L-15126
November 30, 1961
VICENTE R. DE OCAMPO & CO., plaintiff-appellee,
vs.
ANITA GATCHALIAN, ET AL., defendants-appellants.
Vicente Formoso, Jr. for plaintiff-appellee.
Reyes and Pangalagan for defendants-appellants.
LABRADOR, J.:
Appeal from a judgment of the Court of First Instance of
Manila, Hon. Conrado M. Velasquez, presiding, sentencing the
defendants to pay the plaintiff the sum of P600, with legal
interest from September 10, 1953 until paid, and to pay the
costs.
The action is for the recovery of the value of a check for P600
payable to the plaintiff and drawn by defendant Anita C.
Gatchalian. The complaint sets forth the check and alleges
that plaintiff received it in payment of the indebtedness of one
Matilde Gonzales; that upon receipt of said check, plaintiff
gave Matilde Gonzales P158.25, the difference between the
face value of the check and Matilde Gonzales' indebtedness.
The defendants admit the execution of the check but they
allege in their answer, as affirmative defense, that it was
issued subject to a condition, which was not fulfilled, and that
plaintiff was guilty of gross negligence in not taking steps to
protect itself.
At the time of the trial, the parties submitted a stipulation of
facts, which reads as follows:
Plaintiff and defendants through their respective
undersigned attorney's respectfully submit the
following Agreed Stipulation of Facts;
First. That on or about 8 September 1953, in the
evening, defendant Anita C. Gatchalian who was then
interested in looking for a car for the use of her
husband and the family, was shown and offered a car
by Manuel Gonzales who was accompanied by Emil
Fajardo, the latter being personally known to
defendant Anita C. Gatchalian;
Second. That Manuel Gonzales represented to
defend Anita C. Gatchalian that he was duly
authorized by the owner of the car, Ocampo Clinic, to
look for a buyer of said car and to negotiate for and
accomplish said sale, but which facts were not known
to plaintiff;
Third. That defendant Anita C. Gatchalian, finding
the price of the car quoted by Manuel Gonzales to
her satisfaction, requested Manuel Gonzales to bring
the car the day following together with the certificate
of registration of the car, so that her husband would
be able to see same; that on this request of
defendant Anita C. Gatchalian, Manuel Gonzales
advised her that the owner of the car will not be
willing to give the certificate of registration unless
there is a showing that the party interested in the
purchase of said car is ready and willing to make
such purchase and that for this purpose Manuel
Gonzales requested defendant Anita C. Gatchalian to
give him (Manuel Gonzales) a check which will be
shown to the owner as evidence of buyer's good faith
in the intention to purchase the said car, the said
check to be for safekeeping only of Manuel Gonzales
and to be returned to defendant Anita C. Gatchalian
the following day when Manuel Gonzales brings the
car and the certificate of registration, but which facts
were not known to plaintiff;
Fourth. That relying on these representations of
Manuel Gonzales and with his assurance that said
check will be only for safekeeping and which will be
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DECISION
QUISUMBING, J.:
For review on certiorari is the decision[1] of the Court of
Appeals, dated March 25, 1999, in CA-G.R. CV No. 52398,
which affirmed with modification the joint decision of the
Regional Trial Court (RTC) of Pasay City, Branch 117, dated
July 4, 1995, in Civil Cases Nos. 5479[2] and 5492.[3] The trial
court dismissed the complaint against herein respondents Far
East Bank & Trust Company (FEBTC), Equitable Banking
Corporation
(Equitable),
and
Philippine
Commercial
International Bank (PCIB) and ruled in favor of respondent
Fernando David as to the proceeds of the two cashiers checks,
including the earnings thereof pendente lite. Petitioner Cely
Yang was ordered to pay David moral damages
of P100,000.00 and attorneys fees also in the amount
of P100,000.00.
The facts of this case are not disputed, to wit:
On or before December 22, 1987, petitioner Cely Yang
and private respondent Prem Chandiramani entered into an
agreement whereby the latter was to give Yang a PCIB
managers check in the amount of P4.2 million in exchange for
two (2) of Yangs managers checks, each in the amount
of P2.087 million, both payable to the order of private
respondent Fernando David. Yang and Chandiramani agreed
that the difference of P26,000.00 in the exchange would be
their profit to be divided equally between them.
Yang and Chandiramani also further agreed that the
former would secure from FEBTC a dollar draft in the amount
of US$200,000.00, payable to PCIB FCDU Account No. 419501165-2, which Chandiramani would exchange for another
dollar draft in the same amount to be issued by Hang Seng
Bank Ltd. of Hong Kong.
Accordingly, on December 22, 1987, Yang procured the
following:
a) Equitable Cashiers Check No. CCPS 14-009467 in
the sum of P2,087,000.00, dated December
22, 1987, payable to the order of Fernando
David;
b) FEBTC Cashiers Check No. 287078, in the
amount of P2,087,000.00, dated December
22, 1987, likewise payable to the order of
Fernando David; and
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instant case, the payee did not negotiate further the checks in
question but promptly deposited them in his bank account.
The Negotiable Instruments Law is silent with respect to
crossed checks, although the Code of Commerce [23] makes
reference to such instruments. Nonetheless, this Court has
taken judicial cognizance of the practice that a check with two
parallel lines in the upper left hand corner means that it could
only be deposited and not converted into cash.[24] The effects
of crossing a check, thus, relates to the mode of payment,
meaning that the drawer had intended the check for deposit
only by the rightful person, i.e., the payee named therein.
In Bataan Cigar, the rediscounting of the check by the payee
knowingly violated the avowed intention of crossing the
check. Thus, in accepting the cross checks and paying cash
for them, despite the warning of the crossing, the subsequent
holder could not be considered in good faith and thus, not a
holder in due course. Our ruling in Bataan Cigar reiterates that
in De Ocampo & Co. v. Gatchalian.[25]
PARAS, J.:
This is an appeal by certiorari from the decision of the then
Intermediate Appellate Court (IAC for short), now the Court of
Appeals (CA) in AC-G.R. S.P. 04710, dated Jan. 22, 1985, which
dismissed the petition for certiorari and prohibition filed by
Marcelo A. Mesina against the trial court in Civil Case No. 8422515. Said case (an Interpleader) was filed by Associated
Bank against Jose Go and Marcelo A. Mesina regarding their
conflicting claims over Associated Bank Cashier's Check No.
011302 for P800,000.00, dated December 29, 1983.
Briefly, the facts and statement of the case are as follows:
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Page 10 of 55
June 4, 2014
Page 11 of 55
was not a holder in due course; and (6) by reason of the bad
faith in the dealings between the respondents, he is entitled
to claim for damages.
The Issues
Page 12 of 55
ATTY. DE VERA: Did you give Nap Gutierrez any Special Power
of Attorney in writing authorizing him to borrow using your
money?
WITNESS: No, sir. (T.S.N., Alvin Patrimonio, Nov. 11, 1999, p.
105)8
xxxx
Marasigan however submits that the petitioners acts of presigning the blank checks and releasing them to Gutierrez
suffice to establish that the petitioner had authorized
Gutierrez to fill them out and contract the loan in his behalf.
Marasigans submission fails to persuade us.
In the absence of any authorization, Gutierrez could not enter
into a contract of loan in behalf of the petitioner. As held in
Yasuma v. Heirs of De Villa, 9 involving a loan contracted by de
Villa secured by real estate mortgages in the name of East
Cordillera Mining Corporation, in the absence of an SPA
conferring authority on de Villa, there is no basis to hold the
corporation liable, to wit:
The power to borrow money is one of those cases where
corporate officers as agents of the corporation need a special
power of attorney. In the case at bar, no special power of
attorney conferring authority on de Villa was ever presented.
x x x There was no showing that respondent corporation ever
authorized de Villa to obtain the loans on its behalf.
xxxx
Therefore, on the first issue, the loan was personal to de Villa.
There was no basis to hold the corporation liable since there
was no authority, express, implied or apparent, given to de
Villa to borrow money from petitioner. Neither was there any
subsequent ratification of his act.
xxxx
The liability arising from the loan was the sole indebtedness of
de Villa (or of his estate after his death). (citations omitted;
emphasis supplied).
This principle was also reiterated in the case of Gozun v.
Mercado,10 where this court held:
Petitioner submits that his following testimony suffices to
establish that respondent had authorized Lilian to obtain a
loan from him.
