Ilusorio vs CA Digest

Jerome Nikki Q. Reyes JD 2B

Ramon K. Ilusorio, a prominent businessman, entrusted to his secretary, Katherine E. Eugenio, his credit cards and his checkbook with blank checks, as well as the verification and reconciliation of said checking account. Due to this, Eugenio was able to encash and deposit to her personal account about seventeen (17) checks drawn against the account of Ilusorio at the respondent bank, Manila Banking Corporation, with an aggregate amount of P119,634.34. Such fact was not known to Ilusorio, until a business partner asked him whether he had entrusted his credit card to his secretary because the said partner had seen her used the same. Prompted by this, he was minded to verify the records of his account. Thereafter, Ilusorio fired Eugenio and filed a case of estafa thru falsification. Consequently, the bank also filed a case of estafa thru falsification of commercial documents against her. Petitioner then requested the bank to credit back and restore to its account the value of the checks which were wrongfully encashed but the latter refused; hence, the instant case. RTC and CA dismissed dismissed the case for there is no sufficient basis on the plaintiff’s cause.

Whether or not Ilusorio has a cause of action against Manila Banking Corporation Whether or not Manila Bank had no authority to pay the forged forg ed check

No. The Court ruled that in order to be entitled to damages, the petitioner has the burden of proving negligence on the part of the bank for failure to detect the discrepancy in the sig natures on the checks. It is incumbent upon petitioner to establish the fact of forgery, which he failed to do so. It was clear in this case that respondent bank took all the precautions in verifying the same. Moreover, it appears that petitioner accorded his secretary unusual degree of trust and unrestricted access to his credit cards, passbooks, check books, bank statements, including custody and possession of cancelled checks and reconciliation of accounts, which caused him added injury. The contention of the petitioner that the bank had no authority to pay the forged check is correct. It is a rule that when a signature is forged or made without the authority of the person whose signature it purports to be, the check is wholly inoperative. No right to retain the instrument, or to give a discharge therefor, or to enforce payment thereof against any party, can be acquired through or under such signature. However, the rule does provide for an exception, namely:   In the instant case, it is the exception that applies. The Supreme Court held that the petitioner is precluded from setting up the forgery, assuming there is forgery, due to his own negligence in entrusting to his secretary his credit cards and checkbook including the verification of his statements of account.