Philippine National Bank v. Quimpo
REITERATIONFacts
The Antecedents: Francisco S. Gozon II, a depositor of Philippine National Bank (PNB), went to the bank with his friend Ernesto Santos. Gozon left his checkbook in his car, and Santos, while Gozon was inside the bank, took a check, filled it up for P5,000.00, forged Gozon's signature, and encashed it. The bank debited Gozon's account. Upon receiving his statement, Gozon discovered the forged check and demanded the return of the P5,000.00, but the bank refused. Procedural History: Upon complaint, Ernesto Santos was apprehended and admitted to forging Gozon's signature and encashing the check. Gozon filed a complaint against PNB for the recovery of P5,000.00 plus interest, damages, attorney's fees, and costs. The Court of First Instance of Rizal rendered a decision in favor of Gozon, ordering PNB to return the P5,000.00 with legal interest and to pay attorney's fees and costs. The Petition: PNB filed a petition for review on certiorari, raising the sole issue of whether Gozon's act of leaving his checkbook in the car, which contained the forged check, was the proximate cause of the loss, thereby precluding him from setting up the defense of forgery under Section 23 of the Negotiable Instruments Law.
Issue(s)
Whether the act of Francisco S. Gozon II in leaving his checkbook containing the check in question in his car was the proximate cause of the loss, thereby precluding him from setting up the defense of forgery or want of authority under Section 23 of the Negotiable Instruments Law, and whether the bank was negligent in encashing the forged check.
Ruling
The petition is devoid of merit. The Supreme Court affirmed the decision of the Court of First Instance of Rizal, dismissing the petition for review on certiorari for lack of merit.
Ratio Decidendi
On the issue of proximate cause and the bank's negligence: The Supreme Court reiterated the established rule that a bank is bound to know the signatures of its customers. If a bank pays a forged check, it is presumed to have paid from its own funds and cannot charge the amount to the depositor whose signature was forged. This rule is based on the presumed negligence of the drawee bank in failing to verify the signature. The Court found that PNB was negligent in encashing the forged check. A comparison of the forged signature with Gozon's exemplar signatures revealed marked differences, particularly in the formation of the first letter 'F' and the second 'c' in 'Francisco,' and the separation between 's' and 'c' in 'Francisco.' These differences should have alerted a careful signature verifier. The bank's defense of exercising diligence was unavailing as the evidence showed a failure to exercise reasonable business prudence. The Court also held that Gozon's act of leaving his checkbook in the car, while his friend Ernesto Santos was present, did not constitute negligence sufficient to excuse the bank's own negligence. Gozon had no reason to suspect that Santos, a long-time classmate and friend, would breach his trust by stealing and forging a check. Therefore, the proximate cause of the loss was the bank's negligence in failing to detect the forgery.
Main Doctrine
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, unless the depositor's negligence is the proximate cause of the loss.