Page 13 of 55
xxxx
Petitioners testimony failed to categorically state, however,
whether the loan was made on behalf of respondent or of his
wife. While petitioner claims that Lilian was authorized by
respondent, the statement of account marked as Exhibit "A"
states that the amount was received by Lilian "in behalf of
Mrs. Annie Mercado.
It bears noting that Lilian signed in the receipt in her name
alone, without indicating therein that she was acting for and in
behalf of respondent. She thus bound herself in her personal
capacity and not as an agent of respondent or anyone for that
matter.
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xxxx
A: No, sir.
Q: Did you authorize anyone including Nap Gutierrez to write
the figure P200,000 in this check?
A: No, sir.
Q: And lastly, did you authorize anyone including Nap
Gutierrez to write the words P200,000 only xx in this check?
A: No, sir. (T.S.N., Alvin Patrimonio, November 11, 1999). 24
Notably, Gutierrez was only authorized to use the check for
business expenses; thus, he exceeded the authority when he
used the check to pay the loan he supposedly contracted for
the construction of petitioner's house. This is a clear violation
of the petitioner's instruction to use the checks for the
expenses of Slam Dunk. It cannot therefore be validly
concluded that the check was completed strictly in
accordance with the authority given by the petitioner.
Considering that Marasigan is not a holder in due course, the
petitioner can validly set up the personal defense that the
blanks were not filled up in accordance with the authority he
gave. Consequently, Marasigan has no right to enforce
payment against the petitioner and the latter cannot be
obliged to pay the face value of the check.
WHEREFORE, in view of the foregoing, judgment is hereby
rendered GRANTING the petitioner Alvin Patrimonio's petition
for review on certiorari. The appealed Decision dated
September 24, 2008 and the Resolution dated April 30, 2009
Page 16 of 55
DECISION
QUISUMBING, Acting C.J.:
This appeal prays for the reversal of the
Decision[1] dated January 23, 2003 and the Resolution[2] dated
May 14, 2003 of the Court of Appeals in CA-G.R. CR No.
23802.The appellate court affirmed with modification the
Decision[3] dated November 17, 1999 of the Regional Trial
Court (RTC), Branch 82 of Quezon City, which had convicted
petitioner John Dy of two counts of estafa in Criminal Cases
Nos. Q-93-46711 and Q-93-46713, and two counts of violation
of Batas Pambansa Bilang 22[4] (B.P. Blg. 22) in Criminal Cases
Nos. Q-93-46712 and Q-93-46714.
The facts are undisputed:
Since 1990, John Dy has been the distributor of W.L.
Food Products (W.L. Foods) in Naga City, Bicol, under the
business name Dyna Marketing. Dy would pay W.L. Foods in
either cash or check upon pick up of stocks of snack foods at
the latters branch or main office in Quezon City. At times, he
would entrust the payment to one of his drivers.
On June 24, 1992, Dys driver went to the branch
office of W.L. Foods to pick up stocks of snack foods. He
introduced himself to the checker, Mary Jane D. Maraca, who
upon confirming Dys credit with the main office, gave him
merchandise worth P106,579.60. In return, the driver handed
her a blank Far East Bank and Trust Company (FEBTC) Check
with Check No. 553602 postdated July 22, 1992. The check
was signed by Dy though it did not indicate a specific amount.
Yet again, on July 1, 1992, the same driver obtained
snack foods from Maraca in the amount of P226,794.36 in
exchange for a blank FEBTC Check with Check No. 553615
postdated July 31, 1992.
In both instances, the driver was issued an unsigned
delivery receipt. The amounts for the purchases were filled in
later by Evelyn Ong, accountant of W.L. Foods, based on the
value of the goods delivered.
When presented for payment, FEBTC dishonored the
checks for insufficiency of funds. Raul D. Gonzales, manager
of FEBTC-Naga Branch, notified Atty. Rita Linda Jimeno,
counsel of W.L. Foods, of the dishonor. Apparently, Dy only
had an available balance of P2,000 as of July 22, 1992 and
July 31, 1992.
Later,
Gonzales
sent
Atty.
Jimeno
another
letter[5] advising her that FEBTC Check No. 553602
for P106,579.60 was returned to the drawee bank for the
reasons stop payment order and drawn against uncollected
deposit (DAUD), and not because it was drawn against
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maker. From such possession, together with the fact that the
instrument is wanting in a material particular, the law
presumes agency to fill up the blanks.[17] Because of this, the
burden of proving want of authority or that the authority
granted was exceeded, is placed on the person questioning
such authority.[18] Petitioner failed to fulfill this requirement.
Next,
petitioner
claims
failure
of
consideration. Nevertheless, in a letter[19] dated November 10,
1992, he expressed willingness to pay W.L. Foods, or to
replace
the
dishonored
checks. This
was
a
clear
acknowledgment of receipt of the goods, which gave rise to
his duty to maintain or deposit sufficient funds to cover the
amount of the checks.
More significantly, we are not swayed by petitioners
arguments that the single incident of dishonor and his
absence when the checks were delivered belie fraud. Indeed
damage and deceit are essential elements of the offense and
must be established with satisfactory proof to warrant
conviction.[20] Deceit as an element of estafa is a specie of
fraud. It
is
actual
fraud
which
consists
in
any
misrepresentation or contrivance where a person deludes
another, to his hurt. There is deceit when one is misled -- by
guile, trickery or by other means -- to believe as true what is
really false.[21]
Prima facie evidence of deceit was established
against petitioner with regard to FEBTC Check No. 553615
which was dishonored for insufficiency of funds. The
letter[22]of petitioners counsel dated November 10, 1992
shows beyond reasonable doubt that petitioner received
notice of the dishonor of the said check for insufficiency of
funds. Petitioner, however, failed to deposit the amounts
necessary to cover his check within three banking days from
receipt of the notice of dishonor. Hence, as provided for by
law,[23] the presence of deceit was sufficiently proven.
Petitioner failed to overcome the said proof of
deceit. The trial court found no pre-existing obligation
between the parties. The existence of prior transactions
between Lim and Dy alone did not rule out deceit because
each transaction was separate, and had a different
consideration from the others. Even as petitioner was absent
when the goods were delivered, by the principle of agency,
delivery of the checks by his driver was deemed as his act
as the employer. The evidence shows that as a matter of
course, Dy, or his employee, would pay W.L. Foods in either
cash or check upon pick up of the stocks of snack foods at
the latters branch or main office. Despite their two-year
standing business relations prior to the issuance of the
subject check, W.L Foods employees would not have parted
with the stocks were it not for the simultaneous delivery of
the check issued by petitioner. [24] Aside from the existing
business relations between petitioner and W.L. Foods, the
primary inducement for the latter to part with its stocks of
snack foods was the issuance of the check in payment of the
value of the said stocks.
In a number of cases, [25] the Court has considered
good faith as a defense to a charge of estafa by postdating a
check. This good faith may be manifested by making
arrangements for payment with the creditor and exerting best
efforts to make good the value of the checks. In the instant
case petitioner presented no proof of good faith.Noticeably
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Cost of suit.
SO ORDERED.[7]cralaw
Aggrieved, the spouses brought their case to the Court of
Appeals where the Regional Trial Court's judgment was
affirmed, to wit:
WHEREFORE, with the sole modification that the award for
attorney's fee[s] is hereby eliminated, the Judgment appealed
from is in all other respects AFFIRMED, with the costs of this
instance to be taxed against the defendants-appellants.
SO ORDERED.[8]cralaw
Before us now are the following issues: (1) Are the spouses
liable for issuing Security Bank and Trust Company Check No.
027836? (2) Did the Court of Appeals err in upholding the
propriety of the civil case that was instituted separately from
the BP 22 case?
To justify their prayer for a reversal of the Court of Appeals'
decision, the spouses insist that there are special and
important reasons present in the case which constitute a
question of law and there was a misapprehension of facts
committed by the Court of Appeals which must be rectified.
Petitioners maintain that any obligation arising from Security
Bank and Trust Company Check No. 027836 is invalid and
illegal since the same was issued in blank except for the
signature of Milagros Ojeda. They further claim that they
already paid P55,000 to satisfy their obligation to Orbeta of
P30,000 only. The couple also aver that the motion of Orbeta
to file a separate civil action was merely noted by the
Regional Trial Court in the BP 22 case and there was no order
granting the institution of a separate civil action.
