GEMPESAW V.

CA In the case at bar the checks were filled up by petitioners employee

218 SCRA 682
FACTS:
Gempensaw was the owner of many grocery stores. She paid her suppliers
through the issuance of checks drawn against her checking account
with respondent bank. The checks were prepared by her bookkeeper
Galang. In the signing of the checks prepared by Galang, Gempensaw didn't
bother
herself in verifying to whom the checks were being paid and if the
issuances were necessary. She didn't even verify the returned checks
of the bank when the latter notifies her of the same. During her two years
in business, there were incidents shown that the amounts paid for
were in excess of what should have been paid. It was also shown that even
if the checks were crossed, the intended payees didn't receive the amount
of the checks. This prompted Gempensaw to demand the bank to
credit her account for the amount of the forged checks. The bank refused
to do so and this prompted her to file the case against the bank.
Galang and were later given to her for signature. Her signing the checks
made the negotiable instruments complete. Prior to signing of the checks,
there was no valid contract yet. Petitioner completed the checks by
signing them and thereafter authorized Galang to deliver the same to their
respective payees. The checks were then indorsed, forged
indorsements thereon.
As a rule, a drawee bank who has paid a check on which an indorsement has
been forged cannot debit the account of a drawer for the amount of
said check. An exception to this rule is when the drawer is guilty of
negligence which causes the bank to honor such checks. Petitioner in this
case has relied solely on the honesty and loyalty of her bookkeeper
and never bothered to verify the accuracy of the amounts of the
checks she signed the invoices attached thereto. And though she
received her bank statements, she didn't carefully examine the same to
double-check her
payments. Petitioner didn't exercise reasonable diligence which eventually
led to the fruition of her bookkeepers fraudulent schemes.

HELD:

Forgery is a real defense by the party whose signature was forged. A party
whose signature was forged was never a party and never gave his consent
to the instrument. Since his signature doesnt appear in the
instrument, the same cannot be enforced against him even by a holder in
due course. The drawee bank cannot charge the account of the drawer
whose signature was forged because he never gave the bank the order to
pay.