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SYCIP VS COURT OF APPEALS

GR 125059

March 17, 2000

FACTS:For review on certiorari is the decision of the Cort of A!!ea"s which a#r$ed

the %d&$ent of the Re&iona" Tria" Cort of 'e(on Cit), *ndin& !etitioner&i"t) +e)ond reasona+"e do+t of vio"atin& -.- "&- 22, the oncin& Chec/saw-

n A&st 2, 1939, Francisco T- S)ci! a&reed to +), on insta""$ent, fro$

France" Rea"t) Cor!oration 4FRC, a townhose nit- 6!on eection of thecontract to se"", S)ci!, as re8ired, issed to FRC, fort)ei&ht 43 !ostdatedchec/s, each in the a$ont of .9,0-00, coverin& 3 $onth") insta""$ents-

After $ovin& in his nit, S)ci! co$!"ained to FRC re&ardin& defects in thenit and inco$!"ete featres of the townhose !ro%ect- FRC i&nored theco$!"aint- ;issatis*ed, S)ci! served on FRC two 42 notaria" notices to theeotwithstandin& the notaria" notices, FRC contined to !resent for

encash$ent S)ci!?s !ostdated chec/s in its !ossession- S)ci! sent @sto!

!a)$ent orders@ to the +an/- hen FRC contined to !resent the other!ostdated chec/s to the +an/ as the de date fe"", the +an/ advised S)ci! toc"ose his chec/in& accont to avoid !a)in& +an/ char&es ever) ti$e he $ade

a @sto! !a)$ent@ order on the forthco$in& chec/s- ;e to the c"osre of !etitioner?s chec/in& accont, the drawee +an/ dishonored si !ostdatedchec/s- FRC *"ed a co$!"aint a&ainst !etitioner for vio"ations of -.- "&- 22

invo"vin& said dishonored chec/s-

n >ove$+er 3, 1991, the 'e(on Cit) .rosector?s #ce *"ed with the RTCof 'e(on Cit) si Bnfor$ations char&in& !etitioner for vio"ation of -.- "&-22- The tria" cort fond !etitioner &i"t) of vio"atin& Section 1 of -.- "&- 22-

;issatis*ed, S)ci! a!!ea"ed the decision to the Cort of A!!ea"s +t thedecision of the RTC was !he"d

BSS6: whether or not the Cort of A!!ea"s erred in a#r$in& the convictionof !etitioner for vio"ation of the oncin& Chec/s aw-

=;DRACB ;CB;>;B:

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 The instant !etition is GRA>T;- .etitioner Francisco T- S)ci!, Er-, is

AC'6BTT; of the char&es a&ainst hi$ nder atas .a$+ansa "&- 22, for"ac/ of s#cient evidence to !rove the oo- 22creates a !res$!tion %ris tant$ that the second e"e$ent !ri$a

facie eists when the *rst and third e"e$ents of the o

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ti$e of !resentation of the chec/s, he had .150,000,00 cash or credit with

Citi+an/-

208 SCRA 465 (1992)

Associat! "a#$ %s CA

208 SCRA 465 – Mercantile Law – Negotiable Instruments Law – Crosse

C!ec"s – #$ects o% Crossing C!ec"s

Mer"e Re)es is a +sinesswo$an who was issed chec/s +) her csto$ers

as !a)$ents for her services- The chec/s are crossed chec/s which on

their faces are written: H.a)eeIs accont on")J- The chec/s never reached

the hands of Re)es- Bnstead, a certain Rafae" Sa)son &ot ho"d of the chec/s

and had the$ de!osited, and s+se8ent") encashed, fro$ his de!osit

accont with Associated an/-

Re)es de$anded refnd fro$ Associated an/ as she averred that those

chec/s are crossed chec/s and sho"d have on") +e de!osited with Re)esI

accont which is with .rdentia" an/- Associated an/ ar&ed that the

chec/s were indorsed to Sa)son +) Re)esIs hs+and, ddie Re)es-

ISSUE& hether or not Associated an/ sho"d refnd the chec/s-

'EL& Kes- The si chec/s in the case at +ar had +een crossed and issed

Hfor !a)eeIs accont on")-J This co"d on") si&nif) that the drawers 4Re)esIc"ients had intended the sa$e for de!osit on") +) the !erson indicated, to

wit, Mer"e Re)es-

 The cort a"so e"cidated the e

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athori(ed to $a/e indrose$ents- And even if the endorse$ents were

for&ed, as a""e&ed, Associated an/ wo"d sti"" +e "ia+"e to Re)es for not

verif)in& the endorserIs athorit)- There is no s+stantia" di

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161 sc/a 518 + ,oo$ + -a. 54 + Eita,

