Bank Of America v. Associated Citizens Bank

CARPIO, J.:

The Case Before the Court are consolidated cases docketed as G.R. No. 141001 and G.R. No. 141018. These two cases are petitions for review on certiorari1 of the Decision2 dated 26 February 1999 and the Resolution dated 6 December 1999 of the Court of Appeals in CA-G.R. CV No. 48821. The Court of Appeals affirmed with modifications the Decision of the Regional Trial Court of Makati, Branch 64 (RTC).

The Antecedent Facts On 6 October 1978, BA-Finance Corporation (BA-Finance) entered into a transaction with Miller Offset Press, Inc. (Miller), through the latter's authorized representatives, i.e. , Uy Kiat Chung, Ching Uy Seng, and Uy Chung Guan Seng. BA-Finance granted Miller a credit line facility through which the latter could assign or discount its trade receivables with the former.

On 20 October 1978, Uy Kiat Chung, Ching Uy Seng, and Uy Chung Guan Seng executed a Continuing Suretyship Agreement with BA-Finance whereby they jointly and severally guaranteed the full and prompt payment of any and all indebtedness which Miller may incur with BA-Finance. Miller discounted and assigned several trade receivables to BA-Finance by executing Deeds of Assignment in favor of the latter. In consideration of the assignment, BA-Finance issued four checks payable to the "Order of Miller Offset Press, Inc."

with the notation "For Payee's Account Only." These checks were drawn against Bank of America and had the following details:3 Check No. Date Amount 128274 13 February 1981 ₱222,363.33 129067 26 February 1981 252,551.16 132133 20 April 1981 206,450.57 133057 7 May 1981 59,862.72 Total