G.R. No. 150910 - Gonzaludo vs. People

Case Summary (G.R. No. 150910)

Procedural History

Petitioner deposited the ten checks with the respondent, which provisionally credited petitioner’s current account pursuant to a deposit-slip clause reserving the bank’s right to charge back items until actual receipt of current funds. After the Inter-Island Gas discovered that the indorsements on the checks were forged and notified the parties, drawee banks reclaimed the amounts they had paid and reimbursed the Inter-Island Gas. The respondent reimbursed the drawee banks, debited petitioner’s account for the aggregate value of the checks, and sent back the checks, which the petitioner refused to accept. Petitioner sued; the trial court dismissed its complaint, the Court of Appeals affirmed, and the Supreme Court likewise affirmed the appellate judgment, ordering costs against petitioner.

Core Facts Relating to the Checks

Ten checks totaling P8,030.58 were acquired by petitioner from Ramirez and deposited for collection. The checks were payable to Inter-Island Gas Service, Inc., either to order or to bearer, and included several crossed checks. The indorsements purporting to be those of Inter-Island Gas cashiers were later found to be forged. The respondent collected funds from drawee banks under the mistaken belief the indorsements were genuine; upon discovery of the forgeries the drawee banks reclaimed those payments, and the respondent accordingly sought reimbursement from petitioner by charging back petitioner’s account.

Issues Presented

The petition framed three interrelated issues: (a) whether the respondent could debit petitioner’s account for the checks’ value after more than three months from provisional crediting; (b) whether the respondent was estopped from debiting the amount because it had already collected from drawee banks; and (c) if the debit was improper, whether petitioner was entitled to damages.

Nature of the Bank–Depositor Relationship and Effect of Forgery

At the time of deposit the bank’s role was that of collecting agent: it was to present the checks to the drawee banks and collect proceeds. The Court recognized that when a collecting bank actually receives current funds the relationship may mature into creditor-debtor (as argued under Gullas v. Philippine National Bank), but held that here no valid creditor-debtor conversion occurred because the indorsements were forged. Under Section 23 of the Negotiable Instruments Law a forged signature is wholly inoperative and cannot effect payment or discharge the instrument; therefore payments made by drawee banks under the false impression of valid indorsements were legally ineffective. Because the drawee banks’ payments were ineffectual, the respondent could not be deemed to have legitimately converted the checks into cash for purposes of extinguishing petitioner’s liability.

Liability of the Collecting Bank and the Depositor’s Warranty

The Court relied on the principle, articulated in Great Eastern Life Ins. Co. v. Hongkong & Shanghai Bank, that the collecting bank must reimburse drawee banks for checks later found to bear forged indorsements; it was the collecting bank’s duty to require genuine indorsements before cashing checks. However, where the collecting bank relies on the immediate transferor’s warranties, the transferor may bear the loss. By indorsing the checks when depositing them with the respondent, the petitioner acted as a negotiator/indorser and thereby gave the statutory warranties under Sections 65–67 of the Negotiable Instruments Law — specifically, the warranty that the instrument is genuine and in all respects what it purports to be. Those warranties run in favor of the immediate transferee (the respondent). Consequently, the petitioner warranted the genuineness of prior indorsements and is liable for losses resulting from forgeries.

Petitioner’s Negligence and the Character of the Instruments

The Court emphasized petitioner’s negligence in obtaining and cashing checks payable to a corporate payee from an individual (Ramirez) who had no apparent authority to negotiate corporate checks. The Court cited the rule that a person taking checks payable to a corporation does so at his peril as to the authority of the agent who indorses them. Several checks were crossed (deposit-only) and yet were accepted for cash, and some were bearer forms; the combination of bearer status and crossing, and the corporate payee’s appearance on the face of the checks, should have aroused suspicion. This failure to inquire into Ramirez’s authority made petitioner responsible for the loss.

Effect of the Deposit-Sli

Case Syllabus (G.R. No. 150910)

Case Citation and Court

160 Phil. 741; 72 OG No. 3, 557 (January 19, 1976); FIRST DIVISION.
G.R. No. L-29432. Decision dated August 06, 1975; opinion by Justice Castro.
Petition by Jai-Alai Corporation of the Philippines (hereinafter the petitioner) for review of the decision of the Court of Appeals in C.A.-G.R. 34042-R dated June 25, 1968 in favor of the Bank of the Philippine Islands (hereinafter the respondent).

