Case Digest For Law Subject PDF

Preview

Summary

ALVIN PATRIMONIO vs. NAPOLEON GUTIERREZ AND OCTAVIO MARASIGAN III G. No. 187769 June 4, 2014Facts: The petitioner, Alvin Patrimonio and the respondent Napoleon Gutierrez (Gutierrez) entered into a business venture under the name of Slam Dunk Corporation (Slum Dunk), a production outfit that produced...

Description

ALVIN PATRIMONIO vs. NAPOLEON GUTIERREZ AND OCTAVIO MARASIGAN III G.R. No. 187769 June 4, 2014 Facts: The petitioner, Alvin Patrimonio and the respondent Napoleon Gutierrez (Gutierrez) entered into a business venture under the name of Slam Dunk Corporation (Slum Dunk), a production outfit that produced mini-concerts and shows related to basketball. Patrimonio presigned several checks to answer for the expenses of Slam Dunk. Although signed, these checks had no payee’s name, date or amount. The blank checks were entrusted to Gutierrez with the specific instruction not to fill them out without previous notification to and approval by the petitioner. In the middle of 1993, without the petitioner’s knowledge and consent, Gutierrez went to Marasigan (the petitioner’s former teammate), to secure a loan in the amount of P200,000.00 on the excuse that the petitioner needed the money for the construction of his house. In addition to the payment of the principal, Gutierrez assured Marasigan that he would be paid an interest of 5% per month from March to May 1994. In February 1994, Marasigan agreed to Guiterrez' request. Gutierrez simultaneously delivered to Marasigan one of the blank checks the petitioner pre-signed with Pilipinas Bank, Greenhills Branch, Check No. 21001764 with the blank portions filled out with the words "Cash" "Two Hundred Thousand Pesos Only", and the amount of "P200,000.00". The upper right portion of the check corresponding to the date was also filled out with the words "May 23, 1994". On May 24, 1994, Marasigan deposited the check but it was dishonored for the reason "ACCOUNT CLOSED." It was later revealed that the petitioner’s account with the bank had been closed since May 28, 1993. Marasigan sought recovery from Gutierrez, to no avail. He thereafter sent several demand letters to the petitioner asking for the payment of P200,000.00, but his demands likewise went unheeded. Consequently, he filed a criminal case for violation of B.P. 22 against the petitioner, docketed as Criminal Case No. 42816. Issues: Whether Marasigan is a holder in due course. Ruling: Marasigan is not a holder in due course. 1. Under Sec. 52(c) of the Negotiable Instruments Law, a holder in due course is a holder that takes the instrument in “good faith and for value.” Marasigan’s knowledge that the petitioner is not a party or a privy to the contract of loan, and correspondingly had no obligation or liability to him, renders him dishonest, hence, in bad faith. Moreover, his inaction and failure to verify, despite knowledge of that the petitioner was not a party to the loan, may be construed as gross negligence amounting to bad faith.

A holder in due course is a holder who took the instrument under the conditions enumerated under Sec. 52 of the Negotiable Instruments Law. And every holder is deemed prima facie a holder in due course. In the case of Marasigan, he failed to qualify as a holder in due course because he did not meet the requirements of Sec. 52, hence, he is subject to both personal and real defenses as if the instrument is non-negotiable. However, Marasigan still has the right to recover his money.

Since Marasigan is not a holder in due course, the petitioner can set up a personal defense that he did not authorize the filling of the blank check, thus, he is not compelled to pay Marasigan the face value of the check. Moreover, Guiterrez is authorized by the petitioner to use the check for business expenses only, hence, he exceeded the authority given to him when he used the check to pay for the loan which can also be used as a personal defense under Sec. 14. To avoid this kind of incident in the future when I’m dealing with negotiable instruments, I should not exceed the authority given to me by the maker of the instrument so that I can be a holder in due course subject only to real defenses.