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P" %s Co#c-cio# 3i#i#. Co I#c

5 SCRA 75 L Mercanti"e aw L >e&otia+"e Bnstr$ents aw L >e&otia+"eBnstr$ents in Genera" L R"es of Constrction

A !ro$issor) note dated $arch 12, 195 was eected +) icente e&arda,!resident of Conce!cion Minin& Co$!an), and Eose Sarte- n the face of the!ro$issor) note !artia"") reads:

>B>TK ;AKS after date, for va"e received, B !ro$ise to !a) to the order of

the .hi"i!!ine >ationa" an/ - - - -

 The !ro$issor) note $atred and withot !a)$ent fro$ the $a/ers- .>sed Conce!cion Minin& and Sarte-

BSS6: hether or not the estate of e&arda sho"d +e inc"ded in the sit-

=;: >o- There is no need for !rsant to Section 17 4& of the >e&otia+"eBnstr$ents aw:

SC- 17- Constrction where instr$ent is a$+i&os- N here the"an&a&e of the instr$ent is a$+i&os or there are o$issions therein, the

fo""owin& r"es of constrction a!!"):

4& here an instr$ent containin& the word HB !ro$ise to !a)J is si&ned +)two or $ore !ersons, the) are dee$ed to +e %oint") and severa"") "ia+"e

thereon&

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R-,ic Pa#t/s "a#$ %s CA

21 SCRA 73 L Mercanti"e aw L >e&otia+"e Bnstr$ents in Genera" LSi&natre of Ma/ers

Bn 1979, or"d Gar$ent Manfactrin&, thro&h its +oard athori(ed Sho(o

 Ka$a&chi 4!resident and Fer$in Can"as 4treasrer to o+tain credit faci"itiesfro$ Re!+"ic ."anters an/ 4R.- For this, 9 !ro$issor) notes wereeected- ach !ro$issor) note was nifor$") written in the fo""owin&$anner:

 

 OOOOOOOOOOO, after date, for va"e received, BDwe, %oint") and severa"") !ro$iseto !a) to the R;R of the R.6BC .A>TRS A>P, at its o#ce in Mani"a,.hi"i!!ines, the s$ of OOOOOOOOOOO .SS4Q- .hi"i!!ine Crrenc)Q

."ease credit !roceeds of this note to: OOOOOOOO Savin&s Accont OOOOOO Crrent Accont

>o- 17200257 of R;B; GARM>T MFG- CR.-

S&d- Sho(o Ka$a&chi

S&d- Fer$in Can"as

 

 The note +eca$e de and no !a)$ent was $ade- R. eventa"") sed

 Ka$a&chi and Can"as- Can"as, in his defense, averred that he sho"d not +ehe"d !ersona"") "ia+"e for sch athori(ed cor!orate acts that he !erfor$ed

inas$ch as he si&ned the !ro$issor) notes in his ca!acit) as o#cer of thedefnct or"dwide Gar$ent Manfactrin&-

BSS6: hether or not Can"as sho"d +e he"d "ia+"e for the !ro$issor) notes-

=;: Kes- The so"idar) "ia+i"it) of !rivate res!ondent Fer$in Can"as is $ade

c"earer and certain, withot reason for a$+i&it), +) the !resence of the!hrase H%oint and severa"J as descri+in& the nconditiona" !ro$ise to !a) tothe order of Re!+"ic ."anters an/- here an instr$ent containin& the

words HB !ro$ise to !a)J is si&ned +) two or $ore !ersons, the) are dee$edto +e %oint") and severa"") "ia+"e thereon-

