PNB V. PICORNELL against all parties liable thereon.

Among the parties liable thereon is an

46 PHIL 716 indorser of the instrument. Such an indorser who indorses without
qualification, inter alia, engaged that on due presentment, the instrument
FACTS: Picornell followed the instructions of Hyndman, Tavera and Venutra
shall be accepted or paid, or both, according to its tenor, and that if it be
by buying bales of tobacco. He was able to obtain in National Bank a sum
dishonored, and the necessary proceedings on dishonor be duly taken, he
of money together with his commission. He drafted a bill of exchange
will pay the amount thereof to the holder, or to any subsequent indorser who
against the firm and in favor of the bank. It was received by National Bank
may be compelled to pay it. Maniego may also be deemed an
and was accepted thereafter by the firm. However, on alleged conditions of
accommodation party in the light of the facts (i.e. without receiving value
the tobacco, the bill of exchange was not paid.
for the same). As such, she isl iable on the instrument to a holder for value,
notwithstanding such holder at the time of taking the instrument knew her to
HELD: This action for recovery is for the value of the bill of exchange. The
be only an accommodation party, although she has the right, after paying the
firm accepted the bill unconditionally but did not pay it at maturity, wherefore
holder, to obtain reimbursement from the party accommodated.
its responsibility to pay the same is clear. The question whether or not the
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tobacco was worth the value of the bill doesnt concern the bank.
Such partial want of consideration if it was, doesnt exist with respect ANG TIONG VS. TING
to the bank which paid Picornell the full value of the said bill of exchange. GR L-26767, 22 February 1968
The bank was a holder in due course, and was such for value full and
Facts: Lorenzo Ting issued a check for P4,000 payable to cash or bearer.
complete. The firm cannot escape liability.
With Felipe Angs signature (indorsement in blank) at the back thereof, the
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instrument was received by Ang Tiong who thereafter presented it to the
PEOPLE VS. MANIEGO bank for payment. The drawee bank dishonored it. Ang Tiong made written
GR L-30910, 27 February 1987 demands on both Ting and Ang to make good the amount represented by
the check. These demands unheeded. Ang Tiong filed suit for collection. The
Facts: Julia Maniego was an indorser of several checks drawn by her sister,
trial court adjudged for Ang Tiong. Only Ang appealed, maintaining that he is
Milagros Pamintuan, which were dishonored after they had been exchange
only an accommodation party.
with cash belonging to the Government, then in the official custody of Lt.
Rizalino Ubay. Ubay, Pamintuan and Maniego were indicted for the crime of Issue: Whether Felipe Ang is an accommodation party.
malversation. Ubay and Maniego were arraigned, while Pamintuan fled to
Held: Felipe Ang is a general indorser (Section 63, Negotiable Instruments
the United States. Ubay was found guilty while Maniego was acquitted.
Law), in the absence of any indication by appropriate words his intention to
Both, however, were ordered to pay in solidum the amount of P57,434.50 to
be bound in some other capacity. Even on the assumption that Ang is a
the government. Maniego appealed.
mere accommodation party, he is liable on the instrument to a holder for
Issue: Whether Maniego is liable even if she is a mere indorser. value notwithstanding that such holder at the time of taking the instrument
knew him to be only an accommodation party (Section 29,Negotiable
Held: Under the law, the holder or last indorsee of a negotiable instrument
Instruments Law). Assuming further that Ang is an accommodation indorser,
has the right to enforce payment of the instrument for the full amount thereof
the fact that Ang may obtain security from the maker to protect himself
against the danger of insolvency of the latter cannot in any manner affect his
liability to Ang Tiong, as the said remedy is a matter of concern exclusively
between an accommodation indorser and an accommodated party. The
liability of Felipe Ang remains primary and unconditional.
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BANCO DE ORO SAVINGS AND MORTGAGE BANK VS EQUITABLE
BANKING CORPORATION
GR No. L-7491, 20 Jan 1988
Facts: Equitable Banking Corp. drew 6 crossed Managers Check payable
to certain member of its establishment. Subsequently, the Checks were
deposited with Banco de Oro to the credit of its depositor, a certain Aida
Trencio.
Following the normal procedures, and after stamping at the back of the of
the Checks the usual endorsements: All prior and/or lack of endorsement
guaranteed, Banco de Oro sent the checks for clearing through PCHC.
Accordingly, Equitable Banking Corp. paid the Checks. Its clearing account
was debited for the value of the Checks and Banco de Oros clearing
account was credited for the same amount.
Thereafter, Equitable Banking Corp. discovered that the endorsements at
the back of the Checks were forged or otherwise belong to the persons other
than the payees. Pursuant to the PCHC Clearing Rules and Regulations,
Equitable Bank presented the checks directly to the Banco de Oro to claim
reimbursement. However, the latter refused.
Issue:
1.) Were the subject Checks non-negotiable?
2.) Is the Negotiable Instruments Law applicable in deciding controversies
of this nature by the PCHC?
3.) Was Banco de Oro negligent and thus responsible for any undue
payment?