SAMSUNG CONSTRUCTION COMPANY PHILIPPINES, INC. vs. FAR EAST BANK AND TRUST COMPANY AND COURT OF APPEALS G.R. No. 129015, August 13, 2004 Facts: Plaintiff Samsung Construction Company Philippines, Inc. ("Samsung Construction"), while based in Biñan, Laguna, maintained a current account with defendant Far East Bank and Trust Company ("FEBTC") at the latter’s Bel-Air, Makati branch. The sole signatory to Samsung Construction’s account was Jong Kyu Lee ("Jong"), its Project Manager, while the checks remained in the custody of the company’s accountant, Kyu Yong Lee ("Kyu"). On 19 March 1992, a certain Roberto Gonzaga presented for payment FEBTC Check No. 432100 to the bank’s branch in Bel-Air, Makati. The check, payable to cash and drawn against Samsung Construction’s current account, was in the amount of Nine Hundred Ninety Nine Thousand Five Hundred Pesos (P999,500.00). The bank teller, Cleofe Justiani, first checked the balance of Samsung Construction’s account. After ascertaining there were enough funds to cover the check, she compared the signature appearing on the check with the specimen signature of Jong as contained in the specimen signature card with the bank. After comparing the two signatures, Justiani was satisfied as to the authenticity of the signature appearing on the check. She then asked Gonzaga to submit proof of his identity, and the latter presented three (3) identification cards. At the same time, Justiani forwarded the check to the branch Senior Assistant Cashier Gemma Velez, as it was bank policy that two bank branch officers approve checks exceeding One Hundred Thousand Pesos, for payment or encashment. Velez likewise counterchecked the signature on the check as against that on the signature card. He too concluded that the check was indeed signed by Jong. Velez then forwarded the check and signature card to Shirley Syfu, another bank officer, for approval. Syfu then noticed that Jose Sempio III ("Sempio"), the assistant accountant of Samsung Construction, was also in the bank. Syfu showed the check to Sempio, who vouched for the genuineness of Jong’s signature. Satisfied with the genuineness of the signature of Jong, Syfu authorized the bank’s encashment of the check to Gonzaga. The following day, the accountant of Samsung Construction, Kyu, examined the balance of the bank account and discovered that a check in the amount of Nine Hundred Ninety Nine Thousand Five Hundred Pesos (P999,500.00) had been encashed. Aware that he had not prepared such a check for Jong’s signature, Kyu perused the checkbook and found that the last blank check was missing. He reported the matter to Jong, who then proceeded to the bank. Jong learned of the encashment of the check, and realized that his signature had been forged. The Bank Manager reputedly told Jong that he would be reimbursed for the amount of the check. In a letter dated 6 May 1992, Samsung Construction, through counsel, demanded that FEBTC credit to it the amount of Nine Hundred Ninety Nine Thousand Five Hundred Pesos (P999,500.00), with interest. In response, FEBTC said that it was still conducting an investigation on the matter. Unsatisfied, Samsung Construction filed a Complaint on 10 June 1992 for violation of Section 23 of the Negotiable Instruments Law, and prayed for the payment of the amount debited as a result of the questioned check plus interest, and attorney’s fees.

Issue: Whether Samsung Construction is precluded from setting up the defense of forgery. Ruling: Samsung Construction is not barred from setting up the defense of forgery. 1. Under Sec. 23 of the Negotiable Instruments Law, a person who by their acts, silence, or negligence are estopped from setting up the defense of forgery. The Court of Appeals concluded that there is no negligence on the part of Samsung Construction. The presumption remains that every person takes ordinary care of his concerns, and that the ordinary course of business has been followed. Negligence is not presumed, but must be proven by him who alleges it. Hence, the bank is compelled to prove the fact that Samsung Construction was negligent.

The case above mentions the effect of a forged signature and who are precluded from setting up the defense of forgery. According to Sec. 23 of the Negotiable Instruments Law, when a signature is forged or made without the authority of the person whose signature it purports to be, the signature is wholly inoperative and the holder of the instrument has no right to enforce payment, unless the party against whom it is sought to enforce such right is precluded from setting up the defense of forgery or want of authority. Since Samsung Construction is not precluded from setting up such defense, the plaintiff is not liable, hence, there is no right to enforce the payment of the check with a forged signature. FEBTC has also warranted the genuineness of the signature of Jong and has accepted the check, thus, making them primarily liable. Even if FEBTC is in good faith and has exercised diligence, the bank is still liable to the depositor and should bear the loss. When dealing with negotiable instruments in the future, I should avoid being negligent so that I won’t be liable for forged negotiable instruments.

