BPI vs.

CA o BPI’s employees’ supposed negligence

G.R. Number 102383 | 216 SCRA 51 | November 26, 1992 | Gutierrez, J.  Dispatcher failed to get or to require surrender of the promissory
Petition: Review from Decision and Resolution of CA note evidencing the placement
Petitioner: Bank of the Philippine Islands  No showing that the signatures of Eligia on the written authorization
Respondents: Court of Appeals (Seventh Judicial), Hon. Judge RTC Makati (Branch and pretermination request letter were compared to the sample
59), China Banking Corporation, Clearing House Corporation signatures in BPI’s files
Section 23; Forge Indorsements  Impostor then went to China Bank’s office and represented herself as Eligia
Fernando; then opened a current account
DOCTRINE o Initial deposit was P10,000.00
 General rule is that forged signature is wholly inoperative; exception is when the o Application form for current account was reviewed by the Cashier; she then
party relying on the forgery is precluded from setting up the forgery or want of put her initials; BUT she did not interview the fake Eligia
authority. Negligence of the party invoking forgery as an exception is recognized. o Impostor then deposited the two BPI checks
 Banks are expected to exercise the highest degree of diligence in the selection  Her endorsement on the two checks were found to conform with the
and supervision of their employees depositor’s specimen signature; thereafter, China Bank’s guaranty
 Losses of the collecting bank due to negligence of its employees may be mitigated of prior endorsements and/or lack of endorsement was stamped on
(pursuant to Art. 2176, Civil Code) if it is shown that employees of drawee bank the two checks
are also negligent.  China Bank then sent the checks to clearing and BPI cleared them
on the same day
FACTS o Withdrawals began; allowed due to match of signature of impostor and
specimen signatures on file, and sufficiency of funds
 Started with a phone call where the caller, who was purportedly Eligia G. Fernando,
 P1,000,000.00 payable to “cash”, dated October 16, 1981
wanted to preterminate her money market placement on October 9, 1981
 P48,500.00 payable to “cash”, dated October 15, 1981
o Fernando had a money market placement with BPI, as evidenced by a
 P1,000,000.00 payable to “cash”, dated October 19, 1981
promissory note that matures on Nov. 11, 1981, and with maturity value of
 P370,000.00 payable to “cash”, dated October 22, 1981
P2,462,243.19
 P4,100.00 payable to “cash”, dated November 3, 1981
 Promissory note was a roll-over of an earlier 50-day money market
 After withdrawals, remaining funds were at P571.61
placement that had matured on Sept. 24, 1981
 Real Eligia, on Nov. 11, 1981 (maturity date of market money placement) went to
o Purported Fernando called again on Monday to follow up the pretermination
BPI for a roll-over; thereafter she discovered what happened
 Reginaldo Eustaquio (Dealer Trainee) processed the request, and
o Real Eligia denied having preterminated her placement
said that he “made certain” that the caller was the real Fernando by
 Executed an affidavit saying that she was payee of the two checks
verifying details the caller gave with the ones in the ledger/folder of
and that she never received nor endorsed them, and that the
the account
purported signatures at the back (endorsement) were forged
 It was known to Eustaquio and Penelope Bulan (officer who handled
o BPI issued a new promissory note to evidence the roll-over
Fernando’s account) that Fernando worked as a Treasurer of
Philamlife, but no BPI employee ever thought of verifying the  BPI returned the two controversial checks to China Bank (“Payee’s endorsement
pretermination request by calling up Fernando’s Philamlife office forged”); China Bank gave back the checks (“Beyond Clearing Time”)
o Caller insisted on pretermination, even if the amount to be received was  Investigation by Presidential Security Command led to filing of criminal actions for
diminished Estafa through Falsification of Commercial Documents against four BPI
 Method of collection of pretermination funds: two checks, one for employees
P1,800,000.00 and the second for the remaining balance; to be o Arbitration Committee ruled in favor of BPI (China Bank to pay
delivered to Fernando’s Philamlife office P1,206,607.57)
 Request was processed, two check were already drawn  Costs of suit: BPI=25%, China Bank=75%
and were given to dispatcher for delivery o Upon MR, Board of Directors of Philippine Clearing House Corporation
 This was later changed when the caller called again and said that (PCHC) reversed (BPI to pay China Bank)
Rosemarie Fernando, Eligia Fernando’s niece, would “definitely” be  Costs of suit: BPI=25%, China Bank=75%
the one to pick up the checks (with written authorization from Eligia o Upon appeal by BPI, RTC Makati dismissed
Fernando) o Upon appeal by BPI, CA affirmed RTC
 Eustaquio wrote on the purchase order slip: “Rosemarie
Fernando release only with authority to pickup” ISSUES
 Rosemarie later on claimed the checks from dispatcher 1. W/N China Bank may claim reimbursement from BPI, considering that China Bank
 Spoiler: It was an impostor; the impostor impersonated both Eligia and guaranteed the forged endorsement – YES, if China Bank was negligent and BPI
Rosemarie was not; NO, if both are negligent
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2. W/N employees of both banks were negligent, such negligence being the alleging forgery is precluded from setting it up as defense; one of these
proximate cause of the losses – YES exceptions is negligence.
