Professional Documents
Culture Documents
2. Security Bank and Trust Co. v Eric Gan GR No. 150464, June 27, 2006
Facts:
Respondent Gan opened a current account to the petitioner which he can draw check from its
fund. Under a special agreement with the petitioner manager Mr. Qui, respondent is allowed to
transfer fund from his account to another persons account. His transaction of transferring fund
from his account to another account is covered by a debit memo. In December 14, 1982, he was
reportedly to have incurred a negative balance in the amount of P153,757.78. By Sept. 15, 1990
his total obligation to the petitioner allegedly amounted to P297,060.01 inclusive of interest.
Petitioner filed a complaint to recover the sum of money from the respondent after his refusal to
pay contending that the alleged overdraft was made from transactions without his knowledge and
consent. Petitioner presented its bookkeeper, Patricio Mercado who handles the respondents
account and transactions in a ledger. Records show that a transfer of fund from the respondents
account was made to another persons account which was made with authority from Qui which
resulted to the overdraft of his account. Respondent denied to have authorized such transaction.
The lower court dismissed the case on the ground that the petitioner failed to establish with
substantial evidence that the respondent does owe them that sum of money. The CA affirmed the
lower court decision upon the court hence this petition.
Issue:
Whether or not petitioner has established substantial evidence that respondent is liable for the
overdraft on his account?
Ruling:
The court held that the ledger presented is not competent evidence to prove that the respondent
consented to the transaction made on his account. Petitioner invoked Section 43 of Rule 130:
Entries in the course of business Entries made at, or near the time of the transactions to which
they refer, by a person deceased, or unable to testify, who was in a position to know the facts
therein stated, may be received as prima facie evidence, if such person made the entries in his
professional capacity or in the performance of duty and in the ordinary or regular course of
business or duty. Under this exception to the hearsay rule, the admission in evidence of entries
in corporate books required the satisfaction of the following conditions: 1. the person who made
the entry must be dead, or unable to testify; 2. the entries were made at or near the time of the
transactions to which they refer; 3. the entrant was in a position to know the facts stated in the
entries; 4. the entries were made in his professional capacity or in the performance of a duty,
whether legal, contractual, moral or religious; and 5. the entries were made in the ordinary or
regular course of business or duty.
The ledger entries did not meet the first and third requisites. It was due to Mercados testimony
that the ledgers were presented thus there is no need to justify its necessity for presentation since
the person who made them was available to testify in court. Mercado does not have personal
knowledge as to the truthfulness of the entries after stating that the agreement was made between
Qui and Gan. It is undeniable that the ledger does contains the transaction records in the ordinary
course of business but it cannot be used as a prima facie evidence as to the facts that were
recorded therein. Mercado knows the facts of the entry of the check deposits and the withdrawals
but he does not have knowledge as to the facts involving the debit memos issued to support the
transaction.
Petitioner argues that the respondent is estopped from denying the petitioners claim after
benefiting from the special agreement accorded to him resulting to the negative balance. The
court held that the principle of estoppel is not applicable at the case at bar since it was not
established that the respondent received the copy of the ledger to be given the chance to review
the entries therein. Respondent did not benefit from the said agreement since the fund transfer
was from and not to the respondents account. Hence, the benefit goes to another persons account
and not from the respondents. The court denied the petition and affirmed the lower courts
decision.
Financial intermediaries are defined as "persons or entities whose principal functions include the lending, investing or placement of
funds or evidences of indebtedness or equity deposited with them, acquired by them, or otherwise coursed through them, either for
their own account or for the account of others."
Section 3 of P.D. No. 114 defines pawnshop as "a person or entity engaged in the business of lending money on personal property
delivered as security for loans and shall be synonymous, and may be used interchangeably, with pawnbroker or pawn brokerage."
4. Philippine Savings Bank v Chowking Food Corp. GR No. 177526, July 4, 2008
Facts:
Rino Manzano, acting accounting manager of Chowking, endorsed and encashed from
the petitioner 5 checks amounting to a total of P556,981.86. The checks were encashed
without the signatures of the other authorized officials of Chowking but was accepted and
honored by Santos. Manzano misappropriated the amount and when Chowking found out
it demanded reimbursement from the bank. The bank refused thus the respondent filed a
complaint for the sum of money with damages. It impleaded the bank president, Antonio
Abacan and the bank branch manager, Santos who in turn filed a cross claim and third
party complaint against Manzano. But summon was not served to Manzano and the third
party complaint was archived when Santos did not take any further action. The bank
maintained it exercised due diligence in the supervision of its employees while Santos
denied to be negligent on her job. Abacan invokes that the respondent does not have any
cause of action against him because he has no involvement in the transaction. Santos and
Abacan both contend that Chowking is estopped from claiming reimbursement and
damages because of its negligence for allowing Manzano to take hold, endorse and
encash its checks.
RTC Ruling: Ordered the bank and Santos to pay Chowking jointly and severally.
Likewise Santos and Manzano are jointly and severally ordered to reimburse the bank for
whatever amount the bank will be paying to Chowking. On motion for reconsideration,
the court dismissed the complaint of Chowking and ordered Manzano or Santos to pay
Chowking for reimbursement and damages. Chowking appealed before the CA assailing
the court decision that the proximate cause of its loss is due to its negligence.
CA Ruling: Bank and Santos should bear the loss since it is undisputed that Santos was
negligent for honoring the checks signed only by Manzano. Art. 2180 provides that the
obligation imposed on Art. 2176 on negligence is demandable not only to ones own act
but also to the acts of persons for whom one is responsible. Hence the bank is liable for
the negligence of its employee. The bank invokes that Chowking is estopped from its
claim against the bank and that the proximate cause of its loss is due to its own
negligence.
Issue: Whether or not Chowking is estopped from its claim against the petitioner and
whether Chowking should bear the loss from its own negligence.
Ruling:
The doctrine of estoppel is not applicable in the case at bar. For estoppel to occur the
following requisites should be met: (a) conduct amounting to false representation or
concealment of material facts or at least calculated to convey the impression that the facts
are otherwise than, and inconsistent with, those which the party subsequently attempts to
assert; (b) intent, or at least expectation that this conduct shall be acted upon, or at least
influenced by the other party; and (c) knowledge, actual or constructive of the actual
facts. Chowking did not in any way show misrepresentation on the material facts on the
encashment of checks. They do not allow the encashment of checks without the signature
of all its authorized signatories. This the bank knows as the customary practice of
Chowking and it failed to provide evidence to show they observe due diligence required
from banks by the law. The General Banking Law 2000 imposes to all banks to observe
meticulous care in treating the accounts of their depositors. The banks negligence
contributed to the fraud committed by Manzano as it is primarily liable for the negligence
of its officers and agents who are acting within the scope of their employment. Petition
was denied.
disturbing anomaly because she was convinced of the validity of the passport. She also
considered as decisive the fact that the impostor had a mole on her face in the same way
that the person in the pictures on the identification cards had a mole. These explanations
do not account for the disparity between the pictures and the actual appearance of the
impostor. That said person was allowed to withdraw the money anyway is beyond belief.
Bank transactions pass through a successive of bank personnel, whose duty is to check
and countercheck transactions for possible errors. While a bank is not expected to be
infallible, it must bear the blame for failing to discover mistakes of its employees despite
established bank procedure involving a battery of personnel designed to minimize if not
eliminate errors.
of its officers. The court made the proper account of the total amount due to Marcos
ordering the bank to give to him the same plus moral and exemplary damages.