Procedural History

Petitioner deposited ten checks totaling P8,030.58 in its current account with respondent between April 2, 1959 and May 18, 1959.
Inter-Island Gas Service, Inc. later discovered the indorsements on the checks purportedly by its cashiers were forged, and notified the petitioner, respondent, drawers and drawee-banks; a criminal complaint was filed against Ramirez but the City Fiscal later dropped charges for reason stated in the record.
Respondent, after notification and upon return of the checks by the drawee-banks, debited the petitioner’s current account for the amount of the checks; petitioner refused to accept the returned checks.
On October 8, 1959 petitioner’s own check for P135,000 was dishonored because the respondent’s records showed a reduced balance after netting out P8,030.58.
Petitioner filed a complaint with the Court of First Instance of Manila, which was dismissed after trial; the Court of Appeals affirmed the dismissal. Petitioner sought review by the Supreme Court.

Facts — Deposited Checks (Dates, Drawers, Drawee Banks, Payees, Amounts, Exhibits)

Total face value deposited: P8,030.58.
Checks drawn by Delta Engineering Service on Pacific Banking Corporation payable to Inter-Island Gas Service, Inc. or order:
- 4/2/59 Check B-352680 Amount P500.00 Exhibit 18
- 4/20/59 Check A-156907 Amount P372.32 Exhibit 19
- 4/24/59 Check A-156924 Amount P397.82 Exhibit 20
- 5/4/59 Check B-364764 Amount P250.00 Exhibit 23
- 5/6/59 Check B-364775 Amount P250.00 Exhibit 24
Checks drawn by Enrique Cortiz & Co. on Pacific Banking Corporation payable to Inter-Island Gas Service, Inc. or bearer:
- 4/13/59 Check B-335063 Amount P2,108.70 Exhibit 21
- 4/27/59 Check B-335072 Amount P2,210.94 Exhibit 22
Check drawn by Luzon Tinsmith & Company on China Banking Corporation payable to Inter-Island Gas Service, Inc. or bearer:
- 5/18/59 Check VN430188 Amount P940.80 Exhibit 25
Checks drawn by Roxas Manufacturing, Inc. on Philippine National Bank payable to Inter-Island Gas Service, Inc. or order:
- 5/14/59 Check 1860160 Amount P500.00 Exhibit 26
- 5/18/59 Check 1860660 Amount P500.00 Exhibit 27

Facts — Circumstances of Acquisition and Deposit

All checks were acquired by the petitioner from Antonio J. Ramirez, a sales agent of Inter-Island Gas and a regular bettor at jai-alai games.
Upon deposit, the respondent temporarily credited petitioner’s account pursuant to the printed clause on its deposit slips, which reads in pertinent part:
- "Any credit allowed the depositor on the books of the Bank for checks or drafts hereby received for deposit, is provisional only, until such time as the proceeds thereof, in current funds or solvent credits, shall have been actually received by the Bank and the latter reserves to itself the right to charge back the item to the account of its depositor, at any time before that event, regardless of whether or not the item itself can be returned."
After inter-bank clearing and in late July 1959, Inter-Island Gas discovered the indorsements by its cashiers (Santiago Amplayo and Vicenta Mucor) and the corporate rubber stamp impression were forgeries.
Inter-Island Gas notified the petitioner, respondent, drawers and drawee-banks and filed a criminal complaint against Ramirez (later dropped by the City Fiscal for reasons recorded).

Immediate Post-Discovery Actions

Respondent’s cashier Ramon Sarthou called petitioner’s cashier Manuel Garcia and advised respondent would debit the petitioner’s account when the drawee-banks returned the items.
Drawers, upon notice of forgeries, demanded reimbursement from drawee-banks; drawee-banks in turn demanded return from respondent as collecting bank.
Drawee-banks returned the checks to respondent; respondent paid their value to the drawee-banks, debited petitioner’s current account, and forwarded the returned checks to petitioner, who refused to accept them.
Resulting account status as of October 8, 1959: after netting out P8,030.58, petitioner’s balance was P128,257.65, leading respondent to dishonor petitioner’s P