G.R. No. 205839 - LAND BANK OF THE PHILIPPINES, VS. NARCISO L. KHO.[G.R. No. 205840] MA. LORENA FLORES AND ALEXANDER CRUZ, VS. NARCISO L. KHO.DECISION - Supreme Court E-Library

Ruling

Accordingly, P25,000,000.00 was debited from his savings account. Unfortunately, his deal with Red Orange did not push through. On January 3, 2006, an employee of the Bank of the Philippine Islands ( BPI ) called Land Bank, Araneta Branch, to inform them that Red Orange had deposited check No. 07410 for payment. Flores confirmed with BPI that Land Bank had issued the check to Kho. [8] On January 4, 2006, the Central Clearing Department ( CCD ) of the Land Bank Head Office faxed a copy of the deposited check to the Araneta branch for payment. The officers of the Araneta branch examined the fax copy and thought that the details matched the check purchased by Kho. Thus, Land Bank confirmed the deposited check . [9] On January 5, 2006, Flores informed Kho by phone that Check No. 07410 was cleared and paid by the BPI, Kamuning branch. [10] Shocked, Kho informed Flores that he never negotiated the check because the deal did not materialize. More importantly, the actual check was still in his possession . [11] Kho immediately went to Land Bank with the check No. 07410 . They discovered that what was deposited and encashed with BPI was a spurious manager's check. [12] Kho demanded the cancellation of his manager's check and the release of the remaining money in his account (then P995,207.27). [13] However, Flores refused his request because she had no authority to do so at the time. Kho returned to the Land Bank, Araneta branch on January 12, 2006, with the same demands. He was received by petitioner Alexander Cruz who was on his second day as the Officer in Charge (OIC) of the Araneta branch. [14] Cruz informed him that there was a standing freeze order on his account because of the (then) ongoing investigation on the fraudulent withdrawal of the manager's check. [15] On January 16, 2006, Kho sent Land Bank a final demand letter for the return of his P25,000,000.00 and the release of the P995,207.27 from his account but the bank did not comply. Hence, on January 23, 2006, Kho filed a Complaint for Specific Performance and Damages against Land Bank, represented by its Araneta Avenue Branch Manager Flores and its OIC Cruz. He also impleaded Flores and Cruz in their personal capacities. The complaint was docketed as Civil Case No. Q-06-57154 . Kho asserted that the manager's check No. 07410 was still in his possession and that he had no obligation to inform Land Bank whether or not he had already negotiated the check. [16] On the other hand, Land Bank argued that Kho was negligent because he handed Medel a photocopy of the manager's check and that this was the proximate cause of his loss. [17] On April 30, 2009, the RTC dismissed the complaint. [18] Citing Associated Bank v. Court of Appeals , the RTC reasoned that the failure of the purchaser/drawer to exercise ordinary care that substantially contributed to the making of the forged check precludes him from asserting the forgery. [19] It held that (1) Kho's act of giving Medel a photocopy of the check and