Commercial Law

Philippine National Bank vs Romulo Quimpo

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G.R. No. L-53194 – 158 SCRA 582 – Mercantile Law – Negotiable Instruments Law – Liabilities of Parties – Forgery – Liability of the Drawee Bank

In June 1973, Francisco Gozon II went to the Philippine National Bank (Caloocan City) accompanied by his friend Ernesto Santos. Gozon left Santos in his car and while Gozon was at the bank, Santos took a check from Gozon’s checkbook. Santos forged Gozon’s signature and filled out the check with the amount of P5,000.00. Santos was able to encash the check that day with PNB. Gozon learned of this when his statement arrived. Santos eventually admitted to forging Gozon’s signature. Gozon then demanded the PNB to refund him the amount. PNB refused.¬†Judge Romulo Quimpo ruled in favor of Gozon.

ISSUE: Whether or not PNB is liable.

HELD: Yes. 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 change the amount so paid to the account of the depositor whose name was forged. PNB failed to meet its obligation to know the signature of its correspondent (Gozon). Further, it was found by the court that there are glaring differences between Gozon’s authentic specimen signatures and that of the forged check.

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