Cases Moran v CA
DOCTRINE: A bank is under no obligation to make part payment on a check, up to only the amount of the drawer's funds, where the check is drawn for an amount larger than what the drawer has on deposit. Such a practice of paying checks in part has never existed. Upon partial payment, the check holder could not be called upon to surrender the check, and the bank would be without a voucher affording a certain means of showing the payment. The rule is based on commercial convenience, and any rule that would work such manifest inconvenience should not be recognized. A check is intended not only to transfer a right to the amount named in it, but to serve the further purpose of affording evidence for the bank of the payment of such amount when the check is taken up.
FACTS
Spouses Moran are the owners of the Wack-Wack Petron Gasoline. They buy fuel and other related products from Petrophil on a cash on delivery basis. They maintain three accounts with Citytrust, one current account allowed to have zero balance, and two savings account. One of the savings account was allowed to have automatic transfer of funds whenever the current account was insufficient to pay withdrawals, and the other needs authorization to transfer funds. On December 12, 1983, Librada Moran issued a check for P50,576 payable to Petrophil. On the next day, she issued another check for 56,090, payable to the same corporation. On December 14, 1983, the checks were deposited to PNB, which presented both for clearing. On this day, the current account had zero balance, while the savings account covered by the automatic transfer only had P26,104.30, both accounts being insufficient to pay the issued checks. (The other savings account, where authorization is needed only had P43,268.39.) On December 15, 1983, George Moran deposited some funds which were supposed to be used to pay the earlier transaction. However, Librada informed George that Petrophil refused to deliver their orders, and that the checks issued were dishonored due to insufficiency of funds. The branch manager tried to fix the problem by bringing a manager's check to be signed by the spouses to pay off the balance with Petrophil. The bank also tried to apologize to Petrophil, stating in the the letter that it committed "operational error". 6 months later, the spouses demanded that the bank pay them P1M for moral damages, which the bank refused to pay. They filed a case, which the RTC dismissed, and affirmed by the CA.
ISSUE
Whether the spouses had sufficient funds when the bank dishonored the check
RULING
NO. When PNB presented the check for collection, the current account had zero balance, while the savings account had P26,104.30, which is
insufficient to pay off the checks. This would lead to dishonoring of the checks. There is a presumption in law that the ordinary course of business (clearing and withdrawing) has ben followed. Where the spouses failed to show that the checks underwent a different process of clearing, it is presumed that the acts of clearing underwent the same process. Also, there is no obligation with the bank to release amount in the savings account, when the balance being collected is higher. They cannot partially honor a check, being insufficient to pay the whole amount. Neither can they transfer from the other savings account the balance to pay off the check, since authority is needed to be able to transfer such amount. The bank had no obligation to settle the spouses account with Petrophil, but they still tried to in order that they would not have stained relations with the spouses. Villanueva v Nite
DOCTRINE: If a bank refuses to pay a check (notwithstanding the sufficiency of funds), the payee-holder cannot sue the bank—the payee should instead sue the drawer who might in turn sue the bank. Sec. 189 is sound law based on logic and established legal principles—no privity of contract exists between the drawee-bank and the payee.
FACTS
Nite borrowed P409k from Villanueva secured by an Asian Bank check for P325k dated February 8, 1994.The date was later changed to June 8, 1994 with the consent and concurrence of Villanueva. The check was, however, dishonored due to a material alteration when Villanueva deposited the check on due date. On August 24, 1994, Nite remitted P235k to petitioner as partial payment of the loan, through a representative, since she was out of the country. The balance of P174k was now due on or before December 8, 1994.
On August 30, 1994, however, petitioner filed an action for a sum of money and damages against Asian Bank for the full amount of the dishonored check. The RTC ruled in his favor. Pursuant thereto, Asian Bank issued a P325k check to Villanueva. When respondent later on went to Asian Bank to withdraw money from her account, she was unable to do so because the trial court had ordered Asian Bank to pay petitioner the value of respondent’s ABC check.
She went to the CA and filed a petition for annulment of judgment (Rule 47), which was granted on the ground of extrinsic fraud. The CA found that 6 days after receipt of the partial payment of P235k and agreeing that the balance of P174k shall be paid on or before December 8, 1994, Villanueva filed his complaint against Asian Bank for the full amount of the dishonored check without impleading Nite. The apparent haste by which he filed his complaint and his failure to implead Nite showed his intent to prevent her from opposing his action.
Thus this petition for certiorari. ISSUE
1) Whether the CA was correct to annul judgment despite the fact that Nite was not a party to the original collection case;
2) Whether Villanueva could properly sue the bank for non payment of the check in the first place.
RULING
1) YES. A petition for annulment of judgment can be properly filed by a