BPI vs. Casa Montessori Internationale, et. al., G.R. No. 149454.

May 28, 2004 signing of anothers name with intent to defraud, is forgery. In the present case,
Full Text
Facts: Plaintiff CASA Montessori International opened a current account with BPI. In
1991, plaintiff discovered that nine (9) of its checks had been encashed by a certain
Sonny D. Santos since 1990 in the total amount of P782,000.00. It turned out that
Sonny D. Santos with account at BPIs Greenbelt Branch was a fictitious name used
by third party defendant Leonardo T. Yabut who worked as external auditor of CASA.
A Third party defendant voluntarily admitted that he forged the signature of Ms.
Lebron and encashed the checks.
On March 4, 1991, plaintiff filed the herein Complaint for Collection with Damages
against defendant bank praying that the latter be ordered to reinstate the amount
of P782,500.00  in the current and savings accounts of the plaintiff with interest at 6%
per annum.
we hold that there was forgery of the drawers signature on the check.
Negligence is attributable to BPI alone. A banking business is impressed with public
interest, of paramount importance thereto is the trust and confidence of the public in
general. Consequently, the highest degree of diligence is expected, and high
standards of integrity and performance are even required, of it. BPI, despite claims of
following its signature verification procedure, still failed to detect the eight instances
of forgery. Its negligence consisted in the omission of that degree of diligence
required of a bank. It cannot now feign ignorance, for very early on we have already
ruled that 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 own funds, and
cannot ordinarily charge the amount so paid to the account of the depositor whose
name was forged.

RTC rendered decision in favor of CASA. CA modified decision holding CASA as

contributory negligent hence ordered Yabut to reimburse BPI half the total amount
claimed and CASA, the other half. It also disallowed attorney’s fees and moral and
exemplary damages.

Issues: WON there was forgery under the Negotiable Instruments Law (NIL)?

Ruling:

The Court first discussed that forgery is a defense.

“Section 23 of the NIL Section 23. Forged signature; effect of. — When a signature is
forged or made without the authority of the person whose signature it purports to be,
it is wholly inoperative, and no right x x x 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. “

Under this provision, a forged signature is a real or absolute defense, and a

person whose signature on a negotiable instrument is forged is deemed to
have never become a party thereto and to have never consented to the contract
that allegedly gave rise to it. The counterfeiting of any writing, consisting in the