Aure, Christina C.

2019400226

BANK OF THE PHILIPPINE ISLANDS vs. THE HON. COURT OF APPEALS (SEVENTH

JUDICIAL), HON. JUDGE REGIONAL TRIAL COURT OF MAKATI, BRANCH 59, CHINA
BANKING CORP., and PHILIPPINE CLEARING HOUSE CORPORATION, 
G.R. No. 102383,
November 26, 1992

Facts:
In the afternoon of October 9, 1981, a phone call was received by BPI's Money Market Department made
by a woman who identified herself as Eligia G. Fernando who had a money market placement as
evidenced by a promissory note, with a maturity date of November 11, 1981 and a maturity value of
P2,462,243.19, expressing her intention on preterminating the same. Eustaquio as the Dealer Trainee in
BPI's Money Market Department who received the phone suggested to call again the following week.
The caller then followed up with Eustaquio after a week, merely by phone again, on the pretermination of
the placement. Although not familiar with the voice of the real Eligia G. Fernando, Eustaquio 'made
certain' that the caller was the real Eligia G. Fernando by 'verifying' that the details the caller gave about
the placement tallied with the details in 'the ledger/folder' of the account. Eustaquio, thus, proceeded and
the two cashier's checks, together with the papers consisting of the purchase order slip|were authorized by
the officers of the BPI, thereby sending the checks to its dispatcher to be claimed by Fernando in her
office. However, the caller changed the delivery instructions whereby her niece instead would pick them
up. The dispatcher delivered the checks to Fernando’s impersonated niece without requiring the latter to
surrender the promissory note.
Few days after, a woman who represented herself to be Eligia G. Fernando applied at CBC's Head Office
for the opening of a current account. The application was immediately granted which allowed the same on
the withdrawals of the subject checks leaving a balance of only P571.61.
On the maturity date of the money market placement with BPI, the real Eligia G. Fernando went to BPI
for the roll-over of her placement and disclaimed such pretermination. This prompted the filing of
criminal actions for 'Estafa Thru Falsification of Commercial Documents' against four employees of BPI,
and the person who impersonated Fernando. The Arbitration Committee ruled in favor of petitioner BPI
which was later reversed Board of Directors of the PCHC. The RTC of Makati affirmed the latter’s
ruling. BPI filed a petition for review in the Supreme Court contending, among others, that the proximate
cause for the loss of the proceeds of the two checks in question was the negligence of the employees of
CBC and not BPI through the latter’s reliance on the doctrine of last clear chance; and consequently even
under Section 23 of the Negotiable Instruments Law, BPI was not precluded from raising the defense of
forgery.||| 
Issue/s:
(1) Whether the drawee bank, BPI, by virtue of the present clearing guarantee requirement imposed on
the representing or collecting bank under the PCHC rules and regulations is absolved of any liability.
(2) In the event that the payee's signature is forged, may the drawer/drawee bank, BPI, claim
reimbursement from the collecting bank [CBC]) which earlier paid the proceeds of the checks after the
same checks were cleared by petitioner BPI through the PCHC.
Ruling:
(1) No, BPI is not absolved of liability due to the premise that the present clearing guarantee requirement
imposed on the representing or collecting bank under the PCHC rules and regulations is independent of
the Negotiable Instruments Law is not in order. Under the well-settled rule, an administrative agency
cannot amend an act of Congress.
Anent the issue of the petitioner on the applicability of Sec. 23 of the Negotiable Instruments Law, the
provision states that, |
"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 to retain the instrument,
or to give discharge therefore, or to enforce payment thereof, against any party thereto,
can be acquired through or under such forged signature, unless the party against whom
it is sought to enforce such right is precluded from setting up the forgery or want of
authority."
The exception to this rule is when the party relying on the forgery is "precluded from setting up the
forgery or want of authority." In this jurisdiction we recognize negligence of the party invoking forgery as
an exception to the general rule. However, the underlying circumstances of the case show that the general
rule on forgery is not applicable. The issue as to who between the parties should bear the loss in the
payment of the forged checks necessitates the determination of the rights and liabilities of the parties
involved in the controversy in relation to the forged checks. In the case at bar, the records show that
petitioner BPI as drawee bank and respondent CBC as representing or collecting bank were both
negligent resulting in the encashment of the forged checks.
Further, petitioner BPI's reliance on the doctrine of last clear chance to clear it from liability is not well-
taken. CBC had no prior notice of the fraud perpetrated by BPI's employees on the pretermination of
Eligia G. Fernando's money market placement. Moreover, Fernando is not a depositor of CBC. Hence, a
comparison of the signature of Eligia G. Fernando with that of the impostor Eligia G. Fernando, which
respondent CBC did, could not have resulted in the discovery of the fraud. However,.it can still be
conceded that both banks were negligent in the selection and supervision of their employees resulting in
the encashment of the forged checks by an impostor. BPI could have prevented the fraud by just a mere
phone call and CBC likewise could have unmasked the impostor by requiring sufficient identification
documents not just by its acceptance of a mere tax account number. Therefore, BPI cannot be exempted
from liability and is made answerable on damages arising from its negligence.
(2) No, BPI as the drawee bank cannot claim reimbursement from the CBC. The Court applies Art. 2179
which states,
“When the plaintiff’s own negligence was the immediate and proximate cause of his injury, he
cannot recover damages. But if his negligence was only contributory, the immediate and
proximate cause of the injury being the defendant’s lack of due care, the plaintiff may recover
damages, but the courts shall mitigate the damages to be awarded.:
Petitioner BPI's negligence was the proximate cause of the loss, respondent CBC's negligence
contributed equally to the success of the impostor in encashing the proceeds of the forged checks. Here, it
was CBC in fact who has a better right to claim reimbursement. Under these circumstances, the Court
apply Article 2179 of the Civil Code to the effect that while respondent CBC may recover its losses, such
losses are subject to mitigation by the courts. Thus, BPI’s claim of reimbursement is untenable.