59 PHIL 59



Wilson,  a  principal  employee  of  petitioner,  together  with  Wilson,  a messenger-clerk, conspired to withdraw cash from the petitioner’s account through forgery of a check, in the name of the agent authorized to sign the check.
While  the  authorized  agent  of  petitioner  was  on  vacation,  Wilson  and Dolores  sent  a  cablegram  to  China  Banking  for  the  transfer  of  $100,000.  On  the  contract,  the  name  of  Baldwin  was  forged  and  it  was  indicated therein that a certified check be issued.  Thereafter, this was received and
deposited  with  the  BPI.    Upon  deposit,  an  indorsement  in  the  name  of Baldwin was placed.  The bank account was credited.  Later, a letter was sent  to  the  bank,  purporting  to  be  signed  by  Baldwin  asking  that  it  be withdrawn.  This was done in supervision of Dolores.  Dolores and Wilson then was able to get the money.  This eventually came to the knowledge of plaintiff who filed an action against China Banking and BPI.  The trial court dismissed the case.  


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.  
There is no act  of the plaintiff that led the bank astray.  If it was in fact lulled into the false sense of security, it was by the effrontery of Dolores, the messenger to whom it entrusted this large sum of money.
The proximate cause of the loss must therefore be due to the negligence of the bank in honoring and cashing the two forged checks.