RCBC vs Hi-Tri (G.R. No. 192413 June 13, 2012)

Rizal Commercial Banking Corporation vs Hi-Tri Development Corporation
G.R. No. 192413 June 13, 2012

Facts: Luz Bakunawa and her husband Manuel, now deceased (Spouses Bakunawa) are registered owners of six (6) parcels of land covered by TCT Nos. 324985 and 324986 of the Quezon City Register of Deeds, and TCT Nos. 103724, 98827, 98828 and 98829 of the Marikina Register of Deeds. These lots were sequestered by the Presidential Commission on Good Government [(PCGG)]. Sometime in 1990, a certain Teresita Millan (Millan), through her representative, Jerry Montemayor, offered to buy said lots for ₱6,724,085.71, with the promise that she will take care of clearing whatever preliminary obstacles there may be to effect a completion of the sale. The Spouses Bakunawa gave to Millan the Owners Copies of said TCTs and in turn, Millan made a downpayment of ₱1,019,514.29 for the intended purchase. However, for one reason or another, Millan was not able to clear said obstacles. As a result, the Spouses Bakunawa rescinded the sale and offered to return to Millan her downpayment of ₱1,019,514.29. However, Millan refused to accept back the ₱1,019,514.29 down[]payment. Consequently, the Spouses Bakunawa, through their company, the Hi-Tri Development Corporation (Hi-Tri) took out on October 28, 1991, a Managers Check from RCBC-Ermita in the amount of ₱1,019,514.29, payable to Millan’s company Rosmil Realty and Development Corporation (Rosmil) c/o Teresita Millan and used this as one of their basis for a complaint against Millan and Montemayor which they filed with the Regional Trial Court of Quezon City, Branch 99. On January 31, 2003, during the pendency of the above mentioned case and without the knowledge of [Hi-Tri and Spouses Bakunawa], RCBC reported the ₱1,019,514.29-credit existing in favor of Rosmil to the Bureau of Treasury as among its unclaimed balances as of January 31, 2003. Allegedly, a copy of the Sworn Statement executed by Florentino N. Mendoza, Manager and Head of RCBCs Asset Management, Disbursement & Sundry Department (AMDSD) was posted within the premises of RCBC-Ermita.

Issue: Whether or not the escheat of the account in RCBC is proper.

Held: No. An ordinary check refers to a bill of exchange drawn by a depositor (drawer) on a bank (drawee), requesting the latter to pay a person named therein (payee) or to the order of the payee or to the bearer, a named sum of money. The issuance of the check does not of itself operate as an assignment of any part of the funds in the bank to the credit of the drawer. Here, the bank becomes liable only after it accepts or certifies the check. After the check is accepted for payment, the bank would then debit the amount to be paid to the holder of the check from the account of the depositor-drawer.

There are checks of a special type called managers or cashiers checks. These are bills of exchange drawn by the banks manager or cashier, in the name of the bank, against the bank itself. Typically, a managers or a cashiers check is procured from the bank by allocating a particular amount of funds to be debited from the depositors account or by directly paying or depositing to the bank the value of the check to be drawn. Since the bank issues the check in its name, with itself as the drawee, the check is deemed accepted in advance. Ordinarily, the check becomes the primary obligation of the issuing bank and constitutes its written promise to pay upon demand.

Nevertheless, the mere issuance of a managers check does not ipso facto work as an automatic transfer of funds to the account of the payee. In case the procurer of the managers or cashiers check retains custody of the instrument, does not tender it to the intended payee, or fails to make an effective delivery, we find the following provision on undelivered instruments under the Negotiable Instruments Law applicable:

Sec. 16. Delivery; when effectual; when presumed. Every contract on a negotiable instrument is incomplete and revocable until delivery of the instrument for the purpose of giving effect thereto. As between immediate parties and as regards a remote party other than a holder in due course, the delivery, in order to be effectual, must be made either by or under the authority of the party making, drawing, accepting, or indorsing, as the case may be; and, in such case, the delivery may be shown to have been conditional, or for a special purpose only, and not for the purpose of transferring the property in the instrument. But where the instrument is in the hands of a holder in due course, a valid delivery thereof by all parties prior to him so as to make them liable to him is conclusively presumed. And where the instrument is no longer in the possession of a party whose signature appears thereon, a valid and intentional delivery by him is presumed until the contrary is proved.

Since there was no delivery, presentment of the check to the bank for payment did not occur. An order to debit the account of respondents was never made. In fact, petitioner confirms that the Managers Check was never negotiated or presented for payment to its Ermita Branch, and that the allocated fund is still held by the bank. As a result, the assigned fund is deemed to remain part of the account of Hi-Tri, which procured the Managers Check. The doctrine that the deposit represented by a managers check automatically passes to the payee is inapplicable, because the instrument although accepted in advance remains undelivered. Hence, respondents should have been informed that the deposit had been left inactive for more than 10 years, and that it may be subjected to escheat proceedings if left unclaimed.


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