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[G.R. No. 145916.January 29, 2001]
MBTC vs. SANVAR DEV'T CORP.
SECOND DIVISION
Gentlemen:
Quoted hereunder, for your information, is a resolution of this Court dated JAN 29 2001.
G.R. No. 145916(Metropolitan Bank & Trust Company vs. Sanvar Development Corp.)
Isabela State University
issued two Development Bank of the Philippines (DBP) checks to respondent
Sanvar Development Corp. ("Sanvar c/o Engineer Jesus Urrea") as final payment
for respondent's construction of the school's farm structures in Cabagan,
Isabela. The two checks, amounting to P207,428.26 and P161,567.80,
dated July 8, 1992 and July 10, 1992 respectively, were given to respondent's
representative, Engr. Jesus Urrea, who in turn entrusted them to one Eduardo
Talaue. Talaue was supposed to bring the two checks to respondent in order to
enable him (Talaue) to clarify the alleged obligation one Isidro Calueng
(respondent's sub-contractor) owed him. However, instead of forwarding the
checks to respondent, Eduardo Talaue forged the indorsements of Engr. Jesus
Urrea and deposited the checks with petitioner Metropolitan Bank & Trust
Company (Metrobank) under the account of Lily Ballesteros.
For failure of petitioner
to pay the two checks amounting to P368,996.06, respondent filed a case
for collection against petitioner and Eduardo Talaue with the Regional Trial
Court, Branch 92, Quezon City. Respondent prayed that petitioner and Talaue be
held jointly and severally liable for the amounts of P368,996.06, with
interest thereon from September 1992 until fully paid, P50,000.00 as
attorney's fees, and P100,000.00 as exemplary damages.
Petitioner moved to dismiss respondent's complaint on the ground that it did not state a cause of action against it (petitioner bank). The trial court granted the motion, holding that petitioner credited the two checks to the account of Lily Ballesteros only after DBP (drawee bank) had accepted, cleared, and honored the same and that, under �62 of the Negotiable Instruments Law, DBP, as the acceptor/drawee bank, was primarily liable for accepting the checks. However, on appeal to the Court of Appeals, the decision was reversed and the case was remanded to the trial court for further proceedings.
Hence, this present petition for review on certiorari. The issue in this case is whether respondent's complaint states a cause of action against petitioner bank, the collecting bank, as to the two checks.
The answer is in the
affirmative. Respondent's complaint alleges that Eduardo Talaue, instead of
bringing the same to respondent's office in Quezon City and contrary to his
representation, deposited the checks to Account No. 68-0867803-0 (account of
Lily Ballesteros) with petitioner bank, by falsifying the indorsements of Engr.
Urrea; that petitioner bank, despite the falsification of the indorsements of
Engr. Urrea and the obvious irregularity of his alleged indorsements, accepted
the deposit of the two checks to the account of Lily Ballesteros; and that by
virtue of the negligent acts of petitioner bank, together with that of Eduardo
Talaue, respondent had been damaged and prejudiced in the total amount of P368,996.06.
Petitioner contends that respondent's complaint does not state a cause of action against it, since the same does not allege that petitioner committed any wrongdoing or fraud but only alleges that petitioner agreed to act as collecting bank and did not honor the checks.
This contention is without merit. Section 23 of the Negotiable Instruments Law provides that when a signature is forged or made without authority of the person whose signature it purports to be, it is wholly inoperative and no right to retain the instrument or to give a discharge therefor or to enforce payment thereof against any party thereto can be acquired through or under such signature unless the party against whom it is sought to enforce such right is precluded from setting up the forgery or want of authority. In this case, it appears that Isabela State University issued two checks to "Sanvar c/o Engineer Jesus Urrea" which were later entrusted to Eduardo Talaue by Engr. Jesus Urrea. Eduardo Talaue, however, forged the indorsements of Engr. Urrea which allowed the former to deposit the checks to the account of Lily Ballesteros. The checks were then indorsed by petitioner Metrobank (as collecting bank) to DBP, as drawee bank. Petitioner acted as a general indorser when it stamped "all prior indorsements and/or lack of indorsements guaranteed" because it thereby warranted the genuineness of all prior indorsenients. Petitioner is thus liable to DBP for the two checks as a forged indorsement does not operate as the payee's indorsement. The appellate court correctly relied on Associated Bank v. Court of Appeals, 252 SCRA 620 (1996) in which it was held:
By reason of the statutory warranty of a general indorser in Section 66 of the Negotiable Instruments Law, a collecting bank which indorses a check bearing a forged indorsement and presents it to the drawee bank guarantees all prior indorsements, including the forged indorsement. It warrants that the instrument is genuine, and that it is valid and subsisting at the time of his indorsement. Because the indorsement is a forgery, the collecting bank commits a breach of this warranty and will be accountable to the drawee bank. This liability scheme operates without regard to fault on the part of the collecting/presenting bank. Even if the latter bank was not negligent, it would still be liable to the drawee bank because of its indorsement.
The Court has consistently ruled that "the collecting bank or last indorser generally suffers the loss because it has the duty to ascertain the genuineness of all prior indorsements considering that the act of presenting the check for payment to the drawee is an assertion that the party making the presentment had done its duty to ascertain the genuineness of the indorsements."
The drawee bank is not similarly situated as the collecting bank because the former makes no warranty as to the genuineness of any indorsement. The drawee bank's duty is but to verify the genuineness of the drawer's signature and not of the indorsement because the drawer is its client.
Moreover, the collecting bank is made liable because it is privy to the depositor who negotiated the check. The bank knows him, his address and history because he is a client. It has taken a risk on his deposit. The bank is also in a better position to detect forgery, fraud or irregularity in the indorsement.
Petitioner alleges that the foregoing ruling does not apply where, as in this case, DBP, the drawee bank, failed to return the checks with the forged indorsements within the 24-hour clearing period. By reason thereof, petitioner should be absolved from liability pursuant to �4(c) of Central Bank Circular No. 9. The argument, however, is a matter of defense which is better threshed out in the proceedings before the trial court.
For the foregoing reasons, the petition is DENIED for lack of showing that the Court of Appeals committed reversible error.
Very truly yours,
(Sgd.) TOMASITA M. DRIS
Clerk of Court
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