Gabriel Angel V.

de Vera
Equitable PCI Bank vs. Ong
September 15, 2006
Chico-Nazario, J.

FACTS:
 The case originated when a certain Warliza Sarande, relying on the bank’s assurance that
her deposits were credited, issued two checks to respondent Rowena Ong drawn against
the former’s account with PCI Bank.
 On the same day, respondent presented the same checks to PCI Bank for conversion into
manager’s checks, which the bank obliged to do.
 The next day, Ong deposited the checks in her account with Equitable Bank, however she
later received a check return-slip informing her that PCI had stopped payment of the said
checks in the ground of “irregular issuance”.
 Respondent subsequently filed a complaint for sum of money, damages, and attorney’s
fees after failure by PCI Bank to honor the checks despite demands.
 PCI Bank averred that the account the check was drawn against was already closed,
therefore the absence of consideration.
 They further claim that they informed Sarande and Ong about the situation and requested
that they return the checks.
 Upon failing to appear at the hearing, the trial court declared PCI Bank in default and ruled
in favor of respondent, awarding her with damages, etc.
 The RTC denied PCI Banks M.R. and the CA denied its appeal.

ISSUE: Whether or not the RTC and CA was correct in holding that there was consideration,
therefore respondent was a holder for value and in due course.

HELD: Yes, Petition Denied.

RULING:
A manager’s check is one drawn by the bank’s manger upon the bank itself. The check becomes
the primary obligation of the bank which issues it and constitutes it written promise to pay upon
demand. Mere issuance of it is considered acceptance thereof. Such acceptance implies that the
check is drawn upon sufficient funds in the hands of the drawee xxx, the check good, shall continue
good, and binding on the bank. Further, PCI Bank’s issuance of the manager’s checks to Ong
cements the latter’s position as a holder for value. The court reiterated that because of their peculiar
character and general use in commerce, manager’s checks are regarded substantially to be as good
as the money it represents (in other words it has been given value). Further, a manager’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. Yes, not only was Ong a holder in due course but most especially a
holder for value. The case at bar falls squarely with the definition of a holder in due course, as
defined in section 52 of the NIL.