Professional Documents
Culture Documents
Judge Caldona
relationship with the banks being the debtors who use the money
of their customers (creditors) to gain profit.
3. A bank is bound to know the signatures of its customers; and if it
pays a forged check, it must be considered as making the
payment out of its own funds, and cannot ordinarily charge the
amount so paid to the account of the depositor whose name was
forged. With negligence of the bank as the proximate cause of
its loss, it cannot hold the depositor liable
4. San Carlos did not do any act to mislead BPI into making the
payment. BPI allowed itself to be misled by Dolores due to its
own negligence. As a consequence, under Sec. 23 of the NIL,
when the signatures to the checks being forged, neither should the
vale of the checks be charged against the depositor nor the
checks be considered of any value to the bank
Philippine National Bank v Quimpo (03/14/1988)
D: The prime duty of a bank is to ascertain the genuineness of the
signature of the drawer or the depositor on the check being encashed. It is
expected to use reasonable business prudence in accepting and cashing a
check presented to it
Facts:
1. Francisco S. Gozon II, was a depositor of the Philippine National Bank
(PNB or the Bank). In his car, Gozon left his friend Ernesto Santos
while he transacted business in the bank. Santos noticed that Gozon
left his checkbook in the car. Thereafter, Santos took a blank check
from such checkbook. Santos then filled up the check for the amount of
PhP5,000.00, forged the signature of Gozon, and then encashed the
check on the same day
2. Gozon asked that the said amount be returned to his account because
his signature was forged, but the bank refused
3. Gozon filed a complaint for recovery of the amount
4. The RTC ruled in favor of Gozon and ordered the bank to return the
amount
5. The bank filed a petition for review on certiorari before the Supreme
Court
Issue: WON the act of Gozon in putting his checkbook containing the check
in question into the hands of Santos was indeed the proximate cause of the
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loss, thereby precluding him from setting up the defense of forgery or want of
authority under Section 23 of the Negotiable Instruments Law
Held: No
Ratio:
1. The prime duty of a bank is to ascertain the genuineness of the
signature of the drawer or the depositor on the check being
encashed. It is expected to use reasonable business prudence in
accepting and cashing a check presented to it
2. PNB was negligent in encashing said forged check without carefully
examining the signature which shows marked variation from the
genuine signature of Gozon
3. Gozon trusted Santos as a classmate and a friend. He brought him
along in his car to the bank and left his personal belongings in the
car. Santos however removed and stole a check from his checkbook
without the knowledge and consent of Gozon. No doubt Gozon
cannot be considered negligent under the circumstances of the case
PNB v C.A.
D: When one of two innocent persons must suffer by the wrongful act of
the third person, the loss must be borne by the one whose negligence was
the proximate cause of the loss or who put it into the power of the third
person to perpetrate wrong
Facts:
1. Augusto Lim deposited in his account in PCIB a GSIS check worth 57k
drawn against PNB. Upon receipt PCIB stamped the following on the
back of the check: All prior indorsements and or lack of Endorsement
Guaranteed.
2. Following banking practice, PCIB forwarded the check for clearing to
PNB through Central Bank
3. Despite being informed 2 months prior by GSIS that said check was
lost and that payment should be stopped, PNB did not return check
but kept the same, paid the amount and debited it against GSIS
account
4. Subsequently, payment of 57k was re-credited in GSIS account for
the reason that the signatures of GSIS officers on the checks as
drawers were forged
Judge Caldona
5. PNB filed a complaint to recover the 57k sum from PCIB which
refused.
