Facts:

The case involves Violet McGuire Sumacad and others as plaintiffs and appellees against the Province of Samar and the Philippine National Bank (PNB) as defendants and appellant. The events date back to May 1942, during the Japanese occupation of the Philippines, when the Province of Samar issued a check for P25,000 to Paulino M. Santos, the postmaster of Borongan. This check was drawn against the Philippine National Bank's Cebu Branch. Paulino M. Santos subsequently negotiated the check to James McGuire, an American citizen residing in Borongan. After the Philippines was liberated in 1946, McGuire attempted to cash the check at the municipal treasurer's office, but payment was not made. Over the next few years, McGuire sent several letters to the Bureau of Posts seeking payment, which were eventually referred to PNB. On April 25, 1950, PNB requested photostatic copies of the check, which they received on May 12, 1950. At that time, the Province of Samar had a deposit ...

Facts:

Background of the Case

• In May 1942, during the Japanese occupation of Samar, the Province of Samar issued a check for P25,000 to Paulino M. Santos, the postmaster of Borongan. The check was drawn against the Philippine National Bank (PNB) Cebu Branch.
• The payee, Paulino M. Santos, negotiated the check to James McGuire, an American citizen residing in Borongan.

Post-Liberation Events

• After liberation in 1946, James McGuire presented the check to the municipal treasurer of Borongan for payment, but the treasurer only noted it and did not pay.
• McGuire wrote letters to the Bureau of Posts on May 28, 1948, August 5, 1948, and March 30, 1950, seeking payment. These letters were referred to the PNB on April 21, 1950.
• On April 25, 1950, the PNB requested photostatic copies of the check, which were received on May 12, 1950. At this time, the Province of Samar had a deposit of P84,287.47 with the PNB.

PNB's Actions

• On May 14, 1950, the PNB requested James McGuire to present the check to the provincial treasurer and auditor for certification, in accordance with a circular issued by the Secretary of Finance on July 3, 1947.
• On August 22, 1950, McGuire again requested the Bureau of Posts to expedite the certification process.

Withdrawal of Funds

• Before the check could be certified, the Province of Samar withdrew P83,504.07 from its account on September 4, 1951, leaving a balance of only P743.43.

Transfer of Rights and Filing of the Case

• James McGuire transferred his rights to the check to the plaintiffs, Violet McGuire Sumacad et al.
• Unable to cash the check, the plaintiffs filed a complaint against the Province of Samar and the PNB in the Court of First Instance of Samar on July 27, 1953.
• The trial court ruled in favor of the plaintiffs, ordering the defendants to pay P25,000, plus legal interest, attorney’s fees, and costs. Only the PNB appealed.

Issue:

• (Unlock)

Ruling:

• (Unlock)

Ratio:

1. Implied Acceptance by the PNB: The PNB’s request for photostatic copies of the check and its requirement for certification by the provincial treasurer and auditor indicated an intention to assume the obligation of paying the check. This created an implied acceptance of the check.
2. Subsidiary Liability: The PNB’s liability is subsidiary because the primary obligation lies with the Province of Samar, the drawer of the check. The PNB’s role was to ensure sufficient funds were available, but it failed to prevent the withdrawal that exhausted the deposit.
3. No Solidary Liability: The PNB cannot be held solidarily liable with the Province of Samar. Its obligation arises only after the primary obligor (the Province) fails to fulfill its duty.

Dissenting Opinion

• Justice Padilla dissented, arguing that the PNB should not be held liable, even subsidiarily. He emphasized that the original check was never presented to the PNB for payment, and the bank’s actions (requesting copies and suggesting certification) did not create an obligation to pay. He believed the Province of Samar, as the drawer, should be solely liable.