Case Summary (G.R. No. 74917)
Facts of the Case
In 1983, Banco de Oro issued six crossed Manager's checks totaling ₱45,982.23, deposited with Equitable Banking Corporation on behalf of its client, Aida Trencio. The checks were forwarded to the PCHC for clearing. Banco de Oro later discovered that all endorsements on the checks were forged. Seeking reimbursement, Banco de Oro presented the checks directly to Equitable Banking, which refused to honor the claim, leading them to file a complaint. The trial court directed arbitration per the PCHC Clearing Rules.
Arbitration Proceedings
An Arbitrator ruled in favor of Banco de Oro, ordering PCHC to debit Equitable Banking's account and credit Banco de Oro's account, along with interest and a partial award of attorney’s fees. The PCHC Board affirmed this ruling. Subsequently, the trial court upheld the arbitration decision, prompting Equitable Banking to file a petition for review.
Issues Presented
The petitioner raised several issues: whether PCHC had jurisdiction over the case, whether the checks in question were non-negotiable, the applicability of the Negotiable Instrument Law, what laws governed the situation, and whether Banco de Oro was negligent, thus responsible for the payment.
Jurisdiction and Applicable Law
Equitable Banking contended that the PCHC's jurisdiction was limited to genuinely negotiable checks and argued the checks were non-negotiable due to the removal of the "or bearer" clause. The court, however, emphasized that there is no distinction in the PCHC's rules regarding the nature of checks, asserting the jurisdiction applied to both negotiable and non-negotiable instruments as part of its mandate.
Findings on Non-Negotiability
The trial court concluded that the PCHC's articles of incorporation encompass all types of checks used in commercial transactions, affirming the validity of PCHC's jurisdiction even when the checks were non-negotiable. Furthermore, it highlighted that the standard practice in commercial banking operations does not preclude non-negotiable checks from PCHC's jurisdiction.
Petitioner’s Liability
The court further affirmed that Equitable Banking's express guarantee of validity on prior endorsements made at the back of the checks constituted an assumption of liability as if it were an endorser, which rendered it responsible for any losses incurred when these endorsements were found to be forged. The principle of estoppel prevented Equitable Banking from denying the authenticity of its representation post-clearance of the checks.
Estoppel and its Application
Equitable Banking was found to be estopped from contesting its liability as an endorser because it had conducted itself in a manner leading Banco de Oro to believe the endorsements were valid. The reliance on this representation to th
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Case Overview
- The case is a petition for review on certiorari concerning a decision rendered by the Regional Trial Court of Quezon City on March 24, 1986.
- It involves the dispute between Banco De Oro Savings and Mortgage Bank (the petitioner) and Equitable Banking Corporation and Philippine Clearing House Corporation (the respondents).
- The case arose from an arbitration decision regarding the collection of six crossed manager's checks totaling P45,982.23 with forged endorsements.
Facts of the Case
- Banco De Oro's Visa Card Department issued six crossed manager’s checks between March and August 1983, totaling P45,982.23, payable to various member establishments of Visa Card.
- The checks were deposited by Aida Trencio at Equitable Banking Corporation, which presented them for clearing to the Philippine Clearing House Corporation (PCHC).
- After clearing, Banco De Oro discovered that the endorsements on the checks were forged or unauthorized.
- Banco De Oro sought reimbursement from Equitable Banking Corporation, which refused to accept the presentation of the checks directly.
Procedural History
- Banco De Oro filed a complaint seeking payment of P45,982.23, 12% annual interest, P10,000 in attorney's fees, and costs of the suit.
- The dispute was arbitrated under PCHC Clearing Rules, resulting in a decision favoring Banco De Oro, ordering PCHC to debit Equitable’s account and credit Banco De Oro's account.
- Equitable's motion for reconsideration was denied, leading to a petition for revi