Jai-Alai Corporation v.

BPI, 66 SCRA 29, 1975 Facts: Petitioner deposited in its current account with respondent bank several checks, all acquired from Antonio J. Ramirez, a re ular bettor at the !ai"alai ames and a sale a ent of the #nter"#sland $as %ervice, #nc., the pa&ee of the checks. 'he deposits were all temporaril& credited to petitioner(s account. %ubsequentl&, Ramirez resi ned and after the checks had been submitted to inter"bank clearin , the #nter"#sland $as discovered that all the indorsements made on the cheeks were for eries. #t informed petitioner, the respondent, the drawers and the drawee banks of the said checks and for eries and filed a criminal complaint a ainst its former emplo&ee. #n view of these circumstances, the respondent )ank debited the petitioner(s current account and forwarded to the latter the checks containin the for ed indorsements, which petitioner refused to accept. *ater, petitioner drew a ainst its current account a check. 'his check was dishonored b& respondent as its records showed that petitioner(s balance after nettin out the value of the checks with the for ed indorsement, was insufficient to cover the value of the check drawn. A complaint was filed b& petitioner in the +F# but the same was dismissed, as well as b& the +ourt of Appeals, on appeal. ,ence, this petition for review. #ssue: -hether or not the respondent had the ri ht to debit the petitioner(s current account and therefore cannot be held liable for dama es. Rulin : /es, respondent acted within le al bounds when it debited the petitioner(s account. %ince under %ection 01 of the 2#*, a for ed si nature in a ne otiable instrument is wholl& inoperative and no ri ht to dischar e it or enforce its pa&ment can be acquired throu h or under the for ed si nature e3cept a ainst a part& who cannot invoke the for er&, it stands to reason, that the respondent, as a collectin bank which indorsed the checks to the drawee"banks for clearin , should be liable to the latter for reimbursement, for, as found b& the court a quo and b& the appellate court, the indorsements on the checks had been for ed prior to their deliver& to the petitioner. #n le al contemplation, therefore, the pa&ments made b& the drawee"banks to the respondent on account of the said checks were ineffective4 and, such bein the case, the relationship of creditor and debtor between the petitioner and the respondent had not been validl& effected, the checks not havin been properl& and le itimatel& converted into cash. PNB vs. CA GR L-26001, 29 October 1968 FA+'% 5ne Au usto *im deposited in his current account with P+# )ank 6Padre Faura )ranch7 a $%#% check drawn a ainst P2). 'he si natures of the $eneral 8ana er and Auditor of $%#% were for ed. P+#)ank stamped at the back of the check 9All

prior indorsements or lack of indorsements uaranteed, P+# )ank.: P+#)ank sent the check to P2) throu h the +entral )ank. P2) did not return the check to P+#)ank4 and thus P+#)ank credited *im;s account. As $%#% has informed P2) that the check was lost two months before said transaction, its account was recredited b& P2) upon its demand 6due to the for ed check7. P2) requested for refund with P+# )ank. 'he latter refused. #%%<= -ho shall bear the loss resultin from the for ed check. ,=*> 'he collectin bank is not liable as the for er& e3istin are those of the drawers; and not of the indorsers;. 'he indorsement of the intermediate bank does not uarantee the si nature of the drawer. P2);s failure to return the check to the collectin bank implied that the check was ood. #n fact, P2) even honored the check even if $%#% has reported two months earlier that the check was stolen and the bank thus should stop pa&ment. P2);s ne li ence was the main and pro3imate cause for the correspondin loss. P2) thus should bear such loss. <pon pa&ment b& P2), as drawee, the check ceased to be a ne otiable instrument, and became a mere voucher or proof of pa&ment. Hong Kong & Shanghai Banking Corp. vs Peoples Bank & Trust Company, G.R. No. L-28226 September 30, 1970 Facts: 'he Philippine *on >istance 'elephone +ompan& 6P*>'7 drew the check on the ,on kon ? %han hai )ankin +orporation 6,%)+7 and in favor of the same bank in the sum of P@A,BCD.CE. 