Metropolitan Bank and Trust Co. v. Court of Appeals [G.R. No. 88866. February 18, 1991]

24 Mar


Various treasury warrants drawn by the Philippine Fish Marketing Authority were subsequently indorsed by Golden Savings. Petitioner allowed Golden Savings to withdraw thrice from uncleared treasury warrants as the former was exasperated over persistent inquiries of the latter after one week. Warrants were later dishonored by the Bureau of Treasury.


(a) Whether or not treasury warrants are negotiable instruments.

(b) Whether or not petitioner’s negligence would bar them for recovery.


(a) NO. The indication of fund as the source of the payment to be made on the treasury warrants makes the order or promise to pay “not unconditional” and the warrants themselves non-negotiable. Metrobank cannot contend that by indorsing the warrants in general, Golden Savings assumed that they were “genuine and in all respects what they purport to be,” in accordance with Section 66 of the Negotiable Instruments Law. The simple reason is that this law is not applicable to the non-negotiable treasury warrants.

(b) YES. Metrobank was indeed negligent in giving Golden Savings the impression that the treasury warrants had been cleared and that, consequently, it was safe to allow Gomez to withdraw the proceeds thereof from his account with it. Without such assurance, Golden Savings would not have allowed the withdrawals; with such assurance, there was no reason not to allow the withdrawal. However, withdrawals released after the notice of the dishonor may be debited as it will result to unjust enrichment.



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