Beruflich Dokumente
Kultur Dokumente
is under strict liability to pay the check only to the order of Jojo as reflected on the face of the
check. Payment under the forged endorsement of Manny is not to Jojos order. By paying a
party other than to the order of Jojo, ABC bank failed to comply with the terms of the check. It
violated its duty to charge Jojos account only according to his order. Thus, as a general rule,
ABC bank may not debit Jojos account and must re-credit the amount of the check to his
account. However, if ABC bank can prove that Jojo substantially contributed to the making of
the forged signature, the latter is precluded from setting up forgery.
However, all is not lost for ABC bank since it was not Jojos signature that was forged
but Mannys. In cases involving forged endorsements, the drawee ABC bank may not debit the
account of the drawer but may generally pass liability back through the collection chain to the
party who took it from the forger and, of course, to the forger himself, if available (Associated
Bank vs. Court of Appeals, 252 SCRA 620). Thus, ABC bank may seek reimbursement from
XYZ bank. Since Mannys signature was forged, XYZ bank had no right to be paid by ABC
Bank. Furthermore, under Sec. 66 of the Negotiable Instruments Law, a collecting bank like
XYZ Bank that endorses a check bearing a forged signature and presents it to the drawee ABC
bank is liable as an endorser. Thus, XYZ warrants the genuineness of all prior signatures and is
precluded from setting up forgery or want of authority. Thus, as between the drawer, the drawee
and the collecting bank, the collecting bank is ultimately liable for the loss.
Since the drawee ABC Bank is liable to the drawer Jojo, and the collecting bank XYZ
Bank, in turn, is liable to the drawee ABC Bank, can Jojo be allowed to directly collect from XYZ
Bank to simplify matters? Negative. There is no legal relationship between Jojo and XYZ Bank.
Jojo is not a client of XYZ Bank. While the procedure may be simpler, this legal shortcut is not
permissible.
You now know why your bank rarely accepts checks bearing two or more endorsements
as collecting banks, they do not want to be liable as endorsers.
Atty. Christopher E. Cruz is a Full-Time Assistant Professor of the Commercial Law Department,
De La Salle University.
These article are contributed by the CBE Faculty in the column of Business Focus of Manila
Bulletin published August 2, 2004.