FACTS:

Nell Company issued a check to help Casals and Casville Enterprises obtain a  letter  of  credit  from  Equitable  Banking  in  connection  with  equipment,  a garrett  skidder,  which  Casals  and  Casville  were  buying  from  Nell.    Nell indicated  the  payee  as  follows  “EQUITABLE  BANKING  CORPORATION  A/C
CASVILLE ENTERPRISES INC.”
 
Casals deposited the check with the bank and the bank teller accepted the same  and  in  accordance  with  customary  bank  practice,  stamped  in  the check  the  words  “non-negotiable”.    The  amount  was  withdrawn  after  the deposit.
 
This  prompted  Nell  to  file  a  case  against  the  bank,  Casals  and  Casville.  While  the  instant  case  was  being  tried,  Casals  and  Casville  assigned  the garrett skidder to plaintiff which credited in favor of defendants the amount of P450,000, as partial satisfaction of its claim against them.   
 

HELD:

Equitable is not liable to Nell.  Nell should bear the loss as it was through its own acts, which put it into the power of Casals and Casville Enterprises to perpetuate the fraud against it.  
 
The  check  wasn’t  initially  non-negotiable.    Neither  was  it  cross-checked.  The rubber-stamping transversally on the face of the check was only made the bank teller in accordance with customary bank practice, and not by Nell as  the  drawer  of  the  check,  and  simply  meant  that  thereafter  the  same
check could no longer be negotiated.
 
The payee was not indicated with reasonable certainty in contravention of Section 8.  As worded, it could be accepted as deposit to the account of the party named therein after the symbols  of A/C, or payable to the bank as trustee,  or  as  an  agent,  for  Casville  with  the  latter  being  the  ultimate beneficiary.