G.R. No. 8273 - People vs Ticson

On January 9, 1981, Security Bank and Trust Company (SBTC) issued a manager’s check for ₱8 million payable to "CASH," representing the proceeds of a loan granted to Guidon Construction and Development Corporation (GCDC).
The ₱8-million manager’s check, together with other checks, was deposited by Continental Manufacturing Corporation (CMC) in its Current Account No. 0109-022888 with Rizal Commercial Banking Corporation (RCBC), which immediately honored the check and allowed a corresponding withdrawal.
On the following banking day, January 12, 1981, GCDC issued a Stop Payment Order against the check, alleging that it had been inadvertently released to a third party, prompting SBTC to dishonor and return the check to RCBC.
The returned check circulated between the two banks, resulting in automatic debits and credits to balance their respective clearing accounts.

On February 13, 1981, RCBC filed a complaint for damages against SBTC with the Court of First Instance (CFI) of Rizal, Branch XXII. The case, initially docketed as Civil Case No. 1081, was later transferred to the Regional Trial Court (RTC) of Makati City, Branch 143.
Under the rules of the Philippine Clearing House, and pending the resolution of the case, the ₱8-million check was temporarily divided equally and credited to both RCBC and SBTC.

On May 9, 2000, the RTC of Makati City, Branch 143, rendered a decision in favor of RCBC, awarding ₱4,000,000 in actual damages, ₱100,000 as attorney’s fees, and costs.
On appellate review, the Court of Appeals affirmed the RTC decision with modifications. Specifically, the CA ordered SBTC to pay the principal amount of ₱4,000,000 with interest at 6% per annum (calculated from February 13, 1981, until the entry of finality), and deleted the award of attorney’s fees due to insufficient factual and legal basis.
Consolidated petitions for review of the CA decision were subsequently filed by both SBTC and RCBC before the Supreme Court.

The Court of Appeals erred by applying law in a manner that would result in an injustice.
The determination of holder in due course should not rely solely on the Negotiable Instruments Law but must also consider Central Bank rules and regulations.
The manager’s check, as accepted for deposit by RCBC, was not encashed by the payee.
Procedural lapses existed, such as RCBC’s handling of deposits and withdrawals, and the timing of the stop payment order notification.
SBTC also contended that it should not be held liable for speculative damage claims, exemplary damages, or attorney’s fees.

The manager’s check issued by SBTC essentially represented the value of cash, carrying the effect of an advance acceptance.
RCBC, having immediately credited the check to CMC’s account, was acting as a holder in due course.
SBTC’s refusal to honor its obligation caused RCBC lost interest income, warranting compensatory damages equivalent to that loss, along with exemplary damages and attorney’s fees.

Whether or not SBTC is liable to RCBC for the remaining ₱4 million.
Whether or not SBTC is liable to pay lost interest income on the remaining ₱4 million, exemplary damages, and attorney’s fees.
Whether RCBC is entitled to be deemed a holder in due course upon crediting the manager’s check to the depositor’s account.
Whether the proper application of the Negotiable Instruments Law and Central Bank guidelines—specifically Monetary Board Resolution No. 2202 and the July 9, 1980 Memorandum—supports RCBC’s actions.
Whether the procedures surrounding the stop payment order, including the timing and manner of its notification by SBTC, were proper.