NEGO - Associated Bank v. CA
NEGO - Associated Bank v. CA
NEGO - Associated Bank v. CA
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G.R. No. 107382. January 31, 1996.
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* SECOND DIVISION.
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check to it and so on. The loss falls on the party who took the
check from the forger, or on the forger himself.
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the period fixed by law for filing a legal action. The rationale of
the rule is to give the collecting bank (which indorsed the check)
adequate opportunity to proceed against the forger. If prompt
notice is not given, the collecting bank may be prejudiced and lose
the opportunity to go after its depositor.
ROMERO, J.:
1
17962).
The facts of the case are as follows:
The Province of Tarlac maintains a current account with
the Philippine National Bank (PNB) Tarlac Branch where
the provincial funds are deposited. Checks issued by the
Province are signed by the Provincial Treasurer and
countersigned by the Provincial Auditor or the Secretary of
the Sangguniang Bayan.
A portion of the funds of the province
2
is allocated to the
Concepcion Emergency Hospital. The allotment checks for
said government hospital are drawn to the order of
Concepcion Emergency Hospital, Concepcion, Tarlac or
The Chief, Concepcion Emergency Hospital, Concepcion,
Tarlac. The checks are released by the Office of the
Provincial Treasurer and received for the hospital by its
administrative officer and cashier.
In January 1981, the books of account of the Provincial
Treasurer were post-audited by the Provincial Auditor. It
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was
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8 TSN, July 10, 1985, pp. 20-21, 34-35; September 24, 1985.
9 Exhibit FF for Province of Tarlac. On March 20, 1981, the Province of Tarlac
reiterated its request in another letter to PNB. Associated Bank was allegedly
furnished with a copy of this letter. (Records, pp. 246-247) PNB requested the
Province to return the checks in a letter dated March 31, 1981. The checks were
returned to PNB on April 22, 1981. (Exhibit GG) On April 24, 1981, PNB gave the
checks to Associated Bank. (Exhibit 5) Associated Bank returned the checks to
PNB on April 28, 1981, along with a letter stating its refusal to return the money
paid by PNB. (Exhibit 6)
10 Exhibit MM for Province of Tarlac.
11 Civil Case No. 6227, Province of Tarlac v. Philippine National Bank;
Philippine National Bank v. Associated Bank; Associated Bank v. Fausto
Pangilinan and Adena G. Canlas, Regional Trial Court Branch 64, Tarlac, Tarlac.
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SO ORDERED.
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SO ORDERED.
PNB and 13
Associated Bank appealed to the Court of
Appeals. Respondent court affirmed the trial courts
decision in toto on September 30, 1992.
Hence these consolidated petitions which seek a reversal
of respondent appellate courts decision.
PNB assigned two errors. First, the bank contends that
respondent court erred in exempting the Province of Tarlac
from liability when, in fact, the latter was negligent
because it delivered and released the questioned checks to
Fausto Pangilinan who was then already retired as the
hospitals cashier and administrative officer. PNB also
maintains its innocence and alleges that as between two
innocent persons, the one whose act was the cause of the
loss, in this case the Province of Tarlac, bears the loss.
Next, PNB asserts that it was error for the court to
order it to pay the province and then seek reimbursement
from Associated Bank. According to petitioner bank,
respondent appellate court should have directed Associated
Bank to pay the adjudged liability directly to the Province
of Tarlac to
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avoid circuity.
Associated Bank, on the other hand, argues that the
order of liability should be totally reversed, with the
drawee bank (PNB) solely and ultimately bearing the loss.
Respondent court allegedly erred in applying Section 23
of the Philippine Clearing House Rules instead of Central
Bank Circular No. 580, which, being an administrative
regulation
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issued pursuant to law, has the force and effect
of law. The PCHC Rules are merely contractual
stipulations among and between member-banks. As such,
they cannot prevail over the aforesaid CB Circular.
It likewise contends that PNB, the drawee bank, is
estopped from asserting the defense of guarantee of prior
indorsements against Associated Bank, the collecting bank.
In stamping the guarantee (for all prior indorsements), it
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20 Id., at 199.
21 J. VITUG, PANDECT OF COMMERCIAL LAW AND
JURISPRUDENCE 51-53 (Rev. ed., 1990).
22 Id.
23 Section 66, Negotiable Instruments Law.
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27 Id.
28 Id., at 216-235; VITUG, op. cit. note 21 at 53.
29 Banco de Oro v. Equitable Banking Corp., supra; Great Eastern Life
Insurance Co. v. HSBC, supra.
30 Article 2154 of the Civil Code provides: If something is received
when there is no right to demand it, and it was unduly delivered through
mistake, the obligation to return it arises. Banco de Oro v. Equitable
Banking Corp., supra.
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31 Bank of the Phil. Islands v. CA, G.R. No. 102383, November 26, 1992,
216 SCRA 51, 63 citing Banco de Oro v. Equitable Banking Corp., supra;
Great Eastern Life Insurance Co. v. HSBC, supra.
32 CAMPOS & LOPEZ-CAMPOS, op. cit. note 18 at 283 citing Inter-
state Trust Co. v. U.S. National Bank, 185 Pac. 260; Hongkong and
Shanghai Banking Corp. v. Peoples Bank and Trust Co., supra.
634
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33 JORDAN & WARREN, op. cit. note 26 at 217; CAMPOS & LOPEZ-
CAMPOS, op. cit. note 18 at 283.
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ATTY. MORGA:
Q: Now, is it true that for a given month there were two
releases of checks, one went to Mr. Pangilinan and one
went to Miss Juco?
JOSE MERU:
A: Yes, sir.
Q: Will you please tell us how at the time (sic) when the
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The Bank should have first verified his right to endorse the
crossed checks, of which he was not the payee, and to deposit the
proceeds of the checks to his own account. The Bank was by
reason of the nature of the checks put upon notice that they were
issued for deposit only to the private respondents account. x x x
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Pangilinans
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account with Associated had only P24.63 in
it. Had Associated Bank decided to debit Pangilinans
account, it could not have recovered the amounts paid on
the questioned checks. In addition, while Associated Bank
filed a fourth-party complaint against Fausto Pangilinan, it
did not present evidence against Pangilinan
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and even
presented him as its rebuttal witness. Hence, Associated
Bank was not prejudiced by PNBs failure to comply with
the twenty-four-hour return rule.
Next, Associated Bank contends that PNB is estopped
from requiring reimbursement because the latter paid and
cleared
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36 See footnote 9.
37 Exhibit 3-G for Associated Bank.
38 TSN, January 8, 1987.
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41 Eastern Shipping Lines, Inc. v. CA, G.R. No. 97412, July 12, 1994,
234 SCRA 78.
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o0o
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