2 BPI Vs Casa Montessori

1/20/2020 BPI vs. CASA MONTESSORI G.R. No.
G.R. No. 149454 May 28, 2004 Negotiable Instruments Law, Forgery, Public Interest in Banking Business – PINA…
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BPI vs. CASA MONTESSORI

G.R. No. 149454 May 28, 2004 GET
Negotiable Instruments Law, RESOURCE

BUNDLES &
Forgery, Public Interest in

FRESH
CONTENT
NOTIFICATION
Banking Business Sign up for Pinay

JUNE 10, 2019 Jurist Newsletter
Name
FACTS: Email
CASA Montessori International opened a

Current Account with BPI with CASA’s By continuing, you
accept the privacy
President Ms. Lebron as one of its
policy
authorized signatories.
I'M IN!
https://www.pinayjurist.com/bpi-vs-casa-montessori-g-r-no-149454-may-28-2004-negotiable-instruments-law-forgery-public-interest-in-banking-business/ 1/7
1/20/2020 BPI vs. CASA MONTESSORI G.R. No. 149454 May 28, 2004 Negotiable Instruments Law, Forgery, Public Interest in Banking Business – PINA…
In 1991, CASA discovered that 9 of its

checks had been encashed by a certain
Sonny D. Santos since 1990 in the total
amount of ₱782,000.00 CATEGORIES
Banking
It turned out that ‘Sonny D. Santos’ with
account at BPI’s Greenbelt Branch [was] Bar Q & A
a ctitious name used by Leonardo T.
Yabut who worked as external auditor of Civil Law
CASA. Yabut voluntarily admitted that he

Constitutional Law
forged the signature of Ms. Lebron and
encashed the checks. Corporation Law
Criminal Law
A Complaint for Collection with Damages
against BPI to reinstate the amount of
Election Law
₱782,500.00 in the current and savings
accounts of CASA with interest at 6% per Insurance
annum.
Intellectual Property
Law
The RTC rendered a decision in favor of
the CASA. International Law
Labor Law
Modifying the Decision of the RTC, the CA
apportioned the loss between BPI and
Law School
CASA. The appellate court took into
account CASA’s contributory negligence Legal Ethics
that resulted in the undetected forgery.

Mercantile Law
Hence, these Petitions. Political Law
ISSUE: Remedial Law
Special Proceedings
Whether or not CASA is precluded from
setting up forgery as a defense. Taxation
Whether or not BPI was negligent and

therefore liable
POLL
RULING:
Forged Signature Wholly Inoperative

What subjects are y
enrolled in?
Section 23 of the NIL provides:
I am a Bar Reviewee
“Section 23. Forged signature; e ect of.
— When a signature is forged or made
Political/ Constitutional
without the authority of the person
Law & Election Laws)
whose signature it purports to be, it is
wholly inoperative, and no right x x x to
Criminal Law (Special P
enforce payment thereof against any
party thereto, can be acquired through or
Civil Law (Private Int'l L
under such signature, unless the party
against whom it is sought to enforce such
Mercantile Law
right is precluded from setting up the
forgery or want of authority.”
Remedial Law
Under this provision, a forged signature

Taxation
is a real or absolute defense, and a person
whose signature on a negotiable
Labor Law
instrument is forged is deemed to have
never become a party thereto and to have
Legal Ethics
never consented to the contract that
allegedly gave rise to it. Other:
The counterfeiting of any writing, Vote

consisting in the signing of another’s
name with intent to defraud, is forgery. View Results Cro
In the present case, we hold that there

was forgery of the drawer’s signature on
the check.
META
Forgery “cannot be presumed.” It must Register

be established by clear, positive and
convincing evidence. Log in
Entries feed
Having established the forgery of the
drawer’s signature, BPI — the drawee — Comments feed
erred in making payments by virtue
thereof. The forged signatures are wholly WordPress.org

inoperative, and CASA — the drawer
whose authorized signatures do not
appear on the negotiable instruments —
cannot be held liable thereon.
In this jurisdiction, the negligence of the

party invoking forgery is recognized as an
exception to the general rule that a
forged signature is wholly inoperative.
Contrary to BPI’s claim, however, we do
not nd CASA negligent in handling its
nancial a airs. CASA, we stress, is not
precluded from setting up forgery as a
real defense.
Clear Negligence in Allowing Payment

Under a Forged Signature
We have repeatedly emphasized that,

since the banking business is impressed
with public interest, of paramount
importance thereto is the trust and
con dence 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. By the nature of its
functions, a bank is “under obligation to
treat the accounts of its depositors with
meticulous care, always having in mind
the duciary nature of their
relationship.”
BPI’s 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.”
Loss Borne by Proximate Source of

Negligence
For allowing payment on the checks to a

wrongful and ctitious payee, BPI — the
drawee bank — becomes liable to its
depositor-drawer. It “may not debit the
drawer’s account and is not entitled to
indemni cation from the drawer.” In
both law and equity, when one of two
innocent persons “must su er by the
wrongful act of a third person, the loss
must be borne by the one whose
negligence was the proximate cause of
the loss or who put it into the power of
the third person to perpetrate the
wrong.”
Pursuant to its prime duty to ascertain

well the genuineness of the signatures of
its client-depositors on checks being
encashed, BPI is “expected to use
reasonable business prudence.”
Unfortunately, it failed in that regard.
 JUNE 10, 2019  PINAYJURIST

 BANKING, MERCANTILE LAW
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1/20/2020 BPI vs. CASA MONTESSORI G.R. No.

— BANKING, MERCANTILE LAW —  Search …

BPI vs. CASA MONTESSORI

Negotiable Instruments Law, RESOURCE

Forgery, Public Interest in

Banking Business Sign up for Pinay

CASA Montessori International opened a

In 1991, CASA discovered that 9 of its

CASA. Yabut voluntarily admitted that he

that resulted in the undetected forgery.

Hence, these Petitions. Political Law

ISSUE: Remedial Law

Whether or not BPI was negligent and

Forged Signature Wholly Inoperative

Under this provision, a forged signature

The counterfeiting of any writing, Vote

In the present case, we hold that there

Forgery “cannot be presumed.” It must Register

thereof. The forged signatures are wholly WordPress.org

In this jurisdiction, the negligence of the

Clear Negligence in Allowing Payment

We have repeatedly emphasized that,

BPI’s negligence consisted in the

know the signatures of its customers; and

Loss Borne by Proximate Source of

For allowing payment on the checks to a

Pursuant to its prime duty to ascertain

 JUNE 10, 2019  PINAYJURIST

PREVIOUS POST NEXT POST

FEBTC FAR EAST REPUBLIC v. DE

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