Republic of the Philippines

SUPREME COURT
Manila
EN BANC

[G.R. No. L-8155. October 23, 1956.]

VIOLET MCGUIRE SUMACAD, ET AL., Plaintiffs-Appellees, v. THE PROVINCE OF

Jose T. Sumcad for appellees.

Ramon B. de los Reyes and Angel Ilagan for appellant.

SYLLABUS

1. NEGOTIABLE INSTRUMENTS; CHECKS; IMPLIED ACCEPTANCE BY THE DRAWEE;

DECISION

PARAS, J.:

In May, 1942, while the province of Samar was still occupied by Japanese military
forces, a check was issued by said province to Paulino M. Santos (then the postmaster
of Borongan) for the sum of P25,000, drawn against the Philippine National Bank Cebu
Branch. The payee negotiated the check with James McGuire, an American citizen and
resident of the municipality of Borongan. After the liberation in 1946, James McGuire
presented the check to the municipal treasurer of Borongan for payment, but the latter
(who merely noted it) was not able or did not choose to pay the same. James McGuire
wrote letters to the Bureau of Posts dated May 28 and August 5, 1948, and March 30,
1950 seeking payment of the check, which were in turn referred by the Director of the
Bureau of Posts to the Philippine National Bank on April 21, 1950. On April 25, 1950,
the Philippine National Bank requested the Bureau of Posts to furnish it with
photostatic copies of the check which were duly received by the bank on May 12, 1950.
As of this date the province of Samar still had a deposit of P84,287.47 in the Philippine
National Bank. On May 14, 1950, the latter requested James McGuire to present the
check to the provincial treasurer and the provincial auditor for certification in
accordance with the circular issued by the Secretary of Finance of July 3, 1947. On
August 22, 1950, James McGuire again requested the Bureau of Posts to expedite
compliance with the requirement of the Philippine National Bank so as to permit the
encashment of the check. Before the check could be certified by the authorities
concerned as being in order and entitled to priority of payment, the province of Samar,
on September 4, 1951, withdraw the amount of P83,504.07, leaving a balance of only
P743.43. In the meantime, James McGuire transferred his rights to the check to the
herein plaintiffs who, unable to cash it, filed in the Court of First Instance of Samar on
July 27, 1953, the present complaint against the province of Samar and the Philippine
National Bank. After trial the court rendered a decision sentencing the defendants to
pay jointly and severally to the plaintiffs the sum of P25,000, plus legal interest from
May 1950, P1,000 as attorney’s fees, and the costs. Only the Philippine National Bank
has appealed.

The position of the appellant bank is that it did not issue the check and was merely
called upon to pay the same upon being presented for encashment if and when funds
for the purpose were available; that it could not have paid said check because it was
never presented to it with the required certification under the circular of the Secretary
of Finance of July 3, 1947; that the relation between the appellant bank and the
province of Samar was that of debtor and creditor, the debtor being without power to
inquire into the obligation of his creditor unless it had an interest in the same; that
there is nothing in the records to show that the holder of the check ever requested the
appellant bank to withhold the amount of the check or ever filed, before the
exhaustion of the deposit of the province of Samar, any order from the courts or proper
authorities to withhold the amount covered by the check; that in any event, the
appellant bank cannot be held solidarily liable, the province of Samar being the drawee
of the check and therefore primarily liable to pay the same.
Appellant’s contentions are in the main correct. But in view of the fact that as early as
May 12, 1950, upon its own request, it was furnished with photostatic copies of the
check in question; and on May 14, 1950, it went to the trouble of requiring James
McGuire to present the check to the provincial treasurer and provincial auditor for
necessary certification, it voluntarily assumed the obligation of holding so much of the
deposit of the province of Samar as would be sufficient to cover the amount of the
check, or before allowing the withdrawal that exhausted said deposit, of making the
necessary inquiry on the matter. In our opinion, an implied acceptance of the check by
the appellant bank was thereby created. The request by the appellant bank from the
Bureau of Posts for photostatic copies of the check and the subsequent requirement
by it for its presentation by James McGuire to the provincial treasurer and the
provincial auditor for certification, would be an empty gesture if the appellant did not
thereby mean to assume the obligation of paying the check and holding sufficient
deposit of the drawer for the purpose. Even so, appellant’s resulting obligation is
merely subsidiary, the province of Samar being primarily liable to pay the check.

It being understood that the obligation of the appellant is merely subsidiary, the
appealed decision is hereby affirmed, without costs in this instance. So ordered.

Bautista Angelo, Labrador, Reyes, J. B. L., Endencia and Felix, JJ., concur.