Haystack: Manila Lighter Transportation vs. Court of Appeals (GR L-50373, 15 February 1990)

Manila Lighter Transportation vs. CA
[G.R. No. L-50373. February 15, 1990.]
First Division, Grino-Aquino (J): 3 concurring, 1 on leave

Facts: A complaint for recovery of the value of 49 checks (P91,153.11) with alleged forged/unauthorized indorsements of the payee of which 26 were paid to the company or order and 23 to company or bearer, was filed by was filed by Manila Lighter Transportation Inc. against China Banking Corporation on 22 May 1962. The complaint alleged that the checks were issued by customers of the company in payment of brokerage/lighterage services and were all delivered, without its knowledge, to its collector, Augusto Perez. Upon forged indorsements of the company's general manager, Luis Gaskell, the checks found their way into the accounts of third persons in the bank and the proceeds were later withdrawn, to the damage of the company who sought reimbursement or restoration by said bank of the value of the checks. Bank denied liability for the company's loss which was due to its own negligence. It alleged that the company is estopped from denying its collector's authority to receive the checks from the drawers/customers; that the company failed to give Bank and the drawee Banks notice of the alleged forged or unauthorized indorsements within a reasonable time; and that its loss was occasioned by its own failure to observe the proper degree of diligence in the supervision of its employees, particularly its collector, Augusto Perez. Upon leave of court, the Bank filed a third-party complaint against Cao Pek & Co. and Ko Lit who had deposited the checks in question in their respective accounts with the former and had thereafter withdrawn the proceeds thereof. In the decision of 22 January 1972, the lower court found both parties equally negligent, the company, for allowing a state of affairs in which its employees could appropriate the checks and falsify the indorsement thereon of its manager with impunity, and the bank, for not detecting the falsification made by the company's employees when the checks were presented to it. The court ordered the bank to pay the company the amount equal to 50% of the total amount of the checks, ordered the company to pay the bank the amount equal to 50% of the Tabacalera check, ordered third-party defendants Ko Lit and Cao Pek to pay ChinaBank the amounts of P90,500.24 and 1,215.05 respectively, and ordered ChinaBank to pay the company 50% of the amounts recovered from the third-party defendants; with the parties bearing their own costs and attorney’s fees.

Both the company and the bank appealed to the Court of Appeals. Ko Lit and Cao Pek also appealed but their appeal was dismissed for failure to pay the docket fee and to file the record on appeal. On 18 January 1979, the Court of Appeals rendered judgment, modifying that of the lower court, such that the complaint is dismissed and the bank is freed from any liability to the company. The counterclaim of P3,453.53 is granted with interests from the date the amended counterclaim was filed. The third-party defendants are adjudged directly liable to the company for the checks they respectively indorsed; without costs. The company filed a motion for reconsideration of the decision but it was denied. Hence, the petition for review.

The Supreme Court denied the petition for lack of merit; with costs against the company.

1. Issues raised are factual
The company alleged that the Court of Appeals erred in finding that the petitioner was negligent; in holding that said negligence constituted sufficient ground to preclude it from alleging forgery or want of authority; in not ruling that the proximate cause for the loss was the Bank's failure in its duty to ascertain the genuineness of the signatures appearing in the checks; in not ruling that the Bank should have been held entirely liable for the loss; and in not condemning Bank to pay the company damages, attorney's fees, expenses and costs. The issues raised therein are factual. The main issue of the company's negligence had already been determined by the trial court against company and affirmed by the Court of Appeals after examining the evidence in the records.

2. Bank was not negligent
Since the company was not a client of Bank, i.e., did not maintain an account in said Bank, the latter had no way of ascertaining the authenticity of its indorsements on the checks which were deposited in the accounts of the third-party defendants in said Bank. The Bank was not negligent because, in accordance with banking practice, it caused the checks to pass through the clearing house before it allowed their proceeds to be withdrawn by the depositors (third-party defendants in the lower court).

3. Supreme Court decides appeals which only involve questions of law
The Supreme Court decides appeals which only involve questions of law. It is not the function of the Supreme Court to analyze or weigh the evidence all over again, its jurisdiction being limited to resolving errors of law that might have been committed by the lower court. (Dihiansan vs. Court of Appeals, 153 SCRA 712; Francisco vs. Mandi, 152 SCRA 711; Director of Lands vs. Funtilar, 142 SCRA 57).

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