Patrimonio vs.

Gutierrez Gutierrez and petitioner asking for the payment

of ₱200,000.00.
(G.R. No. 187769, June 4, 2014)
Issue: Whether or not Marasigan is a holder in
Doctrines: In order however that one who is
due course thus may hold petitioner liable.
not a holder in due course can enforce the
instrument against a party prior to the Held: No, Marasigan is not a holder in due
instrument’s completion, two requisites must course. Section 52(c) & (d) of the NIL states
exist: that a holder in due course is one who takes
the instrument “in good faith and for value"
(1) that the blank must be filled strictly in
and that it is necessary that at the time it was
accordance with the authority given; and
negotiated to him he had no notice of any
(2) it must be filled up within a reasonable time. infirmity in the instrument or defect in the title
If it was proven that the instrument had not of the person negotiating it.
been filled up strictly in accordance with the
In the present case, Gutierrez was only
authority given and within a reasonable time,
authorized to use the check for business
the maker can set this up as a personal defense
expenses; thus, he exceeded the authority
and avoid liability.
when he used the check to pay the loan he
However, if the holder is a holder in due supposedly contracted for the construction of
course, there is a conclusive presumption that petitioner's house.
authority to fill it up had been given and that
Marasigan’s knowledge that the petitioner is
the same was not in excess of authority.
not a party or a privy to the contract of loan,
Facts: The petitioner and the respondent and correspondingly had no obligation or
Napoleon Gutierrez (Gutierrez) entered into a liability to him, renders him dishonest, hence, in
business venture under the name of Slam Dunk bad faith.
Corporation (Slum Dunk), a production outfit
Considering that Marasigan is not a holder in
that produced mini-concerts and shows related
due course, the petitioner can validly set up the
to basketball. In the course of their business,
personal defense that the blanks were not filled
the petitioner pre-signed several checks to
up in accordance with the authority he gave;
answer for the expenses of Slam Dunk;
hence, Marasigan has no right to enforce
however, these checks had no payee’s name,
payment against the petitioner and the latter
date or amount.
cannot be obliged to pay the face value of the
The blank checks were entrusted to Gutierrez check.
with the specific instruction not to fill them out
without previous notification to and approval
by the petitioner.

Without the petitioner’s knowledge and

consent, Gutierrez went to Marasigan to secure
a loan in the amount of ₱200,000.00
and Gutierrez simultaneously delivered to
Marasigan one of the blank checks the
petitioner pre-signed with Pilipinas Bank in the
amount of "₱200,000.00.

When Marasigan deposited the check, it was

dishonored for the reason "ACCOUNT CLOSED"
and so Marasigan sought recovery from
ASIA BREWERY v. EQUITABLE PCI BANK HELD:

G.R. No. 190432 The Court believes that it need not delve into
April 25, 2017 the issue of whether the instruments have been
delivered, because it is a matter of defense that
FACTS: would have to be proven during trial on the
merits.
Within the period of September 1996 to July
1998, 10 checks and 16 demand drafts In Aquino v. Quiazon, we held that if the
(collectively, “instruments”) were issued in the allegations in a complaint furnish sufficient
name of Charlie Go. The instruments, with a basis on which the suit may be maintained, the
total value of P3,785,257.38, bore the complaint should not be dismissed regardless
annotation “endorsed by PCI Bank, Ayala of the defenses that may be raised by the
Branch, All Prior Endorsement And/Or Lack of defendants.
Endorsement Guaranteed.” All the demand
In other words, "[a]n affirmative defense,
drafts, except those issued by the Lucena City
raising the ground that there is no cause of
and Ozamis branches of Allied Bank, were
action as against the defendants poses a
crossed.
question of fact that should be resolved after
In their Complaint, petitioners narrate: the conduct of the trial on the merits.”

10. None of the above checks and demand

drafts set out under the First, Second, Third,
Fourth, Fifth, and Sixth Causes of Action reached
payee, co-plaintiff Charlie S. Go.
11. All of the above checks and demand drafts
fell into the hands of a certain Raymond U. Keh,
then a Sales Accounting Manager of plaintiff
Asia Brewery, Inc., who falsely, willfully, and
maliciously pretending to be the payee, co-
plaintiff Charlie S. Go, succeeded in opening
accounts with defendant Equitable PCI Bank in
the name of Charlie Go and thereafter deposited
the said checks and demand drafts in said
accounts and withdrew the proceeds thereof to
the damage and prejudice of plaintiff Asia
Brewery, Inc.
RULING:
WHEREFORE, the petition is GRANTED. The
Order dated 30 January 2008 issued by Judge
Benjamin T. Pozon and the Order dated 23
November 2009 issued by Judge Winlove
Dumayas in Civil Case No. 04336 are REVERSED
and SET ASIDE. The Complaint is REINSTATED,
and the case is ordered REMANDED to the
Regional Trial Court of Makati City for further
proceedings. Let the records of the case be
likewise remanded to the court a quo.

Raymond Keh was allegedly charged with and

convicted of theft and ordered to pay the value
of the checks, but not a single centavo was
collected, because he jumped bail and left the
country while the cases were still being tried.