b. BPI’s negligence as found by Arbitration Committee and PHCH Board of
RULING & RATIO Directors
1. If only China Bank was negligent, then BPI could have claimed reimbursement i. Mere telephone call to Eligia’s office in Philamlife for
from BPI vaerification could have unmasked the impostor
a. BPI: Liability was with China Bank since it guaranteed the legitimacy of ii. Bulan, officer who usually handled Eligia’s account negligently
the endorsement due to the negligence of its employees. Section 23, NIL delegated it to Eustaquio, a Dealer Trainee
is wholly inapplicable since China Bank had absolute liability as collecting 1. Eustaquio disclosing sensitive information about the
bank who guaranteed the forged endorsement. money market placement is a violation of General
i. Court: Section 23 of the 1980 Revised PCHC Clearing House Banking Act
Rules and Regulations, which was in effect when BPI gave back iii. During pickup, no verification of signatures on pretermination
the checks to China Bank, is substantially the same with the request letter, letter of authorization, as compared to BPI’s
clearing regulation as quoted in Banco De Oro Savings and specimen signatures of Eligia
Mortgage Bank v. Equitable Banking Corporation, to wit: iv. Failure to ask for surrender of the promissory notes evidencing
1. Sec. 21. xxx xxx xxx the money market placement
Items which have been the subject of material c. China Bank’s negligence as found by Arbitration Committee and PHCH
alteration or items bearing forged endorsement when Board of Directors
such endorsement is necessary for negotiation shall be i. Application process was bypassed due to recommendations by
returned by direct presentation or demand to the the employees (friends-friends, so easier process and even
Presenting Bank and not through the regular clearing absent verification and even misrepresentation that impostor
house facilities within the period prescribed by law for was recommended by a long-standing client of China Bank,
the filing of a legal action by the returning bank/branch, Valentin Co)
institution or entity sending the same. ii. Sudden deposit of more than P2M, as compared to first deposit
ii. Banco De Oro case is applicable since, like in this case, being of P10K should have alerted China Bank employees
questioned is the effect of the collecting bank’s guarantee of “all iii. Successive withdrawals of big amounts should have alerted
prior endorsements and/or lack of endorsements” at the back of them
the checks and the effects of the forged endorsements of the d. To determine liability of each, which negligence was graver?
payees i. Court: Both were negligent in selection and supervision of
1. That the stamp is an express guarantee of the validity their employees
of the checks and that the drawee bank would not have ii. BPI: Following Picart v. Smith’s doctrine of last clear chance,
paid the checks if the guarantee was absent; thus, China Bank had the last clear chance to avoid the loss but it did
defendant is liable for any damage arising from the not due to negligence of its employees
guarantee (collecting bank is estopped from denying 1. Court: Nope, China Bank had no prior notice of the
the guarantee of validity) fraud; therefore, Picart v. Smith does not apply
2. On the forged endorsements, collecting bank or iii. BPI: China Bank was proximate cause, due to its acts and
last indorser suffers the loss because it has the omissions; that BPI’s acts did not actually produce a loss
duty to ascertain the genuineness of all prior 1. Court: Nope, both BPI and China Bank acts and
indorsements considering that the act of omissions were proximate causes of the loss
presenting the check for payment to the drawee is
an assertion that the party making the presentment
has done its duty to ascertain the genuineness of DISPOSITION
the endorsements  60-40 ratio of the P2,413,215.16 loss and P7,250.00 costs; BPI to shoulder 60%,
a. Collecting bank had privity with depositor- China Bank to shoulder 40%
impostor as its client; it should have
verified, authenticated and ascertained
depositor-impostor’s person
2. Both BPI and China Bank employees were negligent; losses are to be mitigated
accordingly
a. Court: Section 23 mandates that, as a general rule, forged signatures are
wholly inoperative. But, Section 23 admits of exceptions, when the party
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