BENIGNO GOITIA, plaintiff-appellant, vs. THE CHARTERED BANK OF INDIA, AUSTRALIA, AND CHINA, defendant-appellee.
FACTS
This case involves a dispute over a lost check. The plaintiff-appellant, Benigno Goitia, based his claim on the court’s earlier decision in Landa v. Sanz (8 Phil. Rep., 13), which dealt with a similar situation. In that prior case, the court had ordered the issuance of a new check to replace a lost one and discussed the reservation of funds for its payment. Goitia contended that the English translation of the Landa decision imposed a duty on the bank to hold and reserve funds for the payment of the new check. The defendant-appellee bank disputed this interpretation.
ISSUE
Whether the bank has a duty to reserve funds for the payment of a replacement check issued to substitute a lost check, based on the court’s decision in Landa v. Sanz.
RULING
No. The Supreme Court affirmed the lower court’s decision, holding that the bank has no such duty. The Court clarified that the English translation of the Landa decision was misleading. The original Spanish text only obligated the bank to “stop” payment on the lost check pursuant to a judicial order. The duty to reserve funds in the bank for the payment of the replacement check rests solely on the drawer of the original check (the account holder), not on the bank. The bank’s obligation is limited to obeying the stop-payment order. Accordingly, the judgment of the lower court was affirmed, with costs against the appellant.
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