constitutes value; and is deemed as such whether the instrument is payable on demand or at a future
time.
Petitioner bank became liable to respondent from the moment it issued the cashiers check. Having been accepted by respondent, subject to
no condition whatsoever, petitioner should have paid the same upon presentment by the former.
2) Simex International (Manila) Inc. vs. Court of Appeals G.R. No. 88013, March 19, 1990

The petitioner is a private corporation engaged in the exportation of food products. It buys these products from various local
suppliers and then sells them abroad, particularly in the United States, Canada and the Middle East. Most of its exports are
purchased by the petitioner on credit.
The petitioner was a depositor of the respondent bank and maintained a checking account in its branch at Romulo Avenue,
Cubao, Quezon City. On May 25, 1981, the petitioner deposited to its account in the said bank the amount of P100,000.00,
thus increasing its balance as of that date to P190,380.74. 1 Subsequently, the petitioner issued several checks against its
deposit but was suprised to learn later that they had been dishonored for insufficient funds.
As a consequence, the California Manufacturing Corporation sent on June 9, 1981, a letter of demand to the petitioner,
threatening prosecution if the dishonored check issued to it was not made good. It also withheld delivery of the order made by
the petitioner. Similar letters were sent to the petitioner by the Malabon Long Life Trading, on June 15, 1981, and by the G.
and U. Enterprises, on June 10, 1981. Malabon also canceled the petitioner's credit line and demanded that future payments
be made by it in cash or certified check. Meantime, action on the pending orders of the petitioner with the other suppliers
whose checks were dishonored was also deferred.
The petitioner complained to the respondent bank on June 10, 1981. 3 Investigation disclosed that the sum of P100,000.00
deposited by the petitioner on May 25, 1981, had not been credited to it. The error was rectified on June 17, 1981, and the
dishonored checks were paid after they were re-deposited. 4
The petitioner then filed a complaint in the then Court of First Instance of Rizal claiming from the private respondent moral
damages in the sum of P1,000,000.00 and exemplary damages in the sum of P500,000.00, plus 25% attorney's fees, and
costs.
Trial court rendered judgment holding that moral and exemplary damages were not called for under the circumstances.
However, observing that the plaintiff's right had been violated, he ordered the defendant to pay nominal damages in the
amount of P20,000.00 plus P5,000.00 attorney's fees and costs.
Respondent court affirmed trial courts decision.
Issue: Whether the bank is guilty of negligence, which warrants SIMEX for damages
Held:
The Supreme Court feels that the award of nominal damages in the sum of P20,000.00 was not the proper relief to which the
petitioner was entitled. Under Article 2221 of the Civil Code, "nominal damages are adjudicated in order that a right of the
plaintiff, which has been violated or invaded by the defendant, may be vindicated or recognized, and not for the purpose of
indemnifying the plaintiff for any loss suffered by him." The Supreme Court found that the petitioner has indeed incurred loss
through the fault of the private respondent, the proper remedy is the award to it of moral damages, which we impose, in our
discretion, in the same amount of P20,000.00.

The depositor expects the bank to treat his account with the utmost fidelity, whether such account consists only of a few
hundred pesos or of millions. The bank must record every single transaction accurately, down to the last centavo, and as
promptly as possible. This has to be done if the account is to reflect at any given time the amount of money the depositor can
dispose of as he sees fit, confident that the bank will deliver it as and to whomever he directs. A blunder on the part of the
bank, such as the dishonor of a check without good reason, can cause the depositor not a little embarrassment if not also
financial loss and perhaps even civil and criminal litigation.
The point is that as a business affected with public interest and because of the nature of its functions, the bank is under
obligation to treat the accounts of its depositors with meticulous care, always having in mind the fiduciary nature of their
relationship. In the case at bar, it is obvious that the respondent bank was remiss in that duty and violated that relationship.
What is especially deplorable is that, having been informed of its error in not crediting the deposit in question to the petitioner,
the respondent bank did not immediately correct it but did so only one week later or twenty-three days after the deposit was
made.

3) BANK OF THE PHILIPPINE ISLANDSvs.HON. COURT OF APPEALS, EASTERN PLYWOOD CORP. and BENIGNO D. LIMG.R. No.
104612May 10, 199
Facts:

Private respondents Eastern Plywood Corporation (Eastern) and

Benigno D. Lim (Lim), an officer and stockholder of Eastern, held at least one joint bank account with the Commercial
Bank and Trust Co. (CBTC), the predecessor-in-interest of petitioner Bank of the Philippine Islands (BPI). Sometime in
March 1975, a joint checking account with Lim in the amount of P120,000.00 was opened by Mariano Velasco with
funds withdrawn from the account of Eastern and/or Lim. Various amounts were later deposited or withdrawn from the
joint account of Velasco and Lim. The money therein was placed in the money market.
Velasco died on 7 April 1977. At the time of his death, the outstanding balance of the account stood at P662,522.87. On
5 May 1977, by virtue of an Indemnity Undertaking executed by Lim for himself and as President and General Manager
of Eastern, 2 one-half of this amount was provisionally released and transferred to one of the bank accounts of Eastern with
CBTC. 3
Thereafter, on 18 August 1978, Eastern obtained a loan of P73,000.00 from CBTC as "Additional Working Capital,"
evidenced by the "Disclosure Statement on Loan/Credit Transaction.

