BANK OF THE PHILIPPINE ISLANDS, petitioner,

vs.
CASA MONTESSORI INTERNATIONALE LEONARDO T. YABUT, responents.
!.R. No. "#$#%# M&' (), (**#
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CASA MONTESSORI INTERNATIONALE, petitioner,
vs.
BANK OF THE PHILIPPINE ISLANDS, responent.
!.R. No. "#$%*- M&' (), (**#
I. STATEMENT OF THE CASE
This case is before the Supreme Court were two Petitions for Review under Rule 45 of
the Rules of Court, assailing the March 2, 2!!" #ecision and the $ugust "%, 2!!"
Resolution of the Court of $ppeals &C$' in C$()R C* +o, -5-", The assailed decision
reads.
/012R234R2, upon the premises, the decision appealed from
is $335RM2# with the modification that defendant ban6 78an6 of the
Philippine 5slands &8P5'9 is held liable onl: for one(half of the value of the
forged chec6s in the amount of P54%,""5,!! after deductions sub;ect to
R25M8<RS2M2+T from third part: defendant =abut who is
li6ewise 4R#2R2# to pa: the other half to plaintiff corporation 7Casa
Montessori 5nternationale &C$S$'9,/
II. STATEMENT OF THE FACTS
C$S$ Montessori 5nternational &C$S$' opened a current account +o, !2>"(!!?"(!"
with 8an6 of the Philippine 5sland &8P5', Ms, Ma, Carina C, @ebron, C$S$As president
was assigned to be one of the authoriBed signatories,
5n ">>", C$S$ conducted an investigation and discovered that nine &>' of its chec6s
had been encashed b: a certain Sonn: #, Santos since ">>!,
5t turned out that CSonn: #, SantosD with account at 8P5As )reenbelt 8ranch was a
fictitious name used b: third part: defendant @24+$R#4 T, =$8<T who wor6ed as
eEternal auditor of C$S$,
=$8<T voluntaril: admitted that he forged the signature of Ms, @ebron and encashed
the chec6s,
The P+P Crime @aborator: conducted an eEamination of the nine chec6s and
concluded that the handwritings thereon compared to the standard signature of Ms,
@ebron were not written b: the latter,
Thus, C$S$ filed a Complaint for Collection with #amages against 8P5 pra:ing that the
latter be ordered to reinstate the amount of P%?2,5!!,!! in the current and savings
account of C$S$ with interest at -F per annum,
RTC thereafter ruled in favor of plaintiff,
III. ISSUE
", 0hether or not there was forger: under the +egotiable 5nstruments @aw &+5@'G
2, 0hether or not 8P5 is negligent and therefore precluded from setting up forger:
as a defenseG
I.. RULIN!
&. FIRST ISSUE
YES. T/ere 0&s 1or2er' o1 t/e r&0er3s si2n&t4re on t/e 5/e56.
Section 2 of the +egotiable 5nstruments @aw provides.
S2CT54+ 2, 34R)2# S5)+$T<R2H 2332CT 43, I 0hen a
signature is forged or made without the authorit: of the person
whose signature it purports to be, it is wholl: inoperative, and no
right to retain the instrument, or to give a discharge therefor, or to
enforce pa:ment thereof against an: part: thereto, can be acJuired
through or under such signature, unless the part: against whom it
is sought to enforce such right is precluded from setting up the
forger: or want of authorit:,
$ forged signature is a real or absolute defense, and a person whose signature
on a negotiable instrument is forged is deemed to have never become a part:
thereto and to have never consented to the contract that allegedl: gave rise to it,
The counterfeiting of an: writing, consisting in the signing of anotherAs name with
intent to defraud, is forger:,
C$ and the RTC found that Respondent =abut himself had voluntaril: admitted,
through an $ffidavit, that he had forged the drawerAs signature and encashed the
chec6s, 1e never refuted these findings, That he had been coerced into
admission was not corroborated b: an: evidence on record,
C$ and the RTC also ruled that the P+P Crime @aborator:, after its eEamination
of the said chec6s, had concluded that the handwritings thereon (( compared to
the standard signature of the drawer (( were not hers, This conclusion was the
same as that in the Report that the P+P Crime @aborator: had earlier issued to
8P5 (( the drawee ban6 (( upon the latterAs reJuest,
7. SECOND ISSUE
YES. Ne28i2en5e 0&s &ttri74te to BPI &8one.