3. To pay costs.
The decision was promulgated in open Court this morning in
the presence of the accused herself, Assistant City Prosecutor
Perpetuo LB Alonzo and Atty. Renerio S. Payumo.
SO ORDERED.
Page 22 of 55
full blown trial had been conducted without the said issue
having been raised by the spouses, hence, they are barred
from doing so, since they are considered to have waived any
objection they may have had on the subject. Finally, Orbeta
points out that the judgment in the BP 22 case did not contain
an award for civil liability which is tantamount to the Regional
Trial Court's approval of the motion.[9]cralaw
To resolve the first issue, we must here emphasize that the
jurisdiction of this Court in a petition such as this is limited to
reviewing errors of law that might have been committed by
the lower court. The allegation of the spouses that Security
Bank and Trust Company Check No. 027836 was delivered to
Orbeta in blank except for the signature of Milagros Ojeda and
the amount of P10,000 annotated at the back of the check,
and their contention that they cannot be held liable for the
face value of the check since Milagros Ojeda was not the one
who filled up the date, name of the payee and the amount
appearing on the check, are questions of fact that require us
to re-examine the evidence presented by the contending
parties during trial. This cannot be done in a petition for
review. Under Rule 45, only questions of law may be raised in
a petition for review, except in very few specified
instances, e.g.where there is variance in the factual findings
of the trial and appellate courts. Since both the Regional Trial
Court and the Court of Appeals agree on the cited facts, we
are bound by their factual findings.
In any event, the spouses do not deny that the check was
delivered to Orbeta and that the signature appearing on the
check belongs to Milagros Ojeda. Even if the check was
delivered to Orbeta in blank, we must stress that the
presumption is that the latter had prima facie authority to
complete the check by filling up the same. Here, the provision
of Section 14 of the Negotiable Instruments Law is pertinent:
SEC. 14. Blanks; when may be filled. - Where the instrument is
wanting in any material particular, the person in
possession thereof has a prima facie authority to
complete it by filling up the blanks therein. And a
signature on a blank paper delivered by the person making
the signature in order that the paper may be converted into a
negotiable instrument operates as a prima facieauthority to
fill it up as such for any amount. In order, however, that any
such instrument, when completed may be enforced against
any person who became a party thereto prior to its
completion, it must be filled up strictly in accordance with the
authority given and within a reasonable time. But if any such
instrument, after completion, is negotiated to a holder in due
course, it is valid and effectual for all purposes in his hands,
and he may enforce it as if it had been filled up strictly in
accordance with the authority given and within a reasonable
time. (Emphasis supplied.)
stance that they cannot be held liable for the check because
they were not the ones who wrote the date, the name of the
payee and the amount, is untenable.
On the second issue, it appears that an urgent motion to file a
separate civil action was filed by Orbeta on October 11, 1990,
which motion was correspondingly noted by the Regional Trial
Court in its decision.[12]cralaw Since the civil liability involved
in this case is one that arises from a crime, the rule is that the
same is impliedly instituted with the criminal action unless the
offended party expressly waives the civil action; reserves his
right to institute it separately; or institutes the civil action
prior to the filing of the criminal case. [13]cralaw The purpose of
the rule requiring reservation is to prevent the offended party
from recovering damages twice for the same act or omission.
[14]
cralaw
Orbeta's intention to reserve her right to recover the civil
liability arising from the BP 22 case is clear from the time she
filed the urgent motion.[15]cralaw The fact that the Regional
Trial Court did not provide for an award of damages in its
decision is also a clear recognition of Orbeta's reservation.
Contrary to the spouses' argument, an order by the Regional
Trial Court granting the urgent motion to file a separate civil
action is not necessary since the rules only require that the
offended party make the reservation before the prosecution
starts to present its evidence and under circumstances
affording the offended party a reasonable opportunity to make
such reservation.
Lastly, we agree with respondent that it is now too late for the
spouses to question the institution of the civil case separately
from the BP 22 case. A full blown trial was conducted in the
civil case with the participation of the spouses, but they never
raised any objection thereto, and they cannot be allowed here
and now to raise this issue for the first time.
WHEREFORE, the instant petition is DENIED. The February
24, 2000 Decision of the Court of Appeals sustaining the
February 23, 1995 Decision of the Regional Trial Court
is AFFIRMED.
Costs against petitioners.
SO ORDERED.
SECTION 15
PAVILIS V. LIVESTOCK CO
ROBERTS, J.
Page 23 of 55
Page 24 of 55
This case differs in its facts from the case at bar. Checks
signed in blank by the defendant in that case and left
unguarded in his office to which strangers had access
rendered him liable by reason of negligence.
I.
On the other hand, the bank may only pay upon the
signature of the drawer, and if that be not genuine,
i.e., forged, the bank, if it pays such check, is liable
to the depositor, because it has no written order from
the depositor. Even though the forgery of the
drawer's
practically
signature
defy
is
done
detection,
so
skillfully
such
as
an
as
to
exact
of
the
signed
order
of
the
Page 25 of 55
Page 26 of 55
LINICK V. NUTTING CO
KEY PASSAGES FROM THIS CASE (3)
I.
Page 27 of 55
the entire court (the italics are ours): "When a note payable to
bearer, which has once become operative by delivery, has
been lost or stolen from the owner, and has subsequently
come to the hands of a bona fide holder for value, the latter
may recover against the maker, and all indorsers on the paper
when in the hands of the loser; and the loser must sustain the
loss. In such a case there was a complete legal instrument;
the maker is clearly liable to pay it to some one; and the
question is only to whom. But in the case before us, where the
note had never been delivered and therefore had no legal
inception or existence as a note, the question is whether he is
liable to pay at all, even to an innocent holder for value. The
wrongful act of a thief or a trespasser may deprive the holder
of his property in a note which has once become a note, or
property, by delivery, and may transfer the title to an
innocent purchaser for value. But a note in the hands of the
maker before delivery is not property, nor the subject of
ownership, as such; it is, in law, but a blank piece of paper.
Can the theft or wrongful seizure of this paper create a valid
contract on the part of the maker against his will,
where none existed before? There is no principle of the law of
contracts upon which this can be done, unless the facts of the
case are such that, in justice and fairness, as between the
maker and the innocent holder, the maker ought to be
estopped to deny the making and delivery of the note. * * *
There may be cases where the culpable negligence or
recklessness of the maker in allowing an undelivered note to
get into circulation, might justly estop him from setting up
non-delivery; as if he were knowingly to throw it into the
street, or otherwise leave it accessible to the public, with no
person present to guard against its abduction under
circumstances when he might reasonably apprehend that it
would be likely to be taken. * * * The evidence tends to show
that when he left the room in his own house, the note being
on the table, and his sister remaining there, he did not confide
it to the custody of the payee, but told him not to take it, and
no final agreement between them had yet been made, and no
consideration given. Under such circumstances he can no
more be said to have trusted it to the payee's custody or
confidence, than that he trusted his spoons or other
household goods to his custody or confidence; and there was
no more apparent reason to suppose he would take and carry
off the one, than the other. The maker, therefore, cannot be
held responsible for any negligence; there was nothing to
prove negligence, unless he was bound to suspect, and treat
as a knave, a thief or a criminal, the man who came to his
house apparently on business, because he afterwards proved
himself to be such. This, we think, would be preposterous. We,
therefore, see no ground upon which the defendant could be
held liable on a note thus obtained, even to a bona fide holder
for value."
In the case of Baxendale v. Bennett ( supra), decided by the
English Court of Appeal, the defendant, at the request of one
Holmes, had written his name for Holmes' accommodation as
an acceptor upon a paper which was blank, except that it had
an impressed bill stamp upon it, and had given it to Holmes
with authority to fill it up and sign it as drawer. Afterwards
Holmes, discovering that he did not need the accommodation,
returned the paper to defendant in the same state in which he
received it. It was stolen from defendant's desk, filled up and
signed by one Cartwright as drawer, indorsed by him, and
subsequently transferred to plaintiff as a bona fide holder for
value. The court (BRAMWELL, L.J.) held that the defendant was
not liable. In his opinion he says: "Suppose he had signed a
blank cheque, with no payee, or date, or amount, and it was
stolen, would he be liable or accountable, not merely to his
banker the drawee, but to a holder? * * * I cannot think so. But
what about the authorities? It must be admitted that the
cases
of Young v. Grote (4
Bing.
