1. Metropolitan Bank & Trust Co. v. CA , G.R.

88866, February 16,

1991

FACTS: January 1979: Eduardo Gomez opened an account with Golden Savings and
deposited over a period of 2 months 38 treasury warrants totalling P1,755,228.37 all drawn
by the Philippine Fish Marketing Authority and purportedly signed by its General Manager
and countersigned by its Auditor: directly payable to Gomez indorsed by their respective
payees, followed by Gomez as second indorser June 25 - July 16, 1979: all warrants were
subsequently indorsed by Gloria Castillo as Cashier of Golden Savings and deposited to its
Savings in the Metrobank branch They were then sent for clearing by the branch office to the
principal office of Metrobank, which forwarded them to the Bureau of Treasury for special
clearing More than 2 weeks after the deposits, Castillo asked if the warrants were cleared.
She was told to wait. Gomez was also not allowed to withdraw from his account exasperated
over Gloria's repeated inquiries and also as an accommodation for a "valued client,"
Metrobank allowed Golden Savings to make the following withdrawals: July 9, 1979 -
P508,000.00, July 13, 1979 - P310,000.00, July 16, 1979 - P150,000.00, Gomez was also
allowed to withdraw a total amount of P1,167,500 (latest on July 16, 1979). July 21, 1979:
Metrobank informed Golden Savings that 32 of the warrants had been dishonored by the
Bureau of Treasury on July 19, 1979, and demanded the refund by Golden Savings of the
amount it had previously withdrawn, to make up the deficit in its account. refused CA
affirmed RTC: favored Golden Savings

ISSUE: Whether or Not, Metrobank can claim a refund from Golden Savings?

HELD: NO. Affirmed. Withdrawn must be charged not to Golden Savings but to Metrobank,
which must bear the consequences of its own negligence. But the balance of P586,589.00
should be debited to Golden Savings, as obviously Gomez can no longer be permitted to
withdraw this amount from his deposit because of the dishonor of the warrants. Metrobank
was negligent in giving Golden Savings the impression that the treasury warrants had been
cleared and that, consequently, it was safe to allow Gomez to withdraw. It "presumed" that
the warrants had been cleared simply because of "the lapse of one week." There was no
reason why it should not have waited until the treasury warrants had been cleared. Art.
1909. The agent is responsible not only for fraud, but also for negligence, which shall be
judged 'with more or less rigor by the courts, according to whether the agency was or was
not for a compensation. Golden Savings acted with due care and diligence

Forgery cannot be presumed. It must be established by clear, positive and convincing

evidence. -here not proven treasury warrants in question are not negotiable instruments
stamped on their face is the word "non-negotiable" indicated that they are payable from a
particular fund Sec. 1. Form of negotiable instruments. An instrument to be negotiable
must conform to the following requirements:

(a) It must be in writing and signed by the maker or drawer;

(b) Must contain an unconditional promise or order to pay a sum certain in money;
(c) Must be payable on demand, or at a fixed or determinable future time;
(d) Must be payable to order or to bearer; and
(e) Where the instrument is addressed to a drawee, he must be named or otherwise
indicated therein with reasonable certainty.

Sec. 3. When promise is unconditional. An unqualified order or promise to pay is

unconditional within the meaning of this Act though coupled with:

(a) An indication of a particular fund out of which reimbursement is to be made or a

particular account to be debited with the amount; or

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(b) A statement of the transaction which gives rise to the instrument judgment. But an order
or promise to pay out of a particular fund is not unconditional.

2. Chan Wan v. Tan Kim, G.R. L-15380, September 30, 1960 (HOLDER
IN DUE COURSE)

FACTS: Tam Kim issued 11 checks payable to cash or bearer. Chan Wan presented
these for payment but were dishonored for insufficiency of funds. This
prompted Chan Wan to institute an action against Tam Kim. She didn't take the
witness stand and merely presented the checks for payment. Tan Kim on the other
hand alleged that the checks were for mere receipts only. The trial court
dismissed the complaint as Chan Wan failed to show that she was a holder in
due course.

ISSUE: Whether or not a holder not in due course is barred from collecting the value
of checks issued to him.

HELD: Eight of the checks were crossed checks specially to Chinabank and should
have been presented for payment by Chinabank and not by Chan Wan.
Inasmuch as Chan Wan didn't present them for payment himself, there was
no proper presentment, and the liability didn't attach to the drawer.

The facts show that the checks were indeed deposited with Chinabank and were by
the latter presented for collection to the drawee bank. But as the account had no
sufficient funds, they were unpaid and returned, some of them stamped account
closed. How it reached the hands of Chan Wan, she didn't indicate.
Most probably, as the trial court surmised, she acquired them after they have
been dishonored.

Chan Wan is then not a holder in due course. Nonetheless, it doesn't mean that she
couldn't collect on the checks. He can still collect against Tan Kim if the latter has
no valid excuse for refusing payment. The only disadvantage for Chan Kim
is that she is susceptible to defenses of Tan Kim but what are the defenses of
latter? This has to be further deliberated by the trial court.

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3. Philippine Education Co., Inc. v. Soriano, GR.L-22405, June 30,
1971

Facts: Enrique Montinola sought to purchase from Manila Post Office ten money
orders of 200php each payable to E. P. Montinola. Montinola offered to pay with the
money orders with a private check. Private check were not generally accepted in
payment of money orders, the teller advised him to see the Chief of the Money
Order Division, but instead of doing so, Montinola managed to leave the building
without the knowledge of the teller. Upon the disappearance of the unpaid money
order, a message was sent to instruct all banks that it must not pay for the money
order stolen upon presentment. The Bank of America received a copy of said notice.

However, The Bank of America received the money order and deposited it to the
appellants account upon clearance. Mauricio Soriano, Chief of the Money Order
Division notified the Bank of America that the money order deposited had been
found to have been irregularly issued and that, the amount it represented had been
deducted from the banks clearing account. The Bank of America debited
appellants account with the same account and give notice by mean of debit memo.

Issue: Whether or not the postal money order in question is a negotiable

instrument

Held: No. It is not disputed that the Philippine postal statutes were patterned after
similar statutes in force in United States. The Weight of authority in the United
States is that postal money orders are not negotiable instruments, the reason being
that in establishing and operating a postal money order system, the government is
not engaged in commercial transactions but merely exercises a governmental
power for the public benefit.

Moreover, some of the restrictions imposed upon money orders by postal laws and
regulations are inconsistent with the character of negotiable instruments. For
instance, such laws and regulations usually provide for not more than one
endorsement; payment of money orders may be withheld under a variety of
circumstances.

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