Can"as is so"idari") "ia+"e on each of the !ro$issor) notes +earin& hissi&natre for the fo""owin& reasons:

 The !ro$issor) notes are ne&otia+"e instr$ents and $st +e &overned +)the >e&otia+"e Bnstr$ents aw-

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6nder the >e&otia+"e "nstr$ents aw, !ersons who write their na$es on

the face of !ro$issor) notes are $a/ers and are "ia+"e as sch- ) si&nin&the notes, the $a/er !ro$ises to !a) to the order of the !a)ee or an) ho"deraccordin& to the tenor thereof-

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ASTRO ELECTROICS CORP PETER RO7AS % P'ILIPPIE E7PORT

A FOREI LOA UARATEE CORPORATIO

R o 16:29 S-t;,/ 2 200

Ast/ia

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Iss:

hether or not Roas sho"d +e so"idari") "ia+"e with Astro for the s$

awarded +) the RTC

'!: Kes- Bn si&nin& his na$e aside fro$ +ein& the .resident of Astro, Roas

+eca$e a co$a/er of the !ro$issor) notes and cannot esca!e an) "ia+i"it)

arisin& fro$ it- 6nder the >e&otia+"e Bnstr$ents aw, !ersons who write

their na$es on the face of !ro$issor) notes are $a/ers- Ths, even withot

the !hrase H!ersona" ca!acit),J Roas wi"" sti"" +e !ri$ari") "ia+"e as a %oint

and severa" de+tor nder the notes considerin& that his intention to +e "ia+"e

as sch is $anifested +) the fact that he a#ed his si&natre on each of the

!ro$issor) notes twice which necessari") wo"d i$!") that he is nderta/in&

the o+"i&ation in two di

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FRASISCO V COURT OF APPEALS

19 SCRA 54

 

FACTS:

A- Fransisco Rea"t) and ;eve"o!$ent and =er+) Co$$ercia" andConstrction Cor!oration entered into a and ;eve"o!$ent andConstrction Contract- Fransisco was the !resident of AFR;C whi"en& was the !resident of =CCC- Bt was a&reed !on that =CCC wo"dnderta/e the constrction of hosin& nits and the deve"o!$ent of a "ar&e!arce" of "and- The !a)$ent wo"d +e on a trn/e) +asis- To faci"itate the!a)$ent, AF;RC eected a ;eed of Assi&n$ent to ena+"e the =CCC

to co""ect !a)$ents fro$ the GSBS- Frther, the) o!ened an accont with a+an/ fro$ which chec/s wo"d +e issed +) Fransisco and the GSBS!resident-

=CCC "ater on *"ed a co$!"aint for the n!aid +a"ance in !rsance to itsa&ree$ent with AFR;C- =owever, an a$ica+"e sett"e$ent ensed, whichwas e$+odied in a Me$orand$ of A&ree$ent- Bt was e$+odied in saida&ree$ent that GSBS reco&ni(es its inde+tedness to =CCC and that =CCCwo"d a"so !a) its o+"i&ations to AFR;C-

A )ear "ater, it was fond ot that ;ia( and Fransisco had drawn

chec/s !a)a+"e to n&- n& denied acce!tin& said chec/s and it was frtherfond ot that ;ia( entrsted the chec/s to Fransisco who "ater for&edthe si&natre of n&, showin& that he indorsed the chec/s to her and thenshede!osited the chec/s to her !ersona" savin&s accont- This incident!ro$!ted n& to *"e a co$!"aint a&ainst Fransisco-

=;:

n&Is si&natre was fond to +e for&ed +) Fransisco-

FransiscoIs contention that he was athori(ed to si&n n&Is na$e inher favor &ivin& her athorit) to co""ect a"" the receiva+"es of =CCC fro$GSBS- This contention is +ereft of an) $erit- The >e&otia+"e

Bnstr$ents aw !rovides that when a !erson is nder o+"i&ation toindorse in a re!resentative ca!acit), he $a) indorse in sch ter$s as tone&ative !ersona" "ia+i"it)- An a&ent, when so si&nin&, sho"d indicate that

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he is $ere") si&nin& as an a&ent in +eha"f of the !rinci!a" and $st

disc"ose the na$e of his !rinci!a"- therwise, he wi"" +e he"d "ia+"e!ersona"")- And ass$in& she was indeed athori(ed, she didn?tco$!") with the re8ire$ents of the "aw- Bnstead of si&nin& n&Is

na$e, she sho"d have si&ned in her own na$e as a&ent of =CCC- Ths, her

contentions cannot s!!ort or va"idate her acts of for&er)-

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P>ii--i# "a#$ o? Co;;/c %s A/.oR L

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3o#ti,a#o %s "acoo!

