Samsung Const. Co. Phil. v Far East Bank; G.R. No. 129015; 13 Aug 2004; 436 SCRA 402

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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.

Whether or not respondent bank is liable to reimburse for the payment of the forged check.

YES. Banks are engaged in a business impressed with public interest, and it is their duty to protect in return their many clients and depositors who transact business with them. They have the obligation to treat their client’s account meticulously and with the highest degree of care, considering the fiduciary nature of their relationship. The diligence required of banks, therefore, is more than that of a good father of a family. Given the circumstances, extraordinary diligence dictates that FEBTC should have ascertained from Jong personally that the signature in the questionable check was his. Since 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.

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