BPI v CA, 216 SCRA 51 (1992) Facts: A phone call was made to BPIs Money Market Department by a woman

who identified herself as Eligia Fernando who had a money market placement as e idenced by a promissory note with a al!e of "#$million# %he caller so!ght to pre&terminate the placement b!t 'eginaldo Esta(!io) a %rainee in BPI) told her that trading time was o er and s!ggested she call the following week# Esta(!io ad ised Penelope B!lan who handled Fernandos acco!nt) b!t Esta(!io was left to attend the pretermination process# %he caller asked that " checks be iss!ed for the proceeds of the pretermination) one for *#+ million and the second for the balance) and that the checks be deli ered to her Philamlife office# ,ater in the same morning) howe er) the same caller changed the deli ery instr!ctions and said her niece) 'osemarie Fernando) wo!ld pick !p the checks# Esta(!io informed her that a written a!thori-ation was needed# %he woman p!rporting to be Eligia Fernando deposited the " checks from BPI to the c!rrent acco!nt with .B.# .B. endorsed the checks) which it sent for clearing and which BPI cleared on the same day# BPI ret!rned the " checks to .B. for the reason /Payees endorsement forged# A ping&pong then started when .0. ret!rned the checks for the reason /Beyond .learing %ime# Issue: 120 BPI and2or .B. are liable for the checks

Held: 3es# Both banks are liable as they were negligent#

Ratio: 4eneral '!le: A forged signat!re is wholly inoperati e 5 payment made thro!gh or !nder s!ch signat!re is ineffect!al or does not discharge the instr!ment#

E6ception: 1hen the party relying on the forgery is precl!ded from setting !p the forgery or want of a!thority 7i#e# negligence of the party in oking forgery8

In this 9!risdiction) we recogni-e negligence of the party in oking forgery as an e6ception to the general r!le# %he records show that BPI and .B. were both negligent) res!lting in the encashment of the forged checks#