INSULAR DRUGS V. PNB - Indrosements
55 PHIL 634
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.
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to the drug company for the amounts represented by the checks, unless it is pleaded and proved that after the money was withdrawn from the bank, it passed to the drug company which thus suffered no loss.