G.R. No. L-50373 – 182 SCRA 251 – Mercantile Law – Negotiable Instruments Law – Liabilities of Parties – Forgery – Forged Signatures of Indorser
From January 1960 to June 1961, Augusto Perez, collector of the Manila Lighter Transportation (MLT), collected 49 checks from MLT’s clients. The checks amounted to P91,153.11. The checks were subsequently indorsed and the signature of Luis Gaskell, MLT’s general manager, appeared on the checks as indorser. The checks were indorsed to three persons who deposited the checks with their respective accounts with China Bank.
Gaskell later disowned the signatures as they were actually forged. MLT then demanded China Bank to refund the aggregate amount of the checks. The trial court ruled that both MLT and China Bank are negligent hence they should share the loss at 50-50 basis. The Court of Appeals absolved China Bank of its liabilities.
ISSUE: Whether or not China Bank should refund the checks.
HELD: No. Since MLT was not a client of China Bank, i.e., did not maintain an account in said Bank, the latter had no way of ascertaining the authenticity of its indorsements on the checks which were deposited in the accounts of the third-party defendants in said Bank. China Bank was not negligent because, in accordance with banking practice, it caused the checks to pass through the clearing house before it allowed their proceeds to be withdrawn by the three depositors.