Case Summary (G.R. No. 170984)
Applicable Law
The case is governed by the provisions of the 1987 Philippine Constitution, alongside the Negotiable Instruments Law (Act No. 2031) and relevant sections of the Civil Code regarding damages and obligations.
Factual Background
On January 9, 1981, SBTC issued a manager's check for P8 million, payable to "CASH," as a loan proceeds to Guidon Construction and Development Corporation (GCDC). This check was subsequently deposited by Continental Manufacturing Corporation (CMC) into its account at RCBC, which allowed immediate withdrawal of the amount. On January 12, 1981, GCDC issued a stop payment order to SBTC, prompting SBTC to dishonor the check and return it to RCBC.
Trial Court Proceedings
RCBC filed a damage complaint against SBTC, which was initially lodged with the Court of First Instance of Rizal and later transferred to the Regional Trial Court of Makati City. The court ultimately ruled in favor of RCBC, mandating SBTC to pay PhP4 million as actual damages, along with attorney's fees and costs.
Court of Appeals Decision
The Court of Appeals modified the trial court's decision, affirming the liability of SBTC for the principal amount of P4,000,000.00 but adding an interest of 6% per annum from the filing of the complaint until the finality of the decision. The appellate court, however, denied the claim for attorney's fees due to a lack of legal basis.
Legal Issues Presented
SBTC challenged the appellate court's decision, presenting numerous arguments including the alleged improper exclusion of Central Bank regulations, issues related to the stop payment order, and the legitimacy of RCBC as a holder in due course. RCBC countered with claims for compensatory damages, lost interest income, exemplary damages, and attorney's fees.
Nature of Manager’s Check
The court emphasized that a manager's check, akin to a certified check, represents a primary obligation of the bank as it indicates acceptance upon issuance. As such, RCBC's reliance on the integrity of the check and immediate crediting to CMC's account was justified, rendering SBTC liable.
Discretionary Withdrawal Against Uncollected Deposits
The court dismissed SBTC's defense based on Monetary Board Resolution No. 2202, clarifying that the Central Bank allowed banks to exercise discretion regarding immediate withdrawals for manager's checks. This discretion fully justified RCBC's actions in permitting the withdrawal.
Damages Awarded
Regarding lost interest income claimed by RCBC, the court ruled that this matter was encapsulated within the legal i
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Case Overview
- The case involves two petitions for review stemming from a dispute between Security Bank and Trust Company (SBTC) and Rizal Commercial Banking Corporation (RCBC) concerning a manager's check issued by SBTC.
- The petitions are consolidated under G.R. No. 170984 and G.R. No. 170987, with the decision rendered on January 30, 2009, by the Second Division of the Supreme Court of the Philippines.
Factual Background
- On January 9, 1981, SBTC issued a manager's check amounting to P8 million, payable to "CASH," as part of a loan to Guidon Construction and Development Corporation (GCDC).
- Continental Manufacturing Corporation (CMC) deposited this check along with other checks into its current account with RCBC.
- RCBC honored the check immediately, allowing CMC to withdraw the funds.
- On January 12, 1981, GCDC issued a "Stop Payment Order" to SBTC, claiming the check was mistakenly released to a third party.
- Following the stop payment order, SBTC dishonored the check and returned it to RCBC, leading to a back-and-forth exchange between the two banks.
- RCBC subsequently filed a complaint for damages against SBTC, which was initially lodged with the Court of First Instance and later transferred to the Regional Trial Court of Makati City.
Lower Court Decisions
- The RTC rendered a judgment in favor of RCBC, holding SBTC liable for P4 million in actual damages, P100,000 in attorney's fees, and costs.
- Upon appeal, the Court of Appeals modified the deci