'his check was sent b& mail to the Pa&ee. %omehow or other, the check fell in the hands of a certain Florentino +han co, who was able to erase the name of the pa&ee )ank and instead t&ped his own name on the check. +han co had opened a current account with >efendant Peoples )ank and 'rust +ompan& and deposited the altered check in his name. 'his check was presented b& the Peoples )ank for clearin and was dul& cleared b& the ,%)+. As a result, the Peoples )ank credited +han co with the amount of the check. +han co be an to withdraw from his account until he closed it. #n the meantime, the cancelled check was returned to the P*>' when the alteration in the name of the pa&ee was discovered. Peoples )ank was notified of the alteration and the ,%)+ requested Peoples )ank to refund to it the sum of P@A,BCD.CE which had been previousl& credited b& Plaintiff )ank in favor of >efendant )ank. 'he Peoples )ank refused to refund such amount. #ssue: -52 the Peoples )ank is liable for a refund to the ,%)+. ,eld: 25. 'he F0A"hourF clearin house rules appl&, which states that, FAll items cleared at @@:CC

o(clock a.m. shall be returned not later than 0:CC o(clock p.m. on the same da& and all items cleared at 1:CC o(clock p.m. shall be returned not later than D:1C a.m. of the followin business da&, e3cept for items cleared on %aturda& which ma& be returned not later than D:1C of the followin da&.F 'hus: F#t is a settled rule that a person who presents for pa&ment checks such as are here involved uarantees the enuineness of the check, and the drawee bank need concern itself with nothin but the enuineness of the si nature, and the state of the account with it of the drawee.F 6#nterstate 'rust +o. v. <nited %tates 2ational )ank, @DE Pac. 0BC, @G@G7. #t at all, then, whatever remed& the plaintiff has would lie not a ainst defendant )ank but as a ainst the part& responsible for chan in the name of the pa&ee. #ts failure to call the attention of defendant )ank as to such alteration until after the lapse of 0H da&s would, in the li ht of the above +entral )ank circular, ne ate whatever ri ht it mi ht have had a ainst defendant )ank. PNB vs GOZON Facts: #n June @GH1, Francisco $ozon ## went to the Philippine 2ational )ank 6+aloocan +it&7 accompanied b& his friend =rnesto %antos. $ozon left %antos in his car and while $ozon was at the bank, %antos took a check from $ozon;s checkbook and for ed $ozon;s si nature, fillin out the check with the amount of PE,CCC.CC. %antos was able to encash the check that da& with P2). $ozon learned of this when his statement arrived. %antos eventuall& admitted to for in $ozon;s si nature. $ozon then demanded the P2) to refund him the amount. P2) refused. 'he +F# ruled in favor of $ozon. P2) appealed on certiorari. #%%<=: -hether or not P2) is liable. ,=*>: /es. A bank is bound to know the si natures of its customers. 'he prime dut& of a bank is to ascertain the enuineness of the si nature of the drawer or the depositor on the check bein encashed. #t is e3pected to use reasonable business prudence in acceptin and cashin a check presented to it. #f it pa&s a for ed check, it must be considered as makin the pa&ment out of its own funds, and cannot ordinaril& chan e the amount so paid to the account of the depositor whose name was for ed. P2) failed to meet its obli ation to know the si nature of its correspondent 6$ozon7. Petitioner was ne li ent in encashin said for ed check without carefull& e3aminin the si nature which shows marked variation from the enuine si nature of private respondent. 9'he act of plaintiff in leavin his checkbook in the car while he went out for a short while can not be considered ne li ence sufficient to e3cuse the defendant bank from its own ne li ence. #t should be borne in mind that when defendant left his car, =rnesto %antos, a lon time classmate and friend remained in the same. >efendant could not have been e3pected to know that the said =rnesto %antos would remove a check from his checkbook. >efendant had trust in his classmate and friend.

