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    REPUBLIC OF THE PHILIPPINES Vs EQUITABLE BANKING CORP.

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    Charles Roger Raya
    This document summarizes a Supreme Court case regarding whether the government can recover funds paid on forged treasury warrants. The Court ruled that the government was negligent and at fault for failing to verify the authenticity of the warrants before payment. Specifically: 1) Corporacion and Equitable Bank deposited treasury warrants received from customers that were later determined to be forged; 2) The banks cleared the warrants through the Treasury and received payment, crediting the funds to their customers; 3) The Treasury later claimed the warrants were forged and demanded refunds from the banks; 4) The Court found the Treasury was negligent for failing to detect the forgeries, as the amounts exceeded the approver's limit and

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    REPUBLIC OF THE PHILIPPINES Vs EQUITABLE BANKING CORP.

    Uploaded by

    Charles Roger Raya
    112 views1 page
    This document summarizes a Supreme Court case regarding whether the government can recover funds paid on forged treasury warrants. The Court ruled that the government was negligent and at fault for failing to verify the authenticity of the warrants before payment. Specifically: 1) Corporacion and Equitable Bank deposited treasury warrants received from customers that were later determined to be forged; 2) The banks cleared the warrants through the Treasury and received payment, crediting the funds to their customers; 3) The Treasury later claimed the warrants were forged and demanded refunds from the banks; 4) The Court found the Treasury was negligent for failing to detect the forgeries, as the amounts exceeded the approver's limit and

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    REPUBLIC OF THE PHILIPPINES vs EQUITABLE BANKING CORP.

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    This document summarizes a Supreme Court case regarding whether the government can recover funds paid on forged treasury warrants. The Court ruled that the government was negligent and at fault for failing to verify the authenticity of the warrants before payment. Specifically: 1) Corporacion and Equitable Bank deposited treasury warrants received from customers that were later determined to be forged; 2) The banks cleared the warrants through the Treasury and received payment, crediting the funds to their customers; 3) The Treasury later claimed the warrants were forged and demanded refunds from the banks; 4) The Court found the Treasury was negligent for failing to detect the forgeries, as the amounts exceeded the approver's limit and

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    112 views1 page

    REPUBLIC OF THE PHILIPPINES Vs EQUITABLE BANKING CORP.

    Uploaded by

    Charles Roger Raya
    This document summarizes a Supreme Court case regarding whether the government can recover funds paid on forged treasury warrants. The Court ruled that the government was negligent and at fault for failing to verify the authenticity of the warrants before payment. Specifically: 1) Corporacion and Equitable Bank deposited treasury warrants received from customers that were later determined to be forged; 2) The banks cleared the warrants through the Treasury and received payment, crediting the funds to their customers; 3) The Treasury later claimed the warrants were forged and demanded refunds from the banks; 4) The Court found the Treasury was negligent for failing to detect the forgeries, as the amounts exceeded the approver's limit and

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    REPUBLIC V.

    EQUITABLE BANK 10 SCRA 8 ISSUE: WON the Government can recover the amounts paid erroneously in
    consideration of the 28 treasury warrants,which in fact, were forged.
    FACTS: Corporacion had acquired 24 treasury warrants through Carranza (its
    former trusted employee) who asked Corporacion to cash the warrants, alleging that HELD: NO.
    it was difficult to do so directly with the Government and that his wife expected a
    sort of commission for the encashment. Corporacion acceded to Carranza's request, The Government was found to be negligent, thus they are not entitled to recovery. It
    provided that the warrants would first be deposited with BPI, and that actual was the Treasurer who initially cleared the 28 treasury warrant, being a member of
    payment of the value of the warrants would be made only after the same had been the aforementioned Clearing Office.
    duly accepted and cleared by the Treasurer and the proceeds duly credited to the
    account of the Corporacion in the BPI. The gross nature of the negligence of the Treasury becomes more apparent when we
    consider that each one of the 24 warrants was for over P5,000, and, hence; beyond
    The warrants were deposited by the Corporacion with BPI. When the warrants were the authority of the auditor of the Treasury — whose signature thereon had been
    deposited with the BPI, each bore the indorsement of the respective payees and that forged — to approve. In other words, the irregularity of said warrants was apparent
    of the Corporation. BPI then presented the warrants for payment to the drawee— the the face thereof, from the viewpoint of the Treasury. Moreover, the same had not
    Government — thru the Clearing Office. advertised the loss of genuine forms of its warrants. Neither had the BPI nor the
    Equitable Bank been informed of any irregularity in connection with any of the
    After clearance, the BPI credited the proceeds of said warrants to the account of warrants involved in these 2 cases, until after the warrants had been cleared and
    Corporacion. Corporacion withdrew the proceeds by means of its own checks and honored. As a consequence, the loss of the amounts thereof is mainly imputable to
    eventually paid the corresponding amounts to Carranza. Later, the Treasurer returned acts and omissions of the Treasury, for which the BPI and the Equitable Bank should
    the treasury warrants to the Central Bank, and demanded, on the ground that they not and cannot be penalized.
    had been forged, that the value thereof be charged against the accounts of the BPI
    Bank. Where a loss, which must be borne by one of two parties alike innocent of forgery,
    can be traced to the neglect or fault of either, it is reasonable that it would be borne
    The Central Bank in turn referred said warrants and letters of demand to the BPI. by him, even if innocent of any intentional fraud, through whose means it has
    BPI opposed the return of the warrants or to have the value thereof charged against succeeded, (Phil. National Bank v. National City Bank of New York, 63 Phil. 711,
    its account in the Clearing Office and requested the Central Bank to return the 723.)
    warrants to the Treasurer.

    In another case, 4 Treasury Warrants were deposited to Equitable Bank by customers


    Wong, and Ching. Equitable Bank then presented the warrants to the Central Bank. It
    was cleared and the bank collected the amounts from theTreasurer. Again, the
    Treasurer returned the warrants claiming they were forged. The Government filed 2
    cases separately against BPI and Equitable Bank seeking to recover:

    (1) from the Equitable Banking Corporation the sum of P17,100, representing the
    value of 4 treasury warrants paid to said bank by the Treasurer of the Philippines;
    and

    (2) from the Bank of the Philippine the total sum of P342,767.63, representing the
    value of 24 warrants similarly paid by the Treasurer to the said Bank.

    These claims for refund are based upon a common ground: although said 28 warrants
    were executed on genuine government forms, the signature thereon of the drawing
    office and that of the representative of the Auditor General in that office are forged.

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