Case Facts Issue Held

PCIB, as a collecting bank has been negligent in verifying the authority of Rivera to negotiate the check. As agent of the BIR (the payee
of the check), defendant IBAA should receive instructions only from its principal BIR and not from any other person especially so when
that person is not known to the defendantIt failed to ascertain whether or not Rivera can validly recall the check and have them be
replaced with PCIB’s manager’s checks as in fact, Ford has no knowledge and did not authorize such. A bank (in this case PCIB) which
Ford Philippines drew and issued Citibank Checks, all in favor of the (CIR) for
cashes a check drawn upon another bank (in this case Citibank), without requiring proof as to the identity of persons presenting it, or
payment of itspercentage taxes. The checks were crossed and deposited with the
making inquiries with regard to them, cannot hold the proceeds against the drawee when the proceeds of the checks were afterwards
IBAA, now PCIB, BIR's authorized collecting bank. The first check was cleared
diverted to the hands of a third party. Even considering arguendo, that the diversion of the amount of a check payable to the collecting
containing an indorsement that "all prior indorsements and/or lack of indorsements
bank in behalf of the designated payee may be allowed, still such diversion must be properly authorized by the payor. Central Bank
guaranteed." The same, however, wasreplaced with two (2) IBAA's managers'
Circular No. 580, Series of 1977 provides that any theft affecting items in transit for clearing, shall be for the account of sending bank,
checks based on a call and letter request made by Godofredo Rivera, Ford's
which in this case is PCIBank.Hence, PCIB is liable for the amount of the embezzled check.
General Ledger Accountant, on an alleged error in the computation of the tax due
PCIB and Citibank are liable for the amount of the checks on a 50-50 basis. As a general rule, a bank is liable for the negligent or
without IBAA verifying the authority of Rivera. These manager'schecks were later
tortuous act of its employees within the course and apparent scope of their employment or authority. Hence, PCIB is liable for the
deposited in another bank and misappropriated by the syndicate. The last two
fraudulent act of its employee who set up the savings account under a fictitious name. It appears that although the employees
checks were cleared by the Citibank but failed to discover that the clearing stamps
(accountant) of Ford initiated the transactions attributable to an organized syndicate, in our view, their actions were not the proximate
18) Phil Commercial Intl do not bear any initials. The proceeds of the checks were also illegally diverted or
What are the liabilities of each cause of encashing the checks payable to the CIR. The BOD of Ford did not confirm the request of Godofredo Rivera to recall Citibank
Bank vs CA switched by officers of PCIB — members of the syndicate, who eventually
party? Check. Rivera's instruction to replace the said check with PCIBank's Manager's Check was not in the ordinary course of business which
(percentage tax BIR- encashed them. Ford, which was compelled to pay anew the percentage taxes,
could have prompted PCIBank to validate the same.
syndicate) sued in two actions for collection against the two banks barely six years from the
date the first check was returned to the drawer. The direct perpetrators of the crime
Citibank is likewise liable because it was negligent in the performance of its obligations with respect to its agreement with Ford (Doctrine
are now fugitives from justice.
of comparative neglegence). The checks which were drawn against Ford’s account with Citibank clearly states that they are payable to
the CIR only yet Citibank delivered said payments to PCIB. The clearing stamps at the back of Citibank Check Nos. SN 10597 and
In an investigation, it was found that these checks were embezzled by the same
16508 do not bear any initials. Citibank failed to notice and verify the absence of the clearing stamps. Had this been duly examined, the
syndicate to which Rivera was a member. It was established that an employee of
switching of the worthless checks to Citibank Check Nos. 10597 and 16508 would have been discovered in time. Citibank however
PCIB, also a member of the syndicate, created a PCIB account under a fictitious
argues that the checks were indorsed by PCIB to Citibank and that the latter has nothing to do but to pay it. The Supreme Court cited
name upon which the two checks, through high end manipulation, were deposited.
Section 62 of the Negotiable Instruments Law which mandates the Citibank, as an acceptor of the checks, to engage in paying the
PCIB unwittingly endorsed the checks to Citibank which the latter cleared. Upon
checks according to the tenor of the acceptance which is to deliver the payment to the “payee’s account only” (contractual obligation).
clearing, the amount was withdrawn from the fictitious account by syndicate
members.
Ford is also negligent (quasi delict for failing to examine its passbook and give notice in a timely manner which could have avoided
further loss. But this negligence is not the proximate cause of the loss but is merely contributory. Nevertheless, this mitigates the liability
of PCIB and Citibank hence the rate of interest, with which PCIB and Citibank is to pay Ford, is lowered from 12% to 6% per annum.
Ford raised the issue within the 10 year prescriptive period.
 Case Facts Issue
Petitioner was a prominent businessman who, because of different business
1) WON the bank is bound to
commitments, entrusted to his then secretary the handling of his credit cards
reimburse petitioner for the
and checkbooks. For a material period of time, the secretary was able to
amount of the forged checks.
19) Ramon Ilusorio vs encash and deposit in her personal account money (through 17 checks) from
CA the account of petitioner. Upon knowledge of her acts (partner telling him that
2) WON Manila Bank in filing an secretary and these were the proximate cause of his own damage. Because of this negligence, he is precluded from setting up
(secretary- estafa thru the secretary used his credit card), she was fired immediately and criminal
estafa case against petitioner's the defense of forgery with regard the checks.
falsification) actions (estafa through falsification) were filed against her by the petitioner and
secretary, is barred from raising
also by the Respondent Bank (Manila Bank). Thereafter, petitioner requested the
the defense that the fact of
bank to restore its money but the bank refused to
forgery was not established.
do so.
