Philippine Savings Bank v Chowking Food Corp. GR No. 177526, July 4, 2008

Facts:

Rino Manzano, acting accounting manager of Chowking, endorsed and encashed from the petitioner 5 checks amounting to a total of P556,981.86. The checks were encashed without the signatures of the other authorized officials of Chowking but was accepted and honored by Santos. Manzano misappropriated the amount and when Chowking found out it demanded reimbursement from the bank. The bank refused thus the respondent filed a complaint for the sum of money with damages. It impleaded the bank president, Antonio Abacan and the bank branch manager, Santos who in turn filed a cross claim and third party complaint against Manzano. But summon was not served to Manzano and the third party complaint was archived when Santos did not take any further action. The bank maintained it exercised due diligence in the supervision of its employees while Santos denied to be negligent on her job. Abacan invokes that the respondent does not have any cause of action against him because he has no involvement to the transaction. Santos and Abacan both contend that Chowking is estopped from claiming reimbursement and damages because of its negligence for allowing Manzano to take hold, endorse and encash its checks.

RTC Ruling: Ordered the bank and Santos to pay Chowking jointly and severally. Likewise Santos and Manzano are jointly and severally ordered to reimburse the bank for whatever amount the bank will be paying to Chowking. On motion for reconsideration, the court dismissed the complaint of Chowking and ordered Manzano or Santos to pay Chowking for reimbursement and damages. Chowking appealed before the CA assailing the court decision that the proximate cause of its loss is due to its negligence.

CA Ruling: Bank and Santos should bear the loss since it is undisputed that Santos was negligent for honoring the checks signed only by Manzano. Art. 2180 provides that the obligation imposed on Art. 2176 on negligence is demandable not only to one’s own act but also to the acts of persons for whom one is responsible. Hence the bank is liable for the negligence of its employee. The bank invokes that Chowking is estopped from its claim against the bank and that the proximate cause of its loss is due to its own negligence.

Issue: Whether or not Chowking is estopped from its claim against the petitioner and whether Chowking should bear the loss from its own negligence.

Ruling:

The doctrine of estoppel is not applicable in the case at bar. For estoppel to occur the following requisites should be met: (a) conduct amounting to false representation or concealment of material facts or at least calculated to convey the impression that the facts are otherwise than, and inconsistent with, those which the party subsequently attempts to assert; (b) intent, or at least expectation that this conduct shall be acted upon, or at least influenced by the other party; and (c) knowledge, actual or constructive of the actual facts. Chowking did not in any way show misrepresentation on the material facts on the encashment of checks. They do not allow the encashment of checks without the signature of all its authorized signatories. This the bank knows as the customary practice of Chowking and it failed to provide evidence to show they observe due diligence required from banks by the law. The General Banking Law 2000 imposes to all banks to observe meticulous care in treating the accounts of their depositors. The bank’s negligence contributed to the fraud committed by Manzano as it is primarily liable for the negligence of its officers and agents who are acting within the scope of their employment. Petition was denied.