G.R. No.

102383 November 26, 1992

BANK OF THE PHILIPPINE ISLANS v!. THE HON. "O#RT OF APPEALS $SE%ENTH &#I"IAL', HON.
&#GE REGIONAL TRIAL "O#RT OF (AKATI, BRAN"H )9, "HINA BANKING "ORP., *+, PHILIPPINE
"LEARING HO#SE "ORPORATION
A certain Susan Lopez San Juan, with the connivance of some BPI employees, succeeded in impersonating Eligia
! "ernando! #he real "ernando is a #reasurer of Philippine American Life Insurance $ompany %Philamlife&
handling Philamlife's corporate money mar(et account and has a money mar(et placement as evidenced )y a
promissory note with a maturity date of *ovem)er ++, +,-+ and a maturity value of P.,/0.,./1!+,!
#he impostor called up BPI and arranged for the pretermination of the placement! Informed that the placement
would yield less than the maturity value )ecause of its pretermination, the caller insisted on the pretermination 2ust
the same and as(ed that two chec(s )e issued for the proceeds, one for P+,-33,333!33 and the second for the
)alance, and that the chec(s )e delivered to her office at Philamlife! But the caller later advised that a certain
4osemarie "ernando, her niece would pic( up the chec(s! #he dispatcher failed to get or to re5uire the surrender of
the promissory note evidencing the placement when the chec(s were claimed! #here is also no showing that Eligia
! "ernando's purported signature on the letter re5uesting the pretermination and the latter authorizing 4osemarie
"ernando to pic( up the two chec(s, )oth of which letters were presuma)ly handed to the dispatcher )y 4osemarie
"ernando, was compared or verified with Eligia ! "ernando's signature in BPI's file! #he niece 64osemarie
"ernando7 was also an impostor!
#he impostor applied at $B$'s 8ead 9ffice for the opening of a current account! #he following day, the woman
holding herself out as Eligia ! "ernando deposited the two chec(s in controversy with $urrent Account *o!
+.01+3:1! 8er endorsement on the two chec(s was found to conform with the depositor's specimen signature!
$B$'s guaranty of prior endorsements and;or lac( of endorsement was then stamped on the two chec(s, which
$B$ forthwith sent to clearing and which BPI cleared on the same day!
#wo days after, withdrawals )egan! 8owever, the )alance shown in the computerized teller terminal when a
withdrawal is serviced at the counter does not show the account's opening date, the amounts and dates of deposits
and withdrawals! #he last withdrawal on *ovem)er /, +,-+ left $urrent Account *o! .01+3:1 with a )alance of only
P<=+!0+!
>hen the he maturity date of the money mar(et placement with BPI came on *ovem)er ++, +,-+, the real Eligia !
"ernando went to BPI for the roll:over of her placement! She disclaimed having preterminated her placement on
9cto)er +., +,-+! She e?ecuted an affidavit stating that while she was the payee of the two chec(s in controversy,
she never received nor endorsed them and that her purported signature on the )ac( of the chec(s was not hers )ut
forged! BPI returned the two chec(s in controversy to $B$ for the reason @Payee's endorsement forged@! A ping:
pong started when $B$, in turn, returned the chec(s for reason @Beyond $learing #ime@!
#he Ar)itration $ommittee ruled in favor of petitioner BPI, ordering $hina Ban(ing $orporation to pay the former
the amount of P+,.30,03=!<- with interest thereon at +.A per annum from the date when P$8$, pursuant to its
procedure for compulsory ar)itration of the ping:pong chec(s under Stoc(holders' 4esolution *o! 0:-1 was
implemented, up to the date of actual payment!
#he Board of Birectors of the P$8$ reversed the Ar)itration $ommittee's decision in its 9rder and BPI is
sentenced to pay $B$ the sum of P+,.30,03=!<-! In view of the facts, no interest nor attorney's fees are awarded!
BPI shall also )ear =<A or P<,/1=!<3 and $B$, .<A or P+,-+.!<3 of the cost of the Ar)itration proceedings
amounting to P=,.<3!33!
#he trial court dismissed the petition )ut modified the order! #he petitioner BPI filed with S$ a petition for review
on certiorari under 4ule /< of the 4ules of $ourt, )ut it was referred to the $ourt of Appeals for proper determination
and disposition! #he appellate court affirmed the trial court's decision!
Issues: In the event that the payee's signature is forged, may the drawer;drawee )an( %in this case
BPI& claim reim)ursement from the collecting )an( C$B$D which earlier paid the proceeds of the chec(s after the
same chec(s were cleared )y petitioner BPI through the P$8$E
>ho )etween the parties should )ear the loss in the payment of the forged chec(sE
Held: Both )an(s were negligent in the selection and supervision of their employees resulting in the
encashment of the forged chec(s )y an impostor! It was the gross negligence of the employees of )oth )an(s which
resulted in the fraud and the su)se5uent loss!