Samsung Construction held an account with Far East Bank. One day a check worth
999,500, payable to cash, was presented by one Roberto Gonzaga in the Makati
Branch of Far East Bank. The bank teller was satisfied as to the authenticity of the
signature appearing on the check. She then asked Gonzaga to submit proof of his
identity, and the latter presented three (3) identification cards. At the same time,
Justiani forwarded the check to the branch Senior Assistant Cashier
Gemma Velez, as it was bank policy that two bank branch officers approve checks
Whether or not Far East Bank is
20) Samsung Const vs exceeding P100,000, for payment or encashment. Velez concluded that the check
liable to reimburse Samsung for
FEBTC was indeed signed by Jong, the chief accountant. Velez then forwarded the check
cashing out the forged check,
(relied on assistant and signature card to Shirley Syfu, another bank officer, for approval. Syfu then
which was drawn from the
accountant) noticed that Jose Sempio III (“Sempio”), the assistant accountant of Samsung
account of Samsung
Construction, was also in the bank. Sempio was well-known to Syfu and the other
bank officers, he being the assistant accountant of Samsung Construction. Syfu
showed the check to Sempio, who vouched for the genuineness of Jong’s
signature. Sempio said that the check was for the purchase of equipment for
Samsung Construction.Later however it was discovered that no such check was
ever approved by the Samsung’s head accountant, the president of the company
also never signed any such check.
Held
1.) No. To be entitled to damages, petitioner has the burden of proving negligence on the part of the bank for failure to detect the
discrepancy in the signatures on the checks. It is incumbent upon petitioner to establish the fact of forgery. Curiously though, petitioner
failed to supply additional signature specimens as requested by the NBI. The bank was not also remiss in performance of its duties, it
practices due diligence in encashing checks (process of verification). The bank didn’t have any hint of the modus operandi of
Eugenio as she was a regular customer, designated by the petitioner himself to transact on his behalf. A mistake is not
equivalent to negligence if they were honest mistakes. In the instant case, we believe and so hold that if there were mistakes, the same
were not deliberate, since the bank took all the precautions. The bank was not shown to be remiss in its duty of sending monthly bank
statements to petitioner so that any error or discrepancy in the entries therein could be brought to the bank's attention at the earliest
opportunity.It was petitioner who was negligent in this case. He failed to examine his bank statements and gave an unusal trust to his
2.) The fact that Manila Bank had filed a case for estafa against Eugenio would not estop it from asserting the fact that forgery has not
been clearly established. Petitioner cannot hold private respondent in estoppel for the latter is not the actual party to the criminal action.
In a criminal action, the State is the plaintiff, for the commission of a felony is an offense against the State. Manila Bank filed the estafa
case against Eugenio on the basis of petitioner's own affidavit, but without admitting that he had any personal knowledge of the alleged
forgery. It is, therefore, easy to understand that the filing of the estafa case by respondent bank was a last ditch effort to salvage its ties
with the petitioner as a valuable client, by bolstering the estafa case which he filed against his secretary.
Far East Bank is liable for reimbursement. Sec. 23 of NIL states that a forged signature makes the instrument “wholly inoperative”. If
payment is made the drawee (Far East) cannot charge it to the drawer’s account (Samsung). The fact that the forgery is clever is
immaterial. The forged signature may so closely resemble the genuine as to defy detection by the depositor himself. And yet, if the bank
pays the check, it is paying out with its own money and not of the depositor’s. A bank is bound to know its depositor’s signature.” Such
liability attaches even if the bank exerts due diligence and care in preventing such faulty discharge. The degree of diligence exercised by
the bank would be irrelevant if the drawer is not precluded from setting up the defense of forgery under Section 23 by his own
negligence. A bank is liable, irrespective of its good faith, in paying a forged check. The crucial fact in question is whether or not the
check was forged, not whether the bank could have detected the forgery. The latter issue becomes relevant only if there is need to
weigh the comparative negligence between the bank and the party whose signature was forged.
The bank itself was remiss in its duty. Not only did the amount in the check nearly total one million pesos, it was also payable to cash.
That latter circumstance should have aroused the suspicion of the bank, as it is not ordinary business practice for a check for such large
amount to be made payable to cash or to bearer, instead of to the order of a specified person. Moreover, the check was presented for
payment by Gonzaga, who was not designated as the payee of the check, and who did not carry with him any written proof that he was
authorized by Samsung Construction. Even assuming that FEBTC had a standing habit of dealing with Sempio, acting in behalf of
Samsung, the irregular circumstances attending the presentment of the forged check should have put the bank on alert.It was not
sufficient for FEBTC to have merely complied with its internal procedures, but mandatory that all earnest efforts be undertaken (extra
effort of calling not enough). FEBTC should have ascertained from Jong personally that the signature in the questionable check was his.
The accusation of negligence on the part of Samsung was not clearly proven. Absence of proof to the contrary, the presumption is that
the ordinary course of business was followed. The settled rule is that the mere fact that the depositor leaves his check book lying around
does not constitute such negligence as will free the bank from liability to him, where a clerk of the depositor or other persons, taking
advantage of the opportunity, abstract some of the check blanks, forges the depositor’s signature and collect on the checks from the
bank. Samsung Construction was not negligent at all since it reported the forgery almost immediately upon discovery.
Forgery was duly proven by NBI and the testimony of PNP was not given credence (NBI has a more experienced expert, PNP merely
relied on "variations"). There was a blatant discrepancy especially in the upward final stroke of the signature.