1aving established the forger: of the drawerAs signature, 8P5 (( the drawee ((
erred in ma6ing pa:ments b: virtue thereof, The forged signatures are wholl:
inoperative, and C$S$ (( the drawer whose authoriBed signatures do not appear
on the negotiable instruments (( cannot be held liable thereon, +either is the
latter precluded from setting up forger: as a real defense,
AR!UMENTS AND DISCUSSIONS
", 3ailure to produce the original chec6s gives rise to the presumption of
suppression of evidence andKor creates an unfavorable inference against it,
The eEamination b: the P+P, though inconclusive, was nevertheless clear,
positive and convincing,
3orger: /cannot be presumed,/

5t must be established b: clear, positive and
convincing evidence, <nder the best evidence rule as applied to documentar:
evidence li6e the chec6s in Juestion, no secondar: or substitutionar: evidence
ma: inceptivel: be introduced, as the original writing itself must be produced in
court, 8ut when, without bad faith on the part of the offeror, the original chec6s
have alread: been destro:ed or cannot be produced in court, secondar:
evidence ma: be produced, 0ithout bad faith on its part, C$S$ proved the loss
or destruction of the original chec6s through the $ffidavit of the one person who
6new of that fact (( =abut, 1e clearl: admitted to discarding the paid chec6s to
cover up his misdeed, 5n such a situation, secondar: evidence li6e microfilm
copies ma: be introduced in court,
The failure of C$S$ to produce the original chec6s neither gives rise to the
presumption of suppression of evidence nor creates an unfavorable inference
against it, Such failure merel: authoriBes the introduction of secondar:
evidence in the form of microfilm copies, 4f no conseJuence is the fact that
C$S$ did not present the signature card containing the signatures with which
those on the chec6s were compared, Specimens of standard signatures are not
limited to such a card, Considering that it was not produced in evidence, other
documents that bear the drawerAs authentic signature ma: be resorted
to, 8esides, that card was in the possession of 8P5 (( the adverse part:,
0e have held that without the original document containing the allegedl: forged
signature, one cannot ma6e a definitive comparison that would establish
forger:H and that a comparison based on a mere reproduction of the document
under controvers: cannot produce reliable results, 0e have also said, however,
that a ;udge cannot merel: rel: on a handwriting eEpertAs testimon:, but should
also eEercise independent ;udgment in evaluating the authenticit: of a signature
under scrutin:, 5n the present case, both the RTC and the C$ conducted
independent eEaminations of the evidence presented and arrived at reasonable
and similar conclusions, +ot onl: did the: admit secondar: evidenceH the: also
appositel: considered testimonial and other documentar: evidence in the form of
the $ffidavit,
The best evidence rule admits of eEceptions and, as we have discussed earlier,
the first of these has been met, The result of eEamining a Juestioned
handwriting, even with the aid of eEperts and scientific instruments, ma: be
inconclusiveH but it is a non sequitur to sa: that such result is not clear, positive
and convincing, The preponderance of evidence reJuired in this case has been
satisfied,
2, 8P5 contends that it was not negligent since it had a signature verification
procedure, in which chec6s are honoured onl: when the signatures therein are
verified to be the same with or similar to the specimen signatures on the
signature cards,
The ban6ing business is impressed with public interest, of paramount importance
thereto is the trust and confidence of the public in general, ConseJuentl:, the
highest degree of diligence is eEpected, and high standards of integrit: and
performance are even reJuired, of it, 8: the nature of its functions, a ban6 is
/under obligation to treat the accounts of its depositors with meticulous care,
alwa:s having in mind the fiduciar: nature of their relationship,/
8P5 contends that it has a signature verification procedure, in which chec6s are
honored onl: when the signatures therein are verified to be the same with or
similar to the specimen signatures on the signature cards, +onetheless, it still
failed to detect the eight instances of forger:, 5ts negligence consisted in the
omission of that degree of diligence reJuired of a ban6, 5t cannot now feign
ignorance, for ver: earl: on we have alread: ruled that a ban6 is /bound to 6now
the signatures of its customersH and if it pa:s a forged chec6, it must be
considered as ma6ing the pa:ment out of its own funds, and cannot ordinaril:
charge the amount so paid to the account of the depositor whose name was
forged,/
, 8P5 is a victim here therefore not liable for the losses
5n both law and eJuit:, when one of two innocent persons /must suffer b: the
wrongful act of a third person, the loss must be borne b: the one whose
negligence was the proEimate cause of the loss or who put it into the power of
the third person to perpetrate the wrong,/
ProEimate cause is determined b: the facts of the case, /5t is that cause which, in
natural and continuous seJuence, unbro6en b: an: efficient intervening cause,
produces the in;ur:, and without which the result would not have occurred,/
Pursuant to its prime dut: to ascertain well the genuineness of the signatures of
its client(depositors on chec6s being encashed, 8P5 is /eEpected to use
reasonable business prudence,/ 5n the performance of that obligation, it is bound
b: its internal ban6ing rules and regulations that form part of the contract it enters
into with its depositors,
<nfortunatel:, it failed in that regard, First, =abut was able to open a ban6
account in one of its branches without privit:H that is, without the proper
verification of his corresponding identification papers, Second, 8P5 was unable to
discover earl: on not onl: this irregularit:, but also the mar6ed differences in the
signatures on the chec6s and those on the signature card, Third, despite the
eEamination procedures it conducted, the Central *erification <nit of the ban6
even passed off these evidentl: different signatures as genuine, 0ithout
eEercising the reJuired prudence on its part, 8P5 accepted and encashed the
eight chec6s presented to it, $s a result, it proEimatel: contributed to the fraud
and should be held primaril: liable for the /negligence of its officers or agents
when acting within the course and scope of their emplo:ment,/ 5t must bear the
loss,
.. DECISION
The Supreme Court held that Petition in )R +o, "4>454 is DENIED, and that in )R +o,
"4>5!% PARTLY GRANTED, The assailed #ecision of the Court of $ppeals
is AFFIRMED with modification. BPI is /e8 8i&78e 1or P%#-,""%, t/e tot&8 v&84e o1 t/e
1or2e 5/e56s 8ess t/e &9o4nt &8re&' re5overe 7' CASA 1ro9 Leon&ro T.
Y&74t, p84s interest &t t/e 8e2&8 r&te o1 si+ per5ent :;<= per annum ,, 5o9po4ne
&nn4&88', 1ro9 t/e 1i8in2 o1 t/e 5o9p8&int 4nti8 p&i in 1488H and attorne:As fees of ten
percent &"!F' thereof, sub;ect to reimbursement from Respondent =abut for the entire
amount, eEcepting attorne:As fees,
The 8oard of $ccountanc: of the Professional Regulation Commission shall be given a
cop: of this decision for such action as it ma: deem appropriate against Respondent
=abut,