Gempesaw vs.

PNB
218 SCRA 682
FACTS:
Gempesaw owns and operates four grocery stores. To pay their debts of her
supplies, she draws checks against her account, she signed each and every crossed
check without bothering to verify the accuracy of the checks against the
corresponding invoices because she reposed full and implicit trust and confidence
on her bookkeeper. Although the Bank notified her of all checks presented to and
paid by the bank, petitioner did not verify the correctness of the returned checks,
much less check if the payees actually received the checks in payment for the
supplies she received.It was only after the lapse of more 2 years that petitioner
found out about the fraudulent manipulations of her bookkeeper.
On November 7, 1984, Gempesaw made a written demand on respondent drawee
Bank to credit her account with the money value of the 82 checks totalling
P1,208.606.89 for having been wrongfully charged against her account.
On January 23, 1985, Gempesaw filed against Philippine Bank of Communications,
the drawee bank for recovery of the money value of 82 checks charged against
the account on the ground that the payees' indorsements were forgeries.
ISSUE:
Whether or not Gempesaw has a right to recover the amount attributable to the
forgeries

RULING:
NO. The trial court for the reception of evidence to determine the exact amount of
loss suffered by the petitioner, considering that she partly benefited from the
issuance of the questioned checks since the obligation for which she issued them
were apparently extinguished, such that only the excess amount over and above
the total of these actual obligations must be considered as loss of which one half
must be paid by respondent drawee bank to herein petitioner.
Petitioner completed the checks by signing them as drawer and thereafter
authorized her employee Alicia Galang to deliver to payees. Drawee bank who has
paid a check on which an indorsement has been forged cannot charge the drawer's

account for the amount of said check where the drawer is guilty of such negligence
which causes the bank to honor such a check or checks.
Under the NIL, the only kind of indorsement which stops the further negotiation of
an instrument is a restrictive indorsement which prohibits the further negotiation
thereof.
In this kind of restrictive indorsement, the prohibition to transfer or negotiate must
be written in express words at the back of the instrument, so that any subsequent
party may be forewarned that ceases to be negotiable.
However, the restrictive indorsee acquires the right to receive payment and bring
any action thereon as any indorser, but he can no longer transfer his rights as such
indorsee where the form of the indorsement does not authorize him to do so.
When it violated its internal rules that second endorsements are not to be accepted
without the approval of its branch managers and it did accept the same upon the
mere approval of Boon, a chief accountant, it contravened the tenor of its obligation
at the very least, if it were not actually guilty of fraud or negligence
Drawee Bank did not discover the irregularity with respect to the acceptance of
checks with second indorsement for deposit even without the approval of the
branch manager despite periodic inspection conducted by a team of auditors from
the main office constitutes negligence on the part of the bank in carrying out its
obligations to its depositors

FACTS:
On November 8, 1982, CASA Montessori International opened Current account with
BPI with CASAs President Lebron as one of its authorized signatories. In 1991, after
conducting an investigation, plaintiff discovered that nine of its checks had been
encashed by a certain Sonny D. Santos since 1990 in the total amount of
P782,000.00. It turned out that Santos with account at BPI Greenbelt Branch was a
fictitious name used by third party defendant Leonardo T. Yabut who worked as
external auditor of CASA. Third party defendant voluntarily admitted that he forged
the signature of Lebron and encashed the checks.

In 1991, plaintiff filed Complaint for Collection with Damages against defendant
bank praying that the latter be ordered to reinstate the amount of P782,500.00 with
interest. RTC rendered decision in favor of the plaintiff. CA modified decision holding
CASA as contributory negligent hence ordered Yabut to reimburse BPI half the total
amount claimed and CASA, the other half. It also disallowed attorneys fees and
moral and exemplary damages.
ISSUE:.
Whether or not forgery can be made a defense
A forged signature is a real and absolute defense, and a person whose
signature appears on a negotiable instrument is forged is deemed to never have
become a party thereto and to have never consented to the contract that allegedly
gave rise to it.
The counterfeiting of any writing, consisting in the signing of anothers name
with intent to defraud, is forgery. First, there was really a finding of forgery. The
forger admitted even in his affidavit of his forgery. Second, there was a finding
by the police laboratory that indeed the signatures were forged. Furthermore,
the negligence is attributable to BPI alone. Its negligence consisted in the
omission of the degree of diligence required of a bank.Loss borne by proximate
cause of negligence.

PNB vs. Quimpo

158 SCRA 582
FACTS:
Francisco Gozon was a depositor of the Philippine National Bank . Ernesto Santos,
Gozons friend, took a check from the latters checkbook which was left in the car,
filled it up for the amount of P5,000, forged Gozons signature and encashed it.
Gozon learned about the transaction upon receipt of the banks statement of
account, and requested the bank to recredit the amount to his account. The bank
refused. Hence, the present action.
ISSUE:
Whether or not the bank should bear the loss resulting from the forged check.
RULING:
Yes. The bank should bear the loss.The prime duty of a bank is to ascertain the
genuineness of the signature of the drawer or the depositor on the check being

encashed. It is expected to use reasonable business prudence in accepting and

cashing a check being encashed or presented to it. Payment in neglect of duty
places upon him the result of such negligence. Still, Gozons act in leaving his
checkbook in the car, where his trusted friend remained in, cannot be considered
negligence sufficient to excuse the bank from its own negligence. The bank bears
the loss.