Title
Samsung Construction Co. Phil. vs. Far East Bank and Trust Company
Case
G.R. No. 129015
Decision Date
Aug 13, 2004
Samsung Construction sued FEBTC for paying a forged check; Supreme Court ruled bank liable due to failure to detect forgery, reinstating RTC’s decision.

Case Digest (G.R. No. 129015)

Facts:

  • Account Relationship
    • Samsung Construction Company Philippines, Inc. (Samsung Construction), based in Biñan, Laguna, maintained a current account with Far East Bank and Trust Company (FEBTC), Bel-Air, Makati branch.
    • The sole authorized signatory was Jong Kyu Lee (Project Manager); blank checks were kept by the company’s accountant, Kyu Yong Lee.
  • Presentation and Payment of the Forged Check
    • On 19 March 1992, Roberto Gonzaga presented FEBTC Check No. 432100, payable to cash, for ₱999,500.00. Teller Cleofe Justiani verified the balance and compared the signature with the specimen card, then forwarded the check to Senior Assistant Cashier Gemma Velez. Velez also compared signatures and sent it to Shirley Syfu.
    • Syfu noticed assistant accountant Jose Sempio III at the branch; Sempio vouched for the signature’s authenticity and Gonzaga’s authority to encash. Syfu approved payment, and the check was encashed.
  • Discovery and Initial Proceedings
    • The following day, accountant Kyu discovered the debit, noted the missing blank check, and reported to Jong, who confirmed the signature was forged. The bank manager allegedly promised reimbursement.
    • Criminal qualified theft charges were filed against Sempio. On 6 May 1992, Samsung Construction demanded FEBTC to credit the ₱999,500.00 with interest. FEBTC replied it was still investigating.
  • Civil Litigation and Appellate Decisions
    • On 10 June 1992, Samsung Construction filed a complaint under Section 23 of the Negotiable Instruments Law for payment of ₱999,500.00 plus interest and attorney’s fees (Civil Case No. 92-61506, RTC Manila Branch 9).
    • At trial, NBI expert Roda B. Flores testified the signature was forged; PNP expert Rosario C. Perez testified it was genuine. The RTC found Flores more credible and ordered FEBTC to reimburse with interest and ₱15,000.00 attorney’s fees.
    • FEBTC appealed to the Court of Appeals (CA), which on 28 November 1996 reversed: it held the conflicting expert opinions created reasonable doubt, and, assuming forgery, attributed loss to Samsung Construction’s negligence in safekeeping its checks, invoking PNB v. National City Bank of New York.

Issues:

  • Whether the Court of Appeals erred in overturning the RTC’s finding of forgery and absolving FEBTC of liability under Section 23 of the Negotiable Instruments Law.
  • Whether Samsung Construction’s alleged negligence in safeguarding its blank checks precludes it from setting up the defense of forgery and shifts the loss to the depositor.

Ruling:

  • (Subscriber-Only)

Ratio:

  • (Subscriber-Only)

Doctrine:

  • (Subscriber-Only)

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