INSULAR DRUGS V. PNB - Indrosements

55 PHIL 634

FACTS:

Foerster  was  a  collector  for  Insular  Drugs.    Upon  collection  of  checks  for payment  to  the  company,  he  deposited  the  checks  in  his  own  personal account.    This  came  to  the  knowledge  of  the  company  and  upon investigation,  the  salesman  committed  suicide  thereafter.    Insular  Drugs filed  an  action  against  the  bank,  to  credit  to  its  account  the  amount Foerster  and  his  wife  took  from  them.    The  indorsements  took  various forms.   

HELD:

When  a  bank  accepts  the  indorsements  on  checks  made  out  to  the company  and  the  indorsements  of  the  salesman’s  wife  and  clerk,  and credits to the personal account of the salesman and his wife, authorizing them to  make  withdrawals,  the  bank  makes  itself  responsible  to  the  drug company for the amounts represented by the checks, unless it is pleaded and proved that after the money was withdrawn from the bank, it passed to the drug company which thus suffered no loss.