FACTS:

SMC issued a dividend check in favor of Delgado and the check was drawn against FBTC.  Delgado was able to alter the check, increased the amount of  the  same  and  deposited  it  with  his  account  in  Republic  Bank.    RB indorsed it with FBTC.  The SMC notified FBTC of the alterations made and demanded  for  reimbursement.    Republic  Bank  then  didn't  want  to reimburse.  The trial court held it liable.
 

HELD:

The 24-hour clearing rule is a valid rule applicable to commercial banks.  It is  true  that  when  an  indorsement  is  forged,  the  collecting  bank  or  last indorser,   as   a   general   rule,   bears   the   loss.      But   the   unqualified endorsement of the collecting bank of the checks should be read together
with  the  24-hour  regulation  on  clearing  house  operation.    Thus,  when  a drawee bank fails to return the forged check to the collecting bank within the 24-hour clearing rule, the collecting bank is absolved from liability.