A check with forged signature payable to cash was drawn against petitioner’s account. Petitioner demands credit of the amount debited by encashment.
Whether or not petitioner may recover from the drawee bank.
YES. The drawer whose signature was forged may still recover from the bank as long as he or she is not precluded from setting up the defense of forgery. Here, the drawer, Samsung Construction, is not precluded by negligence from setting up the forgery. The general rule should apply. Consequently, if a bank pays a forged check, it must be considered as paying out of its funds and cannot charge the amount so paid to the account of the depositor. A bank is liable, irrespective of its good faith, in paying a forged check.