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    Case Digest...

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    Flouressa
    1) George and Librada Moran sued CityTrust Banking Corporation for damages after the bank dishonored checks they had written to Petrophil Corporation due to insufficient funds in their accounts. 2) The court held that a bank is not obligated to pay checks when a depositor's account balance is insufficient, even if the depositor deposits funds later in the day to cover the checks. 3) A depositor is responsible for keeping track of their account balance and ensuring there are enough funds to cover any checks written; the bank has no liability if a check bounces due to insufficient funds, regardless of later deposits.

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    Case Digest...

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    Flouressa
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    1) George and Librada Moran sued CityTrust Banking Corporation for damages after the bank dishonored checks they had written to Petrophil Corporation due to insufficient funds in their accounts. 2) The court held that a bank is not obligated to pay checks when a depositor's account balance is insufficient, even if the depositor deposits funds later in the day to cover the checks. 3) A depositor is responsible for keeping track of their account balance and ensuring there are enough funds to cover any checks written; the bank has no liability if a check bounces due to insufficient funds, regardless of later deposits.

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    1) George and Librada Moran sued CityTrust Banking Corporation for damages after the bank dishonored checks they had written to Petrophil Corporation due to insufficient funds in their accounts. 2) The court held that a bank is not obligated to pay checks when a depositor's account balance is insufficient, even if the depositor deposits funds later in the day to cover the checks. 3) A depositor is responsible for keeping track of their account balance and ensuring there are enough funds to cover any checks written; the bank has no liability if a check bounces due to insufficient funds, regardless of later deposits.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOC, PDF, TXT or read online from Scribd
    Download as doc, pdf, or txt
    48 views1 page

    Case Digest...

    Uploaded by

    Flouressa
    1) George and Librada Moran sued CityTrust Banking Corporation for damages after the bank dishonored checks they had written to Petrophil Corporation due to insufficient funds in their accounts. 2) The court held that a bank is not obligated to pay checks when a depositor's account balance is insufficient, even if the depositor deposits funds later in the day to cover the checks. 3) A depositor is responsible for keeping track of their account balance and ensuring there are enough funds to cover any checks written; the bank has no liability if a check bounces due to insufficient funds, regardless of later deposits.

    Copyright:

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    Moran vs.

    CA
    GR 105836, 7 March 1994
    Second Division, Regalado (J)

    Facts:

    George and Librada Moran maintained 3 joint accounts with CityTrust Banking Corporation. The
    Morans issued checks in favor of Petrophil Corporation, which were dishonored for insufficiency of
    funds. Moran deposited the amount that would cover the checks the day after the check’s clearing.
    Petrophil did not deliver the Morans’ fuel orders for their Wack-Wack Petron Gasoline station,
    prompting the latter to temporarily stop business operations. The Morans sued the bank for damages.

    Issue:

    Whether a bank is liable for its refusal to pay a check on account of insufficient funds, notwithstanding
    the fact the fact that a deposit was made later in the day.

    Held:

    A check is a bill of exchange drawn on a bank payable on demand. Where the bank possesses funds of
    a depositor, it is bound to honor his checks to the extent of the amount of the deposits. Failure to do
    so, when deposit is sufficient, entitles the drawer to substantial damages without proof of actual
    damages. Herein, however, the balance of the account maintained in the bank was not enough to
    cover either of the two checks when they were dishonored. A check, as distinguished from an ordinary
    bill of exchange, is supposed to be drawn against a previous deposit of funds. As such, a drawer must
    remember his responsibilities every time he issues a check. He must personally keep track of his
    available balance in the bank and not rely on the bank to notify him of the necessity to fund the
    checks he previously issued. A bank is under no obligation to make part payment on a check, up to
    only the amount of the drawer’s funds, where the check is drawn for an amount larger than what the
    drawer has on deposit. A check is intended not only to transfer a right to the amount named in it, but
    to serve the further purpose of affording evidence for the bank of the payment of such amount when
    the check is taken up. Clearly, a bank is not liable for its refusal to pay a check on account of
    insufficient funds, notwithstanding the fact that a deposit may be made later in the day. Before a bank
    depositor may maintain a suit to recover a specific amount from his bank, he must first show that he
    had on deposit sufficient funds to meet his demand.

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