430 SCRA 261



CASA has a current account with BPI.  It was discovered that for a material period of time, several checks were encashed by a certain Sonny Santos, who  eventually  was  known  to  be  a  fictitious  name  used  by  the  external auditor  of  CASA.    The  external  auditor  admitted  forging  the  signature  of CASA’s president to be able to encash the checks.  The trial court held the bank liable but this was modified.  The modified decision  apportioned the loss between BPI and CASA.   


A  forged  signature  is  a  real  and  absolute  defense,  and  a  person  whose signature appears on a negotiable instrument is forged is deemed to never have become a party thereto and to have never consented to the contract that allegedly gave rise to it.
The  counterfeiting  of  any  writing,  consisting  in  the  signing  of  another’s name with intent to defraud, is forgery.
First, there was really a finding of forgery.  The forger admitted even in his affidavit of his forgery.
Second,  there  was  a  finding  by  the  police  laboratory  that  indeed  the signatures were forged.
Furthermore,  the  negligence  is  attributable  to  BPI  alone.  Its  negligence consisted in the omission of the degree of diligence required of a bank.

*Loss borne by proximate cause of negligence