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=e"d: >o- There can +e no do+t that the directors of the a!!e""ee co$!an)

had athorit) to $odif) the !ro!osed ter$s of the A$ended Mi""in& Contract

for the !r!ose of $a/in& its ter$s $ore acce!ta+"e to the other contractin&

!arties- As the reso"tion in 8estion was !assed in &ood faith +) the +oardof directors, it is va"id and +indin&, and whether or not it wi"" case "osses or

decrease the !ro*ts of the centra", the cort has no athorit) to review the$-

hether the +siness of a cor!oration sho"d +e o!erated at a "oss drin&

de!ression, or c"ose down at a s$a""er "oss, is a !re") +siness and

econo$ic !ro+"e$ to +e deter$ined +) the directors of the cor!oration and

not +) the cort- The a!!e""ee aco"odMrcia Mi""in& Co$!an) is, nder the

ter$s of its Reso"tion of A&st 20, 19, dt) +ond to &rant si$i"ar

increases to !"ainti

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CRBSG ES - CA Acco$$odation .art)

177 SCRA 59

FACTS&

 The !resident of Movers nter!rises, to acco$$odate its c"ientsS!oses n&, issed a chec/ in favor of !etitioner Criso"o&oEose- This was in consideration of a 8itc"ai$ +) !etitioner over a !arce" of "and,which the GSBS a&reed to se"" to s!oses n&, with the nderstandin&that !on a!!rova" of the co$!ro$ise a&ree$ent, the chec/ wi"" +eencashed accordin&")- As the co$!ro$ise a&ree$ent wasn?t a!!roveddrin& the e!ected !eriod of ti$e, the aforesaid chec/ was re!"aced withanother one for the sa$e va"e- 6!on de!osit tho&h of the chec/s

+) !etitioner, it was dishonored- This !ro$!ted the !etitioner to *"e a casea&ainst Att)- ernares and Santos for vio"ation of .22- Meanwhi"e,drin& the !re"i$inar) investi&ation, Santos tried to tender a cashierIschec/ for the va"e of the dishonored chec/ +t !etitioner refsed to acce!tsch- This was consi&ned +) Santos with the c"er/ of cort and he instittedchar&es a&ainst !etitioner- The tria" cort he"d that consi&nation wasn?ta!!"ica+"e to the case at +ar +t was reversed +) the CA-

'EL&

.etitioner averred that it is not Santos who is the acco$$odation !art) tothe instr$ent +t the cor!oration itse"f- t ass$in& ar&endo that thecor!oration is the acco$$odation !art), it cannot +e he"d "ia+"e tothe chec/ issed in favor of !etitioner- The r"e on acco$$odation!art)doesn?t inc"de or a!!") to cor!orations which are acco$$odation !arties- This is +ecase the isse or indorse$ent of another is "tra vires- =ence,one who has ta/en the instr$ent with /now"ed&e of the acco$$odationnatre thereof cannot recover a&ainst a cor!oration where it is on")an acco$$odation !art)- Bf the for$ of the instr$ent, or the natre of thetransaction, is sch as to char&e the indorsee with the /now"ed&e that theisse or indorse$ent of the instr$ent +) the cor!oration is for theacco$$odation of another, he cannot recover a&ainst the cor!orationthereon-

) wa) of ece!tion, an o#cer or a&ent of a cor!oration sha"" havethe !ower to eecte or indorse a ne&otia+"e !a!er in the na$e ofthe cor!oration for the acco$$odation of a third !art) on") is

