GR 141278; (March, 2004) (Digest)
G.R. No. 141278. March 23, 2004.
MICHAEL A. OSMENA, petitioner, vs. CITIBANK, N.A., ASSOCIATED BANK and FRANK TAN, respondents.
FACTS
Petitioner Michael Osmeña purchased a Citibank manager’s check for P1,545,000 payable to respondent Frank Tan. The check was subsequently deposited at respondent Associated Bank into the savings account of a certain “Julius Dizon” without the endorsement of the named payee, Frank Tan. Osmeña demanded reimbursement from Citibank and Associated Bank, alleging that their payment of the check to an improper party violated the Negotiable Instruments Law and banking practice, as his intended payee, Tan, did not receive the proceeds.
Osmeña filed a complaint for damages. He later amended it to implicate Frank Tan, alleging the check was a demand loan to Tan. The banks defended their actions: Associated Bank claimed the account of “Julius Dizon” was actually Frank Tan’s, and the proceeds were credited to him. Citibank argued it paid the check in due course, relying on Associated Bank’s guarantee of prior endorsements, and that any liability lay with the collecting bank (Associated Bank) for accepting it without proper endorsement.
ISSUE
Whether respondents Citibank and Associated Bank are liable to petitioner Osmeña for encashing the manager’s check despite the apparent lack of endorsement by the named payee, Frank Tan.
RULING
The Supreme Court denied the petition, affirming the lower courts’ dismissal of the complaint against the banks. The legal logic centers on the factual finding that Frank Tan and Julius Dizon were the same person, and Tan received the check’s value. The trial court’s determination, upheld by the Court of Appeals, was based on substantial evidence, including specimen signature cards and bank records showing Tan operated the “Julius Dizon” account.
Consequently, the check’s proceeds were properly credited to the payee. The banks’ obligations were discharged. Citibank, as the drawee bank, was justified in paying the check upon presentment with Associated Bank’s guarantee. Associated Bank, as the collecting bank, credited the amount to its depositor, who was the legitimate payee. Petitioner’s real cause of action was against Frank Tan for the unpaid loan, not against the banks for wrongful payment. Since Tan did not appeal the judgment against him, he remained liable to Osmeña. The banks committed no violation of law or banking practice under these established facts.