Negotiable Instruments Law

Francisco vs Court of Appeals

Facts:

The controversy in this case began in a Land Development and Construction Contract
in 1978, which was entered into by A. Francisco Realty and Development Corporation
(AFRDC), Adalia Franciso as the President and Herby Commenrcial and Construction
Corporation (HCCC) represented by its President and General Manager Jaime Ong
financed by GSIS in a housing project at San Jose Del Monte Bulacan.

AFRDC executed a deed of assignement in favor of HCCC to collect from GSIS.

GSIS and AFRDC put up an executive committee account with the Insular Bank of Asia
(IBAA) for 4,000,000. Check would be issued and co-signed by petitioner Francsico &
GSIS Vice President Diaz.

HCCC filed a complaint in RTC Quezon City against Francisco, ADFRDC and GSIS for
the collection of unpaid balance of P515,493.00

Parties agreed with an amicable settlement through a Memorandum of Agreement thus,

Trial Court dismissed the case upon joint motion to dismiss.

In 1979, Ong discovered that Diaz and Francisoco executed signed checkes drawn
against IBAA payable to HCCC. Ong claims that checks were not delivered to HCCC.

GSIS gave Francisco the custody of checks since she promised to deliver it to HCCC.

Francisco forged the signature of Ong without his consent and make it appear that
HCCC had indorsed the checks. Francisco deposited the checks in her savings account
and later withdrew the credited amount.

Ong filed a complaint of estafa thru falsification of commercial documents.

Francisco denied the allegations and was dismissed by the City Fiscal and was affirmed
by the Minister of Justice in 1981.

Private respondent brought the present case in 1979 against Francisco and IBAA for
the recovery of 370,475 representing the value of seven checks and for damages. After
trial on merits, Trial Court ruled in favor of the respondents. CA affirmed the decision of
the trial court.

Issue:

Whether or not Francisco forged the signature of Ong on the seven checks.

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Negotiable Instruments Law

Ruling:

The SC upheld the decision of the trial court.

The forgery was satisfactorily established in the trial court upon the strength of the
findings of the NBI handwriting expert. Well-entrenched is the rule that findings of trial
courts are factual in nature, especially when affirmed by the Court of appeals, deserve
to be respected and affirmed by the Supreme Court, provided it is sipported by
substantial evidence on record.

The Negotiable Instruments Law provides that where any person is under obligation to
indorse in a representative capacity, he may indorse in such terms as to negative
personal liability. An agent, when so signing, should indicate that he is merely signing in
behalf of the principal and must disclose the name of his principal, otherwise he shall be
held personally liable.

Even assuming that Francisco was authorized by HCCC to sign Ong’s name, still
Francisco did not indorse the instrument in accordance with the law. Every person who,
contrary to law, willfully or negligently causes damage to another, shall indemnify the
latter for the same.

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