Samsung Construction Company vs.
Far East Bank and Trust Held: Far East Bank is liable for reimbursement. Sec. 23 of the Negotiable
Samsung Construction maintains an account with the Far East Bank, having
its project manager Jong as its sole signatory, while the checks remained in
custody of the company accountant Kyu. On March 1, 1992, Roberto
Gonzaga presented a check for payment worth P999,500.00 payable to CASH
drawn against the company’s account.
After checking the balance of the account, bank teller Justiani compared the
signature appearing in the check and the signature specimen of Jong. Being
satisfied, she asked Gonzaga to present IDs.
(as bank policy: if check exceeds 100K, 2 bank officers must approve) Teller
forwarded the check to the Senior Assistant Cashier Velez. Velez turned the
check to Shirley Syfu, another bank officer for approval.
Syfu then noticed that Jose Sempio III ("Sempio"), the assistant accountant of
Samsung Construction, was also in the bank. Sempio was well-known to
Syfu and the other bank officers, he being the assistant accountant of
Samsung Construction. Syfu showed the check to Sempio, who vouched for
the genuineness of Jong’s signature. Satisfied with the genuineness of the
signature of Jong, Syfu authorized the bank’s encashment of the check to
Gonzaga.
The following day Kyu examined the balance of the bank account and
discovered that a check was encashed and that the last black check was
missing. Jong went to the bank and upon learning of the transaction he was
supposedly told by the bank manager that the amount would be reimbursed.
A case was the filed for qualified theft against Sempio.
Samsung Construction demanded for the bank to credit back the amount.
The bank responded that it is still conduction for investigation and so it filed
a complaint for violation of Sec. 23 of the Negotiable Instruments Law.
Issue: Whether or not Far East Bank is liable to reimburse Samsung for
cashing out the forged check, which was drawn from the account of
Samsung
Instrument Law states that a forged signature makes the instrument “wholly
inoperative”.
General Rule: If payment is made the drawee (bank) cannot charge it to the
drawer’s account.
The fact that the forgery is clever is immaterial. The forged signature may
so closely resemble the genuine as to defy detection by the depositor himself.
And yet, if the bank pays the check, it is paying out with its own money and
not of the depositor’s.
Exception: when negligence can be traced on the part of the drawer whose
signature was forged.
The accusation of negligence on the part of Samsung was not clearly proven.
The bank complied with its own internal rules prior to paying out on the
questionable check. Yet, there are several troubling circumstances that lead
the court to believe that the bank itself was remiss in its duty.
1. The fact that the check was made out in the amount of nearly one
million pesos and is payable to cash. it is not ordinary business
practice for a check for such large amount to be made payable to
cash or to bearer.
2. Gonzaga, a stranger to the bank, did not carry with him any written
proof that he was authorized by Samsung Construction to encash the
check.
3. Velez tried to call Jong, but failed. She added that calling the issuer
or drawer of the check to verify the same was not part of the
standard procedure of the bank, but an "extra effort. STILL PAID
OUT THE CHECK
4. Bank alleges that Sempio was well-known to the bank officers. Velez
admitted that she did not know Sempio personally, and that the
Bank did not present other witnesses
The irregular circumstances attending the presentment of the forged check
should have put the bank on the highest degree of alert.