6. RTC: dismissed complaint
7. C.A.: affirmed
Issue: WON indorsements at the back of the check were forged
Held/ratio: No
1. Question of whether or not the indorsements have been falsified is
immaterial to PNBs liability as drawee or its right to recover from
PCIB. This is so for as against the drawee, the indorsement of an
intermediate bank does not guarantee the signature of the drawer,
since forgery of the indorsement is not the cause of loss
Issue: WON PCIB is liable by virtue of the warranty at the back of the check
Held/ratio: NO
1. PCIB guaranteed all prior indorsements, not the auntheticty of the
signatures of the officers of GSIS who signed on behalf because GSIS
is not the indorser of the check. Such warranty Iis irrelevant to PNBs
alleged right to recover
Issue: WON acceptance is equal to payment
Held/ratio: NO
1. Under NIL, acceptance is not required for checks for they are
payable on demand
2. Acceptance is the promise to perform. Payment means actual
performance of the promise
3. Acceptance of a bill is the signification of the drawee of his assent to
the order of the drawer which in the case of checks is the payment on
demand, of a given money
4. Actual payment of the amount of the check implies not only assent to
the order of the drawer and recognition of the drawees obligation
to pay the aforementioned sum but also compliance to said obligation
Issue: WON PCIB is guilty of negligence
Held/ratio: NO
1. Undeniable that PNB had been guilty of greater negligence because
it had previous and formal notice form GSIS that checks were lost
with the payment that payments be stopped
2. In fact, when PCIB sent the check to Central Bank for clearing, PNB
did not return check which, under banking practice, implies that PNB
considered the check as good. By not returning the check, PNB
3 Ad astra per alia fideles
Induced PCIB to believe that the check was good and genuine in
every respect. PNB was the proximate cause of the loss hence, it
cannot recover from PCIB
MWSS v CA
Facts:
1. The Metropolitan Waterworks and Sewerage System (MWSS) is a
government owned and controlled corporation created under RA
6234 as the successor-in-interest of the defunct NWSA.
2. The Philippine National Bank (PNB), on the other hand, is the
depository bank of MWSS and its predecessor-in-interest NWSA.
3. Among the several accounts of NWSA with PNB is NWSA Account 6,
otherwise known as Account 381-777 and which is presently
allocated 010-500281. The authorized signature for said Account 6
were those of MWSS treasurer Jose Sanchez, its auditor Pedro
Aguilar, and its acting General Manager Victor L. Recio. Their
respective specimen signatures were submitted by the MWSS to and
on file with the PNB.
4. By special arrangement with the PNB, the MWSS used personalized
checks in drawing from this account.
5. These checks were printed for MWSS by its printer, F. Mesina
Enterprises, located at 1775 Rizal Extension, Caloocan City.
6. During the months of March, April and May 1969, 23 checks were
prepared, processed, issued and released by NWSA, all of which
were paid and cleared by PNB and debited by PNB against NWSA
Account 6.
7. During the same months of March, April and May 1969, 23 checks
bearing the same numbers as the NWSA checks were likewise paid
and cleared by PNB and debited against NWSA Account 6. The
checks were deposited by the payees Raul Dizon, Arturo Sison and
Antonio Mendoza in their respective current accounts with the
Philippine Commercial and Industrial Bank (PCIB) and Philippine Bank
of Commerce (PBC) in the months of March, April and May 1969.
Thru the Central Bank Clearing, these checks were presented for
payment by PBC and PCIB to the PNB, and paid, also in the months of
March, April and May 1969.
Judge Caldona
CFIs Decision:
CAs Decision:
On appeal and on 29 October 1982, the Court of Appeals reversed the
decision of the CFI Manila and rendered judgment in favor of the respondent
Philippine National Bank.
ISSUE:
A.WON MWSS can assert forgery as a defense?
B. WON MWSS was negligent?
HELD:
A. No, there were no evidence that checks were forged.
Forgery cannot be presumed. It must be established by clear,
positive, and convincing evidence. This was not done in the
present case.
4 Ad astra per alia fideles
B. Yes, MWSS was negligent and this was the proximate cause of its loss.
MWSS committed gross negligence in the printing of its
personalized checks. The records show that at the time the 23
checks were prepared, negotiated, and encashed, MWSS was
using its own personalized checks, instead of the official PNB
Commercial blank checks. In the exercise of this special privilege,
however, MWSS failed to provide the needed security measures.
That there was gross negligence in the printing of its personalized
checks is shown by the following uncontroverted facts, that MWSS
failed to:
(1) Give its printer, Mesina Enterprises, specific instructions
relative to the safekeeping and disposition of excess forms,
check vouchers, and safety papers
(2) Retrieve from its printer all spoiled check forms
(3) Provide any control regarding the paper used in the
printing of said checks
Judge Caldona
Judge Caldona
Judge Caldona
Ilusorio v. CA (11/27/2002)
D: When a signature is forged, it is wholly inoperative unless the party
against whom it is sought to enforce such right is precluded from setting
up the forgery or want of authority
Facts:
1. Ramon K. Ilusorio is a prominent businessman who serves as the
Managing Director of the Multinational Investment Bancorporation at
the time when this case was first instituted. He is also the chairman
and president of other corporations
2. As he was running about 20 corporations at a time and is often out of
the country. As such, he has entrusted his credit cards and his
checkbook with blank checks to his secretary, Katherine E. Eugenio
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Judge Caldona
2.