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s!eci*ca"") athori(ed to do so- Coro""ari"), cor!orate o#cers have no!ower to eecte for $ere acco$$odation a ne&otia+"e instr$entof the cor!oration for their individa" de+ts and transactions arisin&fro$ or in re"ation to $atters in which the cor!oration has no"e&iti$ate concern- Since sch acco$$odation !a!er cannot +e

enforced a&ainst the cor!oration, the si&natories thereof sha"" +e!ersona"") "ia+"e therefore, as we"" as the conse8ences arisin& fro$ theiracts in connection therewith

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C'IA YIA 3I -titio#/

%s

COURT OF APPEALS RIBAL CO33ERCIAL "AI CORPORATIO

PAPERCO (P'ILIPPIES) IC a#! TO3 PE /s-o#!#ts

FACTS&  n Fe+rar) 7, 1979, Chian& Kia Min, a Chinese nationa" +ased in Taiwan, had =an& n& an/ td- f =on& Pon& send 6SU100,000-00 thro&hthe .aci*c an/in& Cor!oration to res!ondent +an/Is head o#ce- There$ittance was for !etitionerIs own accont and was intended to 8a"if) hi$as a forei&n investor nder .hi"i!!ine "aws-

  =owever, when !etitioner chec/ed on his $one) so$eti$e in $id1935, he fond ot that the do""ar de!osit was transferred to the Shawo"evard +ranch of res!ondent +an/ and converted to a !eso accont,

which had a +a"ance of on") .1,2-10 as of cto+er 29, 1979- A "etter of res!ondent +an/ stated that !etitionerIs Crrent Accont >o- 122009 waso!ened on Fe+rar) 3, 1979, with an initia" de!osit of .729,752-20 a tota" of .723,90-00 was withdrawn +) wa) of *ve chec/s res!ective") datedFe+rar) 1, 19 and 2, 1979 and cto+er 5 and 29, 1979, a!!arent") issed+) !etitioner in favor of .a!ercon 4.hi"s-, Bnc-, 4hereafter, @.a!ercon@ one of the herein !rivate res!ondents and a +siness ventre of To$ .e/- Ths, the+a"ance of the accont was redced to .1,2-10 as of cto+er 29, 1979 andno transactions were $ade on the accont since- Bn the sa$e "etter, the+an/ stated that it was no "on&er a+"e to "ocate the $icro*"$ co!ies of theissed chec/s, s!eci$en si&natre cards, and other records re"ated to the8estioned accont, since the accont had +een inactive for $ore than *ve)ears-

  .etitioner insisted that he did not case the transfer of his $one) tothe Shaw o"evard +ranch of RCC, as his instrctions in the te"e&ra!hictransfer were for the $one) to +e re$itted to the RCC head o#ce in Ma/ati,nor its conversion to !esos and the s+se8ent withdrawa"s- >or did heathori(e an)one to !erfor$ these acts-

 The tria" cort deter$ined that the withdrawa"s were not $ade +)!etitioner nor athori(ed +) hi$, and he"d res!ondent +an/ "ia+"e for the6SU100,000-00 4and the interest thereon fro$ date of *"in& of theco$!"aint, da$a&es, attorne)Is fees, and costs- n the other hand, theCort of A!!ea"s, fond that the o!enin& of the crrent accont and thewithdrawa"s therefro$ were athori(ed +) !etitioner accordin&"), it reversedthe decision of the RTC and a+so"ved !rivate res!ondents of "ia+i"it)-

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ISSUE&  hether !etitioner has !roved, +) a !re!onderance of the evidence,that res!ondent +an/ connived with !rivate res!ondents and third !art)defendants .a!ercon and To$ .e/ in a""owin& the withdrawa"s fro$ CrrentAccont >o- 122009, /nowin& these to +e nathori(ed +) !etitioner, and

with the !r!ose of defradin& hi$-

RULI&  >o- The !erson who a""e&es frad or ne&"i&ence $st !rove it,+ecase the &enera" !res$!tion is that $en act with care and!rdence- Good faith is a"wa)s !res$ed and it is the +rden of the !art)c"ai$in& otherwise to addce c"ear and convincin& evidence to thecontrar)- >o %d&$ent for da$a&es co"d arise where the sorce of in%r),+e it frad, fa"t, or ne&"i&ence, was not a#r$ative") esta+"ished +)co$!etent evidence

