GR 168842; (August, 2010) (Digest)
G.R. No. 168842 ; August 11, 2010
VICENTE GO, Petitioner, vs. METROPOLITAN BANK AND TRUST CO., Respondent.
FACTS
Petitioner Vicente Go, doing business as Hope Pharmacy, filed two cases. The first was against his employees, Ma. Teresa Chua and Glyndah Tabañag, for allegedly making unauthorized deposits and encashments of checks amounting to ₱109,433.30. The second case was against respondent Metrobank and Chua, concerning thirty-two crossed checks totaling ₱1,492,595.06, payable to “Hope Pharmacy.” Go alleged these checks were deposited into Chua’s personal account without his endorsement and that Metrobank’s participation was necessary for this diversion.
The Regional Trial Court (RTC) dismissed the complaint against the employees, finding the transactions in the first case were either authorized or for Chua’s separate sideline. However, the RTC held Metrobank liable to Go for moral and exemplary damages, finding it negligent in accepting the crossed checks for deposit into a personal account. The Court of Appeals (CA) affirmed the RTC’s dismissal of the complaint against the employees but deleted the award of damages against Metrobank, absolving the bank of liability.
ISSUE
Whether the Court of Appeals erred in absolving Metrobank from liability for accepting the crossed checks payable to “Hope Pharmacy” for deposit into the personal account of an employee, Ma. Teresa Chua.
RULING
No, the Court of Appeals did not err. The Supreme Court affirmed the CA decision absolving Metrobank. The legal logic rests on the nature of crossed checks and the bank’s duty of diligence. A crossed check, marked with two parallel lines, is not negotiable and can only be deposited into the payee’s account. Here, the checks were payable to “Hope Pharmacy,” a sole proprietorship, making Vicente Go the payee. The bank’s duty was to ensure the checks were deposited only to the account of the named payee.
However, the Court found that Go, through his own actions, was estopped from claiming the bank acted negligently. For three years, Go had allowed the practice where his employee, Chua, deposited checks payable to Hope Pharmacy into her personal account, from which she would then withdraw funds to pay for the pharmacy’s suppliers. By permitting this established procedure, Go led the bank to believe the arrangement was regular and authorized. A bank’s liability must be determined in light of all circumstances, and a depositor’s own negligence, which facilitates the misappropriation, precludes recovery from the bank. While banks are held to a high standard of diligence, they cannot be faulted for following a procedure knowingly and repeatedly authorized by the depositor himself. Thus, Metrobank was not liable for the loss.