EUMELIA R. MITRA vs. PEOPLE OF THE PHILIPPINES and FELICISIMO S. TARCELO G.R. NO. 191404, July 5, 2010

Fact: Petitioner Eumelia R. Mitra (Mitra) was the Treasurer, and Florencio L. Cabrera, Jr. (now deceased) was the President of Lucky Nine Credit Corporation (LNCC), a corporation engaged in money lending activities. Between 1996 and 1999, private respondent Felicisimo S. Tarcelo (Tarcelo) invested money in LNCC. As the usual practice in money placement transactions, Tarcelo was issued checks equivalent to the amounts he invested plus the interest on his investments. When Tarcelo presented these checks for payment, they were dishonored for the reason "account closed." Tarcelo made several oral demands on LNCC for the payment of these checks but he was frustrated. Constrained, in 2002, he caused the filing of seven informations for violation of Batas Pambansa Blg. 22 (BP 22) in the total amount of P925,000.00 with the MTCC in Batangas City. After the trial on the merits, the Municipal Trial Court in Cities found Mitra and Cabrera guilty of the charges. Mitra and Cabrera appealed to the Batangas RTC contending that: they signed the seven checks in blank with no name of the payee, no amount stated and no date of maturity; they did not know when and to whom those checks would be issued; the seven checks were only among those in one or two booklets of checks they were made to sign at that time; and that they signed the checks so as not to delay the transactions of LNCC because they did not regularly hold office there. The RTC affirmed the MTCC decision and later denied their motion for reconsideration. Meanwhile, Cabrera died. Mitra alone filed this petition for review 6 claiming, among others, that there was no proper service of the notice of dishonor on her. The Court of Appeals dismissed her petition for lack of merit.

Issues: 1. Whether or not the elements of violation of Batas Pambansa Bilang 22 must be proved beyond reasonable doubt as against the corporation who owns the current account where the subject checks were drawn before liability attaches to the signatories. 2. Whether or not there is proper service of notice of dishonor and demand to pay to the petitioner and the late Florencio Cabrera, Jr. Ruling: Mitra is held liable for violating BP 22 and notice of dishonor was properly given. 1. The third paragraph of Section 1 of BP 22 reads: "Where the check is drawn by a corporation, company or entity, the person or persons who actually signed the check on behalf of such drawer shall be liable under this Act." The law punishes the mere issuance of bouncing checks, hence, Mitra, who signed the checks, is liable. 2. The prosecution has proved that a demand letter was given to the accused on April 10, 2000 and that the latter were present on that day. Furthermore, the Court accepted the prosecution’s narrative that the accused refused to sign the demand letter to evidence their receipt thereof.

3. After the notice of dishonor was properly given, Mitra failed to pay the checks or make arrangements for their payment within five days from notice. Hence, Mitra cannot escape the civil and criminal liabilities that BP 22 imposes for its breach.

When a check is dishonored, the holder must present a notice of dishonor to inform the party that they will be required to make payment (Sec. 89). In the above case, the prosecution was able to inform the accused, hence, they will not be discharged from liability. According to the third paragraph of Section 1 of Batas Pambansa Blg. 22, a person who signs the bouncing check is held liable. So even if the prosecution failed to prove that the accused violated all the elements of BP 22, the signatories are still held liable. Moreover, the fact that Mitra and Cabrera refused to sign the demand letter given by the prosecution, there is a presumption that both the accused knew that there were insufficient funds to cover the checks upon their presentment for payment. In summary, there is a violation of BP 22 when: 1. A person makes or draws and issues a check to apply on account or for value; 2. The person who makes or draws and issues the check knows at the time of issue that he does not have sufficient funds in or credit with the drawee bank for the full payment of the check upon its presentment; and 3. The check is subsequently dishonored by the drawee bank for insufficiency of funds or credit, or would have been dishonored for the same reason had not the drawer, without any valid reason, ordered the bank to stop payment. In the future, I should avoid being negligent when signing checks so that I won’t be held liable when a check is bounced....