A review of the co$!"aint *"ed +efore the RTC, indicates that !etitionerori&ina"") sed !on an a""e&ation of ne&"i&ence on the !art of res!ondent+an/Is o#cers and e$!"o)ees in a""owin& the said withdrawa"s- 6nder eithertheor) of frad or ne&"i&ence, it is inc$+ent !on !etitioner to show thatthe withdrawa"s were not athori(ed +) hi$- Bf he is na+"e to do so, hisa""e&ations of frad or ne&"i&ence are ns+stantiated and the !res$!tionthat he athori(ed the said withdrawa"s wi"" a!!")-

  Moreover, !etitionerIs si&natres on the 8estioned chec/ a$ontsto (rima %acie evidence that he issed those chec/s- ) den)in& that he

issed the said chec/s it is he who !ts into 8estion the &enineness andathenticit) of the si&natres a!!earin& thereon, and it is he who has the+rden of !rovin& that those si&natres were for&eries->o shared of evidencewas !resented +) !etitioner to show that the si&natres were not his- A"" thatthis !etition re"ies on insofar as concernin& the athenticit) of the si&natresis the *ndin& of the tria" cort %d&e that there was a discre!anc) +etweenthe si&natres on the +an/ for$ and !etitionerIs !ass!ort-

  The Cort, however, +e"ieves that since what is at isse here iswhether !etitioner issed the 8estioned chec/s the essentia" co$!arisonsho"d +e +etween the si&natres a!!earin& on the chec/s and the

s!eci$en si&natres on the de!ositorIs card- Sch is the nor$a" !rocessfo""owed in verif)in& si&natres for !r!oses of +an/ withdrawa"s-Considerin& that the de!ositorIs card was not !rodced in evidence in theinstant case, resort $a) ths +e $ade to sch other doc$ents as wo"d+ear the athentic si&natre of !etitioner- The record is re!"ete withdoc$ents +earin& !etitionerIs si&natre, a$on& the$, his residencecerti*cate, a"ien certi*cate of re&istration, investorIs !ass!ort, toristIs!ass!ort, and the a!!"ication for$s for an RCC crrent accont- Fro$ the

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S!re$e CortIs ea$ination of these records the) *nd no si&ni*cantdis!arit) +etween the si&natres on the chec/s and those on the a+ovesaiddoc$ents, and wi"" not ris/ a *ndin& of for&er) where the sa$e had not+een c"ear") a""e&ed nor !roved- For&er), as an) other $echanis$ of frad,$st +e !roven c"ear") and convincin&"), and the +rden of !roof "ies on the

!art) a""e&in& for&er)-

  There is ths no evidence to de$onstrate that res!ondent +an/ andres!ondent .a!ercon and To$ .e/ co""ded to defrad !etitioner of his$one)- hat the evidence in fact esta+"ishes is that the o!enin& of theaccont and the withdrawa"s were athori(ed +) !etitioner, and that thesi&natres a!!earin& on the 8estioned chec/s were

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P" VS DUI3PO

158 SCRA 582 – Mercantile Law – Negotiable Instruments Law – Liabilities of Parties –

 orger! – Liabilit! of t"e #rawee $an%

In June 1973, Francisco Gozon II went to the Philippine National Bank (Caloocan Cit!

acco"panie# $ his %rien# &rnesto 'antos Gozon le%t 'antos in his car an# while Gozon

was at the $ank, 'antos took a check %ro" Gozon)s check$ook 'antos %or*e# Gozon)s

si*nature an# %ille# out the check with the a"ount o% P+, 'antos was a$le to encash

the check that #a with PNB Gozon learne# o% this when his state"ent arri-e# 'antos

e-entuall a#"itte# to %or*in* Gozon)s si*nature Gozon then #e"an#e# the PNB to re%un#

hi" the a"ount PNB re%use# Ju#*e .o"ulo /ui"po rule# in %a-or o% Gozon

ISSUE: 0hether or not PNB is lia$le

HELD: es 2 $ank is $oun# to know the si*natures o% its custo"ers an# i% it pas a %or*e#

check, it "ust $e consi#ere# as "akin* the pa"ent out o% its own %un#s, an# cannot

or#inaril chan*e the a"ount so pai# to the account o% the #epositor whose na"e was

%or*e# PNB %aile# to "eet its o$li*ation to know the si*nature o% its correspon#ent (Gozon!