3.
4.
5.
6.
7.
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3.
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(3) The spouses Cabamongan informed the bank that Carmelita was in
the US and did not pre-terminate their deposit, and that the person
who did it was an impostor.
(4) San Pedro told the spouses to submit necessary documents to support
their claim, but the bank concluded nonetheless that Carmelita indeed
pre-terminated her deposit.
(5) The spouses made a formal demand, but the bank refused such
demand. The spouses then filed a complaint against the bank for
specific performance with damages.
(6) The RTC rendered a decision in favor of the spouses Cabamongan,
ordering the bank to pay the principal amount, plus moral damages
and attorneys fees.
(7) The CA affirmed the decision of the RTC, but reduced the amount for
moral damages and deleted the awards for exemplary damages
and litigation expenses.
Issue: WON the bank was negligent in allowing the pre-termination of the
account.
Held: Yeeeeees
Ratio:
(1) In this case, it has been sufficiently shown that the signatures of
Carmelita in the forms for pre-termination of deposits are forgeries.
Citibank, with its signature verification procedure, failed to detect the
forgery. Its negligence consisted in the omission of that degree of
diligence required of banks. A bank is bound to know the signatures
of its customers; and if it pays a forged check, it must be considered
as making the payment out of its own funds, and cannot ordinarily
charge the amount so paid to the account of the depositor whose
name was forged.
(2) The bank, through San Pedro, did not observe the degree of
diligence required of banking institutions when despite noticing
discrepancies in the signature and photograph of the person claiming
to be Carmelita and the failure to surrender the original certificate of
time deposit, the pre-termination of the account was allowed. Even
the waiver document was not notarized, a procedure meant to
protect the bank. Citibank is therefore liable for damages.
(3) The time deposit in this case is a simple loan. Thus, in a loan or
forbearance of money, the interest due should be that stipulated in
writing, and in the absence thereof, the rate shall be 12% per annum
counted from the time of demand. The stipulated rate of 2.562% per
annum shall apply for the 182-day contract. From the time of
10 Ad astra per alia fideles
demand until full payment, the interest rate shall be at 12%. As for
the period between the expiration of the 182-day contract and the
extrajudicial demand, the interest will be at rate then prevailing
granted by Citibank
Forged indorsement
Great Eastern Life Ins. Co. v. HongKong Shanghai Bank
D: The only remedy of a bank paying a check to a person who has forged
the name of the payee is against the forger.
FACTS:
1. Great Eastern Life Ins. Co (GELIC) is an insurance company which
drew a check worth 2k payable to the order of Lazaro Melicor from
drawee bank HSBC.
2. Check fraudulently got into the possession of E.M. Maasim who
forged Melicors signature as endorser and personally indorsed the
and presented said check to PNB where the amount was placed in his
credit.
3. After paying for the check, PNB endorsed the same to HSBC which
paid the amount charged in the account of GELIC. A bank statement
was then forwarded to GELIC which made no objection.
4. After four months, GELIC learned that Melicor never received any
check and that the latters signature was forged by Maasim
5. Subsequently, GELIC demanded from HSBC the credit for the amount
of the forged check but the bank refused to do so. Thus, a complaint
was filed.
6. RTC: dismissed
7. C.A.: affirmed
ISSUE: Who is responsible for the refund of the drawer of the amount of the
check drawn and payable to order when its value was collected by a third
person by means of forgery of the signature of the payee?
HELD/RATIO: forger
1. GELIC ordered the money to be paid to Melicor and not to Massim.
That the money was paid to Maasim and not to Melicor who dod s
not endorse or authorize Maasim to indorse it for him. HSBC has no
Judge Caldona
Gempesaw vs. CA
Facts:
1. Gempesaw owns and operates four grocery stores located in
Caloocan City. She also maintains a checking account with PBCOM
Caloocan City Branch.
