[NEGOTIABLE INSTRUMENTS | ATTY.
CENIZA] 1
BPI vs. CASA MONTESSORI INTERNATIONALE
G.R. No. 149454, May 28, 2004
Panganiban, J.
TOPIC: Forgery
DOCTRINE:
Sec. 23 of the NIL
FACTS:
On November 8, 1982, plaintiff Casa Montessori International
opened a current account with defendant BPI with Casa’s
president, Ms. Ma. Carina Lebron as one of its authorized
signatories. In 1991, after conducting an investigation, plaintiff
discovered that nine (9) of its checks had been encashed by a
certain Sonny D. Santos since 1990 in the total amount of
P782,000. It turned out that Sonny D. Santos with account at
BPI’s Greenbelt Branch is a fictitious name used by 3rd party
defendant Leonardo Yabut who worked as external auditor of
Casa. Yabut voluntarily admitted that he forged the signature
of Ms. Lebron and encashed the checks. The PNP Crime
Laboratory conducted an examination of the nine checks and
concluded that the handwritings compared to the standard
signature of Ms. Lebron were not written by the latter.
Casa Montessori filed a Complaint for Collection with
Damages against defendant bank praying to reinstate the
amount of P782,500 in the current and savings account of the
plaintiff at 6% interest per annum. RTC rendered a decision in
favor of the plaintiff (Casa).
BPI elevated the suit to the CA and the CA modified the
decision of the RTC and took into account Casa’s contributory
negligence that resulted in the undetected forgery. It
ordered Yabut to reimburse BPI half the total amount
claimed and Casa the other half and disallowed moral and
exemplary damages.
ISSUE/S:
1. Whether or not there was forgery under the NIL
2. Whether or not any of the parties negligent and therefore
precluded from setting up forgery as a defense
HELD:
1. YES. The Court held that there was forgery of the drawer’s
signature on the check. First, both the RTC and CA found
that respondent Yabut himself had voluntarily admitted,
thru an affidavit, that he had forged the drawer’s signature
and encashed the checks. Yabut never refuted these
findings or claimed that he had been coerced into
admission as this was not corroborated by any evidence on
record. Second, both the appellate and trial courts ruled
that the PNP Crime Lab, after its examination of the said
checks had concluded that the handwritings compared to
the standard signature of the drawer were not hers. This
conclusion was similar with the report provided by the
PNP Crime Lab to the BPI, upon the latter’s request.
The Court further held that the examination by the PNP,
though inconclusive, was nevertheless clear, positive, and
convincing. Forgery cannot be presumed. It must be
established by clear, positive, and convincing evidence.
Under the best evidence rule as applied to documentary
evidence like the checks in question, no secondary or
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 substitutionary evidence may inceptively be introduced, as
the original writing itself must be produced in court. In the
case at bar, Yabut himself admitted to discarding the paid
checks to cover up his misdeed hence, Casa proved the
loss or destruction of the original checked through Yabut’s
affidavit. With that, the PNP document examiner used the
drawer’s signatures on the microfilm copies which were
compared to the standard signature. She affirmed that her
findings were 90 percent conclusive and despite the fact
that the microfilm copies were the only basis of
comparison, the differences were still evident.
Additionally, Carina Lebron herself, the drawer’s
authorized signatory, testified many times that she never
signed those checks. Not to mention, both the RTC and CA
conducted independent examinations of the evidence
presented and arrived at reasonable and similar
conclusions, admitted secondary evidence, which satisfies
the preponderance of evidence required in this case.
2. YES. The Court held that the negligence was attributable
to BPI alone hence, Casa was not precluded from setting
up forgery as a defense. Having established the forgery of
the drawer’s signature, BPI, the drawee, erred in making
payments. The forged signature are wholly inoperative,
and Casa, the drawer whose authorized signatures do not
appear on the negotiable instruments cannot be held
liable.
The Court further held that the banking business is
impressed with public interest hence the highest degree of
diligence is expected and high standards of integrity and
performance are required. It was emphasized that a bank
is under obligation to treat the accounts of its depositors
with meticulous care, and to always bring in mind the
fiduciary nature of their relationship. The 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 paid to the account of the depositor whose
name was forged.
BPI was liable to its depositor-drawee for allowing
payment to a wrongful and fictitious payee because based
on both law and equity, when one of two innocent persons
must suffer by the wrongful act of a 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 the wrong. BPI is expected
to use reasonable business prudence pursuant to its prime
duty to ascertain well the genuineness of the signatures of
its client-depositors on checks being encashed. BPI failed
in this regard. First, Yabut was able to open a bank account
in one of its branches without privity that is without
proper verification of his corresponding identification
papers. Second, BPI was unable to discover early on not
only this irregularity but also the marked differences in the
signature on the checks and those on the signature card.
Third, despite the examination conducted, the Central
Verification Unit of the bank even passed off the evidently
different signatures as genuine.
The Court added that Casa is not estopped from
questioning BPI’s error even after the lapse of the period
given in the notice because the monthly statements issued
by BPI to its clients can be regarded as a simple
confirmation or circularization. The notice cannot be
considered a waiver even if Casa failed to report the error.