Professional Documents
Culture Documents
ASSOCIATED BANK V. CA
252 SCRA 620
FACTS:
Respondent Sima Wei executed and delivered to
petitioner Bank a promissory note engaging to pay
the petitioner Bank or order the amount of
P1,820,000.00. Sima Wei subsequently issued two
crossed checks payable to petitioner Bank drawn
against China Banking Corporation in full
settlement of the drawer's account evidenced by
the promissory note. These two checks however
were not delivered to the petitioner-payee or to any
of its authorized representatives but instead came
into the possession of respondent Lee Kian Huat,
who deposited the checks without the petitionerpayee's indorsement to the account of respondent
Plastic Corporation with Producers Bank. Inspite of
the fact that the checks were crossed and payable
to petitioner Bank and bore no indorsement of the
latter, the Branch Manager of Producers Bank
authorized the acceptance of the checks for deposit
and credited them to the account of said Plastic
Corporation.
ISSUE:
Whether petitioner Bank has a cause of action
against Sima Wei for the undelivered checks.
FACTS:
The province of Tarlac maintains an account with
PNB-Tarlac. Part of its funds is appropriated for
the benefit of Concepcion Emergency Hospital.
During a post-audit done by the province, it was found
out that 30 of its checks werent received by the
hospital. Upon further investigation, it was found out that
the checks were encashed by Pangilinan who was a
former cashier and administrative officer of the
hospital through forged indorsements.
This
prompted the provincial treasurer to ask for
reimbursement from PNB and thereafter, PNB from
Associated Bank. As the two banks didn't want to
reimburse, an action was filed against them.
HELD:
There is a distinction on forged indorsements
with regard bearer instruments and instruments
payable to order.
With instruments payable to bearer, the signature of the
RULING:
No. A negotiable instrument must be delivered to
the payee in order to evidence its existence as a
binding contract. Section 16 of the NIL provides
that every contract on a negotiable instrument is
incomplete and revocable until delivery of the
instrument for the purpose of giving effect
thereto. Thus, the payee of a negotiable instrument
acquires no interest with respect thereto until its
delivery to him. Without the initial delivery of the
A collecting bank is
In
REPUBLIC V. EBRADA
65 SCRA 680
FACTS:
Ebrada encashed a Back Pay Check issued by the
Bureau of Treasury at the Republic Bank in Escolta
Manila. The Bureau of Treasury advised the
Republic Bank that the instrument was forged. It
informed the bank that the original payee of the check
died 11 years before the check was issued. Therefore,
there was a forgery of his signature.
This is the sequence:
Martin Lorenzo
The deceased person, original
payee, where the forgery
happened
Ramon Lorenzo
Delia Dominguez
Mauricia Ebrada
Defendant-appelant
Ebrada refuses to return the proceeds of the check
claiming that she already gave it to Delia
Dominguez. She also claims that she is a HDC
(holder in due course) and that the bank is already
estopped.
HELD:
Ebrada should return the proceeds of the check to
Republic Bank. As an indorser of the check, she was
supposed to have warranted that she has good title to
said check. See Section 65.
Section 23: When the signature is forged or made
without the authority of the person whose signature it
purports to be, it is wholly inoperative, and no right to
retain the instruments, or to give a discharge thereof
against any party thereto, can be acquired through or
under such signature unless the party against whom
it is sought to enforce such right is PRECLUDED
from setting up the forgery or want of authority.
It is only the negotiation based on the forged or
unauthorized signature
which is inoperative. Therefore:
Martin Lorenzo
Signature inoperative
Ramon Lorenzo
To Dominguez: operative
Delia Dominguez
To Ebrada: operative
Mauricia Ebrada
Drawee bank can collect from the one who encashed the
check. If Ebrada performed the duty of ascertaining
the genuiness of the check, in all probability, the
forgery wouyld have been detected and the fraud
defeated.
GEMPESAW V. CA
218 SCRA 682
FACTS:
Gempensaw was the owner of many grocery stores.
She paid her suppliers through the issuance of
checks drawn against her checking account with
respondent bank. The checks were prepared by
her bookkeeper Galang. In the signing of the checks
prepared by Galang, Gempensaw didn't bother
herself in verifying to whom the checks were being
paid and if the issuances were necessary. She
didn't even verify the returned checks of the bank
when the latter notifies her of the same. During her two
years in business, there were incidents shown that
the amounts paid for were in excess of what should
Petitioner
HELD:
instrument.
to double-check her
payments. Petitioner didn't exercise reasonable