PCIB vs CA

HOLDER IN GOOD FAITH

MARIE ANTOINETTE SY
 ACCOUNT

SYNDICATE PAYABLE TO
Through the concerted efforts of a COMMISSION OF
syndicate, the proceeds never reached INTERNAL REVENUE
the BIR – which thereafter sought to
collect from Ford. PAYMENT OF SALES TAXES
FACTS
                             GENERAL LEDGER ACCOUNTANT, RIVERA                         HELD BACK THE

                                 AND ORDERED THE COLLECTING BANK                          AND DULY

AUTHORIZED AGENT OF THE BIR TO REPLACE THE CHECKS WITH MANAGERS CHECKS.

THEREAFTER, CASTRO (MANAGER OF PCIBANK) WOULD DIVERT SAID CHECKS TO AN

ACCOUNT OF A FICTITIOUS PERSON AND COLLECT PROCEEDS FROM

THEREAFTER, THEY WOULD WITHDRAW THE PROCEEDS AND DISTRIBUTE THE AMOUNTS TO
THEIR CO-CONSPIRATORS, WHO ARE NOW, ALL FUGITIVES FROM JUSTICE. THUS, FORD
SEEKS TO COLLECT FROM BOTH PCIBANK AND CITIBANK.
WHO SHOULD BE

LIABLE
 IS LIABLE
The master is liable for the wrongful acts of its servant – in this
case, PCIBank’s manager, among other employees who
participated in the crime. PCIBank authorized the replacement of
the Citibank Checks when the Board of Directors of Ford never
authorized the same. PCIBANK should have remitted the proceeds
immediately to the BIR. It also did not verify the authority of
Rivera in requesting the replacement – considering that it involved
large amounts of money. Also, the collecting bank acts as agent to
the payee. As agent to the BIR it must verify the unwarranted
instructions by Rivera as agent to Ford. Considering also that the
check was crossed, it was a warning that it should be deposited
only to the account of the BIR.
 IS LIABLE
Its liability is based on the breach of the contractual relationship.
It is a depositor’s duty to make sure that payments are only made
to the depositors intended payees. It must treat the accounts of
its depositors with utmost and meticulous care – and should be
equally diligent in selecting its employees.
 In this case, both                                   and                                

are equally liable; however, since Ford is also guilty of contributory

negligence – its employees also participated in the crime – then

the liabilities of the banks are mitigated.

The 12% interest is thus equitably reduced to 6%.