Ratio decidendi:
1.) Banco de Oro by its own acts, stamped its guarantee is now estopped
from claiming that the checks under consideration are not negotiable
instruments.
The Checks were accepted for deposit by Banco de Oro stamping thereon
its guarantee, in order that it can clear said Checks with Equitable Banking
Corp.
By such deliberate and positive attitude of Banco de Oro, it has for all legal
intents and purposes treated the said Checks as negotiable instruments and
accordingly assumed the warranty of the endorser when it stamped its
guarantee of prior endorsement at the back.
2.) The participation of the two banks in the clearing operation of PCHC is
a manifestation of their submission to its jurisdiction.
3.) Although the subject Checks are non-negotiable, the responsibility of
petitioner as endorser thereof remains. While the drawer generally owes no
duty of diligence to the collecting banks, the law imposes a duty of diligence
in the collecting bank to scrutinize Checks deposited with it for the purpose
of determining their genuineness and regularity.
The collecting bank being primarily engaged in banking holds itself out to the
public as the expert and the law holds it to a high standard of conduct.
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ASSOCIATED BANK VS. CA
GR 107382, 31 January 1996
Facts: The Province of Tarlac maintains a current account with the
Philippine National Bank (PNB Tarlac Branch) where the provincial funds are
deposited. Portions of the funds were allocated to the Concepcion
Emergency Hospital. Checks were issued to it and were received by the
hospitals administrative officer and cashier (Fausto Pangilinan). Pangilinan,
through the help of Associated Bank but after forging the signature ofthe
hospitals chief (Adena Canlas), was able to deposit the checks in his
personal account. All the checks bore the stamp All
prior endorsement guaranteed Associated Bank. Through post-audit, the pr
ovince discovered that the hospital did not receive several allotted checks,
and sought the restoration of the debited amounts from PNB. In turn, PNB
demanded reimbursement from Associated Bank. Both banks resisted
payment. Hence, the present action.
Issue: Who shall bear the loss resulting from the forged checks.
Held: PNB is not negligent as it is not required to return the check to the
collecting bank within 24 hours as the banks involved are covered by Central
Bank Circular 580 and not the rules of the Philippine Clearing
House. Associated Bank, and not PNB, is the one duty-bound to warrant the
instrument as genuine, valid and subsisting at the time of indorsement
pursuant to Section 66 of the Negotiable Instruments Law. The stamp
guaranteeing prior indorsement is not an empty rubric; the collecting bank is
held accountable for checks deposited by its customers. However, due to
the fact that the Province of Tarlac is equally negligent in permitting
Pangilinan to collect the checks when he was no longer connected with the
hospital, it shares the burden of loss from the checks bearing a forged
indorsement. Therefore, the Province can only recover 50%of the amount
from the drawee bank (PNB), and the collecting bank (Associated Bank) is
liable to PNB for50% of the same amount.
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PHILIPPINE COMMERCIAL INDUSTRIAL BANK VS. CA
GR 121413, 29 January 2001
Facts: Ford issued Citibank checks in favor of the Commissioner of Internal
Revenue as payments of its taxes, through the depository bank Insular Bank
of Asia and America (later PCI Bank). Proceeds of the checks were never
received by the Commissioner, but were encashed and diverted to the
accounts of members of a syndicate, to which Fords General Ledger
Accountant Godofredo Rivera belongs. Upon demand of the Commissioner
anew, Ford was forced to make second payment of its taxes. Thus, Ford
instituted actions to recover the amounts from the collecting (depository) and
drawee banks.
Issue: Whether Ford has the right to recover from the collecting bank (PCI
Bank) and/or the drawee bank(Citibank) the value of the checks.
Held: The mere fact that forgery was committed by a drawer-payors
confidential employee or agent, who by virtue of his position had unusual
facilities to perpetrate the fraud and imposing the forged paper upon the
bank, does not entitle the bank to shift the loss to the drawer-payor, in the
absence of some circumstance raising estoppel against the drawer. The rule
applies to checks fraudulently negotiated or diverted by the confidential
employees who hold them in their possession. In GRs 121413 and
121479, PCI Bank failed to verify the authority of Mr. Rivera to negotiate the
checks. Furthermore, PCI Banks clearing stamp which guarantees prior or
lack of indorsements render PCI Bank liable as it allowed Citibank without
any other option but to pay the checks. PCI Bank, being a depository
/collecting bank of the BIR, had the responsibility to make sure that the
crossed checks were deposited in Payees account only as found in
the instrument. In GR 128604, on the other hand, the switching operation
involving the checks, while in transit for clearing, were the clandestine or
hidden actuations performed by the members of the syndicate in their own
personal, covert and private capacity; without the knowledge nor official or
conscious participation of PCIBank in the process of embezzlement. Central
Bank Circular 580 (1977), however, provide d that any theft affecting items in
transit for clearing are for the account of the sending bank (herein PCI
Bank). Still, Citibank was likewise negligent in the performance of its duties
as it failed to establish its payment of Fords checks were made in due
course and legally in order. The fact that drawee bank did not discover the
irregularity seasonably constitutes negligence in carrying out the banks duty
to its depositors.