253)
and Ingham v. Primrose (7 C.B. [N.S.] 82) go a long way to
justify this judgment; but in all those cases, and in all the
others where the alleged maker or acceptor has been held
liable, he has voluntarily parted with the instrument; it had
not been got from him by the commission of a crime. This,
undoubtedly, is a distinction, and a real distinction. The
Page 28 of 55
defendant here has not voluntarily put into any one's hands
the means, or part of the means, for committing a crime. But
it is said that he has done so through negligence. I confess I
think he has been negligent; that is to say, I think if he had
had this paper from a third person, as a bailee bound to keep
it with ordinary care, he would not have done so. But then this
negligence is not the proximate or effective cause of the
fraud. A crime was necessary for its completion. Then
the Bank of Irelandv. Evans' Trustees (5 H.L.C. 389) shows
under such circumstances there is no estoppel."
2
This rule of law has now passed into the statute in these
words: "Where an incomplete instrument has not been
delivered it will not, if completed and negotiated, without
authority, be a valid contract in the hands of any holder, as
against any person whose signature was placed thereon
before delivery." (Neg. Inst. Law [Consol. Laws, chap. 38; Laws
of 1909, chap. 43], 34.) The provision of the subsequent
section of the same act, to the effect that "where the
instrument is in the hands of a holder in due course, a valid
delivery thereof by all parties prior to him so as to make them
liable to him is conclusively presumed," must be read in
connection with said section 34, and this provision does not
apply in the case of an incomplete instrument, completed and
negotiated without authority. (Crawford Neg. Inst. 35, note.)
We conclude, therefore, that the delivery of a promissory note
by the maker is necessary to a valid inception of the contract.
The possession of such a note by the payee or indorsee
is prima facie evidence of delivery, but if it appear that the
note has never been actually delivered and that without any
confidence, or negligence, or fault of the maker, but by force
or fraud, it was put in circulation, there can be no recovery
upon it, even when in the hands of an innocent holder.
Defendant contends that, as against the plaintiff, the bank
was justified in paying out the plaintiff's money on the check,
and cites in support of his contention Trust Co. of
America v. Conklin ( supra). If so, it was not because the
check was a valid check in the hands of a third person, but
because of the peculiar contract relation between the bank
and its depositor. We are not called upon to decide this, since
it seems to be conceded that if the check was not a valid
obligation in the hands of the defendant this action will lie as
for money had and received.
The judgment appealed from must be reversed and a new trial
ordered, costs to abide the event.
JENKS and THOMAS, JJ., concurred; WOODWARD, J., read for
affirmance, with whom CARR, J., concurred.
DECISION
Page 29 of 55
B.
C.
II.
IV.
Page 30 of 55
Page 31 of 55
Page 32 of 55
Complainant
The cases were docketed as Criminal Cases Nos. 9433 up to
9443 involving the following details:
DELETED TABLE
At about the same time, fourteen (14) other criminal
complaints, also for violation of BP 22, were filed against
respondent Nicdao by Emma Nuguid, said to be the common
law spouse of petitioner Ching. Allegedly fourteen (14)
checks, amounting to P1,150,000.00, were issued by
respondent Nicdao to Nuguid but were dishonored for lack of
sufficient funds. The Informations were filed with the same
MCTC and docketed as Criminal Cases Nos. 9458 up to 9471.
At her arraignment, respondent Nicdao entered the plea of
"not guilty" to all the charges. A joint trial was then conducted
for Criminal Cases Nos. 9433-9443 and 9458-9471.
For the prosecution in Criminal Cases Nos. 9433-9443,
petitioner Ching and Imelda Yandoc, an employee of the
Hermosa Savings & Loan Bank, Inc., were presented to prove
the charges against respondent Nicdao. On directexamination,13 petitioner Ching preliminarily identified each of
the eleven (11) Hermosa Savings & Loan Bank (HSLB) checks
that were allegedly issued to him by respondent Nicdao
amounting to P20,950,000.00. He identified the signatures
appearing on the checks as those of respondent Nicdao. He
recognized her signatures because respondent Nicdao
allegedly signed the checks in his presence. When petitioner
Ching presented these checks for payment, they were
dishonored by the bank, HSLB, for being "DAIF" or "drawn
against insufficient funds."
Petitioner Ching averred that the checks were issued to him
by respondent Nicdao as security for the loans that she
obtained from him. Their transaction began sometime in
October 1995 when respondent Nicdao, proprietor/manager of
Vignette Superstore, together with her husband, approached
him to borrow money in order for them to settle their financial
obligations. They agreed that respondent Nicdao would leave
the checks undated and that she would pay the loans within
one year. However, when petitioner Ching went to see her
after the lapse of one year to ask for payment, respondent
Nicdao allegedly said that she had no cash.
Page 33 of 55
Page 34 of 55
respect to the other ten (10) checks, she also admitted that
the signatures thereon were hers and that the amounts
thereon were written by either Josie Nicdao or Melanie
Tolentino, her employees whom she authorized to do so. With
respect to the payee, it was purposely left blank allegedly
upon instruction of Nuguid who said that she would use the
checks to pay someone else.
On cross-examination,20 respondent Nicdao explained that
Josie Nicdao and Melanie Tolentino were caretakers of the
grocery store and that they manned it when she was not
there. She likewise confirmed that she authorized them to
write the amounts on the checks after she had affixed her
signature
thereon.
She
stressed,
however,
that
the P20,000,000.00 check was the one that was reported to
her as lost or missing by her saleslady sometime in 1995. She
never reported the matter to the bank because she was
confident that it would just surface when it would be
presented for payment.
Again, respondent Nicdao identified the cigarette wrappers
which indicated the daily payments she had made to Nuguid.
The latter allegedly went to the grocery store everyday to
collect the interest payments. Further, the figures at the back
of the cigarette wrappers were written by Nuguid. Respondent
Nicdao asserted that she recognized her handwriting because
Nuguid sometimes wrote them in her presence. Respondent
Nicdao maintained that she had already paid Nuguid the
amount of P1,200,000.00 as evidenced by the Planters Bank
demand draft which she gave to the latter and which was
subsequently negotiated and deposited in petitioner Chings
account. In connection thereto, respondent Nicdao refuted the
prosecutions allegation that the demand draft was payment
for a previous transaction that she had with petitioner Ching.
She clarified that the payments that Nuguid collected from her
everyday were only for the interests due. She did not ask
Nuguid to make written acknowledgements of her payments.
Melanie Tolentino was presented to corroborate the testimony
of respondent Nicdao. On direct-examination, 21Tolentino
stated that she worked at the Vignette Superstore and she
knew Nuguid because her employer, respondent Nicdao, used
to borrow money from her. She knew petitioner Ching only by
name and that he was the "husband" of Nuguid.
As an employee of the grocery store, Tolentino stated that she
acted as its caretaker and was entrusted with the custody of
respondent Nicdaos personal checks. Tolentino identified her
own handwriting on some of the checks especially with
respect to the amounts and figures written thereon. She said
that Nuguid instructed her to leave the space for the payee
blank as she would use the checks to pay someone else.
Tolentino added that she could not recall respondent Nicdao
issuing a check to petitioner Ching in the amount
of P20,000,000.00. She confirmed that they lost a check
sometime in 1995. When informed about it, respondent
Nicdao told her that the check could have been issued to
someone else, and that it would just surface when presented
to the bank.
Page 35 of 55
personally write the payee and date on the checks was not
material considering that under Section 14 of the Negotiable
Instruments Law, "where the instrument is wanting in any
material particular, the person in possession thereof has a
prima facie authority to complete it by filling up the blanks
therein. And a signature on a blank paper delivered by the
person making the signature in order that the paper may be
converted into a negotiable instrument operates as a prima
facie authority to fill it up as such for any amount x x x."
Respondent Nicdao admitted that she authorized her
employees to provide the details on the checks after she had
signed them.
The MCTC disbelieved respondent Nicdaos claim that
the P20,000,000.00 check was the same one that she lost in
1995. It observed that ordinary prudence would dictate that a
lost check would at least be immediately reported to the bank
to prevent its unauthorized endorsement or negotiation.
Respondent Nicdao made no such report to the bank. Even if
the said check was indeed lost, the MCTC faulted respondent
Nicdao for being negligent in keeping the checks that she had
already signed in an unsecured box.
