Facts:

• The case involves Banco De Oro Savings and Mortgage Bank (petitioner), Equitable Banking Corporation (respondent), Philippine Clearing House Corporation (PCHC), and the Regional Trial Court of Quezon City, Branch 92.
• The dispute concerns six crossed Manager's checks issued by Banco De Oro in March, April, May, and August 1983, totaling PHP 45,982.23, payable to Visa Card member establishments.
• These checks were deposited by Aida Trencio with Equitable Banking Corporation.
• Equitable stamped the checks with "All prior and/or lack of endorsement guaranteed" and sent them for clearing through PCHC.
• Banco De Oro paid the checks, debiting its clearing account and crediting Equitable's account.
• Banco De Oro later discovered the endorsements on the checks were forged and sought reimbursement from Equitable.
• Equitable refused reimbursement, leading to arbitration under PCHC rules.
• The Arbiter ruled in favor of Banco De Oro, ordering Equitable to reimburse the amount with interest and attorney's fees.
• The PCHC Board of Directors and the Regional Trial Court of Quezon City affirmed the Arbiter’s decision.
• Banco De Oro filed a petition for review with the Supreme Court.

Issue:

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Ruling:

• The Supreme Court dismissed the petition for lack of merit.
• The decision of the Regional Trial Court of Quezon City, which upheld the PCHC's ruling, was af...(Unlock)

Ratio:

• Jurisdiction: The PCHC had jurisdiction as its rules and regulations apply to both negotiable and non-negotiable checks.
• Interpretation: The term "check" in the PCHC's Articles of Incorporation and Clearing House Rules includes all types of checks used in commercial and banking operations.
• Estoppel: Banco De Oro was estopped from denying liability because it had stamped its guarantee on the checks, thereby assuming the liabilities of an endorser.
• Forged Endorsements: The collecting bank (Equitable) generally suffers the loss in cases of...continue reading