4) PNB VS. San Miguel Corp

facts:
On July 1, 1996, respondent San Miguel Corporation (SMC, for brevity) entered into an Exclusive Dealership Agreement with a
certain Rodolfo R. Goroza (Goroza, hereafter), wherein the latter was given by SMC the right to trade, deal, market or otherwise
sell its various beer products. Goroza applied for and issued an initial credit line of two million pesos, and started selling SMCs
beer products.
On February 11, 1997, Goroza applied for an additional credit line with the PNB, which the latter also granted, in the amount not
exceeding two million four hundred thousand pesos (P2,400,000.00), making his total credit line with PNB reached four million
four hundred thousand pesos (P4,400,000.00) x x x. Initially, Goroza was able to pay his credit purchases with SMC x x x.
Sometime in January 1998, however, Goroza started to become delinquent with his accounts.
Demands to pay the amount of three million seven hundred twenty-two thousand four hundred forty pesos and 88/100
(P3,722,440.88) were made by SMC against Goroza and PNB, but neither of them paid. Thus, on April 23, 2003, SMC filed a
Complaint for collection of sum of money against PNB and Goroza with the respondent Regional Trial Court Branch 3, Butuan City

Aftersummons,petitionerPNBfileditsanswerwhileGorozadidnot.UponSMCsMotiontoDeclare
Defendantindefault,Gorozawasdeclaredindefault.TrialproceededinsofarasGorozawas
Concerned.theRTCrendereditsdecisioninfavourofSMC,orderingdefendantRodolfoGorozatopaySMCtheprincipalamountof
P3,722,440.00,legalinterestof12%perannum,litigationexpensesP20,000andattorneysfeeofP30,000.GorozafiledaNoticeof
Appeal,whileSMCfiledaMotionforReconsideration.
PNBfiledan
UrgentMotiontoTerminateProceedingsonthegroundthatadecisionwasalreadyrenderedonMay
10,2005findingGorozasolelyliable.
Issue:Whetherornotthecourtofappealserredinholdingthatproceedingsmaycontinueagainstpnbdespitethecompleteadjudicationof
reliefinfavorofsmc.
Held:
theappealofGoroza,assailingthejudgmentoftheRTCfindinghimliable,willnotpreventthecontinuationoftheongoingtrialbetween
SMCandPNB.TheRTCretainsjurisdictioninsofarasPNBisconcerned,becausetheappealmadebyGorozawasonlywithrespectto
hisownliability.Infact,PNBitself,initsReplytorespondent'sComment,admittedthattheMay10,2005judgmentoftheRTCwas
"decidedsolelyagainstdefendantRodolfoGoroza."

By definition, a letter of credit is a written instrument whereby the writer requests or authorizes the addressee to pay
money or deliver goods to a third person and assumes responsibility for payment of debt therefor to the addressee. A
letter of credit, however, changes its nature as different transactions occur and if carried through to completion ends up
as a binding contract between the issuing and honoring banks without any regard or relation to the underlying contract
or disputes between the parties thereto.
xxxx

Thus, the engagement of the issuing bank is to pay the seller or beneficiary of the credit once the draft and the required
documents are presented to it. The so-called "independence principle" assures the seller or the beneficiary of prompt
payment independent of any breach of the main contract and precludes the issuing bank from determining whether the
main contract is actually accomplished or not. Under this principle, banks assume no liability or responsibility for the
form, sufficiency, accuracy, genuineness, falsification or legal effect of any documents, or for the general and/or
particular conditions stipulated in the documents or superimposed thereon, nor do they assume any liability or
responsibility for the description, quantity, weight, quality, condition, packing, delivery, value or existence of the goods
represented by any documents, or for the good faith or acts and/or omissions, solvency, performance or standing of the
consignor, the carriers, or the insurers of the goods, or any other person whomsoever.
xxxx
As discussed above, in a letter of credit transaction, such as in this case, where the credit is stipulated as irrevocable,
there is a definite undertaking by the issuing bank to pay the beneficiary provided that the stipulated documents are
presented and the conditions of the credit are complied with. Precisely, the independence principle liberates the issuing
bank from the duty of ascertaining compliance by the parties in the main contract. As the principle's nomenclature
clearly suggests, the obligation under the letter of credit is independent of the related and originating contract. In brief,
the letter of credit is separate and distinct from the underlying transaction.
27

In other words, PNB cannot evade responsibility on the sole ground that the RTC judgment found Goroza liable and
ordered him to pay the amount sought to be recovered by SMC. PNB's liability, if any, under the letter of credit is yet to
be determined.

5) Lim vs. BDO Unibank

6) Westmont Bank vs. Ong
7) United coconut planters bank vs. Ramos