Further, it was %oun# $ the court that there are *larin* #i%%erences $etween Gozon)s

authentic speci"en si*natures an# that o% the %or*e# check

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P" %s CA + ,oo$

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Metropolitan Waterworks

1&' SCRA 2( – Mercantile Law – Negotiable Instruments Law – Liabilities of Parties –

orger! – Negligence of #rawer 

4etropolitan 0aterworks an# 'ewera*e 'ste" (40''! ha# an account with PNB 0hen

it was still calle# N202'2, 40'' "a#e a special arran*e"ent with PNB so that it "a

ha-e personalize# checks to $e printe# $ 4esina &nterprises 5hese personalize# checks

were the ones $ein* use# $ 40'' in its $usiness transactions

Fro" 4arch to 4a 1969, 40'' issue# 3 checks to -arious paees in the a**re*ate

a"ount o% P3,6366 8urin* the sa"e "onths, another set o% 3 checks containin* the

sa"e check nu"$ers earlier issue# were %or*e# 5he a**re*ate a"ount o% the %or*e#

checks a"ounte# to P3,+7,93 5his a"ount was #istri$ute# to the $ank accounts o% three persons: 2rturo 'ison, 2ntonio 4en#oza, an# .aul 8izon

40'' then #e"an#e# PNB to restore the a"ount o% P3,+7,93 PNB re%use# 5he

trial court rule# in %a-or o% 40'' $ut the Court o% 2ppeals re-erse# the trial court)s

#ecision

ISSUE: 0hether or not PNB shoul# restore the sai# a"ount

HELD: No 40'' is preclu#e# %ro" settin* up the #e%ense o% %or*er It has $een pro-en

that 40'' has $een ne*li*ent in super-isin* the printin* o% its personalize# checks It

%aile# to pro-i#e securit "easures an# coor#inate the sa"e with PNB Further, the

si*natures in the %or*e# checks appear to $e *enuine as reporte# $ the National Bureau o% 

In-esti*ation so "uch so that the 40'' itsel% cannot tell the #i%%erence $etween the %or*e#

si*nature an# the *enuine one 5he recor#s likewise show that 40'' %aile# to pro-i#e

appropriate securit "easures o-er its own recor#s there$ lain* con%i#ential recor#s open

to unauthorize# persons &-en i% the twent;three (3! checks in

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SAN CARLOS MINING V. BPI

59 PHIL 59(FORGED SIGNATURE OF DRAWER)

FACTS:

Wilson, a principal employee of petitioner, together with Wilson, a messenger-clerk, conspiredto withdraw cash from the petitioner’s account through forgery of a check, in the name of the agent

authorized to sign the check.

While the authorized agent of petitioner was on vacation, Wilson and Dolores sent a

cablegram to China Banking for the transfer of $100,000. On the contract, the name of

Baldwin was forged and it was indicated therein that a certified check be issued. Thereafter, this

was received and

deposited with the BPI. Upon deposit, an indorsement in the name of Baldwin was placed.

The bank account was credited. Later, a letter was sent to the bank, purporting to be signed by

Baldwin asking that it be withdrawn. This was done in supervision of Dolores. Dolores andWilson then was able to get the money. This eventually came to the knowledge of plaintiff who filed

an action against China Banking and BPI. The trial court dismissed the case.

HELD:

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.

There is no act of the plaintiff that led the bank astray. If it was in fact lulled into the false sense of

security, it was by the effrontery of Dolores, the messenger to whom it entrusted this large sum of

money.

The proximate cause of the loss must therefore be due to the negligence of the bank in honoring and

cashing the two forged checks.

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Republic v Edrada – PNB vs CA – Gempesaw, Samsung – page 73 book