G.R. No. L-62943 July 14, 1986
Lessons Applicable: Forgery (Negotiable Instruments Law)
FACTS:
- Metropolitan Waterworks and Sewerage System (MWSS) is a GOCC and successor-in- interest of the defunct NWSA.
- The authorized signature for PNB Account No. 6 were those of MWSS treasurer Jose Sanchez, its auditor Pedro Aguilar, and its acting General Manager Victor L. Recio.
- Specimen signatures were submitted by the MWSS to and on file with the PNB
- By special arrangement with the PNB, the MWSS used personalized checks in drawing from this account.
- printed for MWSS by its printer, F. Mesina Enterprises
- March, April and May 1969: 23 checks were prepared, processed, issued and released by NWSA, all of which were paid and cleared by PNB and debited by PNB against NWSA Account No. 6
- deposited by the fictitious payees Raul Dizon, Arturo Sison and Antonio Mendoza in their respective current accounts with the Philippine Commercial and Industrial Bank (PCIB) and Philippine Bank of Commerce (PBC)
- At the time of their presentation to PNB these checks bear the standard indorsement which reads 'all prior indorsement and/or lack of endorsement guaranteed'
- NWSA filed against PNB before the CFI
- PNB also filed a 3rd party complaint against the negotiating banks PBC and PCIB on the ground that they failed to ascertain the Identity of the payees and their title to the checks which were deposited in the respective new accounts of the payees with them
- February 6, 1976: CFI favored MWSS
- CA: reversed and favored PNB
- applied Section 24 of the Negotiable Instruments Law
ISSUE: W/N MWSS can can claim against PNB
HELD: NO. CA reversed.
- A bank is bound to know the signatures of its customers; and if it pays a forged check it must be considered as making the payment out of its obligation funds, and cannot ordinarily charge the amount so paid to the account of the depositor whose name was forged.
- NBI showed that the MWSS fraud was an "inside job" and that the MWSS' delay in the reconciliation of bank statements and the laxity and loose records control in the printing of its personalized checks facilitated the fraud. These reports did not touch on the inherent qualities of the signatures which are indispensable in the determination of the existence of forgery. There must be conclusive findings that there is a variance in the inherent characteristics of the signatures and that they were written by 2 or more different persons.
- Forgery cannot be presumed. It must be established by clear, positive, and convincing evidence. This was not done in the present case.
SEC. 23. FORGED SIGNATURE; EFFECT OF.- When the signature is forged or made without authority of the person whose signature it purports to be, it is wholly inoperative, and no right to retain the instrument, or to give a discharge therefor, or to enforce payment thereof against any party thereto can be acquired through or under such signature unless the party against whom it is sought to enforce such right is precluded from setting up the forgery or want of authority.
- Gross negligence in the printing of its personalized checks - MWSS failed to
- give its printer, Mesina Enterprises, specific instructions relative to the safekeeping and disposition of excess forms, check vouchers, and safety papers
- retrieve from its printer all spoiled check forms
- provide any control regarding the paper used in the printing of said checks
- furnish the respondent drawee bank with samples of typewriting, cheek writing, and print used by its printer in the printing of its checks and of the inks and pens used in signing the same
- send a representative to the printing office during the printing of said checks
- to reconcile the bank statements with its own records
- MWSS requested the PNB to discontinue the practice of mailing the bank statements, but instead to deliver it to Mr. Emiliano Zaporteza. However, he was unreasonably delayed in taking prompt deliveries of the bank statements and credit and debit memos. As a consequence, Mr. Zaporteza failed to reconcile the bank statements. If Mr. Zaporteza had not been remiss in his duty of taking the bank statements and reconciling them with the petitioner's records, the fraudulent encashments of the first checks should have been discovered, and further frauds prevented. This negligence was, therefore, the proximate cause of the failure to discover the fraud.
- One factor which facilitate this fraud was the delay in the reconciliation of PNB statements with the NAWASA bank accounts. x x x. Had the NAWASA representative come to the PNB early for the statements and had the bank been advised promptly of the reported bogus check, the negotiation of practically all of the remaining checks on May, 1969 could have been prevented.
- The records likewise show that the petitioner failed to provide appropriate security measures over its own records thereby laying confidential records open to unauthorized persons. The petitioner's own Fact Finding Committee, in its report submitted to their General manager underscored this laxity of records control. It observed that the "office of Mr. Ongtengco (Cashier No. VI of the Treasury Department at the NAWASA) is quite open to any person known to him or his staff members and that the check writer is merely on top of his table
- Even if the 23 checks in question are considered forgeries, considering the petitioner's gross negligence, it is barred from setting up the defense of forgery under Section 23 of the Negotiable Instruments Law
- PNB had taken the necessary measures in the detection of forged checks and the prevention of their fraudulent encashment. In fact, long before the encashment of the 23 checks in question, the it had issued constant reminders to all Current Account Bookkeepers informing them of the activities of forgery syndicates.
- Under the circumstances, MWSS was in a better position to detect and prevent the fraudulent encashment of its checks.