The MCTC further ruled that there was no evidence to show
that petitioner Ching was not a holder in due course as to
cause it (the MCTC) to believe that the said check was not
issued to him. Respondent Nicdaos admission of
indebtedness was sufficient to prove that there was
consideration for the issuance of the checks.
The second element was also found by the MCTC to be
present as it held that respondent Nicdao, as maker, drawer
or issuer, had knowledge that at the time of issue she did not
have sufficient funds in or credit with the drawee bank for the
payment in full of the checks upon their presentment.
As to the third element, the MCTC established that the checks
were subsequently dishonored by the drawee bank for being
"DAIF" or drawn against insufficient funds. Stamped at the
back of each check was the annotation "DAIF." The bank
representative likewise testified to the fact of dishonor.
Under the foregoing circumstances, the MCTC declared that
the conviction of respondent Nicdao was warranted. It
stressed that the mere act of issuing a worthless check was
malum prohibitum; hence, even if the checks were issued in
the form of deposit or guarantee, once dishonored, the same
gave rise to the prosecution for and conviction of BP 22. 26 The
decretal portion of the MCTC decision reads:
WHEREFORE, in view of the foregoing, the accused is found
guilty of violating Batas Pambansa Blg. 22 in 11 counts, and is
hereby ordered to pay the private complainant the amount
of P20,950,000.00 plus 12% interest per annum from date of
filing of the complaint until the total amount had been paid.
The prayer for moral damages is denied for lack of evidence
to prove the same. She is likewise ordered to suffer
imprisonment equivalent to 1 year for every check issued and
which penalty shall be served successively.
SO ORDERED.27
Incidentally, on January 11, 1999, the MCTC likewise rendered
its judgment in Criminal Cases Nos. 9458-9471 and convicted
respondent Nicdao of the fourteen (14) counts of violation of
BP 22 filed against her by Nuguid.
On appeal, the Regional Trial Court (RTC) of Dinalupihan,
Bataan, Branch 5, in separate Decisions both dated May 10,
1999, affirmed in toto the decisions of the MCTC convicting
respondent Nicdao of eleven (11) and fourteen (14) counts of
Page 36 of 55
Page 37 of 55
Page 38 of 55
the other ten (10) checks were not issued to apply on account
or for value. These findings are allegedly supported by the
evidence on record which consisted of the respective
testimonies of the defense witnesses to the effect that:
respondent Nicdao had the practice of leaving pre-signed
checks placed inside an unsecured cash box in the Vignette
Superstore; the salesladies were given the authority to fill up
the said checks as to the amount, payee and date; Nuguid
beguiled respondent Nicdao to obtain loans from her; as
security for the loans, respondent Nicdao issued checks to
Nuguid; when the salesladies gave the checks to Nuguid, she
instructed them to leave blank the payee and date; Nuguid
had access to the grocery store; in 1995, one of the
salesladies reported that a check was missing; in 1997, when
she had fully paid her loans to Nuguid, respondent Nicdao
tried to retrieve her checks but Nuguid and petitioner Ching
falsely told her that she still owed them money; they then
maliciously filled up the checks making it appear that
petitioner Ching was the payee in the five checks and the six
others were payable to "cash"; and knowing fully well that
these checks were not funded because respondent Nicdao
already fully paid her loans, petitioner Ching and Nuguid
deposited the checks and caused them to be dishonored by
HSLB.
It is pointed out by respondent Nicdao that her testimony
(that the P20,000,000.00 check was the same one that she
lost sometime in 1995) was corroborated by the respective
testimonies of her employees. Another indication that it was
stolen was the fact that among all the checks which ended up
in the hands of petitioner Ching and Nuguid, only
the P20,000,000.00 check was fully typewritten; the rest were
invariably handwritten as to the amounts, payee and date.
Respondent Nicdao defends the CAs conclusion that
the P20,000,000.00 check was stolen on the ground that an
appeal in a criminal case throws open the whole case to the
appellate courts scrutiny. In any event, she maintains that
she had been consistent in her theory of defense and merely
relied on the disputable presumption that the person in
possession of a stolen article is presumed to be the author of
the theft.
Considering that it was stolen, respondent Nicdao argues,
the P20,000,000.00 check was an incomplete and undelivered
instrument in the hands of petitioner Ching and he did not
acquire any right or interest therein. Further, he cannot assert
any cause of action founded on the said stolen check.
Accordingly, petitioner Chings attempt to collect payment on
the said check through the instant petition must fail.
Respondent Nicdao describes as downright incredible
petitioner Chings testimony that she owed him a total sum
of P20,950,000.00 without any documentary proof of the loan
transactions. She submits that it is contrary to human
experience for loan transactions involving such huge amounts
of money to be devoid of any documentary proof. In relation
thereto, respondent Nicdao underscores that petitioner Ching
lied about being employed as a salesman of La Suerte Cigar
and Cigarette Manufacturing. It is underscored that he has not
adequately shown that he possessed the financial capacity to
lend such a huge amount to respondent Nicdao as he so
claimed.
Neither could she be held liable for the ten (10) other checks
(in the total amount of P950,000,000.00) because as
respondent Nicdao asseverates, she merely issued them to
Nuguid as security for her loans obtained from the latter
beginning October 1995 up to 1997. As evidenced by the
Planters Bank demand draft in the amount of P1,200,000.00,
she already made payment in 1996. The said demand draft
was negotiated to petitioner Chings account and he admitted
receipt thereof. Respondent Nicdao belies his claim that the
demand draft was payment for a prior existing obligation. She
Page 39 of 55
xxxx
As a corollary to the above rule, an acquittal does not
necessarily carry with it the extinguishment of the civil liability
of the accused. Section 2(b)36 of the same Rule, also quoted
earlier, provided in part:
(b) Extinction of the penal action does not carry with it
extinction of the civil, unless the extinction proceeds from a
declaration in a final judgment that the fact from which the
civil might arise did not exist.
It is also relevant to mention that judgments of acquittal are
required to state "whether the evidence of the prosecution
absolutely failed to prove the guilt of the accused or merely
failed to prove his guilt beyond reasonable doubt. In either
case, the judgment shall determine if the act or omission from
which the civil liability might arise did not exist."37
In Sapiera v. Court of Appeals, 38 the Court enunciated that the
civil liability is not extinguished by acquittal: (a) where the
acquittal is based on reasonable doubt; (b) where the court
expressly declares that the liability of the accused is not
criminal but only civil in nature; and (c) where the civil liability
is not derived from or based on the criminal act of which the
accused is acquitted. Thus, under Article 29 of the Civil Code
ART. 29. When the accused in a criminal prosecution is
acquitted on the ground that his guilt has not been proved
beyond reasonable doubt, a civil action for damages for the
same act or omission may be instituted. Such action requires
only a preponderance of evidence. Upon motion of the
defendant, the court may require the plaintiff to file a bond to
answer for damages in case the complaint should be found to
be malicious.
If in a criminal case the judgment of acquittal is based upon
reasonable doubt, the court shall so declare. In the absence of
any declaration to that effect, it may be inferred from the text
of the decision whether or not the acquittal is due to that
ground.
The Court likewise expounded in Salazar v. People 39 the
consequences of an acquittal on the civil aspect in this wise:
Page 40 of 55
may appeal from the judgment on the civil aspect of the case
within the period therefor.
under BP 22, i.e., "that the check is made or drawn and issued
to apply on account or for value," is not present.
Nicdao
likewise effectively
Page 41 of 55
Anent the other ten (10) checks, the CA made the following
findings:
Evidence sufficiently shows that the loans secured by the ten
(10) checks involved in the cases subject of this petition had
already been paid. It is not controverted that petitioner gave
Emma Nuguid a demand draft valued at P1,200,000 to pay for
the loans guaranteed by said checks and other checks issued
to her. Samson Ching admitted having received the demand
draft which he deposited in his bank account. However,
complainant Samson Ching claimed that the said demand
draft represents payment for a previous obligation incurred by
petitioner. However, complainant Ching failed to adduce any
evidence to prove the existence of the alleged obligation of
the petitioner prior to those secured by the subject checks.
Apart from the payment to Emma Nuguid through said
demand draft, it is also not disputed that petitioner made cash
payments to Emma Nuguid who collected the payments
almost daily at the Vignette Superstore. As of July 21, 1997,
Emma Nuguid collected cash payments amounting to
approximately P5,780,000.00. All of these cash payments
were recorded at the back of cigarette cartons by Emma
Nuguid in her own handwriting, the authenticity and accuracy
of which were never denied by either complainant Ching or
Emma Nuguid.
