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  • Melva Theresa Alviar Gonzales Vs RCBC

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    Alexir Mendoza
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    Melva Gonzales was an employee of RCBC who encashed a $7,500 check drawn from a foreign bank and payable to her mother Eva Alviar. RCBC was unable to collect from the foreign drawee bank, which dishonored the check twice for irregular endorsement and finally returned it as the account was closed. RCBC demanded payment from Gonzales and Alviar. The Supreme Court ruled that Gonzales was not liable as the check was made useless due to a defect introduced by the qualified endorsement of an RCBC employee, which was the cause of the dishonor. Under the Negotiable Instruments Law, a subsequent party that causes a defect cannot have recourse against prior endorsers who endorsed in good faith

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    Melva Gonzales was an employee of RCBC who encashed a $7,500 check drawn from a foreign bank and payable to her mother Eva Alviar. RCBC was unable to collect from the foreign drawee bank, which dishonored the check twice for irregular endorsement and finally returned it as the account was closed. RCBC demanded payment from Gonzales and Alviar. The Supreme Court ruled that Gonzales was not liable as the check was made useless due to a defect introduced by the qualified endorsement of an RCBC employee, which was the cause of the dishonor. Under the Negotiable Instruments Law, a subsequent party that causes a defect cannot have recourse against prior endorsers who endorsed in good faith

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    23 views1 page

    Melva Theresa Alviar Gonzales Vs RCBC

    Uploaded by

    Alexir Mendoza
    Melva Gonzales was an employee of RCBC who encashed a $7,500 check drawn from a foreign bank and payable to her mother Eva Alviar. RCBC was unable to collect from the foreign drawee bank, which dishonored the check twice for irregular endorsement and finally returned it as the account was closed. RCBC demanded payment from Gonzales and Alviar. The Supreme Court ruled that Gonzales was not liable as the check was made useless due to a defect introduced by the qualified endorsement of an RCBC employee, which was the cause of the dishonor. Under the Negotiable Instruments Law, a subsequent party that causes a defect cannot have recourse against prior endorsers who endorsed in good faith

    Copyright:

    © All Rights Reserved
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    Download as docx, pdf, or txt
    of 1

    Melva Theresa Alviar Gonzales vs.

    Rizal Commercial Banking Corporation


    G.R. No. 156294.  November 29, 2006
    GARCIA, J.
    Facts:
    Gonzales was an employee of Rizal Commercial Banking Corporation
    (RCBC) as New Accounts Clerk in the Retail Banking Department at its Head
    Office. A foreign check in the amount of $7,500 was drawn by Dr. Don
    Zapanta against the drawee bank Wilshire Center Bank(WCB), payable to
    Gonzales’ mother, defendant Eva Alviar (or Alviar) then endorsed this check
    to RCBC
    Gonzales got the check encashed and received its peso equivalent.
    RCBC then tried to collect the check amount from First Interstate Bank of
    California but the check was dishonored on 2 occasions because of irregular
    indorsement before finally getting returned because the account had been
    closed. Unable to collect, RCBC demanded from Gonzales the payment of the
    peso equivalent of the check that she received. Gonzales agreed to have the
    amount deducted from her salary.
    RCBC demanded for the payment of Alviar’s obligation but did not
    receive any response. RCBC sent a letter to Gonzales reminding her of her
    liability as an indorser of the subject check; but, Gonzales resigned from
    RCBC.
    Issue: Is Alviar Gonzales liable for the instrument?
    Ruling:
    No. WCB dishonored the check because of a defect and it is undeniable
    that only the signature of Olivia Gomez, an RCBC employee, was a qualified
    endorsement because of the phrase "up to ₱17,500.00 only." There can be
    no other acceptable explanation for the dishonor of the foreign check than
    this signature of Olivia Gomez with the phrase "up to ₱17,500.00 only"
    accompanying it. The foreign drawee bank would not have dishonored the
    check had it not been for this signature of Gomez; thus, WCB refused to pay
    the bearer because of a defect introduced by the RCBC employee. The Check
    is therefore a useless piece of paper if returned in that state to its original
    payee, Eva Alviar.
    A subsequent party which caused the defect in the instrument cannot
    have any recourse against any of the prior endorsers in good faith as
    according to Sec. 66 of NIL, every indorser who indorses without
    qualification, warrants to all subsequent holders in due course, that the
    instrument is, at the time of his indorsement, valid and subsisting.

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