,e had no reason to suspect that the latter would breach that trust.: $reat =astern *ife #nsurance +o vs. ,on kon and %han hai )ankin +orp. Facts: 'he plaintiff is an insurance corporation, and the defendants are bankin corporations, and each is dul& licensed to do its respective business in the Philippines #slands8a& 1, @G0C, the plaintiff drew its check for P0,CCC on the ,on kon and %han hai )ankin +orporation with whom it had an account, pa&able to the order of *azaro 8elicor. =. 8. 8aasim fraudulentl& obtained possession of the check, for ed 8elicor(s si nature, as an endorser, and then personall& endorsed and presented it to the Philippine 2ational )ank where the amount of the check was placed to his credit. After havin paid the check, and on the ne3t da&, the Philippine national )ank endorsed the check to the ,on kon and %han hai )ankin +orporation which paid it and char ed the amount of the check to the account of the plaintiff. About four months after the check was char ed to the account of the plaintiff, it developed that *azaro 8elicor, to whom the check was made pa&able, had never received it, and that his si nature, as an endorser, was for ed b& 8aasim, who presented and deposited it to his private account in the Philippine 2ational )ank. -ith this knowled e , the plaintiff promptl& made a demand upon the ,on kon and %han hai )ankin +orporation that it should be iven credit for the amount of the for ed check, which the bank refused to do, and the plaintiff commenced this action to recover the P0,CCC which was paid on the for ed check. 'he %han hai )ank denies an& liabilit&, but pra&s that, if a !ud ment should be rendered a ainst it, in turn, it should have like !ud ment a ainst the Philippine 2ational )ank which denies all liabilit& to either part&. Rulin : 'he le al presumption is that the drawee bank would not honor the check without the enuine indorsement of the pa&ee. 'he drawee bank had no le al ri ht to pa& e3cept as to the drawer or to its order 'he collectin bank also had no license or authorit& to pa& mone& to for er or to an&one upon a for ed indorsement. #t was its le al dut& to know that the indorsement was enuine before cashin the check. 9-here a check is drawn pa&able to the order of one person and is presented to a bank b& another and purports upon its face to have been dul& indorsed b& the pa&ee of the check , it is the dut& of the bank to know that the check was dul& indorsed b& the ori inal pa&ee and where the bank pa&s the amount of the check to a 1rd person , who has for ed the si nature of the pa&ee , the loss falls upon the bank who cashed the check , and its remed& is a ainst the person to whom it paid the mone&.: FRANCISCO RODRIGUEZ vs FRANCISCO MARTINEZ FA+'%: 'he !ud ment of the court below contains the followin findin of facts: F'he evidence introduced at the trial shows that the defendant e3ecuted his promissor& note on the @Hth of 5ctober, @GC0, for the sum of A,CCC pesos,

8e3ican currenc&, pa&able to one Felipe +. 8ontalvo4 that the said 8ontalvo, for value received, sold and transferred the said promissor& note to the plaintiff before maturit&4 that the said plaintiff received the same without notice of an& conditions e3istin a ainst the note4 that the plaintiff, before bu&in the note, went to the defendant and asked him in respect thereto, and was informed b& him that the note was ood and that he would pa& the same at a discount4 and that the note was delivered b& the defendant to the said 8ontalvo in pa&ment of a amblin debt which the defendant owed 8ontalvo. @. +onsiderin that the note had an unlawful ori in, can petitioner enforce the same a ainst the maker. Accordin to the facts set out in the !ud ment of the court below, the plaintiff acquired the ownership of the note in question b& virtue of its indorsement, he havin paid the value thereof to its former holder. ,e did so without bein aware of the fact that the note had an unlawful ori in, since he as not iven notice, as the court found, of an& conditions e3istin a ainst the note. Furthermore, he accepted it in ood faith, believin the note was valid and absolutel& ood, and that the defendant would not repudiate it for the reason that he, the defendant, had assured him before the purchase of the note that the same was ood and that he would pa& it at a discount. -ithout such assurance from the defendant we can hardl& believe that the plaintiff would have bou ht the note. #t is thus inferred from the fact that he, the plaintiff, inquired from the defendant about the nature of the note before acceptin its indorsement. 