Clearly, adding the payments recorded at the back of the
cigarette cartons by Emma Nuguid in her own handwriting
totaling P5,780,000.00 and the P1,200,000.00 demand draft
received by Emma Nuguid, it would appear that petitioner had
already made payments in the total amount of P6,980,000.00
for her loan in the total amount of P6,980,000.00 for her loan
obligation of only P2,100,000.00 (P950,000.00 in the case at
bar and P1,150,000.00 in CA-G.R. CR No. 23054).45
Generally
checks
may
constitute
evidence
of
indebtedness.46 However, in view of the CAs findings relating
to the eleven (11) checks - that the P20,000,000.00 was a
stolen check and the obligations secured by the other ten (10)
checks had already been fully paid by respondent Nicdao
they can no longer be given credence to establish respondent
Nicdaos civil liability to petitioner Ching. Such civil liability,
therefore, must be established by preponderant evidence
other than the discredited checks.
After a careful examination of the records of the case, 47 the
Court holds that the existence of respondent Nicdaos civil
liability to petitioner Ching in the amount of P20,950,000.00
representing her unpaid obligations to the latter has not been
sufficiently established by preponderant evidence. Petitioner
Ching mainly relies on his testimony before the MCTC to
establish the existence of these unpaid obligations. In gist, he
testified that from October 1995 up to 1997, respondent
Nicdao obtained loans from him in the total amount
of P20,950,000.00. As security for her obligations, she issued
eleven (11) checks which were invariably blank as to the date,
amounts and payee. When respondent Nicdao allegedly
Page 42 of 55
SO ORDERED.
Section 16
IN RE ESTATE OF MARTENS
KEY PASSAGES FROM THIS CASE (1)
The Court agrees with the CA that the daily payments made
by respondent Nicdao amounting to P5,780,000.00 cannot be
considered as interest payments only. Even respondent
Nicdao testified that the daily payments that she made to
Nuguid were for the interests due. However, as correctly ruled
by the CA, no interests could be properly collected in the loan
transactions between petitioner Ching and respondent Nicdao
because there was no stipulation therefor in writing. To
reiterate, under Article 1956 of the Civil Code, "no interest
shall be due unless it has been expressly stipulated in
writing."
Neither could respondent Nicdao be considered to be
estopped from denying the validity of these interests.
Estoppel cannot give validity to an act that is prohibited by
law or one that is against public policy.52 Clearly, the collection
of interests without any stipulation therefor in writing is
prohibited by law. Consequently, the daily payments made by
respondent Nicdao amounting to P5,780,000.00 were properly
considered by the CA as applying to the principal amount of
her loan obligations.
With respect to the P20,000,000.00 check, the defense of
respondent Nicdao that it was stolen and that she never
issued or delivered the same to petitioner Ching was
corroborated by the other defense witnesses, namely,
Tolentino and Jocelyn Nicdao.
All told, as between petitioner Ching and respondent Nicdao,
the requisite quantum of evidence - preponderance of
evidence - indubitably lies with respondent Nicdao. As earlier
intimated, she cannot be held civilly liable to petitioner Ching
for her acquittal; under the circumstances which have just
been discussed lengthily, such acquittal carried with it the
extinction of her civil liability as well.
The CA committed no reversible error in not consolidating CAG.R. CR No. 23055 and CA-G.R. CR No. 23054
During the pendency of CA-G.R. CR No. 23055 and CA-G.R. CR
No. 23054 in the CA, the pertinent provision of the RIRCA on
consolidation of cases provided:
SEC. 7. Consolidation of Cases. Whenever two or more allied
cases are assigned to different Justices, they may be
consolidated for study and report to a single Justice.
(a) At the instance of any party or Justice to whom the case is
assigned for study and report, and with the conformity of all
the Justices concerned, the consolidation may be allowed
when the cases to be consolidated involve the same parties
and/or related questions of fact and/or law.53
The use of the word "may" denotes the permissive, not
mandatory, nature of the above provision, Thus, no grave
error could be imputed to the CA when it proceeded to render
its decision in CA-G.R. CR No. 23055, without consolidating it
with CA-G.R. CR No. 23054.
WHEREFORE, premises considered, the Petition is DENIED for
lack of merit.
I.
MILLER, J.
Appellant, Mabel Martens Bonk, filed a claim, based on a note
for $1,500, against the administrator of this estate. The claim
being denied, a petition was filed to secure the allowance
thereof, to which the administrator filed answer in the form of
a general denial. Various issues were presented by the
evidence. We deem it necessary to consider only one of them,
namely, whether or not the action of the trial court, in denying
appellant's claim, was proper because of the failure to
establish that the note was delivered during the lifetime of the
deceased.
At the trial, appellant testified that she is the daughter of the
deceased. She identified Exhibit A as a note in the
handwriting of her mother, dated March 1, 1930, promising to
pay appellant $1,500 on December 1, 1930, signed by the
decedent.
1
On the back of the note was the endorsement: "This money is
coming to her for teaching $1,000, and $500. is what the rest
got also. Mother."
The decedent died January 2, 1936. The administrator
qualified on March 1, 1936. Appellant testified that, about
March 11, 1936, in examining the contents of her mother's
safe, she discovered an envelope on which, in her mother's
handwriting, was the notation: "Please give this to S. Fisher in
case of death. Mabel Martens from Mother"; she delivered the
envelope to said Simon Fisher at his law office shortly after
she discovered it; Fisher opened the envelope, which was
sealed, in her presence and in the presence of the
administrator; the note, Exhibit A, was found in the envelope;
her mother had told her that, in case of death, there was a
letter for her, but she knew nothing of any note; she found the
envelope after the administrator had made an examination of
the contents of the safe and had not discovered it; she had
loaned her parents $1,000 from time to time out of money
earned teaching school; her brothers and sisters each had
received $500 when they were married; she married
subsequent to March 1, 1930, and did not receive her $500.
Simon Fisher testified that he first saw the envelope and the
note after the death of the decedent; he opened the envelope
in the presence of the appellant and the administrator; in
1930 appellant agreed to accept a note from her mother in
satisfaction of $1,500 owed by her father's estate, which was
not paid because of insufficient funds; the decedent told him
she had executed a note in favor of appellant for $1,500, and
she would bring it to the office and leave it with him; later she
told him she had placed it in a box or safe at home and for
him to get it and give it to appellant any time he heard of her
death; he told her to deliver it to him or leave it with him, and
if she wanted to, to turn it over to appellant.
Apparently the trial court held that the claim should be denied
because the record failed to establish legal delivery of the
Page 43 of 55
BELLOSILLO, J.:
RAUL H. SESBREO filed a complaint for damages against
Assistant City Fiscals Bienvenido N. Mabanto, Jr., and Dario D.
Rama, Jr., before the Regional Trial Court of Cebu City. After
Page 44 of 55
garnishment was justified. His only duty was to turn over the
garnished checks to the trial court which issued the order of
execution. 5
Petitioner raises the following relevant issues: (1) whether a
check still in the hands of the maker or its duly authorized
representative is owned by the payee before physical delivery
to the latter: and, (2) whether the salary check of a
government official or employee funded with public funds can
be subject to garnishment.
Petitioner reiterates his position that the salary checks were
not owned by Mabanto, Jr., because they were not yet
delivered to him, and that petitioner as garnishee has no legal
obligation to hold and deliver them to the trial court to be
applied to Mabanto, Jr.'s judgment debt. The thesis of
petitioner is that the salary checks still formed part of public
funds and therefore beyond the reach of garnishment
proceedings.
Petitioner has well argued his case.
Garnishment is considered as a species of attachment for
reaching credits belonging to the judgment debtor owing to
him from a stranger to the litigation. 6 Emphasis is laid on the
phrase "belonging to the judgment debtor" since it is the focal
point in resolving the issues raised.
