Scribd
Upload
45 views1 page

Insular vs. National Bank Digest

Insular vs. National Bank Digest

Uploaded by

Jayson Lloyd P. Maquilan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
45 views1 page

Insular vs. National Bank Digest

Insular vs. National Bank Digest

Uploaded by

Jayson Lloyd P. Maquilan
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 1

INSULAR VS.

NATIONAL BANK
FACTS:

 Foerster acted as a collector for the company. He was instructed to take the checks which came to his hands for the drug
company to the Iloilo branch of the Chartered Bank of India. Australia and China and deposit the amounts to the credit of the
company.
 Instead, Foerster deposited checks, including those of Juan Llorente, Dolores Salcedo, Estanislao Salcedo, and a fourth party,
with the Iloilo branch of the PNB. The checks were in that bank placed in the personal account of Foerster.
 After the endorsements on the checks was written “Received payment prior endorsement guaranteed by the PNB, Iloilo
Branch, Angel Padilla, Manager”.
 As a consequence of the endorsements on the checks the amounts therein stated were subsequently withdrawn by U.E
Foerster and Carmen E. de Foerster (wife).
 Eventually the Manila office of the drug company investigated the transactions of Foerster. Upon the discovery of anomalies,
Foerster committed suicide.
Argument of Insular Drug: It never received the face value of the 132 checks in question covering a total of P18,285.92.
The drug company sued PNB for the amount covered by the checks which was improperly and illegally cashed by Foerster.
ISSUE: WON Foerster had implied authority to indorse all checks which made out in the name of the Insular Drug.
HELD : NO.
Right of agent to indorse a very responsible power and not lightly inferred.
The right of an agent to indorse commercial paper is a very responsible power and will not be lightly inferred. A salesman with
authority to collect money belonging to his principal does not have the implied authority to indorse checks received in payment.
Any person taking checks made payable to a corporation, which can act only by agents does so at his peril, and must abide by the
consequences if the agent who indorses the same is without authority. In the present case, PNB not only permitted Foerster to
indorse the checks and place them in his personal account but also permitted Foerster’s wife and clerk to indorse the checks.

You might also like