Thursday, February 02, 2012

Gempesaw vs. CA, 218 SCRA 622

Facts: Gempesaw filed for recovery of the money value of 82 checks charged against her account due to forgery of indorsements made by Alicia Galang, her trusted bookkeeper. In the normal course of her grocery business, it would be Galang who would write the amounts in the check and Gempesaw would only sign the checks without ascertaining its contents. The checks were deposited in the accounts of Romero and Lam, with the aggregate total amounting to 1.2 million pesos.

 Gempesaw filed a case with the RTC which held that  Gempesaw was negligent in handling her affairs by not ascertaining the values of the payments and if indeed the payments reached the payees making forgery not a defense for her to recover. The CA affirmed.

Issue: Whether or not the forgery entitles Gempesaw to reimbursement

Held: Partly Yes & No. The SC found that Gempesaw is indeed negligent which precludes her from raising the defense of forgery. However, the SC, using Art. 1170 of the Civil Code, said that the bank becomes also liable for damages for accepting the check with a second indorsement. It should be noted that in the current banking system, checks with second indorsements are not generally accepted and given this fact, the Bank should also shoulder liability. Gempesaw and the bank are liable 50-50 for the loss.

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