As Assistant City Fiscal, the source of the salary of Mabanto,
Jr., is public funds. He receives his compensation in the form
of checks from the Department of Justice through petitioner as
City Fiscal of Mandaue City and head of office. Under Sec. 16
of the Negotiable Instruments Law, every contract on a
negotiable instrument is incomplete and revocable
until delivery of the instrument for the purpose of giving effect
thereto. As ordinarily understood, delivery means the transfer
of the possession of the instrument by the maker or
drawer with intent to transfer title to the payee and recognize
him as the holder thereof. 7
According to the trial court, the checks of Mabanto, Jr., were
already released by the Department of Justice duly signed by
the officer concerned through petitioner and upon service of
the writ of garnishment by the sheriff petitioner was under
obligation to hold them for the judgment creditor. It
recognized the role of petitioner as custodian of the checks. At
the same time however it considered the checks as no longer
government funds and presumed delivered to the payee
based on the last sentence of Sec. 16 of the Negotiable
Instruments Law which states: "And where the instrument is
no longer in the possession of a party whose signature
appears thereon, a valid and intentional delivery by him is
presumed." Yet, the presumption is not conclusive because
the last portion of the provision says "until the contrary is
proved." However this phrase was deleted by the trial court
for no apparent reason. Proof to the contrary is its own finding
that the checks were in the custody of petitioner. Inasmuch as
said checks had not yet been delivered to Mabanto, Jr.,
they did not belong to him and still had the character of public
funds. In Tiro v. Hontanosas 8 we ruled that
The salary check of a government officer or
employee such as a teacher does not belong
to him before it is physically delivered to
him. Until that time the check belongs to the
government. Accordingly, before there is
actual delivery of the check, the payee has
no power over it; he cannot assign it without
the consent of the Government.
As a necessary consequence of being public fund, the checks
may not be garnished to satisfy the judgment. 9 The rationale
behind this doctrine is obvious consideration of public policy.
Separate Opinions
Page 45 of 55
Involved in the instant case are the salary and RATA checks of
then Assistant City Fiscal Bienvenido Mabanto, Jr., who was
detailed in the Office of the City Fiscal (now Prosecutor) of
Mandaue City. Conformably with the aforesaid practice, these
checks were sent to Mabanto thru the petitioner who was then
the City Fiscal of Mandaue City.
BELLOSILLO, J.:
MANUEL LIM and ROSITA LIM, spouses, were charged before
the Regional Trial Court of Malabon with estafa on three (3)
counts under Art. 315, par. 2 (d), of The Revised Penal Code,
Page 46 of 55
Page 47 of 55
affirmed the finding of the trial court that they were guilty of
having violated B.P. Blg. 22. 17 On 6 November 1992 their
motion for reconsideration was denied. 18
In the case at bench petitioners maintain that the prosecution
failed to prove that any of the essential elements of the crime
punishable under B.P. Blg. 22 was committed within the
jurisdiction of the Regional Trial Court of Malabon. They claim
that what was proved was that all the elements of the offense
were committed in Kalookan City. The checks were issued at
their place of business, received by a collector of LINTON, and
dishonored by the drawee bank, all in Kalookan City.
Furthermore, no evidence whatsoever supports the
proposition that they knew that their checks were
insufficiently funded. In fact, some of the checks were funded
at the time of presentment but dishonored nonetheless upon
their instruction to the bank to stop payment. In fine,
considering that the checks were all issued, delivered, and
dishonored in Kalookan City, the trial court of Malabon
exceeded its jurisdiction when it tried the case and rendered
judgment thereon.
The petition has no merit. Section 1, par. 1, of B.P. Blg. 22
punishes "[a]ny person who makes or draws and issues any
check to apply on account or for value, knowing at the time of
issue that he does not have sufficient funds in or credit with
the drawee bank for the payment of such check in full upon its
presentment, which check is subsequently dishonored by the
drawee bank for insufficiency of funds or credit or would have
been dishonored for the same reason had not the drawer,
without any valid reason, ordered the bank to stop payment . .
." The gravamen of the offense is knowingly issuing a
worthless check. 19 Thus, a fundamental element
is knowledge on the part of the drawer of the insufficiency of
his funds in 20 or credit with the drawee bank for the payment
of such check in full upon presentment. Another essential
element is subsequent dishonor of the check by the drawee
bank for insufficiency of funds or credit or would have been
dishonored for the same reason had not the drawer, without
any valid reason, ordered the bank to stop payment. 21
It is settled that venue in criminal cases is a vital ingredient of
jurisdiction. 22 Section 14, par. (a), Rule 110, of the Revised
Rules of Court, which has been carried over in Sec. 15, par.
(a), Rule 110 of the 1985 Rules on Criminal Procedure,
specifically provides:
Sec. 14. Place where action is to be
instituted. (a) In all criminal prosecutions
the action shall be instituted and tried in the
court of the municipality or province
wherein the offense was committed or
anyone of the essential ingredients thereof
took place.
If all the acts material and essential to the crime and requisite
of its consummation occurred in one municipality or territory,
the court therein has the sole jurisdiction to try the
case. 23 There are certain crimes in which some acts material
and essential to the crimes and requisite to their
consummation occur in one municipality or territory and some
in another, in which event, the court of either has jurisdiction
to try the cases, it being understood that the first court taking
cognizance of the case excludes the other. 24 These are the socalled transitory or continuing crimes under which violation of
B.P. Blg. 22 is categorized. In other words, a person charged
with a transitory crime may be validly tried in any municipality
or territory where the offense was in part committed. 25
In determining proper venue in these cases, the following acts
material and essential to each crime and requisite to its
consummation must be considered: (a) the seven (7) checks
were issued to LINTON at its place of business in Balut,
Navotas; b) they were delivered to LINTON at the same place;
Page 48 of 55
Page 49 of 55
SERENO, J.:
Before the Court is a Rule 45 Petition for Review on
Certiorari filed by petitioner Rizal Commercial Banking
Corporation (RCBC) against respondents Hi-Tri Development
Corporation (Hi-Tri) and Luz R. Bakunawa (Bakunawa).
Petitioner seeks to appeal from the 26 November 2009
Decision and 27 May 2010 Resolution of the Court of Appeals
(CA),[1] which reversed and set aside the 19 May 2008
Decision and 3 November 2008 Order of the Makati City
Regional Trial Court (RTC) in Civil Case No. 06-244. [2] The case
before the RTC involved the Complaint for Escheat filed by the
Republic of the Philippines (Republic) pursuant to Act No.
3936, as amended by Presidential Decree No. 679 (P.D. 679),
against certain deposits, credits, and unclaimed balances held
by the branches of various banks in the Philippines. The trial
court declared the amounts, subject of the special
proceedings, escheated to the Republic and ordered them
deposited with the Treasurer of the Philippines (Treasurer) and
credited in favor of the Republic.[3] The assailed RTC
judgments included an unclaimed balance in the amount of
1,019,514.29, maintained by RCBC in its Ermita Business
Center branch.
We quote the narration of facts of the CA[4] as follows:
x x x Luz [R.] Bakunawa and her
husband Manuel, now deceased (Spouses
Bakunawa) are registered owners of six (6)
parcels of land covered by TCT Nos. 324985
and 324986 of the Quezon City Register of
Deeds, and TCT Nos. 103724, 98827, 98828
and 98829 of the Marikina Register of
Deeds. These lots were sequestered by the
Presidential
Commission
on
Good
Government [(PCGG)].
Page 50 of 55
Page 51 of 55
Sec.
3.
Whenever
the Solicitor
General shall
be
informed
of
such
unclaimed balances, he shall commence
an action or actions in the name of the
People
of
the
Republic
of
the
Philippinesin the Court of First Instance of
the province or city where the bank, building
and loan association or trust corporation is
located, in which shall be joined as
parties the bank, building and loan
association or trust corporation and all
such creditors or depositors. All or any
of such creditors or depositors or banks,
building and loan association or trust
corporations may be included in one
action. Service of process in such action
or actions shall be made by delivery of a
copy of the complaint and summons to
the president, cashier, or managing
officer of each defendant bank, building
and loan association or trust corporation
and by publication of a copy of such
summons in a newspaper of general
circulation, either in English, in Filipino, or in
a local dialect, published in the locality
where the bank, building and loan
association or trust corporation is situated, if
there be any, and in case there is none, in
the City of Manila, at such time as the court
may order. Upon the trial, the court must
hear all parties who have appeared
therein, and if it be determined that
such
unclaimed
balances
in
any
defendant bank, building and loan
association
or
trust
corporation are
unclaimed as hereinbefore stated, then
the court shall render judgment in
favor of the Government of the
Republic of the Philippines, declaring
that
said
unclaimed
balances
have
escheated to the Government of the
Republic of the Philippines and commanding
said bank, building and loan association or
trust corporation to forthwith deposit the
same with the Treasurer of the Philippines to
credit of the Government of the Republic of
the Philippines to be used as the National
Assembly may direct.