'hese facts sufficientl& show that the plaintiff bou ht the note upon the statement of the defendant that the same had no le al defect and that he was thereb& induced to bu& the same b& the personal act of said defendant. #n view of this, we are of the opinion that the defendant can not be relieved from the obli ation of pa&in the plaintiff the amount of the note alle ed to have been e3ecuted for an unlawful consideration. #f such unlawful consideration did in fact e3ist, the defendant deliberatel& and maliciousl& concealed it from the plaintiff. Republic vs =quitable )ankin +orporation, $.R. 2o. *"@EDGA, Jan. 1C, @GBA Facts: 'he Republic of the Philippines seeks to recover from the =quitable )ankin +orporation the sum of P@H,@CC, representin the a re ate value of four 6A7 treasur& warrants and from the )ank of the Philippine #slands the total sum of P1A0,HBH.B1, representin the a re ate value of twent&"four 60A7 warrants. )oth transactions were paid to said banks b& the 'reasurer of the Philippines thru the +learin 5ffice of the +entral )ank of the Philippines. 'hese claims for refund are based upon a common round that the si nature thereon of the drawin office and that of the representative of the Auditor $eneral in that office are for ed.

'he +orporacion de los Padres >ominicos had acquired the twent&"four 60A7 treasur& warrants b& accommodatin its former trusted emplo&ee who asked the +orporacion to cash the warrants, alle in that it was difficult to do so directl& with the $overnment and that his wife e3pected a sort of commission for the encashment. 'he +orporacion acceded to +arranza(s request, provided that the warrants would first be accepted and cleared b& the 'reasurer and the proceeds thereof dul& credited to the account of the +orporacion in the )P#. 'he warrants were, accordin l&, deposited b& the +orporacion with said bank, which accepted them Fsub!ect to collection onl&F. %ubsequentl&, the )P# presented the warrants for pa&ment to the +learin 5ffice of the +entral )ank and after bein cleared, the warrants were paid b& the 'reasurer. *ater on, at different dates, the twent&"four 60A7 warrants were returned to the +entral )ank b& the 'reasurer on the round of for er&. 'he +entral )ank referred the warrants to the )P# and asked for the reimbursement of the amount but the latter opposed its return. 'he same situation happened to the four 6A7 warrants that were deposited in the =quitable )ank. #ssue: -52 the two banks are liable for reimbursement to the overnment. ,eld: 25. 'he twent&"ei ht 60D7 warrants were cleared and paid b& the 'reasurer, in view which the )P# and the =quitable )ank credited the correspondin amounts to the respective depositors of the warrants and then honored their checks for said amounts. 'hus, the 'reasur& had not onl& been ne li ent in clearin its own warrants, but had, also, thereb& induced the )P# and the =quitable )ank to pa& the amounts thereof to said depositors. 'he ross nature of the ne li ence of the 'reasur& becomes more apparent when we consider that each one of the twent&"four 60A7 warrants was for over PE,CCC, and, hence4 be&ond the authorit& of the auditor of the 'reasur& I whose si nature thereon had been for ed I to approve. #n other words, the irre ularit& of said warrants was apparent the face thereof, from the viewpoint of the 'reasur&. 8oreover, the same had not advertised the loss of enuine forms of its warrants. 2either had the )P# nor the =quitable )ank been informed of an& irre ularit& in connection with an& of the warrants involved in these two 607 cases or after the warrants had been cleared and honored I when the 'reasur& ave notice of the for eries adverted to above. As a consequence, the loss of the amounts thereof is mainl& imputable to acts and omissions of the 'reasur&, for which the )P# and the =quitable )ank should not and cannot be penalized.