Ramos v. Court of Appeals [G.R. No. L-64129-31. November 18, 1991]

FACTS

Petitioner, as acting bank manager, allowed withdrawals on uncleared checks deposited into the accounts of her co-accused. Petitioner repeatedly granted accommodations in at least fourteen (14) instances and despite her knowledge that prior checks deposited by her co-accused turned out to be unfunded.

 

ISSUE

Whether or not petitioner is engaged in “check kiting” which amounts to estafa with unfaithfulness or abuse of confidence.

 

RULING

YES. The act of utilizing the float status of uncleared checks constitutes “check kiting”. The crime committed by the accused was estafa with unfaithfulness or abuse of confidence under Article 315 subparagraph 1 (b) of the Revised Penal Code. In this case, petitioner acted maliciously or in bad faith by assuming to dispose the money of the bank as if it were her own, thereby committing conversion and a clear breach of trust. She performed an indispensable act necessary to enable her and her co-accused to accomplish the criminal purpose they had in mind.

 

Philippine National Bank v. Court of Appeals [G.R. No. 107508. April 25, 1996]

FACTS

Petitioner returned the check to PBCom and debited PBCom’s account for the amount covered by the check, the reason being that there was a “material alteration” of the check number.

 

ISSUE

Whether or not there is “material alteration” on the check.

 

RULING

NO. An alteration is said to be material if it alters the effect of the instrument.  It means an unauthorized change in an instrument that purports to modify in any respect the obligation of a party or an unauthorized addition of words or numbers or other change to an incomplete instrument relating to the obligation of a party. Here, the alteration of check number does not affect its negotiability contemplated in Section 1 of the Negotiable Instruments Law.

 

 

Bank of the Philippine Islands v. Court of Appeals [G.R. No. 102383. November 26, 1992]

FACTS

Petitioner’s checks were drawn and deposited to respondent CBC. It was discovered that the signature of payee was forged.

 

ISSUE

Whether or not a drawee bank could claim reimbursement from collecting bank in case of forgery.

 

RULING

YES. Both banks were negligent in the selection and supervision of their employees resulting in the encashment of the forged checks by an impostor. Both banks were not able to overcome the presumption of negligence in the selection and supervision of their employees. Considering the comparative negligence of the two (2) banks, court ruled that the demands of substantial justice are satisfied by allocating the loss and the costs of the arbitration proceeding and the cost of litigation on a 60-40 ratio.

 

Trader’s Royal Bank v. Radio Philippines Network [G.R. No. 138510. October 10, 2002]

FACTS

Manager’s checks were procured by respondents payable to Bureau of Internal Revenue. These checks were crossed and deposited to a collecting bank by persons other than the payee.

 

ISSUE

Whether or not a collecting bank is precluded from setting up the forgery against the drawee bank.

 

RULING

YES. A collecting bank where a check is deposited and which indorses the check upon presentment with the drawee bank, is such an indorser. So even if the indorsement on the check deposited by the bank’s client is forged, the collecting bank is bound by his warranties as an indorser and cannot set up the defense of forgery as against the drawee bank.

 

 

Ilusorio v. Court of Appeals [G.R. No. 139130. November 27, 2002]

FACTS

Petitioner’s secretary was able to encash and deposit to her personal account about seventeen (17) checks drawn against the account of petitioner at the respondent bank. Petitioner disclaims the signatures and demands bank to restoration of funds.

 

ISSUE

Whether or not petitioner is precluded from setting up the forgery.

 

RULING

YES. Petitioner’s failure to examine his bank statements appears as the proximate cause of his own damage. Proximate cause is that cause, which, in natural and continuous sequence, unbroken by any efficient intervening cause, produces the injury, and without which the result would not have occurred. In the present case, the fact of forgery was not established with certainty, having compared the signature in the checks from the specimen signatures on record and satisfied themselves that it was petitioner’s.

 

 

Westmont Bank v. Ong [G.R. No. 132560. January 30, 2002]

FACTS

Manager’s checks payable to respondent Ong was intercepted, indorsed by forging Ong’s signature, and deposited to petitioner. Ong sought for remedies after learning this but to no avail.

 

ISSUE

Whether or not respondent Ong may still recover from petitioner.

 

RULING

YES. Ong’s signature as payee, in the case at bar, 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. Ong should therefore be allowed to recover from the collecting bank.

 

 

Philippine National Bank v. Quimpo [G.R. No. L-53194. March 14, 1988]

FACTS

A check from respondent Gozon was taken and forged by his trustee. It was drawn successfully against the drawee bank. Gozon demands back credit from debited amount. Petitioner bank argues that Gozon was negligent and precluded from setting up forgery.

 

ISSUE

Whether or not Gozon may recover from drawee bank.

 

RULING

YES. Gozon’s act in leaving his checkbook in the car while he went out for a short while can not be considered negligence sufficient to excuse the defendant bank from its own negligence. His trustee, a long time classmate and friend, remained in the same. Gozon could not have been expected to know that the said trustee would remove a check from his checkbook. Gozon had trust in his classmate and friend. He is therefore not precluded from setting up forgery as a defense.

 

Samsung Construction Company Phils. v. Far East Bank and Trust Company [G.R. No. 129015. August 13, 2004]

FACTS

A check with forged signature payable to cash was drawn against petitioner’s account. Petitioner demands credit of the amount debited by encashment.

 

ISSUE

Whether or not petitioner may recover from the drawee bank.

 

RULING

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.

 

 

Metropolitan Waterworks and Sewerage System v. Court of Appeals [G.R. No. L-62943. July 14, 1986]

FACTS

Twenty three (23) “personalized” checks drawn by petitioner were paid by respondent bank and debited against petitioner after they were deposited in collection banks.

 

ISSUE

Whether or not petitioner is barred from setting up the defense of forgery on the ground of gross negligence.

 

RULING

YES. Respondent drawee Bank for not having detected the fraudulent encashment of the checks because the printing of the petitioner’s personalized checks was not done under the supervision and control of the Bank. There is no evidence on record indicating that because of this private printing the petitioner furnished the respondent Bank with samples of checks, pens, and inks or took other precautionary measures with the PNB to safeguard its interests.

 

Republic Bank v. Ebrada [G.R. No. L-40796. July 31, 1975]

FACTS

Treasury of the Philippines issued a check payable to MARTIN LORENZO who was already dead that time. Signature forged, the check was indorsed to RAMON LORENZO, then to DELIA DOMINGUEZ, then to appellant, where it was encashed with the plaintiff-appellee drawee bank.

 

ISSUE

Whether or not the drawee bank can recover from the one who encashed a check with forged signature of payee.

 

RULING

YES. Defendant-appellant, upon receiving the check in question from Dominguez, was duty-bound to ascertain whether the check in question was genuine before presenting it to plaintiff Bank for payment. Her failure to do so makes her liable for the loss and the plaintiff Bank may recover from her the money she received for the check. As reasoned out above, had she performed the duty of ascertaining the genuineness of the check, in all probability the forgery would have been detected and the fraud defeated.