G.R. No. L-26001 – 25 SCRA 693 – Mercantile Law – Negotiable Instruments Law – Liabilities of Parties – Forgery – Forged Check – Warranties
In November 1961, GSIS advised PNB that a check bearing check number 645915- B has been lost.
On January 15, 1962, Augusto Lim, holding GSIS Check No. 645915- B which was in the amount of P57,415.00, went to PCIB to have the check deposited in his PCIB account. Apparently, the check was indorsed to him by Manuel Go, which was previously indorsed by Mariano Pulido to Go. Pulido was the named payee in the check.
PCIB did not encash the check in favor of Augusto Lim but rather it deposited the amount to Lim’s PCIB account. Lim cannot withdraw the amount yet as it needs clearing. PCIB stamped the check with “All prior indorsements and/or Lack of Endorsement Guaranteed, Philippine Commercial and Industrial Bank”. PCIB then sent the check to PNB for clearing. PNB did not act on the check but it paid PCIB the amount of the check. PCIB considered this as a manifestation that the check was good hence it cleared Lim to withdraw the amount.
On January 31, 1962, GSIS demanded PNB to restore the amount and PNB complied. PNB then demanded PCIB to refund the amount of the check. PCIB refused. The lower court ruled in favor of PCIB. This was affirmed by the Court of Appeals. PNB argued that the indorsements are forged hence it has no liability.
ISSUE: Whether or not PCIB should refund the amount to PNB.
HELD: No. The question whether or not the indorsements have been falsified is immaterial to PNB’s liability as a drawee or to its right to recover from the PCIB for, as against the drawee, the indorsement of an intermediate bank does not guarantee the signature of the drawer, since the forgery of the indorsement is not the cause of the loss.
With respect to the warranty on the back of the check, it should be noted that the PCIB thereby guaranteed “all prior indorsements,” not the authenticity of the signatures of the officers of the GSIS who signed on its behalf, because the GSIS is not an indorser of the check, but its drawer. Further, PNB has been negligent. It has been notified months before about the lost check.
