Negotiable Instruments Case Digest: PNB v. CA (1968)

G.R. No. L-26001           October 29, 1968
Lessons Applicable: 

• Forgery (Negotiable Instruments Law)


• Liabilities of the parties (Negotiable Instruments Law)

FACTS:

• January 15, 1962: Augusto Lim deposited in his current account with the PCIB branch at Padre Faura, Manila a GSIS Check of P57,415.00 drawn against the PNB


• PCIB stamped the following on the back of the check: "All prior indorsements and/or Lack of Endorsement Guaranteed, Philippine Commercial and Industrial Bank," Padre Faura Branch, Manila


• Same date: following an established banking practice in the Philippines, the check was forwarded for clearing through the Central Bank to the PNB


• did not return said check the next day, or at any other time, but retained it and paid its amount to the PCIB, as well as debited it against the account of the GSIS in the PNB


• PNB received a formal notice from the GSIS that the check had been lost, with the request that payment thereof be stopped


• January 31, 1962: Upon demand from the GSIS, the P57,415.00 was re-credited to them bec. the signatures of its officers on the check were forged


• signatures of the General Manager and the Auditor of the GSIS on the check, as drawer, are forged


• payee Mariano D. Pulido indorsed it to Manuel Go and then indorsed by Manuel Go to Augusto Lim


• February 2, 1962: PNB demanded from the PCIB the refund


• PNB filed against the PCIB


• CA affirmed CFI: dismissed

ISSUE: W/N PCIB as indorser is liable despite the fact that the check is forged when PNB is also negligent

HELD: NO. Affirmed

• PCIB stamped on the back of the check: "All prior indorsements and/or Lack of Endorsement Guaranteed, Philippine Commercial and Industrial Bank," Padre Faura Branch, Manila


• indorsements falsified is immaterial to the PNB's liability as a drawee, or to its right to recover from the PCIB, for, as against the drawee, the indorsement of an intermediate bank does not guarantee the signature of the drawer, since the forgery of the indorsement is not the cause of the loss.


• Guaranteed not the authenticity of the signatures of the officers of the GSIS who signed because the GSIS is not an indorser of the check, but its drawer


• warranty is irrelevant to the PNB's alleged right to recover from the PCIB


•  in general, "acceptance" is not required for checks since they are payable on demand


• acceptance


• promise to perform an act


• the acceptance of a bill is the signification by the drawee of his assent to the order of the drawer


• payment


• actual performance


• compliance with obligation


• PNB had been guilty of a greater degree of negligence, because it had a previous and formal notice from the GSIS that the check had been lost, with the request that payment thereof be stopped


• PNB's negligence was the main or proximate cause for the corresponding loss


• PNB did not return the check


• when 1 of 2 innocent persons must suffer by the wrongful act of a third person, the loss must be borne by the one whose negligence was the proximate cause of the loss or who put it into the power of the third person to perpetrate the wrong


• where the collecting (PCIB) and the drawee (PNB) banks are equally at fault, the court will leave the parties where it finds them


• applies in the case of a drawee who pays a bill without having previously accepted it


• Section 62 of Act No. 2031 provides

The acceptor by accepting the instrument engages that he will pay it according to the tenor of hisacceptance; and admits:
(a) The existence of the drawer, the genuineness of his signature, and his capacity and authority to
draw the instrument; and
(b) The existence of the payee and his then capacity to indorse.