To facilitate payment of debts to her suppliers, petitioner draws checks against her checking account with respondent bank as drawee. The checks are prepared and filled up by her trusted bookkeeper of eight years and submitted to petitioner for signature together with corresponding invoice receipts. Petitioner did not make any verification as to the correctness of the returned checks or to the payees’ actual receipt of the checks in payment. She later discovered that in the course of two years her bookkeeper had brought eighty-two checks with forged signatures of the payees to respondent bank which accepted them for deposit in the accounts of Alfredo Romero and Benito Lam.
Whether or not petitioner’s negligence caused the bank to honor the checks with forged indorsement.
YES. The petitioner failed to examine her records with reasonable diligence whether before she signed the checks or after receiving her bank statements. Had the petitioner examined her records more carefully, particularly the invoice receipts, cancelled checks, check book stubs, and had she compared the sums written as amounts payable in the eighty-two (82) checks with the pertinent sales invoices, she would have easily discovered that in some checks, the amounts did not tally with those appearing in the sales invoices. Had she noticed these discrepancies, she should not have signed those checks, and should have conducted an inquiry as to the reason for the irregular entries. Likewise, had petitioner been more vigilant in going over her current account by taking careful note of the daily reports made by respondent drawee Bank on her issued checks, or at least made random scrutiny of her cancelled checks returned by respondent drawee Bank at the close of each month, she could have easily discovered the fraud being perpetrated by Alicia Galang, and could have reported the matter to the respondent drawee Bank. The respondent drawee Bank then could have taken immediate steps to prevent further commission of such fraud. Thus, petitioner’s negligence was the proximate cause of her loss. And since it was her negligence which caused the respondent drawee Bank to honor the forged checks or prevented it from recovering the amount it had already paid on the checks, petitioner cannot now complain should the bank refuse to recredit her account with the amount of such checks.