Petitioner BPI theorizes that the *egotia)le Instruments Law, specifically Section .1 thereof is not applica)le in the
light of the a)solute lia)ility of the representing or collecting )an( as regards forged endorsements in consonance
with the clearing guarantee re5uirement imposed upon the presenting or collecting )an(s @as it is worded todayF!
But this theory of petitioner BPI is not in order! #he present case involves chec(s as defined )y and under the
coverage of the *egotia)le Instruments Law! T-ere *re ./o $2' 0*r.! o1 Se2.3o+ 23 o1 .-e Ne4o.3*b5e
I+!.r6me+.! L*/7 T-e 13r!. 0*r. !.*.e! .-e 4e+er*5 r65e /-35e .-e !e2o+, 0*r. !.*.e! .-e e82e0.3o+ .o .-e
4e+er*5 r65e. T-e 4e+er*5 r65e 3! .o .-e e11e2. .-*. * 1or4e, !34+*.6re 3! 9/-o55: 3+o0er*.3ve9, *+, 0*:me+.
m*,e 9.-ro64- or 6+,er !62- !34+*.6re9 3! 3+e11e2.6*5 or ,oe! +o. ,3!2-*r4e .-e 3+!.r6me+.. T-e e82e0.3o+
.o .-3! r65e 3! /-e+ .-e 0*r.: re5:3+4 3+ .-e 1or4er: 3! 90re256,e, 1rom !e..3+4 60 .-e 1or4er: or /*+. o1
*6.-or3.:. T-e S" re2o4+3;e, negligence of the party 3+vo<3+4 1or4er: *! *+ e82e0.3o+ .o .-e 4e+er*5 r65e!
#the payee's names in the two %.& su)2ect chec(s were forged! "ollowing the general rule, the chec(s are @wholly
inoperative@ and of no effect! 8owever, the underlying circumstances of the case show that the general rule on
forgery is not applica)le! #he records show that petitioner BPI as drawee )an( and respondent $B$ as
representing or collecting )an( were )oth negligent resulting in the encashment of the forged chec(s!
Ban(s handle daily transactions involving millions of pesos! By the very nature of their wor( the degree of
responsi)ility, care and trustworthiness e?pected of their employees and officials is far greater than those of
ordinary cler(s and employees! "or o)vious reasons, the )an(s are e?pected to e?ercise the highest degree of
diligence in the selection and supervision of their employees!
In the present case, there is no 5uestion that B9#8 )an(s were negligent in the selection and supervision of their
employees! #he Ar)itration $ommittee, the P$8$ Board of Birectors and the lower court, however disagree in the
evaluation of the degree of negligence of the )an(s!
#he S$ ruled that the issue as to whose negligence is graver is relevant! *o matter how many 2ustifications )oth
)an(s present to avoid responsi)ility, they cannot erase the fact that they were )oth guilty in not e?ercising
e?traordinary diligence in the selection and supervision of their employees! But on whose negligence was the
pro?imate cause of the payment of the forged chec(s )y an impostor!
Petitioner BPI insists that the doctrine of last clear chance enunciated in the case of Picart v! Smith%1= Phil! -3,
C+,+-D& should have )een applied considering the circumstances of the case! But thisis not well:ta(en! #he S$ is not
also persuaded )y the contention of BPI that even if the doctrine of pro?imate cause is applied, still, respondent
$B$ should )e held responsi)le for the payment to the impostor of the two %.& chec(s! Applying the doctrine of
pro?imate cause, petitioner BPI's contention that $B$ alone should )ear the loss must fail! It is
not unnatural or unexpected that after ta(ing the ris( of impersonating Eligia ! "ernando with the connivance of
BPI's employees, the impostor would complete her deception )y encashing the forged chec(s! #here is therefore,
greater reason to rule that the pro?imate cause of the payment of the forged chec(s )y an impostor was due to the
negligence of petitioner BPI!
$onsidering the comparative negligence of the two %.& )an(s, the S$ ruled that the demands of su)stantial 2ustice
are satisfied )y allocating the loss of P.,/+1,.+<!+0 and the costs of the ar)itration proceeding in the amount of
P=,.<3!33 and the cost of litigation on a 03:/3 ratio! $onforma)ly with this ruling, no interests and attorney's fees
can )e awarded to either of the parties!
Petitioner Ban( of the Philippine Islands shall )e responsi)le for si?ty percent %03A& while respondent $hina
Ban(ing $orporation shall share forty percent %/3A& of the loss and the ar)itration cost! #he Philippine $learing
8ouse $orporation is here)y directed to effect the corresponding entries to the )an(s' clearing accounts in
accordance with this decision! G