BANCO DE ORO SAVING V.

EQUITABLE
157 SCRA 188

FACTS:
BDO drew checks payable to member establishments. Subsequently, the
checks were deposited in Trencio’s account with Equitable. The checks
were sent for clearing and was thereafter cleared. Afterwards, BDO
discovered that the indorsements in the back of the checks were forged. It
then demanded that Equitable credit its account but the latter refused to
do so. This prompted BDO to file a complaint against Equitable and PCHC. The
trial court and RTC held in favor of the Equitable and PCHC.

HELD:
First, PCHC has jurisdiction over the case in question. The articles of
incorporation of PHHC extended its operation to clearing checks and other
clearing items. No doubt transactions on non-negotiable checks are within the
ambit of its jurisdiction. Further, the participation of the two banks in the
clearing operations is submission to the jurisdiction of the PCHC.
Petitioner is likewise estopped from raising the non-negotiability of the
checks in issue. It stamped its guarantee at the back of the checks and
subsequently presented it for clearing and it was in the basis of these
endorsements by the petitioner that the proceeds were credited in its
clearing account. The petitioner cannot now deny its liability as it assumed
the liability of an indorser by stamping its guarantee at the back of the
checks.
Furthermore, the bank cannot escape liability of an indorser of a check and
which may turn out to be a forged indorsement. Whenever a bank treats the
signature at the back of the checks as indorsements and thus logically
guarantees the same as such there can be no doubt that said bank had
considered the checks as negotiable.

A long line of cases also held that in the matter of forgery in

endorsements, it is the collecting bank that generally suffers the loss
because it had the dutyh to ascertain the genuineness of all prior
indorsements considering that the act of presenting the check for payment
to the drawee is an assertion that the party making the presentment has done
its duty to ascertain the genuineness of the indorsements.