G.R. No. 129015 ; August 13, 2004
SAMSUNG CONSTRUCTION COMPANY PHILIPPINES, INC., petitioner, vs. FAR EAST BANK AND TRUST COMPANY AND COURT OF APPEALS, respondents.

FACTS

Petitioner Samsung Construction maintained a current account with respondent Far East Bank and Trust Company (FEBTC). The sole authorized signatory was its Project Manager, Jong Kyu Lee, while blank checks were in the custody of the company accountant, Kyu Yong Lee. On March 19, 1992, a certain Roberto Gonzaga presented for encashment at FEBTC a check for P999,500.00, payable to cash and drawn against Samsung’s account. Multiple bank officers compared the signature on the check with the specimen signature card and, after also consulting with Samsung’s assistant accountant Jose Sempio III who vouched for the check’s authenticity, authorized its payment. The following day, Kyu discovered the encashment and a missing check. Jong confirmed his signature was forged. Samsung demanded reimbursement from FEBTC, which was refused, prompting the filing of a complaint.
The Regional Trial Court (RTC), crediting the testimony of an NBI document examiner that the signature was forged, ruled in favor of Samsung and ordered FEBTC to reimburse the amount. The Court of Appeals reversed, holding that the conflicting findings of the NBI and PNP experts created doubt regarding the forgery. It further ruled that even assuming forgery, the loss must be borne by Samsung due to its alleged negligence in safekeeping its checkbook, which allowed its assistant accountant Sempio access to the blank check.

ISSUE

The core issue is whether FEBTC is liable to reimburse Samsung for the amount paid on a forged check.

RULING

Yes, FEBTC is liable. The Supreme Court reversed the Court of Appeals and reinstated the RTC decision. The legal logic is anchored on the fundamental relationship between a bank and its depositor. A bank is bound to know the signatures of its customers; the payment of a check bearing a forged signature is a violation of that duty. The bank’s defense of forgery is an affirmative defense, and the burden of proving the genuineness of the signature rests upon it. Here, the RTC’s finding of forgery, based on its assessment of the credibility of the expert witnesses, is conclusive. The Court of Appeals erred in overturning this factual finding, as no compelling reason was presented to justify a departure from the trial court’s evaluation.
Furthermore, the appellate court erroneously applied the doctrine of comparative negligence. The principle that a loss should be borne by the party whose negligence was the proximate cause of the loss does not apply where, as here, the bank was in the best position to detect the forgery. The bank’s own employees examined the signature and approved the encashment. The alleged negligence of Samsung in check safekeeping was not the proximate cause of the loss; the immediate and proximate cause was the bank’s failure to detect the forgery despite its opportunity and duty to do so. The bank’s liability is primary and absolute. Consequently, FEBTC is ordered to reimburse Samsung the amount of P999,500.00 with legal interest.