Case Summary (G.R. No. L-26001)
Disputed Signatures and Endorsements
PNB alleged that, since drawer signatures were forged, intermediate indorsements must also be forged. The court rejected this, observing no evidence of spurious indorsements. Moreover, forgeries of drawer signatures, not of intermediary indorsements, caused the loss, and a drawee’s liability does not hinge on prior indorsement authenticity.
Warranty on Indorsement
PCIB’s back-of-check stamp guaranteed “all prior indorsements” but did not cover the authenticity of the GSIS officers’ signatures, since GSIS was the drawer, not an indorser. That warranty might benefit a subsequent bona fide holder, but PNB, as drawee, was neither a holder in due course nor a latter indorsee; upon payment, the check ceased to be negotiable and became merely a payment voucher.
Acceptance versus Payment
Under Act No. 2031, “acceptance” is a drawee’s assent to a bill’s order, while “payment” is the actual performance of that order. Checks being payable on demand require no formal acceptance. PNB’s clearing practice—retaining the check and honoring it—constituted payment, satisfying any implied acceptance.
Comparative Negligence and Proximate Cause
PNB claimed PCIB negligence for not detecting forgery. The court found both banks negligent, but PNB was principally at fault. It had formal notice from GSIS to stop payment and yet honored and paid the check, signaling to PCIB that it was genuine. By failing to return the check, PNB induced PCIB to release funds to Lim. Equity dictates that the party whose neg
...continue readingCase Syllabus (G.R. No. L-26001)
Facts
- On January 15, 1962, Augusto Lim deposited GSIS Check No. 645915-B for ₱57,415.00 in his current account at the PCIB Padre Faura branch in Manila.
- The PCIB forwarded the check through the Central Bank to the Philippine National Bank (PNB) for clearing on the same date.
- The PNB neither returned the check nor gave notice of dishonor; it retained and paid the amount to PCIB and debited GSIS’s account.
- On January 31, 1962, GSIS demanded recredit of ₱57,415.00, alleging forgery in its officers’ signatures on the check; PNB complied.
- On February 2, 1962, PNB demanded reimbursement from PCIB; PCIB refused.
- GSIS had, on November 13, 1961, notified PNB of the loss of the check and requested a stop-payment, which PNB acknowledged.
Procedural History
- PNB filed suit in the Court of First Instance of Manila against PCIB for recovery of ₱57,415.00.
- The trial court dismissed the complaint.
- The Court of Appeals affirmed the dismissal.
- PNB sought review by certiorari in the Supreme Court.
Issues Presented
- Whether PCIB was negligent in failing to detect the forged drawer’s signatures.
- Whether the indorsements on the back of the check were forged and, if so, their effect.
- Whether PCIB’s back-of-check warranty of “All prior indorsements and/or Lack of Endorsement Guaranteed” covers forgery of the drawer’s signatures.
- Wheth