At the time of issuing summons in the
action above provided for, the clerk of
court shall also issue a notice signed by
him, giving the title and number of said
action, and referring to the complaint
therein, and directed to all persons,
other than those named as defendants
therein, claiming any interest in any
unclaimed balance mentioned in said
complaint,
and requiring
them
to
appear within sixty days after the
publication or first publication, if there are
several, of such summons, and show
cause, if they have any, why the
unclaimed balances involved in said
action should not be deposited with
the Treasurer of the Philippines as in
this Act provided and notifying them that
if they do not appear and show cause,
the Government of the Republic of the
Philippines will apply to the court for
the relief demanded in the complaint. A
copy of said notice shall be attached to, and
published with the copy of, said summons
required to be published as above, and at
the end of the copy of such notice so
published, there shall be a statement of the
date of publication, or first publication, if
there are several, of said summons and
Page 52 of 55
notice. Any
person
interested
may
appear in said action and become a
party thereto. Upon the publication or
the completion of the publication, if
there are several, of the summons and
notice, and the service of the summons on
the defendant banks, building and loan
associations or trust corporations, the
court shall have full and complete
jurisdiction in the Republic of the
Philippines over the said unclaimed
balances and over the persons having
or claiming any interest in the said
unclaimed balances, or any of them,
and shall have full and complete
jurisdiction to hear and determine the
issues
herein,
and
render
the
appropriate
judgment
thereon. (Emphasis supplied.)
Hence, insofar as banks are concerned, service of
processes is made by delivery of a copy of the complaint and
summons upon the president, cashier, or managing officer of
the defendant bank.[8] On the other hand, as to depositors
or other claimants of the unclaimed balances, service is
made by publication of a copy of the summons in a
newspaper of general circulation in the locality where the
institution is situated.[9] A notice about the forthcoming
escheat proceedings must also be issued and published,
directing and requiring all persons who may claim any interest
in the unclaimed balances to appear before the court and
show cause why the dormant accounts should not be
deposited with the Treasurer.
Accordingly, the CA committed reversible error when
it ruled that the issuance of individual notices upon
respondents was a jurisdictional requirement, and that failure
to effect personal service on them rendered the Decision and
the Order of the RTC void for want of jurisdiction. Escheat
proceedings are actions in rem,[10] whereby an action is
brought against the thing itself instead of the person.[11] Thus,
an action may be instituted and carried to judgment without
personal service upon the depositors or other claimants.
[12]
Jurisdiction is secured by the power of the court over
the res.[13] Consequently, a judgment of escheat is conclusive
upon persons notified by advertisement, as publication is
considered a general and constructive notice to all persons
interested.[14]
Nevertheless, we find sufficient grounds to affirm the
CA on the exclusion of the funds allocated for the payment of
the Managers Check in the escheat proceedings.
Escheat proceedings refer to the judicial process in
which the state, by virtue of its sovereignty, steps in and
claims abandoned, left vacant, or unclaimed property, without
there being an interested person having a legal claim thereto.
[15]
In the case of dormant accounts, the state inquires into the
status, custody, and ownership of the unclaimed balance to
determine whether the inactivity was brought about by the
fact of death or absence of or abandonment by the depositor.
[16]
If after the proceedings the property remains without a
lawful owner interested to claim it, the property shall be
reverted to the state to forestall an open invitation to selfservice by the first comers.[17] However, if interested parties
have come forward and lain claim to the property, the courts
shall determine whether the credit or deposit should pass to
the claimants or be forfeited in favor of the state. [18] We
emphasize that escheat is not a proceeding to penalize
depositors for failing to deposit to or withdraw from their
accounts. It is a proceeding whereby the state compels the
surrender to it of unclaimed deposit balances when there is
substantial ground for a belief that they have been
abandoned, forgotten, or without an owner.[19]
Act No. 3936, as amended, outlines the proper
procedure to be followed by banks and other similar
institutions in filing a sworn statement with the Treasurer
concerning dormant accounts:
Sec. 2. Immediately after the taking effect
of this Act and within the month of January
of every odd year, all banks, building and
loan
associations,
and
trust
corporations shall
forward
to
the
Treasurer
of
the
Philippines
a
statement, under oath, of their respective
managing officers, of all credits and
deposits held by them in favor of
persons known to be dead, or who have
not
made
further
deposits
or
withdrawals during the preceding ten
years or more, arranged in alphabetical
order according to the names of creditors
and depositors, and showing:
(a)
The names and last known place of
residence or post office addresses of
the persons in whose favor such
unclaimed balances stand;
(b)
(c)
(d)
Page 53 of 55
the depositor, the bank may not raise the defense provided
under Section 5 of Act No. 3936, as amended.
Petitioner asserts[22] that the CA committed a
reversible error when it required RCBC to send prior notices to
respondents about the forthcoming escheat proceedings
involving the funds allocated for the payment of the Managers
Check. It explains that, pursuant to the law, only those whose
favor such unclaimed balances stand are entitled to receive
notices. Petitioner argues that, since the funds represented by
the Managers Check were deemed transferred to the credit of
the payee upon issuance of the check, the proper party
entitled to the notices was the payee Rosmil and not
respondents. Petitioner then contends that, in any event, it is
not liable for failing to send a separate notice to the payee,
because it did not have the address of Rosmil. Petitioner avers
that it was not under any obligation to record the address of
the payee of a Managers Check.
In contrast, respondents Hi-Tri and Bakunawa
allege[23] that they have a legal interest in the fund allocated
for the payment of the Managers Check. They reason that,
since the funds were part of the Compromise Agreement
between respondents and Rosmil in a separate civil case, the
approval and eventual execution of the agreement effectively
reverted the fund to the credit of respondents. Respondents
further posit that their ownership of the funds was evidenced
by their continued custody of the Managers Check.
An ordinary check refers to a bill of exchange drawn
by a depositor (drawer) on a bank (drawee), [24] requesting the
latter to pay a person named therein (payee) or to the order
of the payee or to the bearer, a named sum of money. [25] The
issuance of the check does not of itself operate as an
assignment of any part of the funds in the bank to the credit
of the drawer.[26] Here, the bank becomes liable only after it
accepts or certifies the check. [27] After the check is accepted
for payment, the bank would then debit the amount to be paid
to the holder of the check from the account of the depositordrawer.
There
are
checks
of
a
special
type
called managers or cashiers checks. These are bills of
exchange drawn by the banks manager or cashier, in the
name of the bank, against the bank itself. [28] Typically, a
managers or a cashiers check is procured from the bank by
allocating a particular amount of funds to be debited from the
depositors account or by directly paying or depositing to the
bank the value of the check to be drawn. Since the bank
issues the check in its name, with itself as the drawee, the
check is deemed accepted in advance. [29] Ordinarily, the check
becomes the primary obligation of the issuing bank and
constitutes its written promise to pay upon demand. [30]
Nevertheless, the mere issuance of a managers
check does not ipso facto work as an automatic transfer of
funds to the account of the payee. In case the procurer of the
managers or cashiers check retains custody of the instrument,
does not tender it to the intended payee, or fails to make an
effective delivery, we find the following provision on
undelivered instruments under the Negotiable Instruments
Law applicable:[31]
Sec. 16. Delivery; when effectual;
when presumed. Every contract on a
negotiable instrument is incomplete and
revocable
until
delivery
of
the
instrument for the purpose of giving
effect thereto. As between immediate
parties and as regards a remote party other
than a holder in due course, the delivery,
in order to be effectual, must be made
either by or under the authority of the
party making, drawing, accepting, or
indorsing, as the case may be; and, in such
case, the delivery may be shown to have
been conditional, or for a special purpose
only, and not for the purpose of transferring
the property in the instrument. But where
the instrument is in the hands of a holder in
due course, a valid delivery thereof by all
parties prior to him so as to make them
liable to him is conclusively presumed. And
EN BANC
G.R. No. L-38816
November 3, 1933
MALCOLM, J.:
Page 54 of 55
In first place, the bank argues that the drug company was
never defrauded at all. While the evidence on the extent of
Page 55 of 55