BPI FAMILY SAVINGS BANK. VS. MANIKAN

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BPI FAMILY SAVINGS BANK. VS. MANIKAN

Manager's and Cashier's Checks are regarded as substantially to be as good as the money it represents. But allowing the delivery to a person not directly charged with the collection, the drawer assumed the risks of its misapplication.

BPI Family Savings Bank, Inc. and Bayaborda, petitioner vs. Romeo Manikan, respondent.
G.R. No. 148789. January 16, 2003

FACTS: 

Petitioners seek a review of the decision of the CA which has affirmed the judgment of the RTC of Iloilo CIty, dismissing the complaint of petitioners for mandamus and ordering them to pay respondent the sum of P30,000.00 by way of attorney's fees. 

Being the City Treasurer of Iloilo City, respondent assessed petitioner bank business taxes for the years 1992 and 1993. In 1994, the bank issued 2 manager's checks payable to the City Treasurer of IloIlo City, the first check for P462,270.60 was to cover the business tax for the year 1992 and the second check for 482,988.45 was to settle the business tax for the year 1993. 

Bayaborda, the manager of bank's Iloilo branch, instructed an employee Sablo, to deliver the 2 checks to the Secretary to the City Mayor, a certain Espenosa handed then over to his secretary, Salcedo for transmittal to the City Treasurer. The value of the checks were eventually credited to the account of the City Treasurer. The checks however, were not applied to satisfy the tax liabilities of petitioner but of other taxpayers. 

The misapplication of the proceeds of the checks came to the knowledge of respondent City Treasurer who, thereupon, created a committee to look into the matter. The investigation revealed that it was upon the representation of Salcedo that the manager's checks were used to pay tax liabilities of other taxpayers and not those of petitioner bank. Meanwhile, the respondent bank, made a demand on respondent to issue official receipts to show that it had paid its business taxes for the year 1992 and 1993 covered by the diverted manager's checks. When he refused to issue the receipts requested, respondent was sued by the petitioners for mandamus and damages. 

On appeal, petitioner contends that the receipt by the City Treasurer's Office of Iloilo City of the Face Value of the two Manager's checks intended for payment of its business taxes for the year 1992 and 1993 entitles it to the issuance of an official receipt enforceable by a Writ of Mandamus.

ISSUE:

Whether or not the petitioner is entitled for the issuance of official receipts for the 2 manager's checks it draws for the payment of its business taxes delivered to a person not directly charge with the collection.

HELD: 

No. Although the  checks delivered by petitioner bank to Espinosa were manager's checks. A manager's check, like a cashier's check, is an order of the bank to pay, drawn upon itself, committing in effect its total resources, integrity and honor behind its issuance. By its peculiar character and general use in commerce, these are regarded as substantially to be as good as the money it represents. 

However, by allowing the delivery of the subject checks to a person who is not directly charged with the collection of its tax liabilities, the bank must be deemed to have assumed the risk of a possible misuse thereof even as it appears to have fallen short of the diligence ordinarily expected of it. The bank, of course, is not precluded from pursuing a right of action against those who could have been responsible for the wrongdoing or who might have have been unjustly benefited from it. 

Instant petition is partly granted. The appealed decision is affirmed but deleted the award of attorney's fees i favor of the private respondents.

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