ISSUE:

Petitioners argue that the trial court seriously

erred in dismissing their Complaint for lack of
cause of action.
Bank of America vs. Philippine Racing Club
G.R. 150228 July 30, 2009
FACTS:
1. Plaintiff PRCI is a domestic corporation which
maintains a current account with petitioner
Bank of America. Its authorized signatories are
the company President and Vice-President. By
virtue of a travel abroad for these officers, they
pre-signed checks to accommodate
expenses that may come up while they were
abroad for a business trip.
The said pre-signed checks were left for
safekeeping by PRCs accounting officer.
Unfortunately, the two (2) of said checks came
into the hands of one of its employees who
managed to encash it with petitioner bank. The
said check was filled in with the use of a check-
writer, wherein in the blank for the 'Payee', the
amount in words was written, with the word
'Cash' written above it.
2. Clearly there was an irregularity with the
filling up of the blank checks as both showed
similar infirmities and irregularities and yet, the
petitioner bank did not try to verify with the
corporation and proceeded to encash the
checks.
3. PRC filed an action for damages against the
bank. The lower court awarded actual and
exemplary damages. On appeal, the
affirmed the lower court's decision and held
that the bank was negligent.
1. There was no dispute that the signatures in
the checks are genuine but the presence of
irregularities on the face of the check should
have alerted the bank to exercise caution
before encashing them.
It is well-settled that banks are in the business
impressed with public interest that they are
duty bound to protect their clients and their
deposits at all times. They must treat the
any accounts of these clients with meticulousness
and a highest degree of care considering the
fiduciary nature of their relationship. The
diligence required of banks is more than that of
a good father of a family.
2. The PRC officers' practice of pre-signing
checks is a seriously negligent and highly risky
behavior which makes them also contributor to
the loss.
Its own negligence must therefore mitigate the
petitioner's liability.
Moreover, the person who stole the checks is
also an employee of the plaintiff, a clerk in its
accounting department at that. As the
employer, PRC supposedly should have control
and supervision over its own employees.
3. The court held that the petitioner is liable for
60% of the total amount of damages while PRC
should shoulder 40% of the said amount.
CA

Hence this appeal. Petitioner contends that it

was merely doing its obligation under the law
and contract in encashing the checks, since the
signatures in the checks are genuine.

ISSUE: Whether or not the petitioner can be

held liable for negligence and thus should pay
damages to PRC.

HELD:

Both parties are held to be at fault but the

bank has the last clear chance to prevent the
fraudulent encashment hence it is the one
foremost liable.
Gempesaw V. CA (1993)
G.R. No. 92244 February 9, 1993
FACTS:
Gempesaw owns and operates four grocery stores.
To pay their debts of her supplies, she draws checks
against her account, she signed each and every
crossed check without bothering to verify the
accuracy of the checks against the corresponding
invoices because she reposed full and implicit trust
and confidence on her bookkeeper.
Although the Bank notified her of all checks
presented to and paid by the bank, petitioner did
not verify the correctness of the returned checks,
much less check if the payees actually received the
checks in payment for the supplies she received, it
was only after the lapse of more 2 years that
petitioner found out about the fraudulent
manipulations of her bookkeeper.
On November 7, 1984, Gempesaw made a written
demand on respondent drawee Bank to credit her
account with the money value of the 82 checks
totaling P1, 208.606.89 for having been wrongfully
charged against her account.
On January 23, 1985: Gempesaw filed against
Philippine Bank of Communications (drawee Bank)
for recovery of the money value of 82 checks
charged against the Gempesaw's account on the
ground that the payees' indorsements were
forgeries
RTC: Dismissed the complaint
CA: Affirmed: Gempesaw Gross Negligence =
Promixate Cause of the loss
ISSUE: W/N Gempesaw has a right to recover the
amount attributable to the forgeries
HELD: NO. REMANDED to the trial court for the
reception of evidence to determine the exact
amount of loss suffered by the petitioner,
considering that she partly benefited from the
issuance of the questioned checks since the
obligation for which she issued them were
apparently extinguished, such that only the excess
amount over and above the total of these actual
obligations must be considered as loss of which
one half must be paid by respondent drawee bank
to herein petitioner.
Petitioner completed the checks by signing them as
drawer and thereafter authorized her employee
Alicia Galang to deliver to payees
GR: Drawee bank who has paid a check on which
an indorsement has been forged cannot charge the
drawer's account for the amount of said check.
XPN: where the drawer is guilty of such negligence
which causes the bank to honor such a check or
checks.
Under the Negotiable Instruments Law, the only
kind of indorsement which stops the further
negotiation of an instrument is a restrictive
indorsement which prohibits the further
negotiation thereof.
Sec. 36. When indorsement restrictive. - An
indorsement is restrictive which either:
(a) Prohibits further negotiation of the instrument;
or
xxx xxx xxx
In this kind of restrictive indorsement, the
prohibition to transfer or negotiate must be written
in express words at the back of the instrument, so
that any subsequent party may be forewarned that
ceases to be negotiable.
However, the restrictive indorsee acquires the right
to receive payment and bring any action thereon as
any indorser, but he can no longer transfer his
rights as such indorsee where the form of the
indorsement does not authorize him to do so.
When it violated its internal rules that second
endorsements are not to be accepted without the
approval of its branch managers and it did accept
the same upon the mere approval of Boon, a chief
accountant, it contravened the tenor of its
obligation at the very least, if it were not actually
guilty of fraud or negligence.
Drawee Bank did not discover the irregularity with
respect to the acceptance of checks with second
indorsement for deposit even without the approval
of the branch manager despite periodic inspection
conducted by a team of auditors from the main
office constitutes negligence on the part of the
bank in carrying out its obligations to its
depositors.