NEGO when a signature is forged or made without the authority of the person whose signature it

purports to be, the check is wholly inoperative.

Title : G.R. No. 139130
Ilusorio vs CA Date: Nov. 27, 2002
Ponente: Quisumbung, J.
Ramon K Ilusorio– Petitioners CA and The Manila Banking Corporation–
Respondents
Nature of the case:
A petition for review seeks to reverse the decision [1] promulgated on January 28, 1999 by the Court of Appeals in CA-
G.R. CV No. 47942, affirming the decision of the then Court of First Instance of Rizal, Branch XV (now the Regional
Trial Court of Makati, Branch 138) dismissing Civil Case No. 43907, for damages.
FACTS
- Petitioner was the Managing Director of Multinational Investment Bancorporation , the Chairman and/or
President of several other corporations and also a depositor in good standing of respondent bank.
-Petitioner then entrusted his credit cards, checkbook, blank checks, passbooks, etc to his secretary,
Katherine Eugenio who was also in charge of verifying and reconciling the statements of his checking
account.
- Between the dates September 5, 1980 and January 23, 1981, Eugenio encashed and deposited to her personal
account about 17 checks drawn against petitioner’s account at the respondent bank with a total amount of
P119,634.34.
-Petitioner did not bother to check his statement of account until a business partne told him that he saw Eugenio
using his(petitioner) credit card.
-Petitioner fired Eugenio and filed a complaint against her of Estafa thru Falsification of commercial documents due
to the forged signatures she made in the checks.
Respondent bank ,through Mr. Dante Razon(employee of manila bank),also filed a complaint against Eugenio of
Estafa thru falsification of commercial documents against Eugenio.
-Petitioner then requested respondent bank to credit back and restore to its account the value of the checks qhich
was encashed by Eugenio.
PETITIONER’s Contention:
-Manila Bank is liable for damages for its negligence in failing to detect the discrepant checks. He adds that as a
general rule a bank which has obtained possession of a check upon an unauthorized or forged endorsement of the
payees signature and which collects the amount of the check from the drawee is liable for the proceeds thereof to
the payee.
RESPONDENT’s Contention:
-points out that Section 23[13] of the Negotiable Instruments Law is inapplicable, considering that the fact of forgery
was never proven.
ISSUE/S
W/N Manila Bank is liable for damages for failing to detect a forged check-NO
RATIO
- To be entitled to damages, Ilusorio has the burden of proving that the bank was negligent in failing to
detect the discrepancy in the signatures on the checks. Ilusorio had to establish the fact of forgery which he
failed to do by failing to submit his specimen signatures for NBI to conclusively establish forgery.
Furthermore, the Bank was not negligent in verifying the checks as they verified the drawer’s signatures
against their specimen signatures and in doubt, referred to more experienced verifier for further verification.
-On the contrary, it was Ilusorio who was found to be negligent. He accorded his secretary with an unusual
degree of trust and unrestricted access to his finances. Furthermore, despite the fact that the bank was
regularly sending statements of account, he failed to check them until he found out that his secretary was
using his credit cards.
RULING
WHEREFORE, the instant petition is DENIED for lack of merit. The assailed decision of the Court of Appeals dated
January 28, 1999 in CA-G.R. CV No. 47942, is AFFIRMED
Notes
Sec. 23 of the Negotiable Instruments law provides that a forged check is inoperative, meaning there was no
right to enforce payment against any party. But it also provides an exception: “unless the party against
whom it is sought enforce such right is precluded from setting up the forgery or want of authority”.
ONG
http://sc.judiciary.gov.ph/jurisprudence/2002/nov2002/139130.htm