Lessons Applicable: Forgery (Negotiable Instruments Law)
FACTS:
- June 23, 1977: Adalia Francisco (Francisco) president of A. Francisco Realty & Development Corporation (AFRDC) and Jaime C. Ong (Ong) President and General Manager of Herby Commercial & Construction Corporation (HCCC), entered into a contract where HCCC agreed to undertake the construction of 35 housing units and the development of 35 hectares of land.
- HCCC was to be paid on turn-key basis (basis of the completed houses and developed lands delivered to and accepted by AFRDC and the GSIS)
- To facilitate payment, AFRDC executed a Deed of Assignment in favor of HCCC to enable the it to collect payments directly from the GSIS.
- Furthermore, the GSIS and AFRDC put up an Executive Committee Account with the Insular Bank of Asia & America (IBAA) of P4M from which checks would be issued and co-signed by petitioner Francisco and the GSIS Vice-President Armando Diaz (Diaz).
- February 10, 1978: HCCC filed a complaint w/ the RTC against Francisco, AFRDC and the GSIS for the collection of the unpaid balance under the Land Development and Construction Contract in the amount of P515,493.89 for completed and delivered housing units and land development.
- Sometime in 1979: Ong discovered that Diaz and Francisco had executed and signed 7 checks drawn against the IBAA and payable to HCCC but were never delivered to HCCC
- GSIS gave Francisco custody of the checks since she promised that she would deliver the same to HCCC.
- Francisco forged the signature of Ong, without his knowledge or consent, at the dorsal portion of the said checks to make it appear that HCCC had indorsed the checks; Francisco then indorsed the checks for a second time by signing her name at the back of the checks and deposited the checks in her IBAA savings account
- June 7, 1979: Ong filed complaints charging Francisco with estafa thru falsification of commercial documents - dismmised by the Assistant City Fiscal
- According to Francisco, she agreed to grant HCCC the loans in the total amount of P585K and covered by 18 promissory notes in order to obviate the risk of the non-completion of the project.
- As a means of repayment, Ong allegedly issued a Certification authorizing Francisco to collect HCCCs receivables from the GSIS
- RTC: favored Ong and against IBAA and Francisco
- November 21, 1989: IBAA and HCCC entered into a Compromise Agreement which was approved by the trial court, wherein HCCC acknowledged receipt of the amount of P370,475.00 in full satisfaction of its claims against IBAA, without prejudice to the right of IBAA to pursue its claims against Francisco.
- CA affirmed RTC
- Francisco claims that she was, in any event, authorized to sign Ongs name on the checks by virtue of the Certification executed by Ong in her favor giving her the authority to collect all the receivables of HCCC from the GSIS, including the questioned checks.
ISSUE: W/N Francisco can sign Ongs name on the checks and it was not forgery
HELD: NO.
- Francisco had custody of the checks, as proven by the check vouchers bearing her uncontested signature
- Francisco forged the signature of Ong on the checks to make it appear as if Ong had indorsed said checks
- The Negotiable Instruments Law provides that where any person is under obligation to indorse in a representative capacity, he may indorse in such terms as to negative personal liability
- An agent, when so signing, should indicate that he is merely signing in behalf of the principal and must disclose the name of his principal; otherwise he shall be held personally liable
- Instead of signing Ongs name, Francisco should have signed her own name and expressly indicated that she was signing as an agent of HCCC