January 2018 - page 2

FACTS: Fund transfers effected on the basis of an Authority of Debit bearing forged signatures of certain officers of First Metro Investment Corporation (FMIC), transferring money from FMIC’s account to the current account of Tevesteco Arrastre Stevedoring Co., Inc. ISSUE(S): Whether or not BPI-FB was negligent and therefore should bear the loss caused by the fraud. HELD: NO. Every bank that issues checks for the use of its customers should know whether or not the drawer’s signature thereon is genuine, whether there are sufficient funds in the drawers account to cover checks issued, and it should be able to detect…

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FACTS: Defendant encashed with plaintiff bank a check the payee of which had already died years long before its issuance. After it was advised of the forgery and drawer bureau of the check’s amount, plaintiff bank made verbal and formal demands upon defendant to account for the sum but the latter refused to do so. ISSUE(S): Whether or not petitioner bank may recover from the defendant for the payment for the forged check. HELD: YES. Where a check has several indorsement on it, it is not supposed to be drawee’s duty to ascertain whether the signatures of the payee or…

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FACTS: Two manager’s checks in respondent’s name were issued as payment of the shares of stocks he sold. His friend got hold of the checks, forged respondent’s signature and deposited them with petitioner bank, where both are depositors. Petitioner accepted and credited both checks to the forger’s account without verifying the signature indorsements against respondent’s specimen signature. His friend immediately withdrew the money and absconded. ISSUE(S): Whether or not petitioner is liable for the payment of the forged check. HELD: YES. The collecting bank is liable to the payee and must bear the loss because it is its legal duty…

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FACTS: The Province of Tarlac maintains a current account with the Philippine National Bank (PNB) where the provincial funds – including an appropriation for the Concepcion Emergency Hospital – are deposited. Checks are drawn against such account payable to the order of the said hospital, released by the Provincial Treasurer and received for the hospital by its administrative officer and cashier. Faustino Pangilinan was the hospital’s administrative officer and cashier until his retirement in February 28, 1978. However, it was later discovered that even after retirement Pangilinan was able to collect and encash thirty (30) checks with petitioner Bank by…

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FACTS: Ford drew and issued a crossed check in favor of the Commissioner of Internal Revenue (CIR) as payment of its percentage or manufacturer’s sales taxes. The check was deposited with Philippine Commercial International Bank (PCIBank) and was subsequently cleared. Upon presentment with Citibank, the proceeds were paid to PCIBank. In a letter by the Acting CIR, Ford was officially informed that its check was not paid to the government or its authorized agent but were encashed by unauthorized persons. An investigation revealed that Ford’s general ledger accountant had recalled the check purportedly because of an error in the computation…

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FACTS: A check drawn against petitioner was presented for payment to respondent Bank. Satisfied with the authenticity of the signature appearing thereon, the check was encashed. The following day, petitioner’s accountant who had custody of the company checks discovered that a check was missing and reported the petitioner’s project manager who is also the sole signatory to its checking account. Petitioner demanded that it be reimbursed for the proceeds of the check. ISSUE(S): Whether or not respondent bank is liable to reimburse for the payment of the forged check. HELD: YES. Banks are engaged in a business impressed with public…

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FACTS: Private respondent and one other, both officers of Worldwide Garment Manufacturing, Inc., were authorized to apply for credit facilities with petitioner Bank, which issued nine promissory notes uniformly worded except for the dates and amounts in the following manner: ____, after date, for value received, I/we, jointly and severally promise to pay to the ORDER of the REPUBLIC PLANTERS BANK, at its office in Manila, Philippines, the sum of _____ PESOS (…) Philippine Currency… On the right bottom margin of the promissory notes appeared the signatures of both officers above their names with the phrase “and (in) his personal…

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FACTS: Petitioner and private respondent Ong, as presidents of their respective corporations, entered into a contract where the latter shall render construction and land development services and shall be paid on the basis of the completed houses and developed lands delivered to and accepted by the former and the project financer. Years later, Ong learned that seven checks drawn had been executed and signed payable to respondent corporation for completed and deliver work under the contract. These checks were supposed to be delivered to him by petitioner but, instead, the latter forged his signature at the back of the checks…

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FACTS: Respondent Sima Wei executed and delivered to petitioner Bank a promissory note for the payment of a loan. He made partial payments on the note and months later issued two crossed checks for the full payment of his account. The checks were not delivered to petitioner Bank or to any of its representatives and later came to the possession of respondent Lee Kian Huat, who the same to the account of respondent corporation without petitioner’s indorsement. ISSUE(S): Whether or not petitioner had acquired any right or interest on the checks. HELD: NO. Courts have long recognized the business custom…

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FACTS: Respondent guaranteed the payment of 70% of petitioner corporation’s loans on the condition that upon payment of said amount it shall be proportionally subrogated to the rights of the original creditor. The loans were secured by three promissory notes, each of which petitioner Roxas signed twice – as president of petitioner corporation and in his personal capacity. For their failure to pay their loan obligations, respondent filed against both petitioners a complaint for sum of money. ISSUE(S): Whether or not petitioner Roxas should be jointly and severally liable. HELD: Under the Negotiable Instruments Law, persons who write their names…

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