Claudine - page 9

FACTS: Under their check discounting agreement Filipinas Orient Finance Corporation (Filipinas Orient) issued four (4) Philippine Bank of Communications (PBCom) crossed checks to Yu Kio, president of Pipe Master Corporation (Pipe Master), in exchange of four (4) Metropolitan Bank and Trust Company (MetroBank) checks. The PBCom checks were payable to Pipe Master and marked “For Payee’s Account Only.” He indorsed and deposited the PBCom checks in his personal accounts with MetroBank and Solid Bank Corporation (Solid Bank) account. PBCom paid MetroBank and Solid Bank the amounts of the checks and the proceeds were credited to Yu Kio’s personal accounts. ISSUE(S):…

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FACTS: By special arrangement with respondent bank (PNB), Metropolitan Waterworks and Sewerage System (MWSS) used personalize checks in drawing from one of its accounts with PNB. MWSS released twenty-three checks which were deposited in the respective accounts of Raul Dizon, Arturo Sison and Antonio Mendoza with different banks. It was later found that the three depositors were all fictitious persons. ISSUE(S): Whether or not petitioner is barred from setting up the defense of forgery under Section 23 of the Negotiable Instruments Law. HELD: YES. The petitioner was using its own personalized checks, instead of the official PNB Commercial blank checks.…

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FACTS: When private respondent went to collect on what she thought were still unpaid accounts, she was informed that six crossed checks payable to her garment shop had already been issued. Further inquiry revealed that the said checks had been deposited with petitioner bank and subsequently paid by it to one of the bank’s “trusted depositors.” ISSUE(S): Whether or not petitioner bank was negligent and therefore liable for the value of the checks. HELD: YES. The possession of check on a forged or unauthorized indorsement is wrongful, and when the money is collected on the check, the bank can be…

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FACTS: A friend took a check from private respondent’s checkbook, forged the latter’s signature, and encashed the check with petitioner bank. Upon receipt of the statement of account from the bank, private respondent asked for reimbursement as his signature on the check was forged but the bank refused. ISSUE(S): Whether or not petitioner bank was negligent in encashing a forged check. HELD: YES. 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…

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FACTS: Plaintiff discovered that nine of its checks had been encashed by a certain Sonny D. Santos which turned out to be a fictitious name used by plaintiff’s external auditor. Said auditor voluntarily admitted to have forged the signature of one of plaintiff’s authorized signatories for its current account with defendant bank. ISSUE(S): Whether or not defendant bank was negligent. HELD: YES. Since the banking business is impressed with public interest, of paramount importance thereto is the trust and confidence of the public in general. Consequently, the highest degree of diligence is expected, and high standards of integrity and performance…

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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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