REMEDIOS NOTA SAPIERA vs.

COURT OF APPEALS and RAMON SUA

[G.R. No. 128927. September 14, 1999]

FACTS: On several occasions petitioner Remedios Nota Sapiera purchased from Monrico Mart
certain grocery items, and paid for them with checks issued by one Arturo de Guzman. These checks were
signed at the back by petitioner. When presented for payment the checks were dishonored because the
drawers account was already closed. Private respondent Ramon Sua informed Arturo de Guzman and
petitioner about the dishonor but both failed to pay the value of the checks. Hence, four (4) charges of
estafa were filed against petitioner. The trial court acquitted petitioner of all the charges of estafa . However,
petitioner was still ordered to pay P210,150.00 as civil liability to private respondent. Hence, this petition
alleging that respondent Court of Appeals erred in holding petitioner civilly liable to private respondent
because her acquittal by the trial court from charges of estafa was absolute.

ISSUE: Whether petitioner should still pay civil indemnity to private respondent despite her acquittal
from the criminal charges of estafa.

HELD: Yes, petitioner is still liable for the unpaid value of the checks signed by her. The four (4)
checks issued by de Guzman were signed by petitioner at the back without any indication as to how she
should be bound thereby and, therefore, she is deemed to be an indorser thereof. The Negotiable
Instruments Law clearly provides -

Sec. 17. Construction where instrument is ambiguous. - Where the language of the instrument is
ambiguous, or there are admissions therein, the following rules of construction apply: x x x x (f) Where a
signature is so placed upon the instrument that it is not clear in what capacity the person making the same
intended to sign, he is deemed an indorser. x x x x

Sec. 63. When person deemed indorser. - A person placing his signature upon an instrument otherwise
than as maker, drawer or acceptor, is deemed to be an indorser unless he clearly indicates by appropriate
words his intention to be bound in some other capacity.

Sec. 66. Liability of general indorser. - Every indorser who indorses without qualification, warrants to all
subsequent holders in due course: (a) The matters and things mentioned in subdivisions (a), (b) and (c) of
the next preceding section; and (b) That the instrument is, at the time of the indorsement, valid and
subsisting;

And, in addition, he engages that, on due presentment, it shall be accepted or paid or both, as the case
may be, according to its tenor, and that if it be dishonored and the necessary proceedings on dishonor be
duly taken, he will pay the amount thereof to the holder or to any subsequent indorser who may be
compelled to pay it.

The dismissal of the criminal cases against petitioner did not erase her civil liability since the dismissal was
due to insufficiency of evidence and not from a declaration from the court that the fact from which the civil
action might arise did not exist. An accused acquitted of estafa may nevertheless be held civilly liable where
the facts established by the evidence so warrant. The accused should be adjudged liable for the unpaid
value of the checks signed by her in favor of the complainant.
BANK OF THE PHILIPPINE ISLANDS vs. CASA MONTESSORI INTERNATIONALE and LEONARDO
T. YABUT

[G.R. No. 149454. May 28, 2004]

FACTS: CASA Montessori International has a current account with BPI, with CASAs President Ms.
Ma. Carina C. Lebron as one of its authorized signatories. In 1991, after conducting an investigation, CASA
discovered that nine (9) of its checks had been encashed by a certain Sonny D. Santos since 1990 in the
total amount of P782,000.00. It turned out that Sonny D. Santos with account at BPIs Greenbelt Branch
was a fictitious name used by third party defendant Leonardo T. Yabut who worked as external auditor of
CASA. Third party defendant voluntarily admitted that he forged the signature of Ms. Lebron and encashed
the checks. The PNP Crime Laboratory conducted an examination of the nine (9) checks and concluded
that the handwritings thereon compared to the standard signature of Ms. Lebron were not written by the
latter. CASA filed the herein Complaint for Collection with Damages against BPI praying that the latter be
ordered to reinstate the amount of P782,500.00 in the current and savings accounts of the former.

RTC rued in favor of CASA. On appeal, the CA apportioned the loss between BPI and CASA. The
appellate court took into account CASAs contributory negligence that resulted in the undetected forgery. It
then ordered Leonardo T. Yabut to reimburse BPI half the total amount claimed

ISSUES:

1.) Was there forgery under the Negotiable Instruments Law (NIL)?

2.) Were any of the parties negligent and therefore precluded from setting up forgery as a
defense?

HELD:

1.) Yes, there was forgery of the drawer’s signature on the check.

Section 23 of the NIL provides:

Section 23. Forged signature; effect of. -- When a signature is forged or made without the authority of the
person whose signature it purports to be, it is wholly inoperative, and no right x x x to enforce payment
thereof against any party thereto, can be acquired through or under such signature, unless the party against
whom it is sought to enforce such right is precluded from setting up the forgery or want of authority.

Under this provision, a forged signature is a real or absolute defense, and a person whose signature on a
negotiable instrument is forged is deemed to have never 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 anothers name with intent to defraud, is forgery.

In the present case, we hold that there was forgery of the drawers signature on the check.

First, both the CA and the RTC found that Respondent Yabut himself had voluntarily admitted, through an
Affidavit, that he had forged the drawers signature and encashed the checks. He never refuted these
findings. That he had been coerced into admission was not corroborated by any evidence on record.

Second, the appellate and the trial courts also ruled that the PNP Crime Laboratory, after its examination
of the said checks, had concluded that the handwritings thereon -- compared to the standard signature of
the drawer -- were not hers. This conclusion was the same as that in the Report that the PNP Crime
Laboratory had earlier issued to BPI -- the drawee bank -- upon the latters request.
 2.) Having established the forgery of the drawers signature, BPI -- the drawee -- erred in
making payments by virtue thereof. The forged signatures are wholly inoperative, and CASA -- the drawer
whose authorized signatures do not appear on the negotiable instruments -- cannot be held liable
thereon. Neither is the latter precluded from setting up forgery as a real defense.

For allowing payment on the checks to a wrongful and fictitious payee, BPI -- the drawee bank --
becomes liable to its depositor-drawer. Since the encashing bank is one of its branches, BPI can easily go
after it and hold it liable for reimbursement. It may not debit the drawers account and is not entitled to
indemnification from the drawer. In both law and equity, when one of two innocent persons must suffer by
the wrongful act of a third person, the loss must be borne by the one whose negligence was the proximate
cause of the loss or who put it into the power of the third person to perpetrate the wrong.

In this case, CASA was not negligent in handling its financial affairs. CASA, therefore, is not
precluded from setting up forgery as a real defense.