2. Alicia Galang, her trusted bookkeeper who worked for her for 8
years, prepares and fills up all the material particulars of all her
checks. After which the completed checks are submitted to Gempesaw
for her signature, together with corresponding invoice receipts which
indicate the correct obligations due and payable to the suppliers. She
signed every check without bothering to verify the accuracy of the
checks against the corresponding invoices.
3. The issuance and delivery of the checks to the payees were left to
Galang. Gempesaw did not make any verification as to whether the
checks were actually delivered to their respective payees.
4. PBCOM notified Gempesaw of all her checks presented to and paid
by the bank. It also furnished her with a monthly statement of her
bank transactions, attaching thereto all the cancelled checks she had
issued and which were debited against her current account.
5. For the span of 2 years, Gempesaw issued 82 checks in favour of
several suppliers. These checks were all presented by the indorsees
as holders thereof to, and honoured by PBCOM.
6. PBCOM debited the amounts of the checks against Gempesaws
checking account. Most of the checks were for amounts in excess of
her actual obligations. All the checks issued were crossed checks.
7. All 82 checks were brought to Ernest Boon, Chief Accountant of
PBCOM Buendia Branch, who without authority accepted the all for
11 Ad astra per alia fideles
8.
9.
10.
11.
12.
ISSUE:
A. WON Gempesaw can assert forgery as a defense?
B. WON Gempesaw is entitled to damages?
HELD:
A. No, Gempasaws negligence was the proximate cause her loss.
As a rule, a drawee bank who has paid a check on which an
indorsement has been forged cannot charge the drawer's
account for the amount of said check. An exception to this rule
is where the drawer is guilty of such negligence which causes
the bank to honor such a check or checks.
The negligence of a depositor which will prevent recovery of
an unauthorized payment is based on failure of the depositor
to act as a prudent businessman would under the
circumstances. In the present case, Gempesaw relied implicitly
upon the honesty and loyalty of her bookkeeper, and did not
even verify the accuracy of the amounts of the checks she
signed against the invoices attached thereto. Furthermore,
although she regularly received her bank statements, she
apparently did not carefully examine the same nor the check
Judge Caldona
stubs and the returned checks, and did not compare them with
the sales invoices. Otherwise, she could have easily
discovered the discrepancies between the checks and the
documents serving as bases for the checks. With such
discovery, the subsequent forgeries would not have been
accomplished. It was not until two years after the bookkeeper
commenced her fraudulent scheme that Gempesaw
discovered that 82 checks were wrongfully charged to her
account, at which time she notified the drawee Bank.
B. Yes, Gempasaw is entitled to damages because PBCOM is liable
under Article 1170 of the Civil Code, and not Article 2179.
There is a contractual relation between Gempesaw as depositor
(obligee) and the drawee bank as the obligor. In the performance of
its obligation, the drawee bank is bound by its internal banking rules
and regulations which form part of any contract it enters into with any
of its depositors. When it violated its internal rules that second
endorsements are not to be accepted without the approval of its
branch managers and it did accept the same upon the mere approval
of Boon, a chief accountant, it contravened the tenor of its obligation
at the very least, if it were not actually guilty of fraud or negligence
Judge Caldona
BPI v CA (11/26/1992)
D: Generally, payment made through a forged signature is ineffective or
does not discharge the instrument. The exception to this rule is when the
party who relied on the forgery is precluded from setting up the forgery or
want of authority due to its negligence
Note: The RULE is: Whenever any bank treats the signature at the back of the
checks as endorsements and thus logically guarantees the same as such there
can be no doubt said bank has considered the checks as negotiable
Facts:
1. Eligia Fernando was an employee of Philamlife who had money in a
money market placement in BPI. This was evidenced by a promissory
note and hasnt matured yet
2. One day, someone called up BPI to preterminate the placement but
was unable to due to time constraints. She said that she was Eligia
Fernando
3. Three days after, the same caller called and followed up on the
pretermination. The BPI employee who answered the phone verified
the identity of the caller, but failed to complete the verification when
it did not call up Philamlife to ascertain if h was really speaking with
the real Fernando
4. A delivery of the checks (in payment of the preterminated money
market placement) were made by BPI when the niece of the caller
(who pretended to be Fernandos niece and who is actually the same
person as the caller) picked up the two checks from BPIs dispatcher
5. The dispatcher failed to require the surrender of the promissory note
that was supposed to evidence the placement and it was not shown
also that a verification of the identity of the signature of Fernando
was made in the supposed authorization letter that the niece brought
with her when she picked up the checks
6. Later, impostor Fernando opened an account with China Banking
Corp. (CBC) and deposited therein the two checks that were paid to
her by BPI after the pretermination of the placement; these were
cleared by BPI on the same day
7. Two days after the deposit, large amounts of money were withdrawn
by the impostor from the CBC account
8. When the maturity of the placement came, the real Fernando
appeared and disclaimed that she preterminated her money market
placement with BPI
9. BPI, then, returned the two checks to CBC for the reason Payees
endorsement forged, but CBC gave these back for reason of
Beyond clearing time
Judge Caldona
10. The Arbitration Committee ruled in favor of BPI and ordered CBC to
pay the former
11. The Board of Directors of the Philippine Clearing House Corp.
(PCHC), upon CBCs appeal, ruled in favor of CBC
12. The RTC and CA dismissed the petition for review of BPI
Issue: WON BPI was precluded from raising the defense of forgery
Held: Yeeeeeees
Ratio:
1. Since the instruments involved here are checks, which, under sec. 1 of
the NIL, are negotiable instruments, sec. 23 of NIL definitely covers
the issue at hand
2. Sec. 23 of the NIL provides for the general rule and exception in
case forgery attends a negotiable instrument
3. The negligence of the party invoking forgery is an exception to the
general rule that payment made in reliance of a forged signature in
an instrument is ineffective
4. In this case, it doesnt matter who was more negligent between BPI
and CBC because they are both banks and as banks, they are
presumed to exercise a higher standard of diligence
5. Fernando and BPI had more privity because Fernando was BPIs client
first, while CBC did not have any way of discovering the fraud
because their client was only an impostor of Fernando
6. Although the proximate cause of the success of forgery was BPIs
negligence, CBC was also negligent when it failed to act on the
suspicious circumstances that surrounded the transactions of the
impostor (huge over-the-counter withdrawals made immediately after
the account was opened)
Judge Caldona
6. Inter-Island gas informed Jai Alai, BPI, and the drawers and draweebanks of the said checks about the forgeries. They also filed a
criminal case against Ramirez
7. Upon receipt of the letter from Inter-Island, BPIs cashier (Sarthou)
called Jai Alais cashier (Garcia) and advised him that in view of the
present circumstance, he would debit the value of the checks against
Jai Alais account as soon as they were returned by the respective
drawee-banks
8. The drawers of the check (Delta, Enrique, Luzon Tinsmith, Roxas)
demanded reimbursement from their respective accounts from
drawee-banks (Pacific Banking, PNB, Chinabank) who then
demanded from BPI (collecting bank) the return of the amounts they
paid thereof
9. When drawee-banks returned the checks to BPI, the latter paid their
value which the former paid to Inter-Island gas
10. BPI debited Jai Alais current account and forwarded the checks
containing forged indorsements. Jai Alai refused to accept the checks
11. October 8, 1959 Jai Alai issued a check for PHP 135,000 payable
to Mariano Olondriz in payment of certain shares of stock. Check was
dishonored by BPI since the account only contains PHP 128,257.65.
BPI deducted PHP 8,030.58 (total amount of the 10 forged checks)
from the account. Thus, petitioner filed a complaint against BPI
12. RTC dismissed the case. CA affirmed.
Issues:
1. WON BPI had the right to debit the petitioners current account in the
amount corresponding to the total value of the checks in question
2. WON BPO is estopped from claiming that the amount of PHP
8,030.58 (total value of the checks with forged indorsements) had not
been properly credited to petitioners account since the same had
been paid by the drawee-banks and received in due course by BPI
3. WON Jai Alai is entitled to damages from BPI since they had
improperly debited the checks to petitioners account
Held: No to all
Ratio:
1. SC: BPI acted within legal bounds when it debited the petitioners
account.
2. When Jai Alai deposited the checks with BPO, the nature of the
relation was that of agency. BPI was to collect from the drawees of
checks. Not a creditor-debtor relationship.
15 Ad astra per alia fideles
Judge Caldona
Judge Caldona
Issue: WON the company was negligent for allowing a state of affairs in
which its employees could appropriate the checks and falsify the indorsement
of its manager.
Held:
Yeeeeees
Ratio:
(1) The main issue of the companys negligence had already been
determined by the trial court against the company and affirmed by
the CA after examining the evidence in the records.
(2) Since the company was not a client of the bank, that is, it did not
maintain an account in said bank, the latter had no way of
ascertaining the authenticity of its indorsements on the checks which
were deposited in the accounts of the third-party defendants in said
bank. The bank was not negligent because, in accordance with
banking practice, it caused the checks to pass through the clearing
house before it allowed their proceeds to be withdrawn by the
depositors
Associated Bank v. C.A. (1992)
D: Crossing a check is done by writing two parallel lines diagonally on
the left top portion the check. This signifies that check is only to be
deposited and not encashed.
FACTS:
1. Private respondent is engaged in the business of ready to wear
garments under the firm name Meliss RTW.
2. Her customers Robinsons Dept., Payless, Rempson and Corona Bar
issued in payment of their respective accounts crossed checks payable
to Melissa RTW and drawn from Solid Bank, FEBTC, TRB and RCBC.
3. When she went to these companies to collect, she was informed that
the checks have been deposited with Associated Bank and
subsequently paid to one Rafael Sayson. Sayson, however, was not
authorized to deposit and encash such checks by private respondent.
4. Private respondent sued the petitioners for the recovery of the total
value of the checks plus damages.
5. RTC: judgment was rendered in favor of private respondent
Judge Caldona
6. C.A.: affirmed RTC. It said that the cause of action of the private
respondent was the illegal, anomalous and irregular acts of the
petitioner in violating common banking practices by allowing checks
to be deposited and cashed as well as paying to improper parties
without the consent/knowledge/endorsement of private respondent
who was the payee of the crossed checks.
ISSUE: WON private respondent has a cause of action against the petitioners
for their encashment and payment to another person of crossed checks issue in
favor of the former
HELD/RATIO: YES
1. Accepted banking practice: crossing a check is done by writing two
parallel lines diagonally on the left portion of the checks. A.) Crossing
is special when the name/business institution is written in between the
two parallel lines which means that drawee should pay only with the
intervention of the company. B.) Crossing is general where the words
written between the two parallel lines are and Co. or for payees
account only. This means that the drawee bank should not encash the
check but merely accept for deposit.
2. Effects of crossing a check are: a) the check may not be encashed,
merely deposited b) check may be negotiated only once to the one
who has an account with the bank c)crossing a check serves as a
warning to the holder that the check has been issued for a definite
purpose so that he must inquire if he has received the check pursuant
to the purpose.
3. CASE AT BAR, the six checks had been crossed and issued for
payees account only which signifies that the checks were intended
only for deposit by Melissa RTW.
4. That the bank accepted checks to be deposited in account if Sayson
was a deliberate and positive act that the bank treated the checks as
if they were negotiable and, for all intents and purposes, assumed
the warranty of the endorser.
5. When bank paid the checks so endorsed notwithstanding that title has
not passed to the endorser, it did so at its peril and became liable to
the payee whether or not bank was aware of the
unauthorized/forged endorsement.
6. This is so because the law imposes a duty of diligence on the
collecting bank to scrutinize checks deposited for purpose of
determining their genuineness and regularity
18 Ad astra per alia fideles
That payee is allowed to directly recover from the collecting bank responsible
for such encashment is approved by the court
Judge Caldona
7. Pangilinan was able to withdraw the money when the check was
cleared and paid by the drawee bank, PNB.
8. After forging the signature of Dr. Adena Canlas who was chief of the
payee hospital, Pangilinan followed the same procedure for the
second check, in the amount of P5,000.00 and dated 20 April 1978,
as well as for 28 other checks of various amounts and on various
dates. The last check negotiated by Pangilinan was for P8,000.00
and dated 10 February 1981.
9. All the checks bore the stamp of Associated Bank which reads "All
prior endorsements guaranteed Associated Bank."
10. Jesus David, the manager of Associated Bank, alleged that
Pangilinan made it appear that the checks were paid to him for
certain projects with the hospital. He did not find as irregular the fact
that the checks were not payable to Pangilinan but to the Concepcion
Emergency Hospital. While he admitted that his wife and Pangilinan's
wife are first cousins, the manager denied having given Pangilinan
preferential treatment on this account.
11. On 26 February 1981, the Provincial Treasurer wrote the manager
of the PNB seeking the restoration of the various amounts debited
from the current account of the Province. In turn, the PNB manager
demanded reimbursement from the Associated Bank on 15 May
1981.
12. As both banks resisted payment, the Province brought suit against
PNB which, in turn, impleaded Associated Bank as third-party
defendant. The latter then filed a fourth-party complaint against
Adena Canlas and Fausto Pangilinan.
RTCs Decision:
After trial on the merits, the lower court rendered its decision on 21
March 1988, on the basic complaint, in favor of the Province and
against PNB, ordering the latter to pay to the former, the sum of
P203,300.00 with legal interest thereon from 20 March 1981 until
fully paid
on the third-party complaint, in favor of PNB and against Associated
Bank ordering the latter to reimburse to the former the amount of
19 Ad astra per alia fideles
CAs decision:
Affirmed Trial Courts decision
ISSUE:
WON Province of Tarlac was negligent and thus liable for its loss?
HELD:
Yes, the Province of Tarlac, together with PNB and Associated Bank, was
negligent. All three parties should bear the loss.
PNB, the drawee bank, cannot debit the current account of the
Province of Tarlac because it paid checks which bore forged
indorsements. However, if the Province as drawer was negligent to
the point of substantially contributing to the loss, then the drawee
bank PNB can charge its account. If both drawee bank-PNB and
drawer-Province were negligent, the loss should be properly
apportioned between them. The loss incurred by drawee bank-PNB
can be passed on to the collecting bank-Associated Bank which
presented and indorsed the checks to it. Associated Bank can, in turn,
hold the forger, Fausto Pangilinan, liable. If PNB negligently delayed
in informing Associated Bank of the forgery, thus depriving the latter
of the opportunity to recover from the forger, it forfeits its right to
reimbursement and will be made to bear the loss.
The Province of Tarlac is equally negligent as PNB. It permitted
Fausto Pangilinan to collect the checks when the latter, having already
retired from government service, was no longer connected with the
hospital.
PNB also breached its duty to pay only according to the terms of the
check which is payable to order of "Concepcion Emergency Hospital,
Judge Caldona
3. Before Ong could get hold of these checks, his friend Paciano
Tanlimco got hold of them, forged Ongs signature, and deposited the
said checks on his own account with Westmont Bank
4. Westmont Bank accepted and credited both checks without verifying
the signature indorsement even though they have Ongs specimen
signature
5. Tamlico immediately withdrew the money and absconded
6. Instead of going straight to the bank, Ong first sought help of
Tanlimcos family to recover amount. Later, he reported the incident to
CB which also proved futile.
7. It was only after 5 mos. That Ong filed a suit and demanded that
Westmont Bank pay the value of checks.
8. RTC ordered Westmont Bank to pay the value of the checks. CA
affirmed decision
Issues:
WON Ong has cause of action against petitioner Westmont Bank
WON Ong is barred to recover the money from Westmont Bank due to
laches
Held:
Yes. Ong has cause of action against WB
No. Ong is not barred to recover money from WB
Ratio:
1. WB based his allegation on the fact that the note was not actually
delivered to Ong and hence he was not a holder thereof hence he
cannot sue in his own name. The court did not recognize this allegation
claiming that another view in certain cases applies in the present
case: That payee ought to be allowed to recover directly from
collecting bank regardless of whether the check was delivered to the
payee or not.
2. SC applied Sec 23 of NIL : Since the signature of the payee in this
case was forged to make it appear that he had made an
indorsement in favor of the forger, such signature should be deemed
as inoperative and ineffectual. Petitioner as the collecting bank,
grossly erred in making payment by virtue of said forged signature.
The payee, herein respondent, should therefore be allowed to
recover from the collecting bank
3. The collecting bank is liable to the payee and must bear the loss
because it is its legal duty to ascertain that the payees endorsement
Judge Caldona
4.
5.
6.
7.
Judge Caldona
Id.
Id.
Id.
Id.
Id.